Illinios Dealers Sue Rivian

[DuckTruck]

I find it fascinating that these dealers filed a lawsuit to protect the consumer.... how noble of them.....
The dealership model is dying... they just don't know it yet.... Hell, the argument could be made that the buying/leasing a car model is dying but I think that is out there a ways....

For some opposing views on the "Value" dealerships bring to the consumer, a quick google search of "Lawsuits against auto dealerships" brings up quite a bit of material.

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[DuckTruck]

Guess what? Customers are more satisfied with their deal if it takes a long time and a lot of work.

Two customers walking into the same dealership on the same day looking at a FodgeMC Turbo Rambo W150 pickup. Both decide on the same trim level with an identical MSRP of $57,437.

Customer A: "I'll give you $50,000 and not a penny more". Sales Associate A: "We can do that. Sold!"

Customer B: "I'll give you $50,000 and not a penny more" Sales Associate B: "No way we can do that, the best we can do is $55K." They go back and forth and finally settle on $52,375 after a long negotiation.

Which customer thinks they got a better deal and is happier? It's not the one who paid less.

DucRider,

Thanks a lot! You just ruined my day! I was feelin' so good about getting my FodgeMC Turbo Rambo W150 pickup for "only" $54,420, but Noooo!

At least I got it in Launch Green! I was just about to upload the pics, but you went and ruined it for everyone!

At least I got them to come down to $6,000 on the Camp Kitchen, so I got that goin' for me, which is nice....

 

[thrill]

There's a solid study by the antitrust division of the Department of Justice over a decade old that states the "dealer approach" to selling you a car costs you about an extra 10%.

Economic Effects of State Bans on Direct Manufacturer Sales to Car Buyers (justice.gov)

 

[Gshenderson]

I'm not sure there is an easy answer. Everybody who is in business is at risk in the US of having the government legislate you out of operation.

But the current Dealership Only model is not what many customers desire. In the end, the customer has the money, and that is where the power should reside at.

And that same “government” can legislate certain companies and industries into existence or at least guarantee their survival despite their fundamentally flawed business model. Which is what’s happening with the Corporate Welfare the dealership associations and their high priced lobbyists are constantly whining for. Makes me wanna puke when these supposed “free market” states allow this crap to continue. But the associations are in their pockets. It’s as simple as that. Has nothing to do with right or wrong. They all know it’s wrong.

 

[davrow_R1T]

Guess what? Customers are more satisfied with their deal if it takes a long time and a lot of work.

Two customers walking into the same dealership on the same day looking at a FodgeMC Turbo Rambo W150 pickup. Both decide on the same trim level with an identical MSRP of $57,437.

Customer A: "I'll give you $50,000 and not a penny more". Sales Associate A: "We can do that. Sold!"

Customer B: "I'll give you $50,000 and not a penny more" Sales Associate B: "No way we can do that, the best we can do is $55K." They go back and forth and finally settle on $52,375 after a long negotiation.

Which customer thinks they got a better deal and is happier? It's not the one who paid less.

Gotta disagree with this. When I bought my Solara I told 'em my price. They came in just under. I bought it. Best car buying experience of my life.

 

[thrill]

And that same “government” can legislate certain companies and industries into existence or at least guarantee their survival despite their fundamentally flawed business model...

Yep, I'm still pissed about the $10 billion GM owes the taxpayer.

 

[DucRider]

Gotta disagree with this. When I bought my Solara I told 'em my price. They came in just under. I bought it. Best car buying experience of my life.

Obviously there will be a range of buying experiences, but the premise holds overall.
There are a wide range of dealer styles and philosophies. IMO, the worst are the liner/closer stores that use the four square and "If I could, would you?".

 

[Eeyore]

When I've gone to a dealership to buy a new car, I know what I'm going to pay. I do the test drive to be sure about the car. I tell them the price I'll pay. If they come back with a counter offer, I stand up, say thank you for your time, and head for the door. I'm not into wasting time.

I don't need a dealership, the dealership needs me. If there was a different way to buy a new car, I'd use it.

 

[DuckTruck]

Yep, I'm still pissed about the $10 billion GM owes the taxpayer.

At $112,595 MSRP for the "Edition 1" of the new Hummer, it'll only take 89,618 of them sold for G.M. to cover their debt to the U.S, meaning US.

If every Hummer buyer (we're talking vehicles here, folks!) also paid full boat for a Camp Kitchen with their Edition 1, G.M. could square their debt after selling only 85,038 units.

Come on, Mary! Crank up the machinery!

 

[SANZC02]

Yep, I'm still pissed about the $10 billion GM owes the taxpayer.

I think it is closer to 11 billion but whats a billion amongst friends....

 

[MReda]

When I mentioned terrible dealer experience, I wasn't even thinking about negotiating for the best price. I agree with @DucRider , there are people who thrive on it, even if they don't get the best price. Personally, I don't mind doing a little negotiating, but I do like buying from places that offer fixed pricing that is very good, but not great, pricing. I'll just pay their slight markup. For example, I've owned a number of Subarus over the years and we had a local dealer who just charged a couple hundred over invoice. There are better deals out there, but that's good enough for me.

Here are some of the things I've experienced with dealers:
1) taking my keys to look at my trade in, and then "losing them" when I was ready to leave without signing a contract
2) using the four box thing to hide sale price, and asking me to initial everything, which as I understand it is supposed to make a buyer feel like they are committing, even if it is just a few numbers on a napkin
3) avoiding giving me any information on lease prices without trying to collect way more info than they need (it can be harder to go into a dealer fully prepared on lease pricing since it varies from state to state)
4) any high pressure tactics. There are cars I probably would've bought if the salesperson had accepted my answer that I don't make $50k decisions on the spot, and I'd be in touch in a few days.

 

[hed]

My bet if the country doesnt implode is that the dealership model will change out of necessity. Their trade association will do its best to slow this transition down but it can only prolong the inevitable.
Thanks to the internet, amazon, etc. and immediate gratification, which was enhanced via the pandemic, most will want to buy online and have service done at their residence . Would you rather have to go to a dealer, and negotiate for something they most likely will not have in stock? Or if given the choice, order online and have it delivered and serviced at work or home? I think that service model will grow and is made more possible because of EV tech. Obviously service locations will not go away entirely as not everything can be done remotely. I think 10 years down the road, dealership locations will be just about service.

 

[n8dgr8]

Dealers make peanuts on sales. If they were forward looking they would be working with the EV manufacturers on a servicing model. That would truly benefit the consumers. It would make them relevant and save those coveted jobs they are talking about.

I’m sure the rebuttals to this will be EVs do not require service but in reality, nobody really goes to the dealer for routine maintenance unless they throw it into the purchase as a bonus. It is the warrenty work and major repairs where they make their money.

The dealer is expensive for routine maintenance. However I still go because they do the work correctly. Having cheaper places botch repairs doesn't save me any money.

 

[tisodom]

My initial reaction to these lawsuits has been "f these dealers" but I'm trying to think about it from a more balanced viewpoint. What is the cost of entry to do business as a car dealer? Do they take into account the fact that the only way consumers can buy vehicles is through dealerships? Can they exit the business easily without having to deal with a lot of sunk costs? I know this is not apples to apples but the whole Uber/Lyft/taxi medallion thing comes to mind. Those NYC taxi drivers spent millions of dollars, taking high interest loans, for these limited medallions for the right to operate a taxi with the assumption that there aren't alternate options available. So it put them in a really precarious position. I remember reading about many of them taking their lives because the double whammy of their investment tanking in value and not getting enough fares because of rideshare. The laws should have taken care of them - through buying back those medallions at a specified rate, for example - to fully allow Uber/Lyft to operate.

Is there a similar case to be made for these dealerships?

Respectfully, if that were a valid proposition, then any online direct to consumer business model should be either not allowed to exist or the brick and mortar equivalent should be compensated. I bought a pair of shoes from Birkenstock online yesterday. Should shoe stores be allowed to seek compensation since Birkenstock is circumventing them?

When you think of it, the whole idea of a car dealership - being forced to have a middleman to do something you are perfectly competent in doing yourself nowadays - is nonsense. It harkens to the days that travel agents felt the surge of online flight booking. The only difference is that car dealerships have a lot more money and lobbyists.

 

[Pherdnut]

Good luck to them, lol. They won't find any friends in the governor's office. Certainly not among state reps for any counties with businesses profiting from Rivian coming into its own. Rivian is a big deal for both Normal and Illinois at large.