Dealerships are marking EVs up a ridiculous amount, but buying your car online could lower those costs by a lot.
Ford CEO Jim Farley recently caused a ruckus with the statement, “We got to go to non-negotiated price.” A statement in relation to selling cars online. That’s a huge deal for the automotive world. It’s not a new idea, but coming from Ford, it’s not something to be taken lightly. Especially in a world where some dealerships are marking up Ford Broncos over $40,000.
As a fun reminder, the Ford Bronco starts at around $30,000.
Dealerships Do What They Want
The heart of the problem is dealerships. They can charge whatever they want for a vehicle, and they always have. This is especially true as the availability of new vehicles has shrunk due to supply chain issues. If they only have five vehicles on a lot instead of the usual 30 vehicles, supply and demand take charge, and now you’re walking out of a showroom with something that costs way more than what the automaker told you it would cost.
Here’s the rub, the automakers can’t do anything about that. The local dealership might have the logo of the automaker plastered everywhere and as part of the business’ name, but the automaker does not own them.
The result is that sometimes, people will get angry at the automaker for something the dealership has done, like tack on an outrageous markup to a new vehicle. But there can be a better way.
Tesla sells its vehicle directly to customers. The company owns all the Tesla dealerships, but it really sells its vehicle online. This has caused some headaches. There are states with laws that forbid this sort of transaction. The most hilarious one is the state of Texas, where Tesla headquarters is now located. The automaker can build all the Model Y and Cybertrucks it wants at the Giga Texas facility, but it can’t sell them directly to customers. It’s weird.
Fortunately, there’s a happy medium to this—online ordering with a pickup from local dealerships. You build the vehicle you want and pick it up from a local business. The dealerships still get their cut of the deal, but they’re not tossing on extra charges. This also removes the worst part about buying a new car—the pressure sales tactics.
Tell Automakers What You Want
Buying a car sucks because dealing with pushy dealerships is a horrible experience. If you want Car A, they might have it on the lot. Although if they’re having trouble unloading Car B, they’ll steer you that way. It’s happened to me a few times. I’ve had to start to walk away from a dealership before the salesperson told me, “oh, you know what, we do have the car you want.” Oh, now you remember.
Even if all new sales go online, dealerships won’t go away. They still sell used cars, and the service centers are the reason some people shy away from automotive startups. Buying from a cool new startup is great until you have an issue with your vehicle, and the only shop that knows how to fix it is 1,000 miles away.
The heart of the problem is dealerships. They can charge whatever they want for a vehicle, and they always have.
They are also where you’ll still have to go to test drive a car. I know you want to be the first on the block with the latest EV, but I still think you should drive a car before buying it. No amount of VR will recreate the feeling of actually being in a car.
The evolution of the automotive world from gas to electric is huge. It can also be a chance to fix some other issues. The only way to do that, though, is to tell automakers, either on Twitter, Facebook, email, or (gasp) a phone call, that you’re tired of the status quo. They’ve figured out how to make EVs go from zero to 60 in under five seconds. They can figure out how to make the buying experience better.
Don’t bother complaining to the dealerships. They’re happy with the current setup. The issue is, the rest of us are not.
Want to know more about EVs? We have a whole section dedicated to electric vehicles!
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