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Tesla CEO Elon Musk  (Source: Air & Space Smithsonian)
The NADA is launching a campaign against efforts to restrict the franchise dealer model

It looks as though the National Automobile Dealer Association (NADA) is getting a bit scared of the progress being Tesla Motors’ efforts to sell electric vehicles directly to consumers. Earlier this month, the New Jersey Assembly Consumer Affairs Committee voted 4-0 to allow Tesla to sell vehicles from [up to] four company-owned stores within the state.  Earlier this week, New Jersey’s General Assembly passed the bill to solidify those plans. The bill must now go to the state Senate, and if passed, will go before Governor Chris Christie to be signed into law.
 
In neighboring New York, Tesla also scored another victory this week when Governor Andrew Cuomo signed pro-Tesla legislation into law. This legislation not only allows Tesla to keep its five company-owned stores, but also allows for “additional Tesla retail locations [to] be established under a strengthened dealer franchise law.”
 
“New York’s franchised auto dealers and manufacturers as well as innovative companies like Tesla are critical to our state’s economy,” said Governor Cuomo. “This bill ensures that both sides will thrive and be able to grow the market for cutting edge zero emission vehicles.”


NY Governor Andrew M. Cuomo [Image Source: AP]
 
Following these Tesla victories, the NADA is fighting back to protect the franchise dealership model. The NADA has gone into damage control mode, launching a new initiative called “Get the Facts: The Benefits of Franchised Auto Dealers.”
 
The NADA has a full page of resources that show why franchised dealerships are beneficial to consumers and why evil company-owned stores are harmful to everyone.

This video posted on NADA website extols the virtues of the francised dealership model 

“New-car dealers provide the best and most efficient way to buy and sell cars for both consumers and manufacturers, despite the misinformation and misconceptions that have surfaced over the last several months,” said NADA President Peter Welch. “NADA’s efforts will set the record straight about the benefits of the dealer franchise network for consumers, manufacturers and local communities everywhere.”
 
The NADA might see Tesla as a tiny thorn in its side, but the real threat looms from the Alliance of Automobile Manufacturers. The alliance — which counts BMW, Chrysler, Ford, GM, Mercedes-Benz USA, Toyota, Toyota, Volkswagen Group, and Volvo as members – is also warming up to the idea that the franchise model is perhaps antiquated and ripe for change.
 
"It's understandable why Tesla or future competitors would want a simpler sales process. When we look at the big picture, we may be at a tipping point,” said Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers in a statement to Automotive News. “If dealer groups continue their push for more onerous franchise laws, we will be forced to keep an open mind about how best to serve new-car buyers in the future."

Sources: Governor Cuomo's Office, NJ.com, Automotive News, NADA



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By tayb on 6/18/2014 12:39:57 PM , Rating: 5
The bottom line is that if the NADA thinks the dealership model is better than direct sales they should have no problem winning in an open market. Their bullshit is 10 feet thick.




By AntiM on 6/18/2014 12:51:03 PM , Rating: 5
“New-car dealers provide the best and most efficient way to buy and sell cars for both consumers and manufacturers,..

Wrong. Dealerships provide the most efficient way to screw people. I don't know of anyone that would describe a trip to a dealership to buy a new car as a good, "efficient" experience.


By someguy123 on 6/18/2014 4:26:45 PM , Rating: 4
Got a headache from just reading that claim. EVERY dealership I've been to has played games with me, even when I deliberately asked for something. Worst was when I told the salesman that I made up my mind, ready to drive off the lot, and he still played the god damn waiting game with me by walking into the backroom and pretending like he was talking to his boss, who he unfortunately didn't realize was out in the parking lot (neither did I until he walked back in the showroom and greeted people). Now I just try to find the invoice price elsewhere and ask for it upfront. I'm fine with paying over invoice, but if they start upselling attachments and warranties I just leave.


By VoodooChicken on 6/20/2014 10:33:30 AM , Rating: 2
When did it get this way? I bought my first car in 1996, and not only do I remember the name of the man that sold it to me (his 1st solo sale), I remember the name of the guy at another dealership I DIDN'T buy a car from. Both were courteous, took me on multiple lengthy test drives, had no problems with me leaving and coming back another day. From 2005 onward, I've never had as good an experience at any lot, and only a couple times was it a problem with the salesman (in fact, the only person I've bought a car from since was a complete jerk). No matter how much my salesperson tries with me, the next person above them have been very unpleasant dealing with. The art of negotiating is lost.


By Manch on 6/23/2014 9:19:41 AM , Rating: 2
It honestly depends on the dealer. Plenty are crooks, but there are some that genuinely want your business.

My pops came back from Afghanistan for a week and while he was home wanted to get a truck. He was looking at the Dodge Rams at the time. Of the model he was interested in one was filthy, another had cat hair in it, and the last had a spilled Wendy's milkshake. He asked if they had any new models that weren't used because he wanted to buy a truck that day before he flew back. The guy at first was very polite and said he would check. 15minutes later he's seen with his feet up on his desk. Pops ask him again and the guy look annoyed having to check and got snarky saying that those trucks were new, so my father left.

He went across the street to the Ford dealership told them that he wanted to buy a truck that day. The salesman said I will do whatever it takes to get you in one of our trucks today. Not only did the guy bend over backwards and to get him the exact truck he wanted and a price my father was happy with but he threw in a lot of extras to make sure everything was taken care of while he was gone so my mother didn't have to worry about anything! That's service!

I've bought from them as well and they are a great dealership, and they've always been fair. The Dodge dealer across the street is gone now. It pays to treat your customers right.


By maugrimtr on 6/25/2014 7:00:52 AM , Rating: 2
From the website...auto dealers will:

quote:
* Fiercely compete for your business and drive consumer prices down.


Consumer prices being the manufacturers price plus a suitable markup added by the auto dealers. How much do they add to the price of the average car?

quote:
* Take the side of consumers in warranty and safety recalls.


Isn't it the manufacturer who issues safety recalls?

quote:
* Create good-paying local jobs and significant tax revenue for local communities.


Dealerships should not be kept around solely for the purpose of creating jobs and raising tax. The purpose of any enterprise is to compete in a market, make a profit and pay the shareholders. Can it do that if car manufacturers can directly sell to consumers? We'll never find out if the NADA has its way.

quote:
* Simplify an otherwise complex car-buying experience.


Are you f***ing kidding me? You still need to go from dealer to dealer, check information between manufacturers, etc. How exactly do dealers simplify purchasing anything?


By Griffinhart on 6/19/2014 2:41:08 PM , Rating: 2
quote:
Wrong. Dealerships provide the most efficient way to screw people. I don't know of anyone that would describe a trip to a dealership to buy a new car as a good, "efficient" experience.


It depends. Around here, SOME dealers have come around to the idea customers have an easier time getting pricing info and that it makes more business sense to not play the old pricing games of past. There are a few dealers around here that actually set the price of the car to the fair price.

I purchased a car in 2012. I did all my normal research, figured out what was the fair price of the car and went in ready to negotiate. It really threw me off when the initial number they gave me almost perfectly matched the amount I wanted to pay. I had a friend get a similar experience at another dealer a few months later.

I can honestly say, it was efficient, pleasurable and That dealer will have my business later this year when I upgrade my car again.

On the other hand, I went to a few other dealers over the past year to test drive stuff. They played the old fashioned game of "how much can you pay per month" and hiding the fact that they were charging MSRP for the car. It was not a good experience and they did not get my business.

There is a lot to think on with the idea of factory direct cars.

Current dealers and businesses like NADA have a vested interest in strict adherence to the existing system.

I'm not convinced that allowing car makers to sell directly to consumers would be a bad thing, or even lead to the extinction of dealers.

There are a lot of benefits dealers bring to the auto makers. They don't need to manage properties. They don't need to manage personnel like Mechanics and salesmen for each location. They don't need to open thousands of locations. I don't think they want to get into the used car market either.

They will not be able to stuff the channel with cars to pad their numbers. Currently the auto makers customers are the dealers and not the consumer. Deliver 100 Cars to the local dealer and they just sold 100 cars even though no consumers have actually driven one off the lot.

There are also a ton of benefits that dealers bring. Registry (DMV) runs, Used Car sales and trade ins, the service centers....

I think the biggest threat to the franchise model would be internet show rooming. I can see people going to dealers to test drive and then end up ordering online and having it delivered to their homes. But, I don't see most people doing that unless they have no trade in and don't mind registering the car and paying the sales tax themselves.

I can see things turning like the bleak outlook NADA claims if automakers suddenly become the sole way to purchase a car, but I think it more likely that franchises would adapt, weed out the terrible dealers that are always trying to take advantage of ignorant consumers and ultimately be better for the consumer.


By EricMartello on 6/18/2014 1:02:08 PM , Rating: 3
This is correct. The NADA is pushing for protectionism, keeping an old, outdated business model alive that is really detrimental to the consumer.

I think a factory-direct car sales program would not only allow for better pricing, but also the possibility of "built on demand" cars that you can customize EXACTLY the way you want instead of relying on an options package that costs $3,000 but only offers 1 thing you actually want and a bunch of crap that you don't.


By Dug on 6/18/2014 1:40:59 PM , Rating: 2
I couldn't say it better myself.


Legalize it for EV only
By wordsworm on 6/18/14, Rating: 0
RE: Legalize it for EV only
By Spuke on 6/18/2014 6:23:26 PM , Rating: 2
No.


RE: Legalize it for EV only
By wordsworm on 6/20/2014 4:41:47 PM , Rating: 1
I don't know why the baked brains in your country think that electric cars aren't anything but a revolution that is going to happen. They are far superior to anything gas has, and may lead to America finally becoming independent from the oil industry. We're fighting the war of limitations applied to the battery tech, which in itself is a few years from the first of 200 Gigafactories which will entirely change the game. America could reinvest its oil money into clean energy generation, use increased carbon tax revenues to offset the cost of electric vehicles, allow the electric car industry unfair advantages in that any Tom Dick and Harry can build an electric car and sell it without those legislative hurdles that got in the way of potential auto makers.

I cannot understand how you prefer to suck engine exhaust than to clean the air. It's like you want to be sick.


RE: Legalize it for EV only
By Reclaimer77 on 6/21/2014 2:03:54 PM , Rating: 2
wow, batsh*t crazy Liberal alert! ^^^^^

Seriously kid, put the glue down....


RE: Legalize it for EV only
By snyper256 on 6/21/2014 11:47:58 PM , Rating: 2
Are you invested in oil?
Do you think it's beneficial to support oil at all?

It's a matter of importance to push for any and all available alternatives.


Tesla precedent
By RobertFahey on 6/18/2014 12:43:12 PM , Rating: 2
1. Who can blame dealers for this paranoia? It was only 15 years ago that Ford and GM tried to operate their own dealerships. Surely they're tempted again.
2. The Federal Trade Commission -- the real consumer watchdog -- has debunked every one of the dealers' rationale for existence. That's a pretty serious slap in the face, don't ya think?

1. http://teslamondo.com/2014/04/30/when-ford-gm-trie...
2. http://teslamondo.com/2014/04/24/ftc-unofficially-...




RE: Tesla precedent
By EricMartello on 6/18/2014 1:10:36 PM , Rating: 2
The way I see it is that you can buy a lot of products online directly from the manufacturer's website, or you can buy that same item - possibly for less - on amazon or some other website. Most people prefer to buy from places they know and trust even if buying direct is a little cheaper (usually it's more expensive).

I do not think that making it possible for manufacturers to operate their own stores and sell to consumers directly means that dealers will suddenly have to close up shop. There will need to be some updates to the franchise agreements to make auto dealers alongside factory-direct auto stores work.


RE: Tesla precedent
By djc208 on 6/19/2014 9:15:59 AM , Rating: 2
It's more expensive because the manufacturer charges their Suggested Retail Price (MSRP) so as not to undercut resellers. If Wal-Mart buys millions of dollars of product from me I don't want to risk loosing that business by maybe selling it cheaper online direct.

Besides the fact that selling you one costs more than selling a truckload to somone since the time and cost to ship one vice a truckload isn't that different.


Should have read
By SteelRing on 6/18/2014 12:56:26 PM , Rating: 3
quote:
Franchised new-car dealers provide the best, most efficient and most cost-effective way to skin the customers and deep fry them alive and thus maximize the profit going into dealership pockets, monopolized and unchallenged.


I loathe going into car dealerships, it makes my skin crawls and always make me feel I need to take a bath afterwards. Yuck....




Land of the free....
By speedgoofy on 6/18/2014 1:11:49 PM , Rating: 2
I think the real bottom line here is that we have an American company that is trying to improve our way of life and our future. How are we letting the NADA or any organization in America dictate how we have to sell our products? Whatever happened to free enterprise and open markets? I applaud Elon Musk and Tesla team; I hope they keep up the fight! ... Down with the NADA mafia!!!




NADA Obfuscating
By KFZ on 6/18/2014 1:20:17 PM , Rating: 2
The NADA is fighting the battle it knows it will have to face eventually if they don't terminate direct sales: it's jumping straight to the final battle to justify its own existence.

The reality is much simpler and makes it easier to dismiss their claim: a creator has the freedom to sell their own product.

Banning direct auto sales would be like banning Amazon from selling Kindles while saying Wal-Mart is more beneficial and has stronger consumer protections... because it's not Amazon.




ex auto industry employee
By zeppster on 6/18/2014 1:42:14 PM , Rating: 2
I used to work for vAuto (Autotrader) and have dealt with the absolute absurdity that dealers employ for new car sales. I'm all for letting the manufactures sell direct as this is a free market economy. The manufactures with the best vehicles and service will get our business.




Derp
By Gunbuster on 6/18/2014 4:15:31 PM , Rating: 2
Wait, so instead of having to haggle and put up with an asshat sales person and turn down six extended warranties, and undercoat, and windshield diamond coat, and scotch guard, and feel like I just left ABC warehouse just to get near the real cost of a car everyone could buy direct online and all pay the same price? That sound just crazy to me. Yes I'm convinced we need protectionism for the stealerships. /Sarcasm




Most recent Stealer BS
By btc909 on 6/19/2014 12:47:46 AM , Rating: 2
Stopped by Riverside Metro in Riverside, CA Nissan portion of the stealership wanting to look at the 2014 Rogue. Sales Troll comes up, told the Troll what I wanted to look at, Troll asks what features we are looking for and walks out to the front lot to see what they having. Well first you have a tablet that tells you what you have and in what parking spot that vehicle is located in. After watching the Troll I decide to get out of my car and started walking to the right to get a better view of the front of the vehicles, HUMMM those look like Muranos. We got into the car and left.

You should be able to order a car online. You are already paying a destination charge (it's a delivery fee) for the vehicle anyways. I'm sure 10's of thousands of manufacture authorized shops would pop up to do "warranty work" on your vehicle.

Hell I should be able to go to B&H Photo & Video and order a freaking car!




Nonsense
By wookie1 on 6/19/2014 12:20:32 PM , Rating: 2
“New-car dealers provide the best and most efficient way to buy and sell cars for both consumers and manufacturers, despite the misinformation and misconceptions that have surfaced over the last several months,”

This is clearly contradicted by the idea that a law is required to force companies to sell through a dealer. The best and most efficient way to buy and sell cars would emerge naturally if there were no laws in place. It's pretty obvious that the current dealership sales model would not be what emerged given the push to make laws to force it to be so. Otherwise, you'd probably buy a car on Amazon or something.

Seriously, if I go to the dealer to test drive a car and ask questions about it, the sales person can't ever seem to answer even the most basic questions about the car. I have to learn about the car myself from the manufacturer website and internet forums anyway, so why bother with the sales people? Dealerships are protected because they deliver large amounts of sales tax revenue to the cities and states (in most states, anyway). Politicians don't want internet car sales to impact sales tax revenue. That's another reason why they will require a car company to have a physical location in the state - so that they can be required to collect sales tax.




Some valid points
By nolisi on 6/18/14, Rating: -1
RE: Some valid points
By SteelRing on 6/18/2014 1:07:07 PM , Rating: 5
How could you expect a direct sales model to be comparable to dealership model? For your situation and your negotiation skill the dealership model is clearly superior to meet your needs but that doesn't have any bearing that the direct sales would generally skip all those overheads that you require to meet your needs for most other customers.

Besides, the point is not that the direct sales model necessarily has to replace the dealership but the fact there is a market opportunity that can and should be accommodated by the direct sales. The dealership denying this model to exist and thwarting it by twisting the government to outlaw it is anti-competitive bordering to corruption and against everything that a free market should be.

I'm sure there are going to be a lot of people disappointed with the direct sales model just as many people are not happy they have to wait for shipping from amazon before they get their stuffs. However that's besides the point.... you should have a choice and the market should provide it.


RE: Some valid points
By BRB29 on 6/18/2014 1:57:27 PM , Rating: 5
Doesn't matter how they argue, there's no way to get around the math.

Direct sales

Manufacturer cost + profit margin + taxes = consumer price

Dealer Franchise

Manufacturer cost + profit margin + dealer cost + dealer margin + taxes = consumer price

What people who are too dumb to actually do research fail to realize is that MSRP means nothing. It is just a SUGGESTED RETAIL PRICE. It tells nothing about the real cost or what the consumer will pay.

Dealers will make money even if they sell below MSRP because the incentives are often paid by the manufacturer. Even if there's no incentives, the dealer still make money depending on how far below they go under MSRP.

So what will happen when Direct Sales become the norm?
The aggregate MSRP should decrease. But honestly, by then the term MSRP would have no meaning since there's no resellers. It will be just a Price. Any discount will be applied directly.


RE: Some valid points
By Samus on 6/18/2014 6:20:46 PM , Rating: 5
That video and the NADA is ridiculous. What hypocrites. The reason buying a car is so complex is BECAUSE of the dealer-model.

Imagine how complex buying a memory upgrade would be for your laptop if it was only sold by OEM's and there was no set price. Negotiation or lack of fixed price makes things substantially more complex. Don't agree? Look at the window sticker for the last car you bought and tell me what half of those fees are. Environmental fee, dealer fee, advertising fee, documentation fee (that's my favorite) and of course the usual taxes, title, registration, destination/delivery and acquisition fee.

Tesla has two fees of their own, and three fees at the state-level. The MSRP and destination fee (because they deliver it directly to your front door) are paid to Tesla. Sales tax, title and registration are paid to the state.

Yeah, I feel like NADA is really making my life more simple...

I have a friend who bought a Model S in January. Walked in and out of a store in 20 minutes. Three weeks later a two guys dropped it off at his home, they installed the plates he was mailed from Illinois (ordered online at the Tesla store), performed a multipoint on-site inspection, he signed some papers and every month $900 is withdrawn from his bank.

His first checkup is optional at 5000 but recommended at 10,000 miles for tire wear, brakes and chassis torque-check. After that the recommended service intervals are 10,000 miles for all pretty minor crap. The first big service is 50,000 miles for coolant check, brake fluid check, you know, 5 minute stuff. It will probably need tires by then too.


RE: Some valid points
By Solandri on 6/18/2014 7:07:09 PM , Rating: 1
quote:
Direct sales

Manufacturer cost + profit margin + taxes = consumer price

Dealer Franchise

Manufacturer cost + profit margin + dealer cost + dealer margin + taxes = consumer price

While I agree dealers are probably inflating car prices, it's not as simple as you make it out to be. What if you hired a professional negotiator to negotiate your car price with the manufacturer?

Manufacturer cost + profit margin + taxes + negotiator fee < manufacturer cost + profit margin + taxes

How can that be? You see, "profit margin" is not a fixed value. It can be reduced by a good negotiator, enough to offset the negotiator's fee in certain cases (fat profit margins).*

In fact that was the original concept behind mandating the dealer model for car sales. A manufacturer couldn't care less about one additional sale. So individuals didn't have sufficient clout to negotiate a good price with a manufacturer, and the resulting profit margin was huge. But a dealer representing thousands of buyers did have clout, and could get a better price by shrinking down the manufacturer's profit margin. And likewise a dealer did care about an extra sale, so an individual did have negotiating clout with the dealer to reduce the dealer's profit margin. Whether these market conditions still remain the same today is highly questionable, but it's not a simple matter of "no middle man = better price".

* For anyone who doesn't believe this is possible, it's exactly how fleet pricing of cars via discount programs like Costco work. You pay Costco's membership fee, Costco negotiates a better price for the car than you could have with your lousy negotiating skills.


RE: Some valid points
By bsd228 on 6/19/2014 4:13:51 PM , Rating: 2
quote:
While I agree dealers are probably inflating car prices, it's not as simple as you make it out to be. What if you hired a professional negotiator to negotiate your car price with the manufacturer?


Nothing precludes you from hiring that same professional negotiator to deal with the Tesla store as well. And if you want to negotiate with Home Depot or Best Buy, you can. The answer may be no, of course, based on demand of the product.

When the Miata, of all things, came out in the late 90s, dealers brazenly inserted on the sticker "$4000 - additional dealer profit." And that's been the case for other hot new releases. Right now Tesla has little trouble selling to meet demand. So of course your ability to negotiate is limited. But it has absolutely nothing to do with the sales method.

You would lose the ability to negotiate harder with the dealer on the last day of the month, right before many of them face the next month interest change on their inventory, but of course you're paying for those costs in the form of the end price anyway, along with the rest of dealer overhead.
quote:
* For anyone who doesn't believe this is possible, it's exactly how fleet pricing of cars via discount programs like Costco work. You pay Costco's membership fee, Costco negotiates a better price for the car than you could have with your lousy negotiating skills.


It's not that hard to find dealers that sell at "fleet pricing" as their means of attracting business. At this point, there are membership orgs like Costco and web sites a plenty that can all do this, or you can just ask several dealers in your area for a price. I bought my toyota truck in the 90s direct and I bought my last Subaru last year with no effort. Only in the middle did I have to do the hours long negotiation silliness. The fleet price really is the highest price you should be paying for any generally available model. (My insistence on a manual transmission can work against me).


RE: Some valid points
By Brandon Hill (blog) on 6/18/2014 1:10:58 PM , Rating: 2
You probably didn't have to wait on the Active Hybrid 3 because I seriously doubt that it's a big seller and they were probably eager to offload the damn thing :)

Honestly, the 328d seems a like a better proposition than the Active Hybrid 3 IMHO. VASTLY better fuel economy and 300 pound less to drag around.

C&D said it didn't even make sense with the 335i already being in the lineup:

http://www.caranddriver.com/reviews/2013-bmw-activ...


RE: Some valid points
By Mint on 6/18/2014 1:37:40 PM , Rating: 3
God, what a fail of a car. How did BMW wind up with only 2mpg improvement on the city cycle when going hybrid? That's gotta be the worst hybrid ever made.

Maybe all of BMW's good electrical engineers went off to work on the i3.


RE: Some valid points
By Reclaimer77 on 6/18/2014 1:50:18 PM , Rating: 2
Because BMW doesn't make cars that drive like a Prius? They obviously geared it for performance.

Come on Mint, we're talking about BMW here.


RE: Some valid points
By tng on 6/18/2014 2:58:28 PM , Rating: 2
quote:
Because BMW doesn't make cars that drive like a Prius?

After renting more than one Prius over the years, I can say from experience that they go well beyond handling like a pig, more like a pregnant cow.

So yeah you would expect that a BMW 3 hybrid would not be a Prius, but still, better than that.


RE: Some valid points
By Reclaimer77 on 6/18/2014 3:07:07 PM , Rating: 1
BMW Active Hybrid 3 0-60mph = 5.2 seconds
Toyota Prius 0-60 mph = we're still waiting (10 seconds)

And let's not even look at the 1/4 mile times, lol trust me.

Mint thinks "hybrid" means more MPG, more efficiency. That's his own fault, not that of BMW.

Having said that, the Active 3 is about 25% more efficient than the stock 335i sedan, while retaining a LOT of the performance. Again, this IS a BMW we're talking about.

And it's really getting annoying seeing him accuse everyone's "engineers" of sucking just because products don't meet his personal expectations or understanding of target markets.


RE: Some valid points
By Brandon Hill (blog) on 6/18/2014 3:12:49 PM , Rating: 4
quote:
And it's really getting annoying seeing him accuse everyone's "engineers" of sucking just because products don't meet his personal expectations or understanding of target markets.

Reclaimer... in every Apple thread

;-)


RE: Some valid points
By Reclaimer77 on 6/18/2014 5:12:15 PM , Rating: 2
ooooh you'll pay for that :P

I think Apple's engineers are just fine. They PURPOSELY make crap and invest as little as possible to maximize profits.


RE: Some valid points
By Mint on 6/19/2014 8:43:30 AM , Rating: 4
Infiniti:
Q50: 328hp, 20/29 MPG
Q50 hybrid: 360hp, 29/36 MPG

Q70: 330hp, 18/26 MPG
Q70 hybrid: 360hp, 29/34 MPG

Lexus:
GS350: 306hp, 19/29 MPG
GS450h: 338hp, 29/34 MPG

Acura:
RLX AWD: 310hp, 20/31 MPG
RLX AWD hybrid: 377hp, 28/32 MPG

All of these models have roughly equal performance after adding the hybrid parts. BMW's hybrid is 0.4s slower to 60mph than the 335i . If performance was the goal of adding an electric motor to their twin-turbo I6, then they failed. Of course efficiency was the goal. The ludicrous comparison of a BMW to a Prius is your doing, not mine.

I never said anything remotely like "everyone's engineers sucking". BMW is the ONLY manufacturer getting so little MPG gain from going hybrid.

Where did you get 25% from? A BMW marketing brochure? It gained only 3 MPG in the EPA test (and was only 2 last year).

The rest of the 335i is fantastic. The hybridization is the fail.


RE: Some valid points
By Reclaimer77 on 6/19/2014 4:19:37 PM , Rating: 2
quote:
BMW is the ONLY manufacturer getting so little MPG gain from going hybrid.


Yes and my point is that's INTENDED. Obviously. It's the ONLY rational explanation.

If efficiency was BMW's goal, it would be more efficient.

Also you obviously haven't read much about this vehicle. It would be impossible to EPA test it with any accuracy due to how the technology depends greatly on driver style. Some owners are claiming 40+ MPG.


RE: Some valid points
By Mint on 6/20/2014 12:21:58 AM , Rating: 2
Then what was BMW's goal, huh? Making the 335i slightly slower and 300 lbs heavier? Only you would think that's rational.

Car and driver got 23 MPG in their own non-EPA testing. That's barely any better than they get in their 335i testing (22MPG in one review, 20MPG in another).

Here's another scathing review from 4 different editors:
http://www.autoweek.com/article/20130520/CARREVIEW...


RE: Some valid points
By sigmatau on 6/18/2014 7:29:43 PM , Rating: 3
Yes, BMW makes awesome cars, but compare the AH3 to a 335i. The 335i is about $6k cheaper and faster and its engine is more responsive. Paying about $6k more for 2mpg additional compared to a 335i is just terrible.


RE: Some valid points
By Reclaimer77 on 6/18/2014 10:21:11 PM , Rating: 2
$6k more for the M-Sport? Bullcrap. On the BMW forum everyone is saying they got an AH3 M-Sport for cheaper than a similarly equipped 335i. You must be comparing an M-Sport AH3 to a stripper model or something.

Dude we're talking about a 300+ HP sports sedan, I know when you think "hybrid" you think of some gas sipping POS like the Prius, but you need to read some AH3 reviews and get educated.

It's a phenomenal vehicle and the most advanced hybrid in it's price range by far.

Wtf did you people expect from a BMW hybrid? Some three cylinder POS running the Atkinson cycle? Hell no lol.


RE: Some valid points
By sigmatau on 6/19/2014 4:57:04 PM , Rating: 3
The base prices of the 335i is $6k lower than the base price of the AH3. They both have the same options to add in terms of packages. Not sure if the 335i has fewer addons on the base model as that is not apparent when you try to build one on BMW's website since they both have the same options you can add to the base model. The OP got such a good deal because no one wants this care and BMW is begging people to buy them.


RE: Some valid points
By Reclaimer77 on 6/19/2014 5:48:04 PM , Rating: 2
"Base price" is meaningless because only an idiot walks into a dealership and pays that. Unfortunately lots of people are idiots.

The OP clearly knows how to wheel and deal and got himself a bargain.


RE: Some valid points
By nolisi on 6/18/2014 1:47:24 PM , Rating: 2
Brandon- all things being equal, you'd be right, but you overlooked the very item you mentioned on the ActiveHybrid3 which change the logistics of purchase-they're eager to offload it (but it is far from a damn thing.

In order to make your point, you have to compare the vehicle to two other cars which drive differently from eachother: the 335i and 328d (and it's not really economical for me to buy those two other cars to get the benefits of the AH3). And they also happen to be two cars that BMW isn't willing to deal on.

Consider:
1) The 328d is about 2 seconds slower AND BMW isn't willing to deal (I also have to load it up more to get to the same standard equipment as an AH3)
2)The 335i has about the same perf, but again, BMW isn't willing to deal (in fact most articles I've read aside from that C&D indicate that the AH3 is about .2 seconds faster than a 335i)
3) I was able to negotiate about 6K off my bill and if my first month or so of driving is any indication, I'll be able to average 32-33 rather than it being my upper bound on highway speeds (I easily pulled 35 on a trip from Seattle-Portland)

So, all in all, I'm glad BMW released it, and all things being equal, you'd probably be right on. The truth is, I targeted the AH3 knowing they would be willing to offload it.

BTW, putting the vehicle in sport mode- it feels NOTHING like a Prius in spite of C&Ds complaint :P.


RE: Some valid points
By Reclaimer77 on 6/18/2014 3:57:02 PM , Rating: 3
RE: Some valid points
By sigmatau on 6/18/2014 7:15:12 PM , Rating: 2
The 335i has a lower sticker price and is a better driver's car. You will be able to get a grand or two off of that that should match your final price of your AH3 or lower.

You would have gotten a better deal by selling your Ford to a private party. No dealer, no matter what they claim to you that they are buying it at their "retail" sell price is total BS. It always is and always will be. BMW doesn't sell Fords. Unless you went to a non franchise BMW, you will not see a used Ford being sold on their lot. I know most don't want to sell their own vehicles privately for whatever reason, but it would have netted you at least a grand or two more. You do know that NADA stands for North American Dealer Associates right?

Now, moving to the Tesla, you would have to compare that vehicle to something in limited supply like when the Corvette first came out or some other high demand low supply vehicle. No dealer will negotiate with you on that. Not only that, but all dealers would have added money on top of a Tesla if they had a chance to sell them. I would wager that most Teslas would sell for around $10k more than they do today if dealers could get their clutches on them.

Don't confuse buying a car that a dealer was begging to sell to someone with a vehicle that is in very high demand where the supply cannot match it.


RE: Some valid points
By nolisi on 6/19/2014 12:18:27 AM , Rating: 2
quote:
The 335i has a lower sticker price and is a better driver's car. You will be able to get a grand or two off of that that should match your final price of your AH3 or lower.


I disagree it's a better drivers car. While there are some distinguishing differences in pedal feel, and a bit of handling differential, to me, the difference is made up by the extra performance, features and mileage.

As for the price, maybe- but less likely given that most aren't even considering negotiating on an AH3 given the higher sticker price and going for a straight 335.

As for the Escape- I never claimed the dealer told me they were offering me *their* retail. I did the research on KBB and Edmund's of what the dealer retail should be. They met that price. Perhaps their retail will be higher. Please, learn to read.

quote:
Don't confuse buying a car that a dealer was begging to sell to someone with a vehicle that is in very high demand where the supply cannot match it.


I didn't- I told you the background of what I was considering and what I ended up with based on the factors involved. I'm not even suggesting mine is a common scenario.

A dealer will negotiate with you based on what you are personally considering. Trust me- the sales person spent as much time as he could talking down the Model S as soon as I told him I was planning to test drive it before I made my decision.


RE: Some valid points
By bsd228 on 6/19/2014 4:20:11 PM , Rating: 2
quote:
As for the Escape- I never claimed the dealer told me they were offering me *their* retail. I did the research on KBB and Edmund's of what the dealer retail should be. They met that price. Perhaps their retail will be higher. Please, learn to read.


It's simple - the dealership isn't going to lose money on your trade-in. In essence, you're paying them to take it off your hands. If you went through the effort of selling it yourself, you would get more money.

They will make their money in the spread between what they pay you and what they sell it for, or in the form of a higher price on the new car (which is the least ideal if your registration fees are based on price)

At the heart of it, you bought a less popular car and that of course motivated the dealer to make you think you got a steal. Be assured they made money on both cars.


RE: Some valid points
By sigmatau on 6/19/2014 5:04:13 PM , Rating: 2
They made so much money off of you that they offered what you thought was retail on the Ford. They most likely sold the Ford at wholesale or auction.

You are the one complaining about the downsides of buying a Tesla yet you bought a car that no one wants and any dealer would love to dump it off their lot, LOL.

Again, don't try to compare buying a car that is in high demand with low supply to a car no one wants. Also, you probably didn't get as good of a deal as you think, considering what you bought and what you could have bought like a 335i and gotten an even cheaper final price.

That is what everyone is trying to point out to you.


RE: Some valid points
By tng on 6/18/2014 1:13:50 PM , Rating: 4
quote:
I was able to negotiate down to invoice pricing, plus they included additional warranty coverage, and to top it off, they offered dealer retail for my Escape (a couple thousand more than I was expecting given the condition, mileage and age based on KBB and Edmunds reasearch)

So... if you paid the same amount that they paid for the car, plus got all of the stuff mentioned above, that means that they lost money on your sale.

Not sure what that means, but obviously that is not true, so you didn't pay invoice.

The problem with franchised dealerships is that they play these games, we think we got a great deal and really we didn't, it is just a bunch of beads and trinkets for the natives who don't know any better.

I am not saying that the direct manufacturer model that Tesla is pursuing is any better but there should be less BS involved.


RE: Some valid points
By nolisi on 6/19/2014 12:05:44 AM , Rating: 2
Bear in mind that Fiat loses 14K on every 500e it sells- this is a whole trim level of car that it continues to sell. A dealer losing money on a vehicle is not without precedent.


RE: Some valid points
By tng on 6/19/2014 8:08:02 AM , Rating: 2
quote:
Bear in mind that Fiat loses 14K on every 500e it sells

Eh, yeah, but... Fiat also sells the 500e as a CAFE offset, with the mileage of the car that you got, the same can't be said for BMW.

Also I am convinced that the "slip" by the guy at Fiat that they lose $14K on every 500e was an orchestrated marketing tactic to get people to buy the car. There is no better way to make people think that they got value for their money than to tell them that they saved $14K.

BTW, how are you enjoying the car. Hybrid or not bet it is a blast to drive.


RE: Some valid points
By Dug on 6/18/2014 1:50:30 PM , Rating: 2
What users doesn't realize is that invoice is just a word, when they believe it's the actual cost of the car. Dealerships caught on long ago after Internet access was the norm, and changed what's listed on the invoice.
You can basically put anything on there and hide the actual cost. Only the dealerships ordering the cars know the cost and it's different from dealership to dealership depending on the type of car and what banks they use. Some actually buy their cars, while others are on loan for the cost of interest - depreciation. You will never see the kickbacks from the car manufacturers. So they may be getting an additional 3 thousand for just selling the car and you wouldn't even know it.

Believe me, there's no such thing as free additional warranty or giving full price for your trade in. That super negotiating you did was already set up well in advance and those costs that you think you received are already built into that invoice.


RE: Some valid points
By nolisi on 6/18/2014 2:16:40 PM , Rating: 2
quote:
Believe me, there's no such thing as free additional warranty or giving full price for your trade in. That super negotiating you did was already set up well in advance and those costs that you think you received are already built into that invoice.


Additional warranty- I will amend this slightly, I got them to throw in replacement on windshield since I have a HUD (I confirmed that my insurance company wouldn't cover the full cost of replacing with the equivalent windshield). Perhaps terming this as warranty coverage was probably not accurate, but nonetheless, I didn't pay anything for this- and perhaps you're right, this may have been "set up in advance".

Full price on trade in- I don't know how you can suggest this was set up in advance. I did my research on trading in vs selling my Escape well before I talked to the dealership. Given the condition of the car and mileage (I was way over average mileage for a 4 year old car @88K), I was expecting at least $2-3K less than what they offered. I was quite surprised at the figure they came back with after evaluating it.


RE: Some valid points
By Motoman on 6/18/2014 2:28:16 PM , Rating: 2
quote:
Full price on trade in- I don't know how you can suggest this was set up in advance.


I'm guessing you didn't research what the dealer cost and incentives were on the car you were buying...if they gave you "more than your trade in was worth" then you left a lot of money on the table.


RE: Some valid points
By nolisi on 6/18/2014 2:50:12 PM , Rating: 3
You're doing a lot of guessing here to suggest that I don't know what I was getting or could have gotten in a deal that, at the last time I checked, I was a part of, and you weren't(unless you worked for the dealership).

A) I did find out BMW had a $4k incentive to dealerships to sell AH3's. One dealer in my area which didn't have it in stock admitted to it, the second dealership (which did) wouldn't admit to it. I got more than this $4k incentive.

B) A dealer incentive to sell a new car is not tied to the value of a trade in to my knowledge.

C) Before we even hit the negotiating table, I told the salesperson I wasn't going to trade in the Escape. In essence, I made sure to negotiate the price of the AH3 without the idea of a trade in involved. The Escape came into the picture after we got to the number I wanted on the AH3.

D) I did my research with KBB and Edmunds on the Escape before I walked in- not only did I tell them I wasn't trading the car in, but they also had no idea what I was expecting for it.

Ultimately, you might be right: at some point, somewhere, I may have missed some money I could have saved. But the amount is likely negligible, and ultimately what I paid on the BMW vs the value I got for the Escape were as isolated as possible, and is still significantly above what the vehicles were supposed to be sold for.

This is why people don't like talking to geeks- yes we're highly intelligent, but we make a lot of assumptions about things we think should be true 100% of the time (such as how I negotiated, what I researched, and what I knew at the time of sale), rather than accounting for situational variables.

Ultimately, I spent 3 months of researching different cars, available incentives, over a week of negotiation, including best possible loans outside of each dealership for each vehicle I was considering. I didn't decide one week I wanted a new car and spent only 3-4 hours including test drive before I signed the contract.


RE: Some valid points
By bsd228 on 6/19/2014 4:22:29 PM , Rating: 2
quote:
Ultimately, I spent 3 months of researching different cars, available incentives, over a week of negotiation, including best possible loans outside of each dealership for each vehicle I was considering. I didn't decide one week I wanted a new car and spent only 3-4 hours including test drive before I signed the contract.


Hopefully you spent the same amount of effort selecting your 401k and other retirement investments.


RE: Some valid points
By Motoman on 6/18/2014 2:13:46 PM , Rating: 4
There's not any valid points there.

1. If the car you want from GM, Ford, whatever is a popular car, you could wind up waiting anyway. And/or if you ordered a car with just the features you wanted and it had to be built.

2. You'll always get more money selling your car yourself, rather than trading it in. Always. So that's no really a plus. On the other hand, you never *have* to sell it yourself. If you really just want to dispose of your car, you can always take it to a used car dealer and take what they offer. If your old car is kind of valuable, you can even contact a car broker to sell it for you.

3. Negotiating with a franchise dealer is pure smokescreen. That's not a plus in the favor of dealerships - it's one of the massive negatives. Do the research on the car you want ahead of time...find out what the dealer's cost is, what incentives they're going to get for selling it, etc. Then walk in and make an offer you're comfortable with, including a reasonable amount of profit for them (because it's not worth their time at all if they're not going to make any money on the transaction). If the dealer won't take your offer, go on to the next dealer. If you wind up "negotiating," you've already lost.

Oh, and as for the title: "Tesla's Direct Sales Victories Have the National Auto Dealer Association Calling for Reinforcements" - yeah sorry that your cartel is breaking up. Such a shame.


RE: Some valid points
By nolisi on 6/18/2014 3:04:47 PM , Rating: 2
See my above post, Moto.

You're making assumptions about how I negotiated or what knowledge I had at the time of sale. Believe it or not, you are not the only one to know these things. Oh, and anytime you say the word always, (like you'll always get more money selling the car yourself)- recognize that there are probably exceptions and/or perspectives that invalidate that absolute.

Sure, I could sell my car myself (and I considered that option- based on the fact that you're trying to educate me here on things you assume I don't know, you're probably also assuming I didn't consider it and/or didn't try to sell it prior to my purchase). Given the time investment of selling the car myself, plus the likely value I could have pulled from selling the car myself based on KBB and Edmunds), the dealer ended up offering me close to what they should have been able to sell it for retail, and well above the number I tried selling it for already.

Review your assumptions- ask questions about what I did instead of making assumptions to be argumentative.


RE: Some valid points
By Rukkian on 6/18/2014 5:07:19 PM , Rating: 2
quote:
Sure, I could sell my car myself (and I considered that option- based on the fact that you're trying to educate me here on things you assume I don't know, you're probably also assuming I didn't consider it and/or didn't try to sell it prior to my purchase). Given the time investment of selling the car myself, plus the likely value I could have pulled from selling the car myself based on KBB and Edmunds), the dealer ended up offering me close to what they should have been able to sell it for retail, and well above the number I tried selling it for already.


On top of that (at least in the states I have purchased a car in), there is the added benefit of not paying sales tax on the trade in amount. If you trade in your car for 10k, and the local sales tax is 7% (my situation on my last new car) that is $700 more that you get from trading it instead of selling it outright. While you do (usually) get more by selling the car yourself, I don't usually find it worth my time, effort, or headache to sell a car myself.

When I downsized (a couple of cars ago), I traded in a Honda Pilot with 90k miles for a HHR with 15k miles, which sold for $500 less than the the amount I traded in my Pilot for, meaning I paid $0 in sales tax, on top of getting more than KBB private party sale on my trade in.

Not every situation is black and white.


RE: Some valid points
By Motoman on 6/18/2014 5:51:54 PM , Rating: 1
I'm sorry, but you're overly impressed with yourself.

You have clearly missed a few things. But I've said all that needs to be said.

If you're pleased with your outcome, then fine. But you should stop trying to inform the rest of the world with your "advice" as you did with your OP...because you're wrong.


RE: Some valid points
By nolisi on 6/19/2014 12:00:14 AM , Rating: 2
quote:
because you're wrong.


I explained the entirety of the situation because you made false assumptions, not because I was impressed with myself. I've got the contract and the the car to back it up.

The truth is you're making assumptions with no knowledge, and jumping to the conclusion I'm wrong based on......? That's right, nothing but assertion.


RE: Some valid points
By synapse46 on 6/18/2014 4:37:53 PM , Rating: 2
I bought a new car from a dealership once. This process literally took ALL day. It is nice to have a new car, but unless you want to pay out the A$$ for it, the process is so miserable I'm not sure I'll do it again.


RE: Some valid points
By Motoman on 6/18/2014 5:55:21 PM , Rating: 2
Which is why you do all your research up front, and decide what you're going to pay for the vehicle, and walk in and offer it to them. And have your financing already lined up and ready to go, and don't play into their financing deals.

You walk in with an offer, effectively with cash in hand, ready to go. This is the only way you're not going to f%cked with.

They can take it or leave it. Without any additional BS like "doc fees" (no, I'm not going to pay you $50 for making copies) or "protectants" (see: Fargo).

If that dealer won't take it, the next dealer will.


RE: Some valid points
By btc909 on 6/19/2014 12:51:50 AM , Rating: 2
Lease, drive as many miles as you want, buy out the lease, go to a used car dealer and put it on consignment, keep the full insurance coverage, lease again, collect your check when the vehicle has sold, cancel the insurance, repeat.


"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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