What do you mean? The sales manager who just so happened to be passing through the waiting area while I was getting my oil changed said he knew someone who was super interested in buying my specific 2021 base model Mazda 3! What a cool guy to be always looking out for deals like that!
I don’t think they care. Making money is the only reason to get into car sales. It’s nobody’s dream job and it’s not like you get great benefits or good hours.
Points they made in favor of a broker:
* "price upfront "
* "more personal service"
* "finding difficult sought-after vehicles"
* "saving money"
* "convenience"
I'm sold. I've never used a broker but all of these sound great.
Last dealer I went to I swore them off for good. Last two vehicles I've purchased I bought online.
So how does it work? You just tell the broker what you want and they find a dealer somewhere in the region willing to play ball?
Are brokers only used for expensive cars, or could you use one for something as common and mundane as a Corolla?
I used one for a toyota
I just told them what I wanted, they came back with an inventory list and the deal they could get for each spec. I picked one, showed up to the dealership to sign the deal the broker had negotiated, and drove off. You can do local or out of state. Paid the broker $500, well worth it for me
Last time I was buying a car I was looking at leasing asked a broker hey can I get one of these 4 vehicles under this price and he came back with a full price sheet including his broker fee. Way more simple than being jerked around by 5 dealerships
I’d only ever heard of brokers in the context of what car enthusiasts did before e.g. online car ads
So this is interesting and now I want to know more 😅
It is way simpler. The problem is because they're so greedy, a lot of these dealers are outright refusing to do business if they encounter a broker. I experienced it personally a couple years ago. My cousin was looking for a RAV4 and used a broker. With the wording that he broker used to reach out to dealers, a couple of them, instead of giving the info requested, outright asked if they were a broker and when they responded, they never replied again. She ended up purchasing from a dealer who wasn't tripping about dealing with a broker. Idiots lost a sale because of greed and it was insane to see.
Sure, some do. But any actually seasoned broker already have dealers in their network and pricing from these dealers that get updated at least once a month.
I’m literally in the process of using a broker (Delivrd) for my next vehicle purchase. Will update the post to see how it goes. I’m sure it’ll be better than dealing with all the dealer bullshit.
Car dealerships can go fuck themselves. If their service was so great, when why are they legally required to exist?
Curious how that works for you! Ive seen a few of their videos on youtube and it seems like a solid service but thats obviously from their own youtube channel.
What kind of car are you looking for?
My sister used a broker for her car. She gave some vague parameters she was looking for and a general price range, he gave her a list of candidates. She chose her car and he drove two hours away, got it, and delivered it to her door. Sounds pretty sweet to me.
I’ve used 3 different brokers for my last 3 cars and have had a great experience each time. There’s lots of competition among brokers, especially in big markets like socal.
I’m looking at a new car and will definitely look into it as well.
I’m at the point where I’d rather pay money to not step into a dealership. When I got my Rivian it took 30 minutes of online paperwork, one signature in person and I was driving off within 5 MINUTES after I showed up.
I was looking for other Reddit threads on this and it hilarious how people will ask about this service on r/askcarsales and they’ll say…
> Why would you want to pay a middle man?
…without a hint of irony
Seriously. In particular, ANY dealer that:
* Doesn't respect OEM MRSP
* Adds BS "add-ons"
* e.g. Overpriced "paint protection" that isn't legit PPF or ceramic, Overpriced anti theft, Overpriced ... anything
* Worst of all: "Market adjustment"
...has NO business whining about the growing popularity of brokers. There's a reason there's a stigma/cliche about buying cars... DEALERS make it a nightmare; terrible sales reps, terrible finance departments, terrible pricing strategies, etc.
Car dealerships are completely unnecessary. It’s a middle man for the sake of making money. They are basically Ticketmaster. They provide no service and are just trying to screw people
They’re actually really helpful. They provide local and regional economic buffers for the whole industry. The dealer has to take allocation from the car plant and they’re the ones holding the inventory when the economy is not doing well. Inversely, they reap the rewards when demand is high and supply is low. They’re the business taking the risk of floating $30-$50 million in daily depreciating inventory.
What are the benefits?
This ensures auto-plants can run at or near full utilization. (Since dealers must accept allocations) This keeps shifts (UAW) working along with just-in-time supply chains. They also distribute some of the profits that would be going to car makers to local economies. It also helps the car maker have a large distributed service network without extensive capital costs ensuring you can get your car fixed wherever you drive it.
Cons?
Local bad actors.
Not at all if you understood just in time supply chain management and manufacturing you’d understand the nuance of the situation but you’re a dumb child so I went right over your head
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> don’t like the Toyota dealer in your hometown? -screw that guy and go to the Toyota dealer down the road. Dealer competition keeps pricing competitive.
Sure, but there are often geographic restrictions on where new dealerships can be established, meaning that if there’s a terrible dealership that controls an area, someone else wouldn’t be able to start their own competitor. And there are lots of dealership conglomerates anyway, so if I go down the road, I might end up at another store owned by a corporation with similar policies… and I’d rather give my profit to the company that made the vehicle at that point. With Toyota specifically, some US distributors are known to throw on their own BS mandatory packages/accessories that then get passed on to dealers/consumers. And some dealers will refuse to sell to people outside their immediate market because they know their service department won’t profit if they sell to you.
Most dealers are disincentivized from providing transparent out-the-door pricing for consumers, so even if you’ve already decided which car to buy, you now have to waste even more time figuring out which dealer will give you the best price after all the garbage nitrogen tires and vin etching and doc fees they throw in.
Actually, quite the contrary, OEM‘s monitor customer satisfaction in markets very closely buy cells happen all the time where OEMs will pull franchise agreements from dealerships that are under representing their markets or continually providing poor satisfaction. Yeah, you might not be able to open a dealership right next-door because there are franchise agreements on market representation but if you’re opening a dealership you would want to be in a market that could support your business anyway so this is kind of a moot point.
Please tell me how many franchise agreements were pulled from various dealers for wild ADMs and how the manufactures were so *upset* by the practice that the captive lenders refused to underwrite the loans.
Let me help: *zero*.
My argument is that I don’t want to waste an unknown amount of time going to an unknown number of car dealerships to get the best out-the-door price. People love to claim that “the smart dealers will give upfront, transparent pricing” but it’s hard to trust that a dealer won’t throw in some mandatory add ons at the end of the process. There’s a dealership group near me that’s pretty well known for tacking garbage on at the very end, but that fact is always missing from the LLM generated 5-star reviews they spam on Google Maps.
I’ll occasionally scroll through car salesperson subreddits and it seems like it’s not uncommon for salespeople to manipulate surveys by either filling them out on behalf of their customers or deliberately mistyping the customer’s email so that the survey never gets sent.
See, the thing is, corporate employees DO NOT want to deal with you! Well, not you specifically.
But yea, the OEMs like dealers because they can tell a dealer, “You’re buying 500 cars this month!” And the dealer says, “OK! Send em on over!”
They most likely also really don’t want to deal with customers.
There are a few customer facing roles at OEMs for like warranty stuff, but dealers benefit the OEMs just as much as the dealers themselves.
The employees might not want to, but the majority of the OEMs very much would prefer to completely upend the dealership model. Unfortunately, the dealer lobby group is super powerful and has laws in place protecting their business model and there are age old contracts protecting dealers as well.
Source? I’ve been in the industry for a decade and have never heard this. The manufacturers would each have to build and staff thousands of service centers. That is an insane cost that they’re not currently paying for
What part of the industry have you been in exactly? I was a senior product manager at one of the big 3 for 7 years working on customer facings apps, websites and curated experiences etc.
My entire tenure there was near constant friction with dealerships in terms of customer experience, mark ups, transparency, user data and anti competitive behavior. Senior management spent an enormous amount of effort and resources trying to reign in control from the dealers and made it explicitly clear, both internally and in public facing comments, that they would like to control the entire customer experience.
GM does 180 Billion in revenue and employees 160k people. And dealerships are large profit centers, not cost centers. Capex investment is the name of the game in automotive industry
No one talks about this seriously because there is no chance of it changing for the legacy OEMs. The Franchise Dealer model is entrenched in state law and contracts between franchises and OEMs. The dealer business will not be going anywhere while cars still drive on roads.
> They most likely also really don’t want to deal with customers.
If true, there should be no reason for dealership protectionist laws, right? If those laws were repealed, OEMs wouldn’t care to enter the market anyways, so there should be no functional difference. So in that case, why do dealerships fight tooth and nail to keep those protections alive?
I say remove the protections and let the market sort it out. If OEMs want to compete, great! If they don’t, fine! Either way, no reason to bar them from doing so.
Manufacturer will buy it for certified used if it’s in good shape, otherwise it goes to a used car lot or private party. I’d love to buy an actual factory recertified used vehicle.
Carmax made the roadmap and set the standard there. "We will pay $X for your car, regardless of you buying from us or not."
There's nothing stopping other retailers from doing the same, aside from disrupting their current business models.
You think your town's Toyota dealer would compete with the one in the next town? No, it would be like walmart and they would all set exactly the same price.
Some warranties do require you to have all your services performed at approved service centers. If they're in the service business, that list would probably get a lot shorter.
It wasn’t an accurate assertion, but if you had to get your service work done at a dealer rather than by whoever, the rate would likely be a LOT higher. Even with competition, Toyota dealers are $200-$250/hr out here, for example.
But, the bigger issue is that if the entity responsible for paying for the warranty repairs gets to decide if *your* repair is warranted, they’re more likely to deny your claim. See: health insurers denying payments for services your doctor approved.
If your under warranty, than price is irrelevant since it's under warrenty.
If it's not under warrenty corporate service centers would have to compete with third party independent service centers.
So what would change? If there were corporate owned service centers and no dealership attached. You still have the option to take it to a private mechanic for any service if you choose.
The Change would not be on the service center side of a corporate sales dealership.
The change would be on the sales side of corporate manufacturer direct to customer sales.....
Currently, When a dealer gets a new car, they get it at invoice price from the manufacturer, then they sell it at msrp or marked up from msrp. After they sell the car they take the profit between Invoice and Final sale price.
If the dealership is cut out, then the manufacturer would be able to sell directly to the customer at invoice pricing instead of msrp pricing.... Cutting out the middle man.
Based on your question, it seems you think that the third party dealership system is cheaper than if a manufacturer implemented it's own direct sales platform.... An entire industry completely propped up on artificially inflating new vehicle prices.
Obviously the manufacturer would need to hire sales staff, but that's going to be significantly cheaper than third party dealerships.
I think the pretending that invoice pricing is at all relevant is ridiculous because you'd need to build out a billion plus in infrastructure across the country to move to a direct sales model with physical locations.
Your thinking to literally, like manufacturers would need to replicate the exact dealership model.... That's not the case, There are current direct sale platforms to mimic, like tesla. You have more showroom style rather than full lots. If you want to test drive, go to a show room. Order direct from manufacturer website and ship direct to customer.
Regardless of what anyone thinks of tesla, they have one of the easiest and most convenient sale processes. On new orders, The price listed is the price you pay. Their sales reps are also not commissioned if you speak with someone, so they don't pressure you like normal dealership salesman.
All of that's great. You're still looking at a billion plus in infrastructure to have showrooms, expanded HR, staffing, admin costs, and support services across the country for a company like Ford or GMC.
Right, don't business costs money.... Obviously. That is still cheaper than propping up an entire 3rd party industry. You just clearly not smart enough to comprehend that.
Again, you said invoice cost. It won't be invoice cost.
And while prices might come down marginally you're an idiot if you think car companies wouldn't simply capture as much profit as they could anchored to already existing prices.
Holy shit. I've explicitly pointed out that your comment about invoice pricing is wrong.
Are you just dumb or intentionally ignoring what I *actually* said?
Okay. Since invoice pricing is specifically for third party dealers buying from auto manfufcatuers. You are absolutely right. Invoice pricing would not be relevant, as customers would just buy at manifcatcuter set cost, Which would be similar to invoice pricing since there is no third party industry to prop up and msrp no longer being a thing as well.
Pandantic much? But I'm sure you will keep going.
And, again, that's wrong because current costs do not include the massive amount of extra costs for maintaining staffing, admin, property, insurance, benefits, etc... at their new distribution, service, and showroom networks.
Yeah, you are just dumb.
“Approved service center” is what oilchange places put on their wall to bring in chepasses.
Pretty much anywhere is “warranty approved” if you keep records.
Tesla can't legally void your warranty if you don't use them for service. Were they refusing to sell parts for a while? I think so, but that was largely because it's a garbage company that isn't good at being a car company. It doesn't happen anymore, because it was illegal
I mean, they do that now, and they're ridiculously expensive. Everyone who currently says "I get all my work done at the dealer" are just going to say "I get all my work done at the corporate service center."
An oil change isn't going to be the problem, but when it comes time to diagnose the transmission light that requires a proprietary scanner, you're bringing it to Toyota.
I could see that number shrinking if service got consolidated to just the few major car brands. It'd be easier for them to keep things closed-source and exclusive if they had complete control over the dealerships.
I'm not arguing *for* dealerships necessarily, but there are pros and cons.
Federal law protects your cars warranty when having services rendered at 3rd party shops.
If you have a part replaced, then you would loose factory warranty on that part and the new part warranty would be provided thru the shop who installed (labor) and the part supplier/manufacturer (parts).
It is illegal for manufacturers to void a cars warranty because you had maintenance done elsewhere.
> And an important part is that the federal warranty is very minimal in coverage and not on the whole car.
/r/confidentlyincorrect in action, the Magnuson-Moss Warranty Act protects your entire warranty from being voided when you use a third party shop, there is no separate "federal warranty".
"Magnuson-Moss Warranty Act (15 U.S.C. 2301): This law requires manufacturers to provide detailed, written disclosures of warranty terms. It prevents manufacturers from voiding warranties simply because you used third-party parts or service centers."
The Magnuson–Moss Warranty Act, which is the law that prevents a manufacturer from cancelling your warranty if you don't buy parts or service from them, is not a "federal warranty". It is a law that governs warranties.
The conversation isn’t about service though, it’s about sales. They’re 2 different (albeit related) markets. Independent service centers offer competition in the service market. Getting rid of dealers will mean no independent competition on the sales side.
Lmao you mean like what happens right now with every single car dealerships service center?
Are we joking? Because there are entire swaths of the market owned by the same dealership group (sonic automotive for example)
Autonation, Sewell and the list goes on. Most privately owned dealerships have sold out to big corporate. They all play by the same price sheets for sure.
I don't think you have either. Both Tesla service centers were charging $87 for parts and labor to R&R the low voltage battery. I don't know of a single dealership in my area that charges less than $150 for the battery alone, much less installation.
Tesla might not be great, but their service dept is cheap comparatively.
Good luck trying to get warranty repairs from a third party shop. Or trying to get body work done, or any work that anyone with two eyes can see is bad but their service center said is fine.
At least with the dealership model the dealers will fight against the manufacturer when they deny a claim or make a dumb decision. Tesla owns the shop, the store, the parts chain, the software, everything. They won’t sell parts to third parties that don’t do everything they want, and even then it’s a low priority.
The reason why so many Tesla’s got totaled for small accidents wasn’t extensive damage, it was lack of parts from Tesla. When it takes 6 months to get a fender, it’s cheaper to total the car.
Again, I'm not trying to defend Tesla, just... call it "writing a community note".
If you've ever dealt with Tesla service, it must have been in the very early years and not recently. My 2018 had the upper control arms warrantied twice. Once to replace with the updated part and the next time to re-do the job due to a bolt they removed and reinstalled coming loose. Both times turnaround was same day. When I came back, they replaced the upper control arms again along with the hardware. I've also had my rear roof glass replaced under warranty due to stress cracking. All I had to do was take about four pictures of the crack from different angles. Claim was approved within five minutes of submission of service request.
I was also rear-ended last year. Incredibly minor damage visually to the rear bumper and trunk lid. Total damage was $8k and change. Total turnaround time was five business days. They had the parts delivered the day after I dropped off my car.
Also, they will sell parts to third party shops, but at their retail pricing. Oddly enough, this is cheaper than my indy shop can purchase from Worldpac for about 90% of their parts. The only thing we have to do is physically go to their service centers and purchase and pick up the parts directly.
Now, if that indy shop wants to be labeled and branded as an authorized Tesla repair facility, then yes, they need to jump through some hoops ie: certain amount of bays dedicated to Tesla, employees dedicated to Tesla, Superchargers on site, total building size, etc... But that's not really any different than most other OEMs.
I've had great experience with Tesla Service centers. Issue ends up resolved for under the quote price.
They have given me $100,000 loaner vehicles for free while working on my regular EV.
Out of all the many brands of new cars I’ve owned since 1999, I vastly prefer Tesla service centers over all private dealer service centers, except maybe BNW service centers as long as you’re under the 3 year full warranty.
On top of this as if dealerships aren't known to basically scam you out of your money. Never ever take your car there unless it's warranty or recall related.
I’m not sure why you think this. If multiple dealers are owned by corporate then they share the same profit center and stakeholders. They have no incentive to compete with themselves, unless the company itself decides to pit each location against one another based on some KPI.
The caveat to this is that some dealer groups themselves have become increasingly large to the point that all of the dealerships in your area may be owned by the same group, effectively creating the same monopoly on service.
There’s also legislation protecting against new dealerships being opened within a certain geographic region.
I don’t particularly care who owns the OEM service. What would be nice is right to repair laws that put independent service centers on equal footing with OEM ones. That would certainly force some competition.
This--A good, honest mechanic will save you a TON of money in the long run. It took me YEARS to get my wife to stop taking her car to the dealer. They'd suggest a mountain of maintenance at her annual inspection. My private mechanic will be straight with you. Here's what you need now, here's what's probably not going to make it to the next inspection, so we can do it now if you want, or you can come back in a few months.
If we replaced dealership service centers with corporate service centers, they would still have to compete with private shops. They wouldn't just disappear?
If the manufactures owned the service centers, you can bet that kind of vertical integration would slowly push out 3rd parties. With dealers being separate businesses, all the special tools and software required have to be “sold”, and anyone can buy them.
If the service centers are all corporate, those things can stay proprietary, 3rd parties would be physically unable to work on modern cars. The manufactures would have a service monopoly overnight. This can be mitigated by right to repair laws, but if want to see those in place first.
If you look at the aftermarket tuner market, you will know this is false. Every locked ECU gets figured out sooner than later and indy shops are not going away for the consumables like tires and brakes.
So let me get this straight. You're suggesting that non-corporate dealers, who still have to compete with private shops, charge too much. But corporate dealers would charge less because they still have to compete with private shops?
Does that really happen when there is only one Porsche Center in a metro area (175 miles to next one)? Seems like its captive audience and they do whatever hey want.
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My local Toyota dealer charges over $200 an hour already, I’m fine with them going out of business.
There’s also other privately owned mechanic shops that’s often provide better service for cheaper prices than the dealer does anyways
Not to mention, where did those independent mechs get their parts. From the dealer. And the dealers are essentially 3rd parties licensed by the mfrs that have to pay for storage of all those parts. People don’t realize how much longer repairs would take if the part has to be shipped from a mfr warehouse, which is a more affordable means of storage, but longer to service a vehicle.
Prime example is Tesla, who have notoriously long repair times thanks to parts not being immediately available.
Automakers have nowhere near the storage or location numbers of independent dealers. They have no incentive to increase warehouse capacity when it cost them money to do so.
Tesla is a shit car company, but it’s the example of what happens with mfr owned dealers and how thy will cut costs for profit at the expense of service times.
They'd add more if they closed dealers. Or partner with Amazon. Or just keep the parts at whatever place they start delivering cars to people. This isn't exactly rocket surgery.
And tesla is not a good example of that, because it's a bad car company. No other company would run that way. It's why you don't hear about similar issues with Rivian or even Vinfast
Rivian and Vinfast also do minuscule sales numbers so they’re not really a good example either. Tesla is a bad car company for sure but the argument could be made that they are bad because of the fact they own the dealers and cut corners at the expense of quality service.
It could be made, but they're bad at everything so it's not a good example.
Selling zero cars makes them a bad example, but in a tougher way. They have less money to keep parts around but still do.
Delivering cars isn’t the same as servicing and storing parts.
You say “no other company would run that way”, but ignore that the mfr would have to handle the added costs… just like Tesla. Why would a car manufacturer add in a bunch of extra costs with multiple warehouses in a single area when it’s more cost effective to just have 1 parts warehouse that supplies multiple area service centers?
Are you ignoring that all the cost for extra warehouses for parts storage would get passed down to consumers?
If there were actual parts issues, customers would change brands so brands would fix it.
Almost every part I get for my cars needs to be ordered in and they show up the next morning, from parts stores or the dealer. Parts availability might even get better and cheaper as a result of ditching dealers, because any business would then be able to stock and order parts that are dealer-only now, meaning you would have competition.
You seem to be ignoring all of the costs that mandating dealers adds to consumers
If they’re coming from parts stores, they likely aren’t the manufacturer part and wouldn’t have same mfr warranty. Ironically, you even cite them coming from dealers… each of which has its own parts warehouse.
I’m not ignoring dealer costs and markups. The thing is that manufacturers have to pay most the same costs if those dealers didn’t exist… or they would have to cut the amount of locations, diminishing service.
“Just change brands” is nonsense.
When I say parts I order, I mean the store or the dealer orders them from their respective distributor's warehouse. That is, dealer-only parts are coming from warehouses now anyway. No dealer has a "warehouse"; they have some space in the back for frequently used items.
Manufacturers won't have to pay massive dealer profits if they close the dealers and sell parts directly or to parts stores. There's a whole layer of profit-taking cut out. Parts stores would take some, but it's nothing comparable to what dealers do. To your mechanic, the only difference is a lower cost and who delivers it the next day.
And if your car is hard to get parts for, you're not going to switch to a different company next time? Who is spouting nonsense now?
Lmao… you clearly haven’t worked much with dealers. Most parts aren’t coming from distributor warehouses. They are coming from dealers inside their dealer group or surrounding dealers because it’s faster. They turn to distributors when other options fail because it takes so long to ship…. And time is money.
You think that mfrs will cut costs instead of pocketing the extra profits? Thats even more laughable. They’d already have increased costs, and they’d pocket the difference. They’d also have to eat the costs on all the warranty work that they underpay dealers to perform.
“Car that’s hard to get parts for” Bahahahhaa…. You sweet summer child.
I was ASE certified for years and still work in the industry (not at any dealer either). I do research on cars for known issues and parts availability before I buy anything. For example, I’m not gonna buy a 97-2000 Vette because they are known to have BCM failures, the part isn’t available, and there’s no good way to retrofit a different module. I’m capable (and have) retrofitted modern systems into older cars, and did bodywork for years as well. I can retrofit an EV driveline into older ICE cars as well.
Why would I buy a Kia that discontinued the power rear hatch struts after 4 years?
Lol… hard to get parts for. You’re talking to someone that has 60 year old car that the parts stopped being made decades ago. It was my daily before most people had the internet (long retired from that duty). I find “hard to get parts” comical since I’ve dealt with it for decades.
If your car is getting a warranty repair, send it to the dealer? I don’t understand the question. When I get 3rd party warranties I take it to either, whoever’s closest. They just send the bill to the warranty provider and I leave. As far my mechanics warranty on their work/ parts? I go and I assume most go to a good Indy and have a trusted mechanic there. Usually 1 year 12k miles on work. If using OEM parts they use the manufacturers warranty which varies.
> When I get 3rd party warranties I take it to either, whoever’s closest
Until said company says the shop you picked “isn’t in their network” like it’s health insurance. That’s a complete farce in itself.
I don't see too many franchise dealerships competing against each other on service cost now. There is often only one for that brand in any given town/city.
I had an intermittent problem on my new truck. I went to the dealer closest to me and they had a 2-3 week wait just to get in, and they said if it's not doing it they won't be able to do anything. I called the dealer and hour away. They got me in in a few days and replaced the most likely causing the problem, which it was.
There are strict rules in place that dealerships of a certain brand can’t be built within certain distances. They are set up in a way that they don’t have to compete with each other. It’s rare to find two competing dealerships of the same OEM in the same town. In a lot of states it’s even legislated that way.
At my work we do the same thing where we only set up new distributors so they don’t have to compete with each other. They are assigned territories.
It’s basically set up to function the same as if a company were to handle their own distribution
> Are you sure? Privately owned service centers have to compete with one another on price and service. Corporate owned do not.
Have you seen the cost of dealer labor? And they don't even diagnose/fix stuff half the time, they just want to do extensive replacements for $$$$$. I don't think the dealer competition = lower costs have really panned out.
No they don't. And on top of that their distance between each other are directly dictated by the OEMs. You can't just go grab a loan and open a GM dealership without talking to GM, who will want to VERY MUCH know who you are, where you are 'wanting' to build a dealership, and ultimately get permission from GM weather or not you can or can't do that.
There's a LOT of stipulation when it comes to opening a dealership as it's a franchise. It's one thing to have yet another 'bob's used car lot', but selling new cars as a manufacturer dealer is a direct franchise and a WHOLE lot of requirements..
Most dealers have age old contracts that stipulate who and how a competing dealer could open up in “their region”
The majority of the big ownership groups and dealers were founded by former executives and senior management at the OEMs and got sweet heart contracts that are lifelong.
Generally speaking, most dealerships are part of a larger ownership group that buy up all the dealers in a specific area to avoid exactly what you’re talking about.
Or they have incredibly lopsided contracts with the OEMs that give them domain over entire regions.
Most of the old time executives at the OEMs got out and started dealerships and got sweetheart contracts that are lifelong. Some were able to be dissolved due to bankruptcy, but others like ford, still have these super lopsided dealer contracts.
Well except Ford. Ford corporate has been screwing the customer via dealers for a century. Ford dealers are largely despicable but they learned it from corporate.
WHY do people bow to Corporate overlords like they are some savior? Literally every single commerce problem we have comes from Corporations bleeding Consumers for all they're worth, and you want more of that?!
Apple is an exception, not the rule. You ever try to get an android fixed? Samsung and google are horrendous to deal with. Expect that to be the default, not Apple.
Yes. Both at Apple and Independent repair shops, with OEM and aftermarket parts, under a service plan and not.
What's the "gotcha" you're going for here?
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I could imagine a boomer walking into a corporate owned store and just losing his shit because Timmy at the desk wont give him the 10k under MSRP he's been getting every time he decidid to BLESS a dealership with a sale. "MSRP or kick rocks" Lol
Oh please, half of reddit already hates major corporations already. Dealers make barely anything on new cars and used car margins are extremely small. Owning a dealership is a volume and customer experience game. For every shitty dealership in your area there are 2 good ones.
Dealer owned service centers will still have to compete against one another. Manufacturer owned service centers will not. A point in your favor, though, is that it would eliminate the bad actors. Tbh I wonder if a manufacturer has ever tried this, because it would be a huge profit center for them.
My local dealer charges over $200 an hour already, I’m fine with them going out of business. There’s also other privately owned mechanic shops that’s often provide better service for cheaper prices than the dealer does anyways
Dealers DO not have an incentive to get warranty work done for you. In fact, the incentive works the other way. It is in their best interests to get you to pay out of pocket. The manufacturer only pays about HALF the actual time it takes to replace a part under warranty. They essentially double their money by getting the customer to pay. Pick any make, model and part to r&r and I will come back with a screenshot of paid time vs warranty time. ANY MAKE OR MODEL. They ALL DO IT.
CP labor time is usually warranty time multiplied by 1.6. That's the industry standard. But you have to get a customer to actually pay that out of pocket. What's a dealer going to make more money on... the repair that costs the customer nothing or the same repair they have to sell to a customer when the customer has the option to take it aftermarket for much cheaper. Most people are taking their cars to the aftermarket for repairs that are not covered under warranty. Your insights aren't wrong per se, but your assumptions aren't really inline with the reality of the service maintenance and repair vertical.
Your comment was about cp vs wp time. But the hourly rate for warranty is based on a dealers market rate (what they are charging customer for warranty-like repair work after discounts). And dealer have an opportunity to reset/increase this rate once per year (twice per year in some states).
How do you think Tesla and Rivian operate? They have corporate owned service centers. There are independent shops that also work on them.
We don't need dealerships.
Sure. And the 30 traditional OEMs don't have any of that. Not only is their state law blocking your OEM service center euphoria there would be the capital investment to build out those centers (or do the dealers give them up for free in your fantasy). There are over 30,000 franchise dealers in the united states and they all have service centers. That will be cheap and fast to replace in rainbow land.
If car manufacturers selll directly to you, they will be the one that lie and steal from you. Why would they want that reputation when the middle men are taking all the hits? Just bad for business.
I don't agree with your presumption actually. The company has its reputation to consider, and so they prefer to do no games just set price and that's it. They sell to everyone. Car dealers meanwhile have to extract maximum cash from each person which they do through intimidation, deceit, aggression, and sometimes outright theft.
Dude I have a Master’s Degree in Industrial Engineering, dealers allow automakers to offload inventory in predictable batches. They are all for this system existing for this exact reason. Direct-to-consumer is certainly possible for them but in no world would they prefer a model where they get stuck with the unsold inventory.
> Dude I have a Master’s Degree in Industrial Engineering
And you're incapable of reading the law? Are many IE's illiterate or just you? I'm aware of how floor plans work. I don't think you're aware at all of the law.
What are you talking about? I never said that wasn’t true. I know that’s true. The point I’m making is that automakers like it this way and they don’t want it to change either.
Well thanks for sharing your opinion, but it is incorrect. Many major automakers are exploring direct to consumer sales for new brands. Guess you didn't learn about that when you got your MASTERS DEGREE lmfao.
That isn’t my opinion, thats quite literally how production forecasting works. The only way direct-to-consumer would financially make sense for them is if they offer bespoke, highly customizable, and costly models. It would make sense for someone like Aston Martin, sure, but not for any automaker that has volume dealers.
Tesla: Operates a pure direct-to-consumer model globally, controlling the entire sales process without a third-party dealer network.
Ford: Utilizes a "Model e" strategy that implements fixed-price, no-haggle EV sales while still utilizing dealers as delivery and service points.
Mercedes-Benz: Transitioning to an "Agency Model" in major markets like Europe and Australia, where customers buy at a national fixed price and dealers receive a flat commission.
Volkswagen: Launching its new Scout Motors brand in 2026 as a 100% direct-to-consumer entity to bypass traditional dealership structures.
Stellantis: Testing agency-style sales through its premium brands like Alfa Romeo while navigating legal and logistical pushback from its broader dealer network.
Rivian & Lucid: Following the Tesla playbook by using online-only ordering and physical "experience centers" to sell directly to buyers without franchises.
The Benz and Ford examples you used involve dealers, Alfa Romeo falls into the category I just told you about of low volume and highly customizable, and the rest are startup brands with no pre-existing dealer networks, of course this makes sense for them. I specifically mentioned that I was referring to large-volume products.
You're trying so hard to argue I feel like you're being dishonest and rude. I'm just talking about cars here buddy, and I'm talking about direct to consumer sales and I listed a few examples of major brands that either wholly use this model (like Rivian, Tesla, and Lucid) or are dipping a toe into the water because they like the advantages it offers over a traditional model (like Mercedes, Stellantis, and Ford).
The new major brands (Tesla, Rivian, Lucid) who weren't already committed to the dealer model had a choice to either start one or go direct to consumer. DESPITE the major hurdles and legal challenges protecting dealerships they still ALL chose to go the no dealer route. The legacy brands are heavily encumbered with dealer relationships, and when THEY start new projects they ALSO try out no dealers. So everything I said is true, they are exploring and pushing this as a new model which they feel has major advantages for them.
That's all I have to say and I made my point, I supported it with evidence, and your crying and insulting comments have no effect on that at the end of the day.
"I should be glad, if I could flatter myself that I came as near to the central idea of the occasion, in two hours, as you did in two minutes"
Edward Everett to President Lincoln about the Gettysburg address. That is how I feel about what you just said. Well done.
> Not sure why you think that experience is going to be better than the dealer experience when dealers get paid for warranty work and have a direct incentive to get it approved for you.
Well, I for one am willing to let OEMs compete in this space if they want to, and find out for sure.
You're allowed to service your car anywhere. No middle man required.
Dealer service centers are only necessary for warranty and recall work that the OEM is paying for. Dealers are also motivated to do warranty & recall work (dealers get paid by the OEM market rates to do warranty work, they get to adjust those market rates annually and this is protected by state law in most instances). OEMs are motivated to limit warranty & recall work since they are footing the bill.
But I guess the companies engineering these cars in a way that requires tons of service labor while also trying to stuff the cars full of subscription fees will be great at providing customer service. /s
Try don’t have customer facing employees because dealership agreements forbid it. Dealerships get to exclusively have that customer relationship in their zone.
It doesn’t have to be that way.
Replacing the Franchise Dealer model with DTC would expand choice? Please explain. Dealers compete against each other. A pure DTC would have no competition.
For sales they are the middleman. For service they can be the main point of contact, but I use independent mechanics for my cars. The local Porsche indie is 30% cheaper than the dealer and knows his stuff.
My Porsche indy used to be about a lot cheaper ($139 oil change) but that was three years ago and they are at $290 for the exact same service now. My Porsche dealer is charging $350 but they are 15 min closer and do a comped mini-detail. I'm back at the dealer now.
I mean they could just operate the service center without having to operate the sales part of the dealership.
In fact, dealerships generate significantly more profit from their service centers than from their actual vehicle sales.
We’re pretty much already here, and cars that can’t be moved get discounted (the opposite of Reddit’s obsession over markups for cars people just want to test drive and buy used). Find a dealer that has an acceptable fee structure and you’re golden. MMV, unfortunately.
> They provide no service and are just trying to screw people
This is false. Car dealerships allow you to test drive cars. Not sure you want to buy a car you can't see or test drive.
literally this. a car salesman has no special skills... you could train a 15 year old to do their job. Buy low, sell high, add on unnecessary options, sweet talk the customer into a purchase, show them around the car.
unfortunately the general car buyer is stupid, and just show up to the lot with 'hey i'm looking for a new car since my old one is junk now, and i dont know how financing works'.
They are necessary for most car manufacturers, at least for now. After decades of selling through dealers most car manufacturers are not set up to keep inventory long term and provide after sale support, the dealerships have always been responsible for that. So now if they want to cut out the middle man, they will have to start investing in new infrastructure and staffing. Do they really want to do that though?
Credit to Tesla where it’s due, their buying experience is mostly painless. You can set up a test drive online, take the car out with no salesperson, and do the actual transaction at home over the internet. No haggling or any of the typical 4 square BS you see at most dealers.
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I remember buying my Tesla m3 back in 2018 and telling my wife "I just bought a car online". She looked at me like I'm crazy... A month later that's the ONLY car she drives.
You may not encounter the 4 square, but large Tesla price fluctuations are an ongoing thing vs manufacturers setting the price once or twice a year. Wondering whether their CEO will change pricing on a whim.
https://www.usatoday.com/story/cars/research/2026/02/11/january-tesla-sales-2026/88621948007/
https://finance.yahoo.com/news/customers-left-scrambling-tesla-makes-013000723.html
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The new market value (pricing) is at least transparent, even if Elon’s nonsense is exhausting. With traditional manufacturers the real time market value depends on whether it’s truck month, employee pricing, 0% APR promo, competing brand conquest discount, dealer markup, etc. Not to mention paint and interior protection you can’t get out of, nitrogen filled tire fees, the list goes on. You can play dealers off each other but the average consumer is exhausted by all the BS.
Even if Ford or GM only adjusts prices once a year, the price you pay depends on real time market conditions and whatever BS your dealer subjects you to and you may get a very different price today than a friend would get next month.
Yes, traditional manufacturers will apply monthly incentives if excess inventory is piling up at dealers. But that is the manufacturer. The dealer doesn't care because it's not money from their pocket.
Paint protection and other add-ons can have value to some people, but for the most part I agree that they are not a net benefit. The two items that might be of value to come customers are wheel/tire insurance and lost key insurance.
My last two car deals went smoothly with no surprises. I researched using dealer rater, contacted the specific salespeople mentioned, waited for my vehicle to arrive, signed, and drove. I think where things go south is when people think one dealer is getting cars for much cheaper than other dealers, which isn't the case of course. People need to be prepared to walk rather than reward those dealers.
What is interesting to me is that brokers aren't usually the cheapest. They often can't get a very specific or popular car (because only some dealers work with them). But they are convenient.
You’re also a moderator on a car subreddit with millions of people, you’re in all likelihood a more educated car buyer than 99% of average car buyers, if not more. Those of us that understand the games know how to play them, but most people don’t and just walk into their local dealer without having thoroughly researched things. The salesman talks them into a test drive and next thing you know they’re playing 4 squares enamored with new car smell. Dealers play those games because they work.
Your average car buyer is ill informed and ripe for exploitation. For them, paying a broker for a good deal, that isn’t necessarily the best possible, is still better than they’d do on their own. Time also has value and some people just want to buy something they like at a fair price and move on.
Do I wish the price was the price? Yes! And most salespeople would love it too - much more than having to go back and forth between the customer who swears they never pay list, and the manager who wants to hold gross. The salesperson just wants to shake a hand, get a unit on the board that counts towards a bonus, and move on to the next customer.
I've written service and worked in sales. More cars sell for under MSRP than at or over. Markups get all of the attention. Often the sales dept breaks even, existing to keep the service dept and parts dept busy (where the money is made). Aggressive F&I people were the bane of my life then, but fortunately we had some good low key people as well.
We were moving away from 4 squares years ago, and I haven't seen one in actual use for the longest time. I'm sure there are some old school dealers that use them, but it seems like a trope trotted out in influencer/broker videos. I did a quick search in r/CarSalesTraining and it's barely mentioned.
The turnover within the industry is massive, because dealing with the public is challenging. It's an interesting business that I think more people should try before voicing strong opinions (not you, just in general).
Tesla solves your first two paragraphs. The price is the price. Even if the CEO is erratic, the pricing is transparent. For what it’s worth, when I ordered RAM truck in 2022 the MSRP changed multiple times between placing my order and delivery, though I paid the originally quoted and agreed upon price.
I’ve seen 4 squares with every recent shopping trip I’ve done in the past 18 months. Maybe my area is just old school, but even leading with “spare me the 4 squares, just give me the price” has turned into 4 squares where I cross out everything except the number and negotiate it directly at multiple dealers.
Going the Tesla or Carmax way solves your last paragraph. I grew up and worked in the automotive industry and am happy to be out of it.
I don't think OEMs are prepared to carry the cost of nationwide sales and service centers. It's at least $8mil per location before stocking and staffing. Even if you trim down to fewer locations, that's a massive outlay - and now you need to carry not only all of the inventory you build on the books, but you're paying for all of the trades, etc.
Tesla has been able to outsource some parts of the deal thus far thanks to large margins. It's going to be interesting to see how they transition to the next phase now that some models are being cut back.
One of my local dealerships doesn't do commission in their company anywhere. It's insanely different going there. No employees are sitting at the door waiting for you to stop. You walk in, they take your name, then an employee helps. Never once felt pushed to buy anything and this was a Mazda dealer.
can you really test drive with no salesperson? i hate test driving with a salesperson, I cant focus on the car at all
can i set up a test drive with a plaid? lol
I didn’t have a salesperson when I test drove a Model 3 or Y performance in 2021, I’m not sure if the Plaid is available for test drive or if they lock it into a lower powered mode.
When I had a Model 3 loaner it was locked into chill mode FWIW.
A few years ago I wanted an EV. I really liked the Ioniq 5 but had such a terrible dealer experience I literally bought my Model 3 on my phone in front of the sales guy that refused to drop the $10K "Market Adjustment".
They provide one meaningful service, test drives. The rest can be handled by other businesses. Warranty work? They can contract with independent shops. Finance? There are many companies that would love to help. Trade ins? That is handy, but there are companies that buy cars and they could expand. Negotiating? Just set the price on a web page.
The OEM's just need a small showroom with 1 or 2 of each model for test drives. Get rid of these ridiculous lots with hundreds of cars.
Anyone who thinks this is an idiot. Yes, the service is overpriced, but if give an easy place for people to get maintenance and repairs done, warranty fixes, and most valuable to me, an easy place to get OEM parts and fluids.
Retail locations are necessary. Manufacturers selling direct isn't going to make cars cheaper, products are priced to what the market will bare. It will just transfer more profit to the manufacturer. Ticket sellers are also necessary, the trouble with Ticketmaster is the monopoly.
100% agree.
I have bought multiple cars from dealers and only 1 purchase was a good experience.
I will never go back, im buying old broken junk the rest of my life.
“Dealership Dynasty” families make up a large percentage of the top 1% as well. Some of the richest people in the country are nothing more than middle men skimming off the top.
They cheat. I remember going to the dealership and they were going to charge me 800 per month to lease a freaking Mazda CX-9 which is a 50k car at most. Saw deals a couple months later for like $400 a month through a broker. Cheats and swindlers.
I feel like the solution to brokering is obvious. If their clients feel the need to add another middle-man to save money, then you need to simplify your buying process.
Too many dealerships are running on practices that feel like they came from the 80s. They intentionally waste customer time and play a lot of games to squeeze money from people. The entire system needs an overhaul. Auto manufacturers should have much more control over dealers than they currently do.
Especially when large amount of dealerships are owned by large corp. Looking at you AutoNation.
That "support mom and pop" or "support local guy" idea went out the window long ago when these owners do not even live in the same city let alone few miles of these dealerships.
I will never understand why I can't just go to "honda.com" or something and order a car and have them bring it to me. Shit, I'll even go pick it up myself if it's not too far.
Fuck dealerships.
Man, if the dealer model can be destroyed by a cheaper way of buying cars, isn't it pure capitalism to let if die?
Oh right, that flavor of capitalism is only for us proles, not for the owners.
It’s not even a cheaper model. Brokers buy/lease from dealerships. I’m not even sure what the article is supposed to be about.
If I come in to a dealership and tell them to sell me a car for a $8000 loss, they can just say no
The whole article stumped me. They're complaining about a paying customer's representative haggling?
If they are asking for a deal so bad they're losing thousands just don't sell it to them. No one is forcing you to, lol.
Exact same thought reading that piece: it sounds less like “we’re losing money” and more like “we hate informed buyers who won’t sit through our F&I theater.” Brokers just compress all the games into one phone call, so the usual confusion tricks don’t work. If a broker really is asking below cost, cool, say no. If they keep saying yes, that’s not a broker problem, that’s a management problem. Main point: they want protection from their own bad deals, not brokers.
If you visit the subs that car salesfolk inhabit (including service managers), it's a pretty simple mindset: the dealer is entitled to the upper hand in all negotiations. Entitled. Anything the customer does to upset that advantage is characterized as unethical, sleazy, and nearly criminal in their eyes.
In other words, if a customer uses the same tactics that the dealership employs then that is completely out-of-bounds. There are no win-win scenarios because *any* value the customer enjoys, above and beyond simply receiving the product, is lost profit that they were entitled to because reasons.
They're complaining about brokers knowing the true price and all the incentives to get the lowest price. Dealer will sell a car at $8K loss when it's 300th sale of the month that gives them a $50K bonus from the manufacturer. It's just the broker knows this and will only offer a price that loses them $8Knvs them trying to jerk some customer I person to over pay by $10K so they have no loss at all.
Yeah the Broker just doesn't play the dealers fuck-fuck games. If the dealer doesn't wanna deal they'll find one that will whereas the individual buyer might not be as good at standing up to the shit some dealers pull.
It's an outdated law keeping the situation as-is. It's one of the biggest reason Tesla and other upstart EV brands had a snowball's chance in hell of breaking into the US car market - they're the only ones that can sell direct to consumers. Dealers simply add a huge middle-man cost to the transaction.
And, worse still, they NEED the service departments to keep them lucrative. Without a decent-volume service department, most dealers would go bankrupt.
If manufacturers could setup direct to consumer "dealers" (retail stores) huge cost savings would happen for OEMs and customers... better yet, service centers at those locations would MILES better, b/c they'd be tied directly to the OEMs service systems/catalogs. Most dealers are given much less, and less helpful specs/manuals/records than the OEMs could provide... if they were integrated into the same systems.
Source: Was an analyst for a couple years for Total Customer Connect, a (ridiculously fast growing) service company for dealer service centers. I visited and got to know TONS of dealers in the SF bay, and spoke to hundreds of GMs and Service managers around the nation. (It was also cool being a top-tier partner with AAIA/ACES database - we sent corrections to their catalog constantly, based on dealer feedback)
I’ve bought around 35 cars from either new or used car dealers in my life thus far. This is between my wife and myself. Literally everything in the spectrum from Chevy to weird shit like Lotus. Cars to trucks to everything in between. Cash purchase, financing, and leasing.
Ive been treated with honesty and dignity in a grand total of 4 of those transactions. Every other transaction has been the same thing - treated like a piece of meat that money could be pounded out of. One time a salesman literally screamed at my wife and we left with her in tears. You can’t make this shit up.
Cars are a hobby for me, and I like the dopamine chase. I like to haggle and I know how to work the game. But for people who just need transport and know what they can spend it’s rough out there.
And don’t get me started on the service side. I respect dealer techs, it’s a hard job, but the front of the house is a shit show at all places imho The rare exception being BMW. It blows my mind that BMW always gave us a clean vacuumed loaner car for any service-even oil changes….and I can’t even get a shuttle to the bus from GMC for service on a $95k Denali truck.
>Allowing unregulated brokering to go unchecked will ultimately hurt the dealer model, they say.
Good, fuck them, dealers are disgusting and I think it's one of the most universally hated jobs and experiences. If something bad is happening to them, it's probably good for the consumer.
I've used a broker for 3 vehicles. And in every case, the price I paid was MSRP or below with no fee to the broker. With my Subaru, the price was about 7% below what I was finding at the dealership. With no hassle and no pressure.
When I bought my c7 they initially tried to put on 20k worth of add-ons. It took me 3 hours of asking to remove things and them saying "no" and me driving away for them to remove all the bullshit and sell it to me for their advertised price.
I fucking hate dealerships with a passion. Useless shady salesman.
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Realtors are definitely worse. The dealers do actually fix recalls/warranty, which has some value. Realtors are deadass useless parasites unless you have somehow never been in a house before and need help finding the door.
sucks to have a conversation with someone who seems kinda interesting and then they drop that they’re a real estate agent and ask if you’re thinking of buying a house soon 💔
Didn’t even mean it in the context of relationships… this has happened to me a few times when I’m chatting with someone at Cars and Coffee. Usually it’s pretty easy to avoid because they love putting magnets/decals with their name and contact info on the doors.
Eh, for an average, cookie-cutter suburban home with absolutely nothing to distinguish it from the next home? Yeah, I 100% agree. Most people buying in a subdivision don't need a realtor.
But for anything at all more complicated — competitive market, specific requirements, higher price ranges, etc — they're incredibly useful and will often save you money over trying yourself. Our first realtor helped us steal a home we loved from an accepted offer because of connections; our second realtor helped us shape our bid so that we were accepted at below market on an as-is fixer upper with no need for back and forth haggling. Well worth the completely insignificant fraction of the total home price.
As a customer that's now interested in using brokers, thanks to this article, if a dealer and I were ever to communicate about why I used one, I'd just send them the email below:
> Dear Dealer,
I used a broker because I cannot buy the vehicle from the manufacturer directly and the longstanding dealer/customer (social) contract has been broken. By greedy dealers... like you.
>[Several images of vehicles on their lot with several thousands in "market adjustments"]
> Warm regards,
A customer that would've dealt with you directly if you'd even considered making the same offer to me that you provided to my broker.
And the “add ons”. I had two different dealerships straight refuse to sell me a car because at one, I wouldn’t buy one of their extended warranties for $1500, and the other for not buying either a paint protection plan or a wheel protection plan for $800. I was gonna cut them a check for the full price of the car, no financing needed, which they also scoffed at.
Yeah last time I was buying a car, I remember being in a good mood right up until I saw the sign for the dealership coming up. Then my mood completely changed. I hate it.
That's exactly why dealerships sponsor little league sports. Because they know everyone hates them like the parasites they are, so they try and weasel community good-will into the defense of their industry.
Well, if the dealers wouldn't force unnecessary adds (I'm looking straight at every protection package, tint package, extended warranty, and pre-paid maintenance offering) people wouldn't be inclined to find a 3rd party service to buy the vehicle for/from.
We're replacing a car later this year and I'm dreading going to the dealer since my regular guy left for a brand I don't want.
Do you have Costco in your area? I’ve used their auto buying service and it was great. The dealer has to give you the Costco price, so that removes all the stress. You just go pickup your new vehicle and pay them.
I've used it before. It only settles the vehicle price. The dealer still slow walks you through finance. I almost got up three or four times in 20 minutes (under my hard time limit) when the bozo wouldn't stop talking about their warranty (it was 3rd party even), then all the protection plans. Etc. Costco can't make a shitty dealer a good one though. I've also called around and beat Costco prices.
Costco eliminates the negotiation on the vehicle price, not the rest.
Sorry to hear that. Once, I had my own check from my credit union and specifically told them that I didn’t want to discuss any extras. Maybe it’s my “resting asshole face” that told him I was not going to play?
I hate dealerships, don't get me wrong.
But what's the difference between a car broker and a realtor? both are useless intermediary charging a premium for no value add, claiming they will "get you the best price".
I worked at a Honda dealership. And as reliable as those cars are, the dealership made the most money in the service department, with vehicle accessories as a distant second.
So what’s the reason for brokers?
People felt they get screwed by car dealers and wanted assistance. Fact!
Buying a car from a dealer is a process of deception. A broker is reassuring to buyers that know they are getting fucked.
Your whole business model consists of being shady and fucking people over. So when the customer hires a broker who knows all the shady tricks and doesn’t play, your argument basically boils down to they’ll hurt our business model? First off, good, secondly you pretty much just admitted your business is based on fucking over unaware people.
I've bought 4 new cars from dealerships, negotiating for myself. I like to think I came out ahead on 3/4 by following basic rules on buying (end of month, leftover inventory, low demand vehicles, etc). On the fourth vehicle, it was during COVID when things went sideways for new vehicles, as well as used prices. That one was rough, but I was able to unwind it as the car was a lemon and got all my money back.
The one mitigating factor that questions whether I got a good deal or not was time. Spending months researching models, trims, prices, and discounts. Contacting multiple dealerships. Tracking sales models and new release updates. Then there was the biggest time sink: the finance department. At the easiest it was a good 4 hours from start to finish. On the one bad deal, it was 6 hours. If you figure your time is worth $50/hr, that's half the value of the broker right there.
My next new car will absolutely be via a broker.
Bro 4 hours in finance? That's clown world. "Let me save you time - I've got my rate from XXX bank and ready to go. If you can beat it, fine, otherwise, don't waste my time. I won't buy any extra warranty or maintenance package, so don't cover those options with me. Don't waste your breath."
We're out of finance / upsell central in less than 45 minutes most of the time.
IME they ask upfront. Like, one of the first 3 questions the sales person will ask you is how you’re planning to pay. I suppose you could lie, but (as a bad liar) that seems like a more challenging way to go about it.
I just told them "I'd prefer to work out a price before dealing with financing". I didn't lie but I didn't feel obligated to answer their question which wasn't their business at that point
> Bro 4 hours in finance? That's clown world.
I agree! In my experience, there's 2 kinds of car dealers: The dealers that will give you a reasonable quote off the bat, and the ones that will try to waste all of your time and play games.
Every time I've bought a car I've run into that. The dealers that refuse to talk numbers on the phone or via email will try every bullshit stunt and I end up not buying a car from them.
It's funny because even my local dealer which likes to do the silly things like markup stickers on the window will work with me offline. I only once bought a car from them because their prices aren't that great, but they do make an attempt at least.
I just tell them in advance I've been preapproved by the manufacturer. I also tell them I have a hard stop at a particular time (usually an hour) and if its not done, they'll need to undo everything, because I'm leaving.
Throws them off their game, and really has prevented the hard sell on some stuff.
That's what I did when I bought the Supra last April. I talked with the sales manager directly and he agreed on MSRP before coming in. I'd walked away from the same dealer before on an AT Supra, so they knew I'd just walk again if they started playing around.
Had a rate and amount from my local credit union and said "if you can beat it, I'll take it." They beat it, I took it.
I was in and out on the whole transaction in under an hour.
4-6 hours. Wooooof.
I've not spent more than 2 hours on a car deal in a long time.
My last purchase was literally 30 mins.
Must be a hard sell on the back end offerings.
Wow, I do similar, but pay with cash or outside financing. Last one I paid with a check, in and out of the dealer in 30 minutes, including the test drive.
Seriously. I have been working at dealerships most of my life (on the repair side) and last time I bought a car from a dealer(not mine) I was still stuck in f and I for hours. I made it as easy as possible for them and it still took forever.
Yeah most people don't have that time, especially if they are buying because they have to and not because they want to. Buying a car is like finding a job in that respect -- it is best to look for one when you don't *need* it.
That’s the thing. The majority of consumers genuinely don’t know better. They go in not knowing what car they want and never considered financing.
We should be asking: how do we educate the consumer?
“Lebowitz thinks many customers are ill-advised and don’t realize the risk or that using a broker for a deal ultimately adds cost or sidesteps regulations or both.”
Oh yes, customers need an “expert” in the form of some jackass working on commission to sell the car to them. Have to love when they pretend this is about protecting customers instead of their profits
Between Chevrolet, Ford, Honda, Subaru, Mazda, BMW, and Porsche I didn’t run into single a salesman who gave any indication they knew much about the cars I was looking at. At best they didn’t talk out of their ass and make stuff up.
When I bought my last Jeep I used a sales person that was pretty popular for giving good deals on the forum. I don't know that he off roaded much but he was very much nerdy about the various things you could do and modify and all lol.
I've had some good dealership experiences before but he was definitely tops lol. We agreed to everything over the phone, and then he called me the day the jeep arrived and was ready. When I came in he took over the finance dude's room, printed the papers, and I signed them and that was that. Fun times.
I'm shopping for a used 2023-24 M340i and want Xdrive. Never driven a BMW in the ~30 yrs I've had my license. Local dealer recently got one, listed it on their site, I went to look, and it had just arrived, not available to look at. Ok, no biggie.
I head back 2 weeks later, now it's in the shop having the rim rash removed... dafuq?? I wasn't in a "hurry" when I got there but **After 40 minutes** of being at the dealer, waiting for a status check on the one I was interested in for 25, I tell the sales person, "Ya know, I'm good, I'll just head over to Concord". He panics, brings the manager over and offer to let me drive a new one. Ok...
On the drive, I'm liking it but dude couldn't answer a SINGLE question about the one I was interested in, nor the one we were in. Didn't know what the driving modes did, didn't know if the car they pulled out had Xdrive... So, since we were on a desolated side road, I asked if I could "give it the beans on a launch". No problem.
I put it in sport let it get it get to 5mph before punching it, to minimize getting caught off gaurd with a fishtail or torque steer (I'm a motorcycle racer, never tracked a car, but was an idiot in my Integra and TL). The car immediately pitched the rear end out... I just said, "Yep, RWD, not Xdrive".
"Wait, how do you know?" he asked.
I rolled my eyes in my head and just said, "If it was AWD it would've tracked (more or less) straight, even if all 4 tires were spinning. RWD has a tendency to pitch the ass-end out, especially if you're not familiar with the car".
"Huh..." he muttered.
Dude, YOU should be the expert. You're not selling Hyundais, Dodges, or Teslas... I'd expect you to know your cars well enough to speak to the kind of customer actively seeking an M-series (not M "$erie$", sadly)
if he is still employed that means he is selling cars. that means most people he deals with don't care about that stuff. enthusiasts are a fraction of the customer base. most enthusiasts will find they know more than the staff about the cars.
As a small used dealer myself I 100% agree. When I say small I mean small too, 3 person team. I get so many repeat customers it’s insane. Here’s the trick: treat them like people and don’t screw them over.
I don’t charge a doc fee. Small dealer down the street charges $900 per car. Had a person come to me saying they wanted a $3000 car from them cash and they OOTD was $4800 before tag tax title. He bought a similar car from me for $2800 OOTD, I made $1000 and he “saved” $2000
> I don’t charge a doc fee. Small dealer down the street charges $900 per car.
As you'd expect, California has pretty strict rules about how much a dealer can charge the customer in fees. https://lawyersforconsumers.com/dealer-fees-in-california-which-are-illegal-which-are-negotiable-and-how-to-fight-them/
Exactly! When I tried to negotiate with my local dealer they gave me about $1500 off. Broker got me $8k. I gave them a shot to even come close and the dude tried to guilt me because he had a wedding to pay for. I was like, what the hell?
You do realize the broker works on commission too? They usually make $1,000 per sale versus the car salesmen that makes $250-$750.
I sold BMWs for a few years, it was fun but brokers are absolutely commission based and are honestly even lazier than car salesmen
The way the deals with brokers would work is that I’d make no money and the broker would make all the money, so no one ever wanted to work with brokers because you’d make a bag of chips and some pocket lint on the deal.
As a consumer it’s probably easier to buy, honestly. But that broker doesn’t know shit about the car either, and the dealer often wouldn’t deliver the car. You do miss out on the professional delivery service, at least with nicer brands as they have delivery specialists that know everything
There are good dealerships. I’ve worked at several. Unfortunately most are sleazy and terrible and they deserve to go away
I think this broker was relatively knowledgeable about the car, but ultimately I didn’t care because I can do plenty of research that is much more credible than input from a guy trying to sell me something, on the manufacturer’s specs website and forums.
Yeah, I was the tech guy at my dealership so every delivery was catered to the customer and special. There are good sales people out there, I promise you. They are just harder and harder to find
Don’t forget that the jackass salesman is an “expert” whose job it is to know their product yet often can’t answer basic fucking questions. I have been in dealerships many MANY times and I have literally NEVER encountered a situation where the salesman actually knew the vehicle up and down.
Their job is to sell things, not actually know fucking anything about the product.
I despise car dealerships.
I remember asking a dealer about a Cadillac CT-6 Premium like 4-5 years ago and they had no idea what it was.
"Yeah, we have plenty of CT-6 Premiums!!!" and then you realize they're all 4 cylinder and 6 cylinder models
yup. most of the time they are sitting around. can't tell me anything about the car that a doug demuro video or car and driver article would explain. and then they want a good base pay, health insurance, pto, etc.
while lowballing your trade in. and listing it for 20% more the next day on their lot.
99% of the time these "experts" don't know shit about cars. I bet the majority of the users in this sub know better than the average car salesman. They're just know sales and commissions, they don't know shit about cars.
>Oh yes, customers need an “expert” in the form of some **high school dropout** jackass **who doesn't know jack shit about cars or car sales regulations** working on commission to sell the car to them.
There, fixed that for accuracy. When I want to buy a car from someone who's entire qualifications list is "failed Algebra 1 and comfortable with lying about anything," I'll go to a dealership. Otherwise, I'll either use a broker or just find a deal someone else got online and email dealerships until I find one that'll match it.
And if they don't do deals over email? They can go fuck themselves. Same with if they don't do paperwork via DocuSign or similar. It's 2026, no, I'm not going to come in to sign a fucking document.
Still can’t figure out from multiple articles what car brokering actually is and how the dealership loses money. The dealership makes the sale. Regardless it sounds like I need to hire a broker for my next car purchase if the dealership is losing $3-7k. Every dealer I go into doesn’t want to negotiate and I don’t even throw out unreasonable offers.
I ask to go out the door all in for the MSRP on the sticker. That way it makes up for the taxes, title, fees, all that stuff. So it’s a good enough to make me happy discount. So many places won’t negotiate $1 right now and there’s still 2024’s sitting on the lots. Idk what they think is going to happen.
One sales guy did drop the price $10k on a ford maverick for me but he scared me out of it because he said no one’s buying them and all this ford warranty crap. I just need a small-mid size pickup.
As the owner of a 2022 first model year Maverick with 40k miles on it I haven't had any issues. I have the Ecoboost, I think there were some fairly gnarly recalls on the early hybrids but I think those are largely resolved now too.
Basically they dislike that the broker has the ability to keep the competition up and by proxy drive the cost of the deal down more than a regular consumer would usually be able to
Sales tax is paid when registering the vehicle which can easily be done by anyone that's not a lazy ass. It will be collected even if there are no dealerships.
>He’s had customers come in with offers advertised by brokers that would be a $10,000 loss for him.
And I am sure you have *never* posted crazy deals on your website to get customers in the door and then pull the "oh man, we just sold that one..." line, right?
Right?
I just reported a dealer to the state AG for advertising a Ranger Raptor with a 2k discount then racking on almost 4k in ADM over email.
Their excuse?
We don't control our website. It's a 3rd party.
Alright then.
Just to jump on the dealer bullshit bandwagon.
This morning I needed to get a new gas cap. Looked at OEM ones. Cost in Boulder - $75. Cost 15minutes away $25.
3x the price for no reason whatsoever.
I needed a front main seal for a Ford 3.5L. Their wholesale was $13, their retail was $39. Ridiculous. Ford can engineer, test, manufacture, and ship it for $13 but the dealer needs an extra $26 just for it to sit on their shelf.
While this sucks, I'm not sure it gets better without dealers. If dealers go away and Ford has to replace the service, that price is going to be the same everywhere and it wont be $25. If anything, there will be fewer locations and you'll be stuck driving to a farther location *and* paying the higher price.
unlikely
Ford (or others) would just need to make authorized repair centers for warranty work. half the time the people wrenching there started at a dealer, and have the skills and training, but not the paperwork from the manufacturer, to do repairs.
Hell, it would probably be a selling point for the manufacturers to do this. They could quadruple their repair centers for very little cost.
But at the end of the day most of this is a moot point with electrics needing so much less repair and maintenance work.
Had a very similar experience recently when buying all weather floor mats for a Honda HRV. Checked multiple dealers in my area (Chicagoland) and all of them had vastly different pricing, ranging from under $200 to over $500.
It’s unfortunate, but every aspect of the car dealership model is disgusting.
> Sansone explained the math that can make it “financially feasible” for some dealers who often lose $3,000 to $7,000 on a broker deal.
> If a dealer sold five cars at a $3,000 loss, but “earned $1,000 a car on the other 85 cars to hit a certain sales objective, the math is in your favor,” Sansone said.
If the math still works for you, WTF are you whining about?
To hell with the dealer model. It should be allowed to go extinct. Let people buy direct from the manufacturer. No haggling, no variation, the price is the price, aside from the transportation cost of getting it to you or you getting to it to pick it up.
Dealers should be for used cars only.
I don't give a damn about their profit margins. Realistically normal people have no reasons to care about whether or not the dealerships continue to exist or go extinct like so many other out of date business models.
There are so many bad takes and examples of people not understanding the industry in this thread. I fully understand hating the dealer sales model. I get it. However, anyone who has spent any significant amount of time in the service side has to realize how this sounds. A good dealer will absolutely be the best place to have your vehicle serviced. I've seen many cars come in that a aftermarket shop simply gave up on. I've seen many of those cars get fixed in an afternoon because the people that deal with that product line day in and out know what to look for. Not only that, Toyota was rebuilding 2.4l engines way outside of warranty for years on what they call a "warranty enhancement". Not because they had to, but because Toyota corporate actually cares about their reputation. There were $2000 cars getting new pistons and rings on the corporate dime. How often do you see people raving about that though?
> Allowing unregulated brokering to go unchecked will ultimately hurt the dealer model
That's kind of the point. Stop selling above MSRP and it'll stop being an issue.
Working in used cars not only did I learn to just buy used for the sake of saving money but Jesus Christ I could not imagine buying a car from one of the dealers we worked with, I'd say 1 in 10 dealers were trustworthy enough for you to not feel fucked
Used a broker to get an allocation for upcoming car. I could have spent a bunch of times contacting dealerships, working sales guys, to sit on waitlists, instead I just paid a broker to do it for me. He provides updates on the status and will be working on this until delivery.
They could have a point about shady brokers and New Jersey needing to pass laws to help protect customers--they've had to deal with customers walking in with fraudulent discounts, and it could very well be underenforced.
However, the guys interviewed either need to be replaced by someone more professional, or they deserve to lose their lobbying effort. No one cares about your community activity, nor do they care that someone savvy knows how you make money and gets a price where the dealer profits and the buyer gets a nice discount. Bringing it up creates the image they're upset that they couldn't get both the full price on the car and the manufacturer incentive. The article leaves the impression they're entirely self-interested and trying to manipulate gullible readers for support, rather than pointing out real problems with the car broker industry.
No one is forcing the Dealers to sell a car. If they don't want to sell a car for a certain price, they can say no. I don't understand their argument. "We agree to see this car, but we are unhappy about it?"
I follow a YT channel called Delivered or something like that and they charge 1k. From what I’ve seen it’s worth it. These dealerships will take you for all you got if you let them.
Sure but I don’t care how many times they call. They have data and insight on the latest pricing and incentives. They are educated advocates that fight to get you the best deal.
I think we can all pick up the phone. But knowing where to start negotiating is key. Unless you want to try and haggle a ton of dealers. Doing a nationwide search and find the lowest price and back out shipping is really our only strategy. These folks have “actual” recent deal data to go off of that might be missed on the big searches.
>that fight to get you the best deal.
Not really. They get you a deal - not the *best* deal. No one is guaranteeing that.
1. Be clear on what you want to buy.
2. Research sold prices on forums.
3. Call 3-5 dealers.
4. See who bites for what price.
Which is doable on your own.
Literally the Deliverd guy on YouTube says the same thing.
I get the value for folks who really are incompetent when buying cars but for everyone else it's not rocket science.
Don't like the price? Walk.
Don't like how you're treated? Walk.
All you're buying is a depreciating commodity anyway.
I respectfully disagree.
I don’t have reliable recent sales data. Maybe I get lucky and want the same exact car that the Delivered guy did a video/livestream on. But that’s rare.
While I believe i am able to hold my own when buying a car. I still don’t have the data that the brokers do.
Maybe what I should do is try and pay a broker for recent sales data if they have it. Maybe that is cheaper than having them negotiate but IDK if they will share or gatekeep.
I travel so I use multiple car dealers in multiple states for maintenance services. There is absolutely no completion between dealers. Their prices are all the same. It’s called an oligopoly, where no one undercuts anyone else.
"We've always been able to punch people in the nose on every sale. That's part of law. What do you mean that wasn't fun for you? It's ALWAYS been like that. You know, if anyone else did it, you'd get two punches to the nose (probably). I just don't see the problem. "
Dealership's logic.
So forgive my ignorance. I’ve never used a broker before. Do you just basically be like “hey go get me the best deal you can on this specific car and I’ll pay you” and then they go do it? That sounds nice.
pretty much. they search autotrader and stuff so you don't have to. They usually dont work out for buyers of 'specific' cars though. there was a poster above who mentioned a broker getting him a good lease deal, but im sure he wasn't picky about color choices or options packages.
if you want an porsche 911 with a specific color, stitching, seat choice, wheel choice, etc... they will still try to push you into toward your second choice because its a deal. I had one broker offer to find me a gt3 for free on the contingency that i pay him if he finds my perfect car. after 6 months of searching i found it before he did
no it was the other guy who posted "Got my current lease with a broker. Dealers all wanted $1600+/mo WITH a decent down-payment and I did 0 down $850/mo with a broker."
For my current lease I contacted a broker, paid the fee and agreed on pricing. Got a build code from a local bmw dealer. Spec'ed out the car how I wanted, waited for it to be built and delivered and picked it up at the dealership when it arrived.
Only used them for a lease. Visit leasehackr forum and you can get an idea of how it works.
Basically they have contacts within a region or even nationally. These dealerships sell volume, need to hit a certain number to get manufacturer kickbacks, or have aging units they want moved, demos.
Broker list the deal, sometimes how many, what exactly is needed to hit the advertised price (used to be a lot of true zero drive offs before covid), shipping cost, etc.
You make contact with the broker. Go over the details, exact trim/color, monthly, money down needed, etc. Pay them and then your credit will get ran by the dealer. If approved, you show up at agreed time or do everything remote, car gets sent to your house etc.
The reason we have an X3 right now instead of a Blazer EV is because of how shit the dealer experience was, where they wouldn't even entertain offers posted by Chevy themselves on leasing. And my wife was a repeat customer of theirs for the last decade and I had used them for service for 20 years. That dealer lost a customer for life.
The Oregon market is small and kind of sucks for brokers (would love to hear from others in the area if they've found reputable ones) but if you live in a place like California, using a broker is a total no brainer. It can save you big bucks and a lot of time.
> they wouldn't even entertain offers posted by Chevy themselves on leasing.
That's why I have an EV6 instead of a Mach E.
The Ford dealer came back with a monthly price nearly double what was advertised on Ford's website, and told me that the price online was wrong, and their price was take it or leave it. So I left it.
Mostly bs. Car dealers never lose money. If by lose they mean don’t make as much that’s how business works. ‘Sansone explained the math that can make it “financially feasible” for some dealers who often lose $3,000 to $7,000 on a broker deal.’
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If anyone needs a broker pm me. I mostly handle CA (licensed and incorporated in CA), but have a few dealerships nationwide I work with. Helped a few folks out on Reddit already 🫡
Fuck em.
I got my last 2 cars via broker. Easy, no bullshit and no hidden price or delays to pressure you into shit.
Some dealerships are easy as hell to work with. Portland’s downtown Porsche dealership has been fucking fantastic. Tesla is the *easiest* buying process I’ve seen someone go through for a car in the US.
If Toyota, Honda and BMW dealerships worked like Porsche’s model or ideally Tesla? I wouldn’t use a broker to get those car brands.
Good. If it hurts car dealerships, then I'm for it. After the BS that was COVID and the years after, based on how they behaved, I have no sympathy and am actively cheering for their downfall.
So let me get this straight. They are mad that they are being forced to compete with one another? Imagine the horrors of having someone in the consumer's corner helping them not leave money on the table. If you can't compete in the market, then you die, it's as simple as that.
It blows me away that dealerships wonder why they have such a bad reputation with the general public, and then show their hands with anti-consumer moves like this.
They sincerely believe this.
"Your local dealer owns the real estate,” Lebowitz said. “They have millions invested in the community, right? They sponsor Little League. The broker rents an office for $3,000 a month, and they could be in Bermuda next month.”
When I worked at the service center of Subaru of Portland, there was one service advisor who would routinely tack on extra wiper blades and and odds and ends to his tickets to milk extra money and commission out of people, usually old people. Before he worked there he sold mortgages for Bear Sterns or Lehman Brothers or one of those mortgage companies that caused the financial crisis. The general manager of the dealership was fully aware that he was doing this because he got in trouble for it a couple of times. My job was to run the records file system so people would always ask me for his tickets and I would have to pull them up and see "yep, customer came in for an oil change and he charged them for six wiper blades on a 2012 Outback."
My point is that there are great people who work at car dealerships, but there are a lot of scammers and people with no sense of morality who are just evil disgusting terrible people and I think that there should be fewer places that make that mentality profitable.
Good! Fuck stealships, fuck their greed! Many of them deserve to suffer for taking advantage of people for many years with their lies, obscene overcharging and markups. I want their profits to hurt badly, I want them to feel the pain they inflicted on people for decades!
I’ve had people tell me I need to secure car deals for them before etc, but I never knew there was an official industry call “Brokers” that actually rent buildings for 3k a month and advertise. holy crap.
I can’t believe they are crying, all a broker does is “negotiate” on behalf of a customer. Thats it!
Lol its like bringing your dad in to make a car deal. how are they gonna stop that?
This article trying to paint the broker as the bad guy. Meanwhile the only reason the broker exists in the first place is the shady tactics dealers use. I’m goin got a dealership tonight actually and I’m already dreading the conversations.
How about you stop trying to gig us with add ons, fees and other bullshit on TOP of trying to screw us on basic pricing by adding markups ON TOP OF keeping little to no stock of base model vehicles so consumers are forced to buy a higher grade model that may be out of people’s budget? No? Oh ok then fuck you.
Car dealerships enjoy something the average consumer doesn't - political representation in State legislatures. The laws reflect their preferences, not yours
I've seen enough Reddit posts where someone shows the bill of sale with $4500 of unnecessary additions and asks if they got a good deal to not car what dealers think.
I don't understand the complaint. Brokers work with dealers; they can't go direct to manufacturers.
If dealers weren't approving the deals then the broker has no product.
It sounds like dealers are just mad at other dealers.
I used a broker for a lease on our Volvo and i’ll never go without one again.
For like $600, they do almost all of the legwork for you in terms of vehicle search and pricing. I did everything through my broker, signed all the forms via docusign, and spent 15 minutes total at the dealer picking the car up.
My monthly payment was several hundred dollars less than what I was getting offered when i spoke with dealerships so yeah, fuck them.
I have used a broker more than once to buy a new car and never had a bad experience. Most people I know who have bought a new car from a dealer have had bad experiences. "See, they install that Tru-coat at the factory!"
Wouldn’t be a need for brokers if there were rules heavily enforced for all dealers, to prevent consumers from being put in a ring around the Rosie event when buying a car or give a price that’s outrageous.
"Oh, by the way, this is the actual price. Please ignore the price we advertised online, which is thousands of dollars less; we had to wash the car and add a fake ceramic coating. Also, step into this office where a "finance guy" will spend hours trying to find a way to tack money back on that you just negotiated down. Wait... where are you going?"
You mean people don't like this experience?
Just kill the dealer model already. That’s the solution. While dealers may have provided a benefit in the early days of cars and certainly provide a financial benefit for manufacturers, dealers are terrible for consumers and they have become shark salesmen over the years and are terrible to deal with.
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