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Why do we have to buy cars from dealers?
The dealer arranges financing, collects taxes, handles the state registration, and offers an opportunity to see and drive various models before making a decision. It will take your old car on trade and stands ready to provide factory-warranty service and handle recalls.
Are car dealerships becoming obsolete?
They most likely will even be around during the next decade. However, car dealerships are becoming increasingly obsolete, as various market disruptors are threatening their basic business model, thanks to the internet and cutting out the middle man.
Why do dealerships not have cars?
Across the country, dealerships are facing an inventory shortage because there is a lack of microchips being produced that are needed to run a vehicle. Dealerships are also selling vehicles to customers before they even hit the lot. “It’s almost become a just in time type business for us,” said Searcy.
Why are car dealerships still around?
Aside from all of the back-end laws and costs, dealerships still exist to provide the customers a good customer service experience and build brand loyalty. Dealerships allow for an easier process when it comes to doing warranty and recall work, as well as routine maintenance and other repairs.
Why are new car lots so empty?
A shortage on auto chips or silicone microchips necessary for the production of new automobiles has left many dealer lots empty nationwide. Conversely, that auto chip shortage has led to a boom for used car businesses.
Do you pay more to buy a car from a dealer?
The flip side of Lacy’s local-business-is-good-business argument is the middleman effect: You pay more to buy a car from a local dealer. O’Connell cited “a Department of Justice study that found that 5 to 10 percent is added to the cost of a car because of the dealer system,” and decried the idea that dealers exist “to protect customers.”
Why are auto dealerships independent franchises?
Almost every auto dealer is an independent franchise, because nearly ever state requires it to be that way. It’s a business model that began as a way for automakers to spread their geographic reach quickly and with minimal corporate investment—the franchise owner assumes most of the financial risk.
Does Tesla want to change the way we buy cars?
But first it wants to change the way we buy them. This year Tesla has faced off against the National Automobile Dealers Association (NADA), a trade group that represents car retailers, over Tesla’s right to sell cars through its websites and manufacturer-owned stores.