Will dealerships soon be a thing of the past?

Tim
By Tim Suddard
Jun 24, 2023 | Buying and Selling, Column, Buying a Car, Dealership | Posted in Columns | From the Oct. 2022 issue | Never miss an article

Photography Credit: J.A. Ackley

While I do most of my own work on my cars, I recently drew the line on maintaining our Honda Ridgeline, the company truck. We have a local place–Auto Clinic of Ormond–that I trust, and it handles most service and repairs that I do not.

But sometimes I get tempted. Every now and then, our local Honda dealership will email a coupon for a $29.95 synthetic oil change. I went to my local guy and asked him what he thought. He candidly admitted that he couldn’t even buy the oil for that price, so I would be a fool not to take that deal. 

While I can change the Ridgeline’s oil in about 15 minutes–don’t even need to jack it up–I also couldn’t purchase the materials at that price. So I made an appointment.

Knowing the oil change was a loss leader, I have since let my local Honda dealer service the differential and replace a filter or two once there. While I’m aware that some of these services were overpriced, it was easy to let them handle it and not have to take the truck somewhere else.

Overall I was getting pretty good service, and the dealership was fairly easy to deal with. Then things changed during my last visit. 

First, I was told my air conditioning system desperately needed cleaning. The fee would be $75. This fake service reminded me of the time a dealership told my mom that her brake system needed a $125 cleaning. 

While there, just for kicks, I figured I’d look into getting a new Ridgeline. I’m on my third one, as I’ve been driving Ridgelines since 2005. How much to get a new truck? I knew that my trade-in was worth roughly $30,000, so I figured I could sidestep into a new one for $10,000 to $15,000.

Within an hour, the salesman called me back. “Great news,” he said. “For $31,000, you could walk out with a new Ridgeline.” And by that, he explained, he meant I could pick up the truck a few months from now, as it still had to be built and delivered. 

I scoffed at the offer and asked to see the math. He sheepishly admitted that the price of a new Ridgeline was $56,000, a bit of an increase over the $38,500 we paid for ours. A quick check of Honda’s website confirmed that, yes, prices had risen–but a truck comparable to ours cost about $44,000, not the $56,000 I’d been quoted. 

Did I miss the sales tax? No, that didn’t account for the difference, either. 

Between the price gouging and fake service, I came away pretty pissed. I think I’ll pay more for oil changes with my local independent shop or just do them myself again. I don’t need to play those games. 

But more importantly, I was angry that two years ago, during the pandemic shutdown, dealers were desperate to sell a car at any price. It almost seemed like we were all in this together.

Today, that loyalty is gone. The dealers have gone wild and will seemingly do anything to make a buck or three. 

This got me thinking about the state of car dealerships. I grew up in one. But how soon until they become a relic of the past? If we can buy nearly anything else online with a few clicks, why do we still play these games when buying a new car?

As Tesla has proved, you can manufacture and sell cars with no dealer system at all. Is this the future, or will automobile dealerships suddenly get more honest and avoid the extinction they arguably deserve?

How have your dealership experiences gone? Good, bad or somewhere in between? I’d love to hear about them. 

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Comments
jimbob_racing
jimbob_racing SuperDork
8/19/22 8:10 a.m.

I worked at a several dealerships in parts and service. I will never forget the sales people and sales mangers at each one of them laughing and high fiving each other when celebrating them screwing someone who just bought a car. They lived for it.

OHSCrifle
OHSCrifle GRM+ Memberand UltraDork
8/19/22 8:12 a.m.

When I buy a new car, which isn't often, I arrive informed and tell them I'm ready to buy but I want no games. I have my own financing but am willing to use theirs if they can offer a better deal. I tell them I have a two hour limit once I know they have the vehicle I want. 
 

Mostly what I get in return is games and irritation and a feeling of being berkeleyed. I won't miss them at all. 

TJL (Forum Supporter)
TJL (Forum Supporter) Dork
8/19/22 8:17 a.m.

I was recently thinking a out this when driving through Sanford, Fl. On one side of the interstate, a HUGE car lot that i worked at many years ago, previously known as seminole ford, with its grand total of about 30 cars on the lot, the rest just open pavement that used to house hundreds and hundreds of new stock autos. 

across the interstate, a shopping mall that is rapidly heading towards being shuttered. 
 

my thought was smash the 2 together. Lots cant keep more than a few cars on the lot. Most is ordering online and waiting like any newer car buyer has found out.  Shopping mall is about empty. Move the cars inside the big anchor stores that are closed and make it an indoor, medium sized car showroom and ordering/pickup facility.  

granted the service dept is still a thing, but its also detached at this dealership. Close the showroom and lot, move that showroom to the "mall" and lease the showroom/lot property to anyone who wants it. 

ddavidv
ddavidv UltimaDork
8/19/22 8:17 a.m.

Let the sales department die a quick, painful death.

I too worked at several stealerships and experienced the same disgusting sales staff jimbob knew. We had ONE sales guy who was decent and treated all his customers like customers and not 'marks'. He sold more cars than the other three nimrods. Most dealership GMs are former car salespeople and they do not understand (nor want to) how the back of the store works. But, it won't keep them from meddling in it, trying to make more money.

Dealers will still be needed for servicing because modern cars are simply too complex for the owner or corner garage to diagnose. But the sales model is irretrievably broken and needs to go away.

Apexcarver
Apexcarver UltimaDork
8/19/22 8:21 a.m.

There is a definite trend for new OEMs to follow the path that Tesla has been blazing. There are no "dealerships" there are "galleries" and you can only order a car through their internet or phone portal. Apparently that is the workaround to dealer franchise laws in the states that they can pull it off.  Most of the new small EV players are doing that and it looks like Ford may be trying to move that way with at least their EV business with splitting ICE and EV sales.  That said, its gonna be hard for the traditioinal big manufacturers to walk that one back. 

 

Honestly, I dont call them "stealerships" and "salesweasels" for nothing.  

 

Call me strange, but I HATE when I go anywhere (department stores included) that I have to chase special "sales" and deal with a commissioned salesperson and negotiate a price.  It doesnt matter,  you always end up feeling like you are getting screwed over somehow, or at the very least SOMEONE is getting screwed over. Call me a bleeding heart, but it shouldnt be that for me to get a good deal that they have to try to Berk Over Ms. Jones over there ( Who NEEDS to buy a car today to replace the one that got destroyed for whatever reason), just so the stealership can make ends meet.   Besides, even if I did get a good deal, you are left feeling like they are hiding some way they screwed you over that would make it a bad deal that you are just fooling yourself over. 

 

I hate it about as much as politics. 

maschinenbau
maschinenbau GRM+ Memberand UberDork
8/19/22 8:36 a.m.

Since I'm sure they will show up soon, remember that for every "my dealer isn't bad" story there are at least a dozen absolute horror stories. 

calteg
calteg SuperDork
8/19/22 9:18 a.m.

Gnash your teeth about the (admittedly bad) state of dealerships, but as long as there are lobbyists and "middle man" protections enshrined in most state law, dealerships won't be going anywhere anytime soon.

Asphalt_Gundam
Asphalt_Gundam Reader
8/19/22 9:24 a.m.

It is possible for a better experience.

About a month and a half ago I had to replace my truck as it was no longer reliable for the long haul towing to tracks and back that it primarily gets used for. At the time of buying that truck I had been circling the dealership for 2 days waiting for them to close so I could look at it by myself but the place was open till 10pm and I gave up and went in. Got the normal aggressive, blood in the water treatment from the sales guy. Told him I was here to look at this truck and ONLY this truck (Ford at a Dodge dealership). After beating that wind out of his sails (sales?) I looked it over and then there was the test drive where he wouldn't shut up and I was literally running on E (I believe it went down to 3 miles to E on the test drive). I had some problems that gave me negotiating room and when he was too eager to get my trade in I leveraged for another grand over what they offered. Had to turn down/say no to a lot of valueless add on BS. Overall I got my money's worth but it wasn't really a pleasant experience.

Now by contrast just a over a month ago my buying experience when about as ideal as I could have hoped for. I arrived and nobody rushed me in the parking lot. I went and literally crawled under the truck to inspect it/verify condition (no rust) and that nothing was leaky or possibly failing. Then I went inside. I had to get the sales guy's attention, told him what truck I wanted to look at, he gave me the keys, photo copied my license. We went out to the truck, opened it up, told me what information he had/knew about it while giving the interior, box and under the hood a look over. Then he says it has plenty of fuel in it, just take it for a drive and come back when you're satisfied...and he went back inside. I had the truck all to myself for the better part of an hour to inspect and test drive to my satisfaction. The only thing I could find wrong with it was out of balance wheels. Deciding to buy it there was no negotiation on price. IMO it was a fair price that I was willing to pay. For my trade in I was honest about it's problems and realistic in my expectation of value which was no nonsense agreed to. Had my own financing so filled out some papers, signed a check and went to lunch in my old truck while they balanced the wheels and once done was on my way home.

Duke
Duke MegaDork
8/19/22 9:40 a.m.

So, if dealerships "go away" (they won't), how do you test drive?

I'd never buy a car without a test drive.

 

calteg
calteg SuperDork
8/19/22 9:45 a.m.

In reply to Duke :

The theoretical "build to order" future has the dealership with a very small allocation of demo vehicles. Think one high-option and one low-option trim level of every model. You come in, test drive those, then put your order in at the kiosk or online. Obviously the dealership will try and upsell you on accessories, warranty, etc

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