Why do car dealerships exist?

I gotcha. Like a Gateway store, for example. Your model is still a car dealership. It's just an O & O (owned & operated) instead of a franchise, and I'm sure it's done in the auto industry, just as some McDonald's can be O&O and some can be franchised, but you wouldn't necessarily know the difference.

O & Oing adds cost and risk to the operation: land lease, inventory liability, added insurance, etc. There's gonna be a significant mark-up, but yeah, I guess they could keep a low inventory on hand and try to cut out unnecessary costs and you could get something cheaper. I'm not exactly sure how Saturn's "no-haggle" pricing works, but I imagine they have some O&Os, or else some strict pricing rules for their franchisees.

 

It was Daewoo. They also enlisted college students to try and sell cars to their friends and such. Didn't work so well.

 

Given that car dealerships are one of the businesses still buying lots of newspaper ad space, I say keep the system as is until I retire.

 

Consumers themselves can't change it, but the market could. If a big automaker (i.e. not Daewoo) actually tried this and was able to sell their cars at a significantly lower price, it's conceivable that they'd do quite well. If they did, the others would follow.
And given the dire state of the US auto industry, it might be worth a shot for one of the Big Three.
I'm not sure how Saturn dealerships work, either, but they tend to be purely Saturn and if they're part of big local chains, it's hard to tell. And I'll say that I bought a Saturn a few years back and it was much more pleasant than my other car-shopping experiences.

 

There are any number of alternatives to schlepping from dealer to dealer to dealer trying to save $100 on the price of your car.

Cars.com, edmunds.com, autobytel.com and many others will let you research new and used cars, and get competitive bids on line. You can also go semi-direct through gmbuypower.com or forddirect.com.

I bought my last new car via the Internet and it was a pleasure. The entire deal was negotiated via e-mail and I never set foot in the dealership until it was time to pick up the car. The one before that was done through a local dealer's website. Again, the whole thing was negotiated via e-mail.

I don't think I'll ever buy another new car any other way.

You're still dealing with a retailer, but it's a lot less pressure and hassle.

No going back and forth with the manager, no bullshit hidden charges, just the out-the-door price.

Easy. Or at least easier.

 

It' simple.

Auto manufacturers are in the business of manufacturing automobiles. Having to sell directly to the customer would necessitate a logistics infrastructure that they likely couldn't maintain. In the end cars would probably be more expensive because instead of dealing with say (hypothetical) number 500 dealers who will do the grass roots marketing, they have to deal directly with millions of consumers.

Sure, with the internet, you can do a helluva lot of research bult ultimately you need a single point of contact.

It's the same reason that people don't buy meat directly from the farmer. Why would he want to set up a system to sell individual steaks when he can ship 300 steaks to his retailers?

 

My ex bought a friggin' Daewoo. WTF?

 

I thought Daewoo made stereos?

 

Having spent quite a number of years in the retail industry, I can assure you GM, Toyota, or Ford never want to be in retail. But they sure as hell want to make sure they control their dealers.

Large manufacturers have major headaches just working out the supply chain side of things to their wholesaler/retail customers.

Trust me. If there were no car dealers you'd probably wait a year for your car and it be 30% more expensive than if you bought from a dealer.

 

If you didn't have car dealerships, you wouldn't be able to trade in your old car when you got a new one.

In Rusty's example, the GM store wouldn't let you trade in a Ford or Honda when you wanted a GM. What are they going to do with it? GM can't turn around sell it, because that wouldn't look right for a GM employee to be saying favorable things about a competitor's product.

 

So how did you know what cars you wanted? Did you ever test drive one?