It would be if it was true, but it’s bullshit. Pre-COVID, it was common for many dealer brands to discount 10-15% off MSRP, sometimes 20%, and still make money on each vehicle sold. And that’s not counting the manufacturer profit that is already baked into that as well.
As another example, Tesla’s margins used to be around 30-35% per car, but now are a bit under 20% average from what I remember. Nobody is selling shit at MSRP and only making $200, that’s just nonsense.
Cars that normal people can afford have thin margins.
The fat pandemic days of product scarcity and low interest rates are gone. Cheap cars will be back, but not without a lot of kicking and screaming first.
You’d think they could make a decent profit on a bare bones electric car once they go more mainstream. Just an electric motor, stereo and power windows and the basic safety features. Don’t need all the other fancy stuff.
But that would undercut their argument that no one wants them and that regulators should give them a break. Don’t worry, the Chinese will find a way into the market eventually and offer them.
Nobody buys bare bones cars, at least in the states. The value proposition just isn’t there. Most people will go used as the feature set is better for your money.
“bare bones cars” is one of the memes on this subreddit, along with “le manuel wagon”. Nobody wants them, that’s why they don’t make them.
Yeah for petrol cars. Electric is new and soon to take over and probably has lots of people who can’t afford expensive new electric cars that would take a bare bones electric one that was comfortable and offered cheap running cost over a second hand petrol/diesel car instead. It just has to be priced appropriately
I wouldn’t be upset if every dealership in the world’s insurance suddenly lapsed and mysteriously burned to the ground. There is no reason there should be a middle-man in a car buying process.
The actual buildings don’t even need to go away. Turn them into delivery centers and maintenance/repair (which is already there). I want to order a car online, get ALL the paperwork finalized online, then go in to review/sign a couple documents, get my keys and leave.
And who is going to turn them into these barebones delivery centers? Dealerships are all independently owned and have to pay rent on a substantial amount of land beyond just the building itself. No automaker on the planet has the spare cash to buy all of their dealers out. With certain exceptions like Ferrari of course. But why would they want to deal directly to the public?
This is legitimately a big part of the reason why Teslas are selling and other EVs aren’t. The Tesla buying experience is like the difference between a handjob and a root canal. No sane person is going to want to go back to spending hours talking to a sweaty man in a cheap suit when they can just go online and finish a purchase in 20 minutes instead.
I ended up getting one at msrp but fuck the dealer and greasing on another $1600 in fees. I could have walked but there where three other guys who showed up to look while I was test driving it lol
Same. Tried to get one last year and they stopped taking orders (and then there was a 12+ month wait). Tried again this year when the order banks opened, but Ford increased the price (and then there was an unknown amount of wait).
I bought a Model 3 instead from my phone that was cheaper and I picked up a week later.
The dealership model itself has a lot of modernizing and updates in general that need to happen…
It’s incredible how backwards they are. When they list cars on their sites or third party sites, they still post very long lists with all the old school crap like “Power Windows,Power Door Locks”, but with many not even listing the actual options on the car, or the exact color, describing the color as just “gray” when there are two different types of gray offered. It’s hilarious.
The dealership model itself has a lot of modernizing and updates in general that need to happen…
Lol it is pretty brutal in a lot of ways.
Absolutely. If it costs Ford 10k to build a car, msrp is 20k, dealers should be getting these things for like 16k to sell for the 20.
Or manufacturers just need to supply the inventory for free and allocate a base sales commission for units sold.
Lmao, a car with 20k MSRP has a margin of like $200. In no world is there a 10k profit margin on a 20k car.
Tesla makes like $9k per car they sell.
That’s just depressing.
It would be if it was true, but it’s bullshit. Pre-COVID, it was common for many dealer brands to discount 10-15% off MSRP, sometimes 20%, and still make money on each vehicle sold. And that’s not counting the manufacturer profit that is already baked into that as well.
As another example, Tesla’s margins used to be around 30-35% per car, but now are a bit under 20% average from what I remember. Nobody is selling shit at MSRP and only making $200, that’s just nonsense.
If the MSRP is 20k, Ford is probably making $800/unit and the dealer is making $400. Unless the dealer can sell it for 25k…
Unfortunately, this is true.
Cars that normal people can afford have thin margins.
The fat pandemic days of product scarcity and low interest rates are gone. Cheap cars will be back, but not without a lot of kicking and screaming first.
You’d think they could make a decent profit on a bare bones electric car once they go more mainstream. Just an electric motor, stereo and power windows and the basic safety features. Don’t need all the other fancy stuff.
But that would undercut their argument that no one wants them and that regulators should give them a break. Don’t worry, the Chinese will find a way into the market eventually and offer them.
That will not sell. People buying new cars are not people on a super budget who will be continuing to buy used economy cars.
Nobody buys bare bones cars, at least in the states. The value proposition just isn’t there. Most people will go used as the feature set is better for your money.
“bare bones cars” is one of the memes on this subreddit, along with “le manuel wagon”. Nobody wants them, that’s why they don’t make them.
Yeah for petrol cars. Electric is new and soon to take over and probably has lots of people who can’t afford expensive new electric cars that would take a bare bones electric one that was comfortable and offered cheap running cost over a second hand petrol/diesel car instead. It just has to be priced appropriately
Yes, but they make their money on financing and service.
Oh, I agree. I can only afford cheap cars myself. (Happy Honda Fit owner).
But I also understand how low interest rates and fat pandemic-era profits gave automakers an excuse to chop the affordable products off their lineups.
I wouldn’t be upset if every dealership in the world’s insurance suddenly lapsed and mysteriously burned to the ground. There is no reason there should be a middle-man in a car buying process.
The actual buildings don’t even need to go away. Turn them into delivery centers and maintenance/repair (which is already there). I want to order a car online, get ALL the paperwork finalized online, then go in to review/sign a couple documents, get my keys and leave.
And who is going to turn them into these barebones delivery centers? Dealerships are all independently owned and have to pay rent on a substantial amount of land beyond just the building itself. No automaker on the planet has the spare cash to buy all of their dealers out. With certain exceptions like Ferrari of course. But why would they want to deal directly to the public?
Car dealerships are way overbuilt for that – whenever you see a fancy showroom, remember that you’re paying for it when you buy a car.
I’ve been trying to buy a Ford Maverick (hybrid) for a while. Holy shit has it soured me on dealerships and the dealership model.
This is legitimately a big part of the reason why Teslas are selling and other EVs aren’t. The Tesla buying experience is like the difference between a handjob and a root canal. No sane person is going to want to go back to spending hours talking to a sweaty man in a cheap suit when they can just go online and finish a purchase in 20 minutes instead.
Same
I ended up getting one at msrp but fuck the dealer and greasing on another $1600 in fees. I could have walked but there where three other guys who showed up to look while I was test driving it lol
Probably their 3 EV sales guys who swapped clothes to get you to eat the extra $1600
Lol maybe, this was in 2022 and to walk on a lot and get a vehicle at Msrp at that time was surprising in itself
Same. Tried to get one last year and they stopped taking orders (and then there was a 12+ month wait). Tried again this year when the order banks opened, but Ford increased the price (and then there was an unknown amount of wait).
I bought a Model 3 instead from my phone that was cheaper and I picked up a week later.
Same here man
It’s incredible how backwards they are. When they list cars on their sites or third party sites, they still post very long lists with all the old school crap like “Power Windows,Power Door Locks”, but with many not even listing the actual options on the car, or the exact color, describing the color as just “gray” when there are two different types of gray offered. It’s hilarious.