ADM fatigue may have finally occurred.

[JASmith]

So in this hypothetical, what happens when all the dealerships have shut down and you need to get your vehicle repaired?

Same place I get my vehicle repaired already or that you'd bring your vehicle to after getting into an accident. Going to a dealership for service and repairs, with rare exception, is generally a huge ripoff. If USAA insurance can handle paying third party repair shops to repair vehicles that are very close to totaled all day everyday, so too can Ford.

This is particularly advantageous for rural folks. A small town may not be able to support a Ford, Chevy, Hyundai, Honda, and Toyota dealership for such a small population, but it can support two universal car repair shops to service all of those vehicles. Worst I heard was a guy that bought a Fiat in Houston, moved to a small town in Alabama, and for warranty work had to drive for ages when a regular unaffiliated repair shop was right near by.

Sponsored

 

[Mavman123]

I'd have to disagree with you about that 4 to 7k statement. I've owned 2 hybrids that I bought new. I bought my fully loaded 2008 Prius in the middle of fast rising gas prices, and I had to wait for it, but I paid about $27k or maybe $1500 more than a comparably built Accord, and about the same as a Camry. I paid MSRP on that one because of demand.

My 2017 Prius had an MSRP of just over $32k, and I juggled that down to $26.5k because gas was cheap, and hybrids were easy to find. That $32k list was very much inline with any accessorized Camry or Accord on the lots.

I'm strictly talking about the same car model and their identical hybrid vs gasoline. Camry vs Camry hybrid etc. I was playing devil's advocate to say that technology is getting cheaper over time. Obviously prices will overall increase if the current inflation rate keeps up

 

[Angry Hippo]

Already suggested it, eliminate dealerships.

True free-market capitalism will not tolerate a middle-man that offers nothing of value and merely increases costs. Direct order sales are the solution, and the only impediment to them are unions, unions setup by comrades, such as the dealership union that spends big time lobby money in government to put up roadblocks to eliminating open competition.

Its 2022, I can get financing in 5 minutes by filling out an automated form online, and you can build vehicles already on the configurator, just need to setup a centralized low-cost call center and/or online chat to follow up on glitches now and then and allow ordering from the site. Tesla seems to have worked this out, Ford should follow suit.

Are you kidding? You just made the argument that there is potential collusion among automakers to artificially constrain supply to boost prices... and so your solution is to put even more pricing control in the hands of the auto manufacturers? Really? REALLY?

Dealers are selling vehicles at market price (which is over the imaginary MSRP number), resulting in added dealer markups. To not do so would literally be leaving money on the table.

Do you think the automakers are going to out of some sense of altruism or moral righteousness decide "well we don't want to make too much money and be greedy, lets sell our cars for less than the market commands". I don't see it happening. The manufacturers aren't any less money hungry than dealers. SInce many (all?) are publicly traded they're actually legally obligated to maximize profits.

Considering these are the same people you just suggested wouldn't be opposed to illegal price fixing I have no faith those are same people who will bring prices back down to normal.

 

[ITSATRUCK]

Simple, there are going to be winners and loosers. As customers spend more money on a vehicle it better be a great product. I can guarentee Tesla will not have issues selling whatever they can make. Just like ford could sell many more times hybrid mavericks then they can build now. Right product for the market.

 

[jbpoole]

Already suggested it, eliminate dealerships.

True free-market capitalism will not tolerate a middle-man that offers nothing of value and merely increases costs. Direct order sales are the solution, and the only impediment to them are unions, unions setup by comrades, such as the dealership union that spends big time lobby money in government to put up roadblocks to eliminating open competition.

Its 2022, I can get financing in 5 minutes by filling out an automated form online, and you can build vehicles already on the configurator, just need to setup a centralized low-cost call center and/or online chat to follow up on glitches now and then and allow ordering from the site. Tesla seems to have worked this out, Ford should follow suit.

Dealers could still provide PDI, parts, accessories and service. They would save tons of money on floor plan, advertising and, by reducing the number of liars (salesmen) on staff, salaries/benefits.

 

[Jusgee]

There are about 30 used '21 Broncos Sports sitting in dealer lots around my town of ~40K. All priced at $39K (well over MSRP). I don't see anyone buying these at that price and hope these drop to reasonable prices soon.

 

[rlhdweman]

When I went for my 200 mile test ride a couple weeks ago it took me past 5 large cities, everyone of those had dealerships by the interstate, all full of full size trucks from every brand in every color, there is certainly no shortage of them, maybe its ADMs or the price of fuel, maybe people are finally getting tired of paying 60K-80K for 4 wheels & a steering wheel, something has changed.

 

[Vols44]

When I went for my 200 mile test ride a couple weeks ago it took me past 5 large cities, everyone of those had dealerships by the interstate, all full of full size trucks from every brand in every color, there is certainly no shortage of them, maybe its ADMs or the price of fuel, maybe people are finally getting tired of paying 60K-80K for 4 wheels & a steering wheel, something has changed.

At the risk of posting it again, I drive by half a dozen dealerships to, during and from work. The GM and CDJR lots are at least half full (front to back) while the rest have a lot of space between new vehicles. The large motor, high end and fully loaded (with and without ADM's) makes and models stay on the lot while in transit (stock orders) are spoken for (by deposit).

Carvana and Carmax churn out sales (witness it first hand on a daily basis without working there), because the process is brief, payments are simplified and people are willing to pay excessive (compared to traditional dealers) finance rates to have a vehicle delivered to their driveway.

Can the younger (obviously I'm not), generations relate to thoughts like:

-the dealer car buying experience is like waiting in an ER
-no means no (to the F&I person)
-why is the paperwork so mandatory, lengthy and full of potentially hidden addendum's?
-the S in MSRP works both ways and means there is wiggle room regardless of who's wiling to buy, sell or walk.

 

[NewBernWolf]

It is hard to compare outside of model-to-model hybrid costs. I would say that the prius is an upscale economy car, more in line with something like a honda fit than an accord or camry. To me, you're sort of proving the point that they cost more if you paid the same for a prius as one of those other models (I know there are several prius models at this point, but my argument still stands).

How much were the equivalent accord/camry hybrids compared to their gas engine counterparts? That is the fair comparison. The answer for pretty much every vehicle to date that has a gas and hybrid/electric option, is that the latter costs more on the sticker. The Maverick is the first vehicle to flip that script, which is pretty awesome to see!

But they're very much midsized cars with all of the accessories as a Camry and Accord. There's very little difference in fit and finish, although the rear seat is an inch or so narrower. I'm not sure where you came up with the idea that a Prius is a comparable build as a Honda Fit, which is the smallest car Honda produces.

But sure, apples to apples, a Camry LE has an MSRP $25,925. A Camry Hybrid LE has an MSRP of $27,280. A mid-level Prius has an MSRP of $25,835.

 

[DryHeat]

Direct order sales are the solution, and the only impediment to them are unions, unions setup by comrades, such as the dealership union that spends big time lobby money in government to put up roadblocks to eliminating open competition.

Not to sidetrack this never-ending argument, but this is a strange use of the word "union." And an even stranger use of the phrase "unions set up by comrades."

The people who own car dealerships are just that... owners. They are not workers, not members of any kind of union, and certainly not "comrades." They are business owners who have created trade associations to change laws to benefit themselves, not the workers and not the customers. You should call what they and their lobbyists are doing by its rightful name -- crony capitalism.

I know many people like to blame things on unions -- I see a lot of that on this forum. But calling a bunch of car dealership owners a "union set up by comrades" is an incredible stretch.

 

[JASmith]

Not to sidetrack this never-ending argument, but this is a strange use of the word "union." And an even stranger use of the phrase "unions set up by comrades."

The people who own car dealerships are just that... owners. They are not workers, not members of any kind of union, and certainly not "comrades."

They have literally set up a trade union to combine their bargaining power with local, state, and federal authorities. The "comrade" comment was tongue in cheek since I was called a comrade for suggesting a direct sales model, eliminating the middle-man, which is not anti-capitalist in the least. What I consider anti-capitalist is when anticompetitive legislation is put in place that interferes with the organic free market putting up barriers to new business models that only serve the status quo, as then you delve into crony-capitalism where its the big players (through natural size of the large corporation or unionized lobbying by owners like dealerships have done) that service to maintain their monopolies.

 

[pxpaulx]

But they're very much midsized cars with all of the accessories as a Camry and Accord. There's very little difference in fit and finish, although the rear seat is an inch or so narrower. I'm not sure where you came up with the idea that a Prius is a comparable build as a Honda Fit, which is the smallest car Honda produces.

But sure, apples to apples, a Camry LE has an MSRP $25,925. A Camry Hybrid LE has an MSRP of $27,280. A mid-level Prius has an MSRP of $25,835.

That is fair, I took a look. The prius is definitely at this point in a gap between the compact and mid-size car segments, now leaning towards mid-size. It didn't use to be, but that is how the car segment works, models constantly grow in physical size over the years.

Anyway, the original point still stands - Camry hybrid +$1,300. Accord Hybrid + $1,200. Corolla Hybrid + $3,600. CRV + $5K - really? Maverick - Minus $1,085. One of these things is not like the other.

 

[Angry Hippo]

Not to sidetrack this never-ending argument, but this is a strange use of the word "union." And an even stranger use of the phrase "unions set up by comrades."

I agree, JASmith hasn't been making much sense this whole time.

I, too, find it strange when:
JASMITH tells me that dealers are not selling fewer vehicles - then provides a link that shows vehicle sales are up.
Immediately backtracks and insists vehicle sales are down - then provides a link examining a different time period than their first link.
Then argues with me that I'm wrong that sales are down even though it was my original premise.

The funny part was when they got all indignant and started name calling when I expressed confusion as to what on earth they actually believe/think about vehicle sales numbers.


I still don't think I've gotten a reasonable explanation why they think if we eliminated the price gouging dealers that we wouldn't end up with price gouging manufacturers. I find this 'solution' especially odd after JASMITH strongly hinted the manufacturers might be engaged in price fixing and collusion.

At least now if we don't like the price at the dealer we can try another dealer (and let the market decide). In your direct-to-consumer model if you don't like the price Ford or Hyundai is giving you direct what are your options?

 

[DryHeat]

They have literally set up a trade union to combine their bargaining power with local, state, and federal authorities. ... What I consider anti-capitalist is when anticompetitive legislation is put in place that interferes with the organic free market putting up barriers to new business models that only serve the status quo, as then you delve into crony-capitalism where its the big players (through natural size of the large corporation or unionized lobbying by owners like dealerships have done) that service to maintain their monopolies.

Actually, what they have "literally" set up is a trade association -- specifically the National Automobile Dealers Association -- which "represents all franchised new-car dealers — domestic and import — before Congress, federal agencies, the media and the general public."

A trade union, on the other hand, is "an organization of workers who have come together to achieve common goals" such as better wages and benefits.

I'm glad you recognize that what really brought about the legal requirement for sales through local dealerships was crony capitalism. (So perhaps this is just a personal quirk where you tag business activity you don't like as "union" without regard to the actual meaning of the word?)

The irony, of course, is that many of these trade associations have been engaged in anti-union activities for years, including lobbying for legislation that makes it more difficult for workers to maintain an actual union. They would be mortified to learn that you had lumped them in with unions (if they cared at all what you or I think).

Sponsored