Are car dealerships a thing of the Past?

[Oracle of Delphi]

Are car dealerships a thing of the past? Will we all be ordering our cars through Costco soon? I wonder how Costco will be able to handle my GM Employee Discount?

http://www.costcoauto.com/index.asp

Edited May 20, 2007 by Pontiac Custom-S

[bobo]

A co-worker tried the Costco referral service to buy an Infiniti G35, but he said the price wasn't that spectacular and used a broker instead.

[CARBIZ]

I am not sure how the set up is in the States, but up here the irony is that Costco would have to GET their vehicles from a dealer - so how could they possibly beat a dealer price? One of the biggest fallacies out there is that you can save THOUSANDS by using a broker, etc, which is why I don't like dealing with GM employees. GM employees will shop and shop, then shop again, because they either a) really can't afford the level of vehicle they are shopping for or b) keep hoping some magic price will fall in their lap.

Of course, what really burns up us pros in the business is that if you did ORDER your vehicle from Costco, you would have to test drive it, get brochures, etc. from...you guess, it - the dealer.

One of the best self-defense tricks a newbie can learn on the show room floor is to sniff out a fleet customer from a dozen yards.

[Sixty8panther]

GM's dealer network serously needs to be revamped.

[gm4life]

Amen to that brother. I just buy my cars through a dealership it is simple. Now I wish I could do it direct from the manufactor.

[HarleyEarl]

Automobile dealerships.

Love-hate relationships.

I don't want them to

go away,

Some don't realize their

marketing potential.

There is a massive GM dealership I go by each

day. But it drives me crazy the way it's so

hodegbodge. The showroom is a potpourri

of Cobalts, Cadillacs, Corvettes, Silverados, all

mixed together, no rationale.

No special place for Cadillacs and Corvettes.

No spotlighted areas, nothing to entice you in.

The lot is no different, immediately around the

main showroom. Nothing special to grab your eye.

Totally disorganized visually.

It sounds trivial, the presentation thing, but I think it's more important than one thinks.

There is an older GM dealership in Edmonton, Alberta, north of here, near downtown. They have such a knack of

highlighting their showroom vehicles. The large windows are right at the sidewalk level and they spotlight Cadillacs, Corvettes and

other special GM vechicles so well....effectively lit, they sparkle, you want to go in, you want that car in the window. Totally sexy, glamourous effect.

Many modern dealerships are so ineffective in their presentation of what they sell.

[A Horse With No Name]

G.M. certainly has a lot of dealerships in our area that could use help. My daughter (16) wanted to go "look at" a few new cars. We were just looking but the salespeople at the G.M. dealership would not even greet us when we walked in.

Chris

[HarleyEarl]

I did a little test of some dealerships in the area, as to their

treatment of a customer walking in.

Dismal. Honda, Pontiac/Buick, you name it.

Infiniti, just the most arrogant, uppity approach.

It makes you wonder if customers go to the dealership

that is least objectionable and make their purchase there.

The best of a bad lot.

The only one that made some effort was Saturn.

GM could make the perfect car and perfect

marketing and still be let down

by the lowly, inept car salesman and his mentoring

general manager and dealership.

[A Horse With No Name]

I agree. Personnaly I was really embarassed by the G.M. dealership because we built (electrical) the building it sits in when I worked for a former employer.

Really don't want them to be a reflection of my work.

I wish I could find a well trained qualified salesperson to work with when I buy my next car. (which won't be for a little while.)

Chris

[Flybrian]

One wishes dealerships would employ a smaller number of helpful, knowledgable consultants that are rewarded for sales with a small bonus on top of a decent living wage. You eliminate the hustle and the high turnover rate and the wolf pack tactics; you do away with the predator/prey mentality that nobody likes and you help people buy a car in a respectable, professional fashion.

One wishes.

[CARBIZ]

Fly, I couldn't agree with you more; however, I think the manufacturers prefer it this way. They can blame lousy service on the dealer, rather than owning up to the mistakes theirselves.

I would rather be a consultant, much like a real estate agent. I enjoy guiding customers through the process of figuring out what kind of vehicle they need (as opposed to want), then going over their purchase/lease options. Unfortunately, everything bogs down on price. Since the dealer body is set up the way it is, the famous "dealer may sell for less" phrase applies and then it is a race to the bottom. Throw in a few unfounded boasts about "I saved five thousand dollars off my new Cavalier last year" crap, mix in a little disinformation on the internet, garnish with a little misleading advertising and you have a great recipe for an adversarial relationship out of the gate.

Perhaps 30 years ago, that served GM and the Big 3 well. After all, if you didn't like the Chevrolet dealer, go up the street to the Pontiac dealer. However, I believe now that the imports are much stronger and desireable, this pitting of dealers against each other no longer serves anybody.

I don't see this changing any time soon or at all, and here's why: the customers don't want it to either. Since the dealers aren't allowed to band together and fix the price, then what is left? I mean, how pissed off would you guys on this board be if you went to 3 Chevrolet dealers in a row and were told that they wouldn't budge off the price of the (insert your favorite wish vehicle here)?

Ironically, Toyota got sued in Western Canada a few years back because a buying group complained they couldn't buy vehicles cheaper off the internet because the dealers out west wouldn't budge off the internet price. Toyota was trying to eliminate the haggling process, but that didn't suit a so-called consumer protection group (actually, they charged a fee to get you the best price, so I wonder whose side they were really on.)

In any event, the dealer isn't going anywhere. As much as people may dream about buying their vehicle on the internet, they stilll need to touch, feel and drive the vehicle. Unless you want to put all of your faith in CR, MT, etc.

[A Horse With No Name]

Ironically I would pay $500 more for a car if I could have a good salesperson. I see new cars traded in all the time that shouldn't be traded. Went to the Ford dealer with a friend to get his SVT Focus Oil changed. Wandered over to new cars.

Traded in with less than 5000 miles were a new Miata, a Cobalt SS, a c6 corvette, A toyota FJ cruiser, and several expensive domestics.

Considering the cost of these cars their owners would have been much better off spending the extra $500 to have a sales associate like CARBIZ than loose $5000 when they don't like-can't use the car they just bought.

Chris

[regfootball]

a lot of what biz says makes sense. and good salespeople make the process good so you feel like you got value for your purchase.

then there are the bad apples, and sales managers, and the jerks who run the dealership and worst, the bloodsuckers who own the chain and all the real estate the thing is on. and i hate having to fund the massive overhead a dealer has. the overly large buildings, the excessive inventory, the huge expanse of expensive property that would be much better served by other things, the blonde with the big juggs sitting on the reception desk, etc. if the staff could be trimmed as fly suggested, it would be nice. i would prefer to go to small 'test drive centers' and have many brands available to me. i hate giving the moguls my cash. i would rather give it to the union and that's not saying much. i'd rather not have either bunch of bloodsuckers getting my money.

all my new purchases have come down to developing a good positive cooperation with the salesperson. not giving in to them, but working with them as well as they work for me. the best approach is to do your research and find out what everything is going for and then it becomes pretty easy.

biz's thing about finding out what people need is important but as he also said, most people have a disconnect between what they THINK they want and what would actually best fit their needs. And then there are all the preconceived notions they start out with and all the crappy info they get off the internet and from their friends.

the dealer i got my aztek from was a one price shop that also gave me a ridiculously good trade number for my old SHO. and the sales guy was great. the dealer sells all GM brands except hummer and saab although I am pretty sure they could get hummer if you wanted one. i like the one stop GM shop idea. the ford dealer i got the 500 from is from the same ownership group but this dealer is more closely networked with other ford dealers. so there was mostly only ford to pick from. when i inquired if it was possible to get the montego instead, it got met with resistance. ford ought to consolidate their dealers. FLM.

i think dealerships ought to hire better class of folks to sell the cars although I am sure that is mostly due to not wanting to pay alot. you kind of get what you pay for.

the places i get the best experience from are mostly saturn dealers. GM dealers overall are pretty good. Ford is spotty. German marques are tough to shop. Toyota and Honda dealers are stuffy....at least Honda is semi friendly at the start. I've found Mazda dealers to be very good. VW dealers are the most snobbish of the cheap brands. If you want to get treated like $h!, shop VW. Or Any of the upper channel Japanese makes.

Edited May 21, 2007 by regfootball

[bobo]

I hate the new car buying process. In the future, I will probably buy only from brokers, like I did with the Silverado. In that case, I did the test driving at Autoshow in Motion. I would not waste dealers' time that I will not be buying from, nor ask them for brochures. If I do decide to spend time at a dealership kicking tires and stuff, I would do my best to get a reasonable deal from them. Dealers are entitled to make some money.

[CARBIZ]

It's funny what people consider "making some money." Sometimes, for kicks, I ask prospects that: "What profit would you consider 'reasonable' on a $25k car?" That answer is truly shocking - usually in the $400-500 range. Are they kidding? These are the same people that will blow $1,000 on a suit that the retailer makes $500 on! Or goes to Loblaws (a particularly outrageous major grocery chain up here) and spend $500 on groceries for the family, making that retailer a tidy $200 profit.

There is one insurance broker we have had the misfortune of dealing with occasionally, and they "dictate" that we are allowed to make $600 on a vehicle. I wonder how much they make on one policy per year? (Hint: I've never seen an insurance broker driving a 5 year old Cavalier.)

[Oracle of Delphi]

It's funny what people consider "making some money." Sometimes, for kicks, I ask prospects that: "What profit would you consider 'reasonable' on a $25k car?" That answer is truly shocking - usually in the $400-500 range. Are they kidding? These are the same people that will blow $1,000 on a suit that the retailer makes $500 on! Or goes to Loblaws (a particularly outrageous major grocery chain up here) and spend $500 on groceries for the family, making that retailer a tidy $200 profit.

There is one insurance broker we have had the misfortune of dealing with occasionally, and they "dictate" that we are allowed to make $600 on a vehicle. I wonder how much they make on one policy per year? (Hint: I've never seen an insurance broker driving a 5 year old Cavalier.)

May I ask what brand you sell?

[CARBIZ]

Chevrolet. Used to be Oldsmobile, too. I can sell Toyotas, but only when forced to....

[FAPTurbo]

I can sell Toyotas, but only when forced to....

How many bars of soap do you go through after a Toyota sale?

[Drew Dowdell]

How many bars of soap do you go through after a Toyota sale?

it's probably something more like methadone....

[CARBIZ]

I find selling crack at the local public school in a trenchcoat makes me feel clean again.............