What value are dealerships adding to the purchase experience?

[connoisseurr]

To simply answer the question in your title, "What value are dealerships adding to the purchase experience?"

Simple.

AMV = Adjusted Market Value ?

Other than that, zero value. I'd love to see a future where we can eliminate the dealership model to simply exist for service procedures and product display/testing. Keep a unit or two at different service centers in a region for customers to view, and then factory order each vehicle from Ford. This reduces the number of BS configurations that are produced to then sit on lots collecting dust.

Sponsored

 

[gordonf238]

I was sure to get a purchase order, breaking down the price all the way to doc fees and taxes when I ordered mine through a local dealer. That’s a legally binding purchase order and the dealer can’t just add a few grand when I’m ready to take delivery.

The sad part is people who order one through Ford’s website, pay the deposit, and when the car finally arrives, that’s when price negotiations begin. Poor all around execution

 

[bp99]

Regardless, there needs to be local staffing to prep and deliver the vehicle. There needs to be local staffing for service and repair. It doesn't matter to me if it's Ford or a third party. There's overhead regardless. It's just a matter of how that expense is distributed.

Dealers are adding ADM because the current market conditions allow for it. Tesla might not have dealers, but they've been raising prices almost weekly lately. The Model Y going from ~$52K to ~$60k in six months is no different than a dealer adding ADM. It's just that Tesla is getting all the additional money, not a dealer. For the consumer, the price is still higher despite who puts the money in their pockets.

 

[RickMachE]

I think many are very naive. The average person is clueless when it comes to buying a vehicle. They need help with trim and option selection, they need help with financing, they need help with service. Yes, some dealers are awful. Just like some retail stores are awful. Not unique to auto dealerships.

Buying online works for some. But, not yet, for most.

 

[Blue highway]

There are a couple of separate issues here.

From a sales perspective, I don’t see a lot of value when buying new… buying used? Maybe some value because I want to see the exact car I’m considering.

from a service perspective, I like having a lot of places with access to factory parts, training and tools. This was a factor in choosing the MME ( along with seeing the crappy panel gaps on the Model Ys near me)
In the long run I could see dealerships simply being service centers…. That’s where they make money now.

 

[phil]

There are a couple of separate issues here.

From a sales perspective, I don’t see a lot of value when buying new… buying used? Maybe some value because I want to see the exact car I’m considering.

from a service perspective, I like having a lot of places with access to factory parts, training and tools. This was a factor in choosing the MME ( along with seeing the crappy panel gaps on the Model Ys near me)
In the long run I could see dealerships simply being service centers…. That’s where they make money now.

Since the rise of the internet, I have seen no value in dealer sales departments. They probably add negative value, for me.

I also avoid dealer parts and service like the plague - I get better, cheaper service elsewhere. That probably won't be an option with the electric Mustangs, though, at least for a few years.

 

[Jim D]

An honest question. I routinely check around to see if a particular color/trim Mach-E is potentially available at one of the local dealerships, in hopes of grabbing one on the spot instead of waiting for my custom order to be delivered. Regardless of whom I contact, the average markup for a Mach-E in the NYC metro area is $5-$10k over MSRP.

That’s a hefty profit for doing….. what exactly? Dealerships have become nothing more than drop-off venues in the transaction. Sure, current economic and supply-chain issues gives them the upper hand. But doing what exactly? Ford designs, manufactures, and markets these vehicles. If they wanted, a truck could drop your order off right in your driveway. Just like Carvana. So what does the dealership do? VIN etching for $399? Prepare the registration documents? I’m honestly puzzled because aside from being a service center, there is zero reasons for these price-gouging middlemen to exist.

Mach-E purchase experience is a prime example for Ford. Great car, great demand, but you’ve got a network of greedy, sleazy, lying dealers stuck in the middle acting as gatekeepers.

What can we dot to get Ford to allow us to buy their vehicles straight from the website?

$10k profit for doing zero work. I am flabbergasted. It’s like winning the lottery without ever buying a ticket.

If Ford wants to compete with big EV names like Tesla, they need to start with the sales experience. Right now, their sales model is about 70 years too old.

I didn't pay any mark up at Healy Brothers in Beacon NY. I can't say I was impressed with their EV knowledge, but they were straight on the price.

 

[voxel]

Yesterday, I bought a Mach-E Premium RWD Standard Range with only $1K markup (originally listed with zero markup but finance guy shoved one in) literally off the truck. I test drove it with the plastic coverings over the seats and the plastic film/stickers on the rear view mirror and display. The original person who owned the order failed a credit check and I lucked out.

The typical extra warranty and accessories push happened but they weren’t aggressive about it. My first EV, the VW ID.4, I was basically forced to buy accessories, tint, and pay for nitrogen. But I did pay MSRP so I guess for $1K I did get something. There are good and bad dealers. At least the VW dealership had an EV specialist working 2 days a week on site and he was knowledgeable. The ability to fix EV problems is the "value added" from a dealer. Unsure about the Ford dealership I bought the Mach-E from.

I owned Tesla Model Y before this and the ordering process was simple but had zero flexibility. Everything is by the book. Order fee is not a deposit. Any changes triggered price increases to current levels (old orders with historical prices were locked to a config for fear of $5K+ increases). There was no negotiating. Trade in offers were final. If your delivered car had issues, you had to accept delivery and get the problem fixed after - or outright reject delivery and wait for a new VIN a few weeks later. My Y only had a brake pedal with excess play that was fixed by the service center the following week. If I rejected the car for that, I could be waiting weeks or months (nobody knows how the system works).

 

[Jonno21]

I can only write from a U.K. perspective but I ordered online and collected from the dealer I nominated at the time of ordering. There was no mark up on price and there was good communication on delivery times etc. It turned up at the dealer before the online tracker tool here said it should.

You still need a PDI and the ability for test drives as I would never buy a car without a test drive. It does sound as though the U.S. dealers are milking the price as much as possible. Capitalism and greed at it's finest.

 

[tannerk89]

It seems that the no value add by dealer seems to be more of a problem with Ford and other big 3 dealerships. In my experience dealers absolutely can add value. My fiancé purchased a Volvo from a dealership in Greensboro, NC and it was the best experience. Everything was well laid out, easy transaction, no BS, and they did a great job of teaching her about the car and features etc. They did some great work on the sale and we truly appreciated their service. I haven’t seen that from Ford though which is a shame, it shouldn’t be a luxury brand “thing” to have good, honest, customer service. My experience with ford dealers has been mixed with some OK and some pretty bad, but I would never say that I have had a good experience at one of their dealers. It always feels like I’m managing how much they are screwing me over rather than getting any value.

 

[RickMachE]

Since the rise of the internet, I have seen no value in dealer sales departments. They probably add negative value, for me.

I also avoid dealer parts and service like the plague - I get better, cheaper service elsewhere. That probably won't be an option with the electric Mustangs, though, at least for a few years.

I think the key here is where you say "for me".

Not everyone can navigate the internet.

Not every internet site provides all the information, support, etc. in a well-designed, easy to navigate manner.

 

[Scrannel]

Tesla US dealership disputes - Wikipedia

The Federal Trade Commission recommends allowing direct manufacturer sales, which a 2000 report by a Goldman Sachs analyst projected would save consumers an average of $2,225 on a $26,000 car.

 

[ARK]

I can only write from a U.K. perspective but I ordered online and collected from the dealer I nominated at the time of ordering. There was no mark up on price and there was good communication on delivery times etc. It turned up at the dealer before the online tracker tool here said it should.

You still need a PDI and the ability for test drives as I would never buy a car without a test drive. It does sound as though the U.S. dealers are milking the price as much as possible. Capitalism and greed at it's finest.

I agree, test drives are very important. Cars are expensive enough and owned long enough where someone should really drive it at least once before pulling the trigger.

On the other hand, some people started purchasing homes during the pandemic sight unseen so what do I know ?‍

 

[yngwenli]

I owned Tesla Model Y before this and the ordering process was simple but had zero flexibility. Everything is by the book. Order fee is not a deposit.

Was always surprised by the order fee where if you cancel, you just lost $250. The cheapest Model Y is now $59k (was $49k at the start of this year I think). A White MY with the cheapest wheels shows Oct 2022 delivery.

Guess people really want it (or need it) to be willing to pay that much more from just Jan 2021.

I wonder what values will be if this supply chain issue resolves itself (don't think it will anytime soon).

 

[yngwenli]

I agree, test drives are very important. Cars are expensive enough and owned long enough where someone should really drive it at least once before pulling the trigger.

On the other hand, some people started purchasing homes during the pandemic sight unseen so what do I know ?‍

Pretty much all the cars I've purchased, I didn't test drive (only test drove 1 out of like 6?).

I suppose to me, if "I" think it's not this or that or great, it's a "me" problem since other's, more knowledgeable have already put it through it's paces.

I just adjust honestly and live with it. I'd probably be more annoyed with car features vs. the drive (no 360 camera? can't unlock the glove box unless I use a screen?, no rear passenger down window button?).

Sponsored