In Defense of the Franchised Dealer

"AMGWTFBBQ" (amgwtfbbq) 10/23/2014 at 11:35 • Filed to: None

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Whenever there is an article posted about Tesla and their factory owned dealership program I see a lot of comments about how privately owned dealerships are "outdated" or "bad for consumers."

I feel, as someone who has been well served on both sides of the desk by franchised dealers, obligated to say something.

In my time as a service advisor, and occasionally as a sales consultant, I've seen plenty of people bring their car in for service because it was "making a weird noise" or something to that effect. Often times these issues are difficult to replicate, and a major source of tension between customers who are strapped for time and dealers who cannot submit a warranty claim to the manufacturer without proof. Have you ever been one of these people? Has a dealer ever taken care of you anyway? Many dealers will help out anyway as an act of good will toward the customer. My dealer has a policy to just do the right thing.

Does your car come with rentals while it is in for service? Many don't. In many of the situations like the above, even if they do, good luck getting one for that phantom noise or problem without submitting a valid warranty claim. Again, as an act of good will many dealers I've seen have just gone ahead and footed the bill for the customer.

Have you ever bought a used vehicle and had an issue pop up a month down the road? I recently sold a pickup to a gentleman who found out the rear defroster didn't work. Did our company tell him, "Tough luck, it's a used vehicle, and you bought it as-is. Should have paid a few thousand more for coverage." Nope. We did the right thing. Good luck getting General Motors to cover something broken on your used Nissan.

Speaking of General Motors, they've really done a great job of running their business. Imagine the cost the next time we have to bail them AND their entire dealer network out. Just imagine if your sales consultant at the Chrysler dealership treated you with the same care as the guy who built it after getting hammered on his lunch break.

Manufacturers only go so far to train dealership personnel. Often it's a litany of outdated, horribly boring tests that take a couple weeks and a couple hundred bucks paid to the new guy to finish. Many dealers pay a LOT out of their own pockets to train their consultants. Would you rather buy a car from someone who can help you find the RIGHT car, or from some minimum wage Target dropout who can only tell you "Well you said you wanted a blue one, and I think it has satellite radio..."

NOBODY likes to haggle the price on their new car down right? Nobody has EVER called more than one dealer and worked them against each other right? I've found your biggest competition as a dealer is not another brand, but the guy selling the same car down the street. That competition keeps prices low. Good luck getting a factory owned dealer to beat another factory owned dealer on price.

Good luck getting a really great deal period. If you buy a car today, you're getting a great deal before you argue a cent off the price. Have you ever bought a car on the last day of the month, or on a bad weather day? I've seen the desk down right LOSE money just to put a unit on the board. Good luck getting anything like that out of a factory owned store.

I'm sure that just like every other article on the subject I'll see plenty of comments to the contrary, but honestly ask yourself if the grass will really be greener.

cletus44 aka Clayton Seams > AMGWTFBBQ 10/23/2014 at 11:42

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I learned to wrench after dealer mechanics ripped me and my family off multiple times from multiple brands. You might be a good guy (you probably are) but 90% of the times I've interacted with dealer service writers and mechanics , they've been just a little short of downright criminal. It's a broken system that needs reform and I'll continue to go far out of my way to not spend a penny at a dealership. And yes, used cars from private sellers are all I drive.

KusabiSensei - Captain of the Toronto Maple Leafs > AMGWTFBBQ 10/23/2014 at 11:44

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I'm not sure that anyone is saying that one should move to the factory store system in lieu of franchises, but that there should be options.

If you want to purchase your car from a franchised dealer, fine and dandy. If you want to purchase your vehicle from the manufacturer direct, that should be fine and dandy too.

My issue is that most dealers aren't as willing to do custom orders for vehicles, because they'd rather sell what is on the lot *NOW*, as opposed to getting the customer exactly what they want. Because no one wants to be stuck with the purple car with tan interior.

Direct sales should allow for those people who want to custom order everything to do that. But so long as the dealer franchise associations want to shut down direct sales completely, using the government to compel it, then they won't have my support.

gordonbombay > KusabiSensei - Captain of the Toronto Maple Leafs 10/23/2014 at 11:45

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THIS ^ . So much of this!!!!!

nermal > KusabiSensei - Captain of the Toronto Maple Leafs 10/23/2014 at 11:51

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Agreed. If the current dealership sales model is so effective, then opening up direct sales won't be an issue. Because consumers don't want to order and wait, and prefer to buy off the lot, they'll still continue going to dealers, right?

KusabiSensei - Captain of the Toronto Maple Leafs > nermal 10/23/2014 at 12:06

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Wouldn't you just love to ask Rick Snyder that question?

MHunter905 > AMGWTFBBQ 10/23/2014 at 12:07

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IMO dealerships are mostly evil entities. I regret ever getting into the business. I am now Jaded for the rest of my life.

AMGWTFBBQ > KusabiSensei - Captain of the Toronto Maple Leafs 10/23/2014 at 12:09

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As a consumer, I'm all for custom ordering or finding exactly what I want. You've generally got two options, wait for it to be built, or dealer trade for it. The issue you run into generally is not that the dealer doesn't want to do the leg work of going and getting it, it is the money.

You lose your dealer cash, or more specifically, you don't have it to begin with when you're trading for a car off another dealer's lot. Generally, given the competitive nature of the car business, much of this money is already being given to the consumer as a discount. You can't give what you don't have, and therefore are in the situation where it's in everyone's best interest financially to sell the car off the lot.

I agree though, we're car people, and we generally know exactly what we want when we go car shopping. The vast majority of people are not.

AMGWTFBBQ > nermal 10/23/2014 at 12:10

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Most dealers can place an order for you already.

jariten1781 > AMGWTFBBQ 10/23/2014 at 12:11

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Those are exceptions. My dealer experiences in many states with many brands have been nearly universally poor on both sales and service sides. The parts guys are usually pretty decent though.

Franchised dealers are necessary in a lot of smaller markets where a factory store wouldn't move enough inventory for the manufacturers to build. In the bigger markets a factory store opens additional competition which would drive out the poor dealers, and those unicorns like you're describing would continue to thrive based on customer experience.

I don't think anyone is advocating the ending franchises wholly, just ending the franchise only laws.

AMGWTFBBQ > cletus44 aka Clayton Seams 10/23/2014 at 12:12

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You sound like a good guy too, but if you're encountering the same issue everywhere you go...

Would you mind elaborating?

KusabiSensei - Captain of the Toronto Maple Leafs > AMGWTFBBQ 10/23/2014 at 12:25

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Then what exactly is the damn problem with letting the consumer choose direct vs dealer sales?

If the dealer only wants their allocation and doesn't want to do the legwork of either doing a dealer trade or a custom build, then what is the problem with letting someone pay more to get a custom build from the manufacturer?

You aren't even touching the issue which is that the dealer associations want the state governments to BAN DIRECT SALES by using the force of the state government.

If the manufacturers only sell at MSRP with no discounts, then dealers won't lose customers on price...

If the manufacturers just drop the car off at your house after you buy it, the dealers don't lose out on service.

But my experience is that if you don't buy the car at that specific dealer, the service department/anyone else wants nothing to do with you. I've already told one Audi dealer GM that if I ever want to buy an Audi, I will gladly pay more to not deal with his staff, in sales or in service, because they are that bad.

Face it, banning direct sales is not in the consumers interest. It is only in the dealerships' interest.

If you think the two business models can compete (and dealerships have additional value to offer), then open direct sales and let's see how it goes. Let people choose.

You can't give what you don't have, and therefore are in the situation where it's in everyone's best interest financially to sell the car off the lot.

It is not in the consumers interest to sell them a car that they don't want (either because of options or colors or what have you). Since dealers cannot wrap their heads around that, the status quo persists.

nermal > AMGWTFBBQ 10/23/2014 at 12:27

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This is true, but not after they try to push you to buy something off the lot, especially if it's near the end of the month.

I've been shopping and asked about ordering, and was told it would take 3-6 months to get something in, although others are reporting the same thing taking 1-2 months. This may be the exception to the rule though.

cletus44 aka Clayton Seams > AMGWTFBBQ 10/23/2014 at 12:33

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Elaborating what? And it wasn't always me getting bad experiences over the sales counter. It also included my mom and dad.

We had Honda try to sell us a $700 replacement seat when the problem turned out to be a burned out fuse.

I had Chevy recommend that I replace the water pump on my truck when I had just replaced it 200 miles ago. It wasn't leaking or anything either.

AMGWTFBBQ > KusabiSensei - Captain of the Toronto Maple Leafs 10/23/2014 at 12:34

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I agree. You still have the option of paying more or just ordering it though so I don't see the problem. I'm not going to lose a sale over something like that. I'm always happy to go get a car for someone who knows what they want and understands the extra cost.

AMGWTFBBQ > KusabiSensei - Captain of the Toronto Maple Leafs 10/23/2014 at 12:41

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As for a dealer not wanting any of your service business because you bought somewhere else? That makes NO sense. Zero. None. That's pretty silly of them.

I could understand if you took a million test drives and jerked them around for days and then bought somewhere else, but otherwise that's just bad business.

AMGWTFBBQ > nermal 10/23/2014 at 12:51

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If you feel you're being pressured, just tell them no, I want to order. Of course they are going to push you to buy what's on the lot. It's a business. Are you really so sensitive that someone offering to save you a few hundred bucks with a "wrong color discount" necessitates building a completely separate dealership? Just tell them what you want and what you will or will not do!

Little Black Coupe Turned Silver > AMGWTFBBQ 10/23/2014 at 13:29

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Can being the key word.

I ended up walking out of a dealer while trying to find my last car, because they just flat out refused to spec build one for me, and were so pushy to get me into one their lot. The car on the lot had things like the wrong transmission and wrong numbers of doors from what I wanted, so I wasn't just being picky around colors.

Little Black Coupe Turned Silver > nermal 10/23/2014 at 13:30

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Find a dealer you like, and have them order it. You will be so much happier with the car, the wait will be worth it.

AMGWTFBBQ > Little Black Coupe Turned Silver 10/23/2014 at 13:31

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Gospel.

Little Black Coupe Turned Silver > AMGWTFBBQ 10/23/2014 at 13:38

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Sure, there are good dealers out there.

But there are way too many bad ones that cast a bad shadow over them all.

I've been dealing with dealers for like 3 years now. The track car hasn't seen one since 2009, and now I have the daily that I bought new.

The first dealership flat out refused to work with me to find or build the car to my specs. I ended up walking out when they got so pushy on trying to force me into an automatic sedan when I wanted the 6-speed hatch.

The second dealership was great for the buying process, they gladly ordered me the car to my specs after doing an extensive search to try and find one.

Then when it started going through a gallon of coolant in a month, they told me the burning smell was my air freshner, and that dying the coolant system is old tech that isn't done anymore.

The third dealership was awesome and dyed the system, and the leak was found a week later. They were great, but I've sadly moved to a different state.

nermal > AMGWTFBBQ 10/23/2014 at 13:57

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I don't think it's so much a case of being sensitive as it is one of feeling valued as a customer. If I'm going to be spending $30k on a new car, I want to be treated like a freaking princess throughout the entire process. I don't want to go argue with somebody for 3 hours. I don't want to say "no" three times to every add-on they offer before they move on. That's why direct ordering is appealing - I can go on Tesla's website and order the exact Model S that I want, without having to argue about or compromise on anything.

Granted, there are some people that like putting their gloves on and doing battle, or playing games. Such as "I want a red F150 crew cab. But I'll go to a dealer and tell them I want a blue extended cab, so they'll give me an extra discount on the red crew cab they have in stock".

The most successful dealers will be able to accomodate both types, as well as being able to figure out the type of buyer they are working with up front, and quickly. This will be more of a requirement than an option moving forward, especially if direct to consumer sales become more prevalent.

KusabiSensei - Captain of the Toronto Maple Leafs > AMGWTFBBQ 10/23/2014 at 14:05

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When your business model forces people to buy from one of 5 places in a metro area, are you really that concerned if you piss off the one off customer?

I mean, especially if you have an investment group that owns most of the dealers. What are they going to do? Buy it elsewhere?

KusabiSensei - Captain of the Toronto Maple Leafs > AMGWTFBBQ 10/23/2014 at 14:09

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But there are plenty of dealers who are fine losing that sale because they'd rather sell their own inventory as opposed to order something for the customer, and don't want to deal with the hassle.

Since there are consumers who feel the same way about dealers, why not allow manufacturer direct sales to get rid of the hassle?

You still will not answer the question as to why states should ban direct sales (which is the way most state laws read right now) as opposed to having direct sales be an option.

Why should states protect an antiquated business model through force of law?

AMGWTFBBQ > KusabiSensei - Captain of the Toronto Maple Leafs 10/23/2014 at 14:42

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I never argued for or against banning direct sales, just that it's a pretty terrible idea in general.

AMGWTFBBQ > KusabiSensei - Captain of the Toronto Maple Leafs 10/23/2014 at 14:45

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I'd say that definitely you are concerned about pissing off the customer. When they buy a car from the other guy down the street, I don't get anything, and I never get the time I spent back. As for owning most of the dealers, why would it make any sense to build 5 of the same dealership in the same city? I can see owning multiple different dealerships, but even then you want YOUR store to get the business. You still wouldn't get paid for your other store selling a car. Make sense?

mike in So Cal > AMGWTFBBQ 10/26/2014 at 23:12

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i knew exactly what i wanted, and thru the scion site emailed all the dealers in my area at the same time. found ONE same day, and local.