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Would you rather purchase your next vehicle factory direct , or through your local dealership?

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April 6, 2021

Volvo:
As Volvo Cars transforms into an EV-only brand in less than a decade, it is reinventing the way it will sell the next-generation vehicles.

The automaker last week announced plans to move to an online-only, fixed-price sales model for its expanding fleet of battery-powered models.

Volvo's all-digital strategy will have ramifications for the brand's 281 U.S. dealers.
- Source: Automotive News

General Motors:
Consumers looking to buy the new GMC Hummer EV pickup or SUV will be doing it online with minimal dealer involvement, directly from General Motors, for at least the next two years.

After that, the retail shopping experience will "evolve" as GM rolls out more electric vehicles.

The vehicles will make it to GMC dealership showrooms eventually, but even then, the buying process will change, said Phil Brook, vice president of marketing for Buick and GMC.

"There’s no doubt about that," Brook told the Free Press, though he declined to offer further details.

"This vehicle allows us to take a different approach," Brook said. "The market is evolving and changing and we’re changing, but we are working through the dealers. We see our dealers as a huge competitive advantage for us."
- Source; The Detroit News









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Thanks for sharing this, Perian! Do you have the link for the first article you quoted? The Detroit News link goes to the second article.
 

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"This vehicle allows us to take a different approach," Brook said. "The market is evolving and changing and we’re changing, but we are working through the dealers. We see our dealers as a huge competitive advantage for us."

Now that is a great, don't answer the question, corporate response.









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Right now I'd rather buy from a dealer to get the full experience. I went into a Tesla showroom a while back and wasn't satisfied with their model. There was only one model of each car in the showroom and several people were tryin to climb around inside the cars and push all the buttons - including several kids (not going to say if any of them were mine). I want to drive the car I'm going to buy first to get a feel for everything. You miss out a lot by not driving a vehicle first.
 

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They both have their pros and cons...Dealership experience has IMO only one pro: the ability to test drive prior to buying...other than that, it's all CON in more ways than one. Overpriced Extended warranties/Gap coverages, which you'll definitely need if you buy the overpriced extended warranty, paint protection scams, underbody treatments and my personal favorite the $500 pinstripe job.

Online, I tend to think its more the price you see is the price you get...which should help with valuation down the line.

I never understood anyway why a car just doesn't cost what it costs and leave it at that, with the negotiation model, you always worry about whether you got hosed or not because someone somewhere definitely got a better deal regardless of what you initially think you got away with
 

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I still want the dealership for test drives and service, but as far actual sales process I'd much rather do it online with one reasonable price. None of this slimy bargaining with the dealer.
 

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A savvy shopper will pay more with this new sales model. Leftover models languishing on dealer lots make for the best deal. This won't happen with online only sales direct from the manufacturer.

Some states franchise laws will not permit this sales model.
 

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Right now I'd rather buy from a dealer to get the full experience. I went into a Tesla showroom a while back and wasn't satisfied with their model. There was only one model of each car in the showroom and several people were tryin to climb around inside the cars and push all the buttons - including several kids (not going to say if any of them were mine). I want to drive the car I'm going to buy first to get a feel for everything. You miss out a lot by not driving a vehicle first.
Indeed. If you don't drive before you buy, you're either insane or are truly a non-driving schlub. And there are certainly some out there. Exceptions being if you drove a rental, a friend's car, or otherwise rode in or got behind the wheel other than at a dealership. But the dealership has a lot going for it. Too bad most car salesturkeys continue to be ignorant or jerks or both.

That said, I've had a few excellent sales people over the decades. They were smart, savvy, straight, knew their stuff, had actual personalities, and were a pleasure doing business with. Rare, unfortunately.
 

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Indeed. If you don't drive before you buy, you're either insane or are truly a non-driving schlub. And there are certainly some out there. Exceptions being if you drove a rental, a friend's car, or otherwise rode in or got behind the wheel other than at a dealership. But the dealership has a lot going for it. Too bad most car salesturkeys continue to be ignorant or jerks or both.

That said, I've had a few excellent sales people over the decades. They were smart, savvy, straight, knew their stuff, had actual personalities, and were a pleasure doing business with. Rare, unfortunately.
I imagine Nissan rogue buyers are likely to support direct buying without actually seeing let alone test driving it
I would back to back check out different brands and models the same day and dont like the notion of hopping on line and ordering up a test drive seeing it and returning it and having to wait and arrange a different model ETC
and online - direct sales what about used / and trade ins? or will that be dealt with separately?
 

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Too bad most car salesturkeys continue to be ignorant or jerks or both.

That said, I've had a few excellent sales people over the decades. They were smart, savvy, straight, knew their stuff, had actual personalities, and were a pleasure doing business with. Rare, unfortunately.
The root cause for this is the "vicious cycle" that dealership consulting company Rikess Group depicts here:

 
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The root cause for this is the "vicious cycle" that dealership consulting company Rikess Group depicts here:

TBH you're never going to get the "right" people to do sales...My twin did sales for a little after he retired from Active Duty, and in his words..."you can't be an ethical human and do this ****, the whole business is built off screwing people over, the more you screw people over the more you make, something inside you has to be dead to do this job"...Combine the inherent lack of morality with the low guarantee pay, you're always going to have that high turnover. The cycle is never going to stop until dealerships revamp their salesman pay structure/incentives.
 

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TBH you're never going to get the "right" people to do sales...
In automotive retail, would that apply both to franchised dealerships as well as to a "factory direct" sales model?
 
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In automotive retail, would that apply both to franchised dealerships as well as to a "factory direct" sales model?
I'd imagine in a factory direct model, that the salespeople would be direct employees of the automaker, so I'd like to think that the BS 'nanigans would be to a minimum. But getting rid of franchise salespeople is only 25% of the problem...it's the f---king finance guy you need to look out for, that BS IMO needs to be done away with, w/ the online factory direct model, financing would/should be lender direct...my last 2 purchases I went to the dealer with financing already handled, but for grins I played the whole "show me yours" thing w/ the finance guy and the disparity in rates was bananas...2-3 points higher "in dealer" vs USAA.
 

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TBH you're never going to get the "right" people to do sales...My twin did sales for a little after he retired from Active Duty, and in his words..."you can't be an ethical human and do this ****, the whole business is built off screwing people over, the more you screw people over the more you make, something inside you has to be dead to do this job"...Combine the inherent lack of morality with the low guarantee pay, you're always going to have that high turnover. The cycle is never going to stop until dealerships revamp their salesman pay structure/incentives.
This is not far off from what I told my dad about being a technician at a Dealership; "To make good money, you need to know how to lie, cheat and steal". However, think of other large purchases or service work one pays for, isn't there a lot of this in those purchases too? Just some examples off the top of my head, all exhibit opportunities to exploit the customer; home improvements; windows, siding, roof, remodeling or landscaping work, furniture, recreational vehicles, etc. Heating and Cooling repairman anyone?........

I'd imagine in a factory direct model, that the salespeople would be direct employees of the automaker, so I'd like to think that the BS 'nanigans would be to a minimum. But getting rid of franchise salespeople is only 25% of the problem...it's the f---king finance guy you need to look out for, that BS IMO needs to be done away with, w/ the online factory direct model, financing would/should be lender direct...my last 2 purchases I went to the dealer with financing already handled, but for grins I played the whole "show me yours" thing w/ the finance guy and the disparity in rates was bananas...2-3 points higher "in dealer" vs USAA.
No-way, the manufacturer isn't going to absorb that cost, dealership and sales people would do most of what they do now, the only thing removed would be the purchase-price and negotiations, with that removed suddenly Dealerships would be "less slimy" virtually overnight.
 

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I'd imagine in a factory direct model, that the salespeople would be direct employees of the automaker, so I'd like to think that the BS 'nanigans would be to a minimum. But getting rid of franchise salespeople is only 25% of the problem...it's the f---king finance guy you need to look out for, that BS IMO needs to be done away with, w/ the online factory direct model, financing would/should be lender direct...my last 2 purchases I went to the dealer with financing already handled, but for grins I played the whole "show me yours" thing w/ the finance guy and the disparity in rates was bananas...2-3 points higher "in dealer" vs USAA.
Mercedes Canada OWNS most if not all of there dealerships in canada and I will say compared to a GM dealer they are night and day but the franchise Audi dealers are as good if not better then the MB dealers in my experience and it is the "brand managers" that are letting the dealers "get away with" the stunts VS other brands that take IMAGE seriously to even get the dealers "in line"
 

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In automotive retail, would that apply both to franchised dealerships as well as to a "factory direct" sales model?
What happened to Saturn? I shopped Saturns way back when, their markup was pretty significant and I doubt I'd have purchased even if in the market for a car.
 

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I still want the dealership for test drives and service, but as far actual sales process I'd much rather do it online with one reasonable price. None of this slimy bargaining with the dealer.
That's the thing I hate the most about the whole affair, the way the dealers have to do all this back and forth haggling BS. Just offer up a good reasonable price in the middle that we can all be happy with instead of their good ole lowball ya and go from there or the flinch tactics. We are still going to need these dealers around for yes, service and of course the warranty things so I think them completely going away is shall we say a bit of a stretch or pipe dream....
 
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