Source: Federal Trade Commission
quote: On top of that, the dealership makes most of their money on servicing and parts. Which interests them in making you do "extra servicing" that you do not even need.
quote: I highly doubt a direct sales auto manufacturer is going to spend the post-sale trying to convince me that the new car I was just convinced was awesome needs a special undercoat, special regional weatherization, and a special after market warranty and care package.
quote: If I'm buying a Chrysler
quote: Permitting direct sales would put Ford in the position of competing on both product and services directly against GM, Chrysler, Toyota and others, with much stricter control of the end to end experience. A crappy experience could not be written off to the 'dealer' but instead would be a black mark against the automaker itself. That's huge.
quote: As I, and many others I know always say, the worst part of buying a car is the dealer.
quote: As I've pointed out before, middlemen can lower costs. If the distribution and marketing process for all the automakers is similar enough, substantial money can be saved by having a middleman consolidate those tasks. Rather than have 3 automakers run 3 of the same marketing surveys (one each), the single middleman can run a single survey.
quote: Or rather than each automaker having to set up a trucking system to distribe cars to each major metro area, a single middleman could handle transportation for all the automakers.
quote: Any time a task can be consolidated, that's an opportunity for a middleman to save the end customer money. Otherwise, you can carry the "middlemen are bad" belief to ridiculous extremes. Why should automakers advertise in newspapers and on TV? That's a middleman! They should each set up their own newspapers and TV stations to run their car ads. Why should you shop at a supermaket? That's a middleman! You should be buying each of your groceries directly from individual farmers.
quote: Whether a middleman would increase or decrease costs in this particular case isn't for the government or us on a web forum to decide. Just allow both, and the market will sort out which saves the consumer money and/or delivers better service.
quote: The current statute only bars franchisors from competing against their franchisees (for example, Ford cannot compete against Ford dealerships).Tesla complies with that statute because we do not compete with any franchise.