Personal Finance & Money Asked by AndraSol on August 17, 2021
Interested in buying a brand new car (in the US) for the first time, I went browsing through the websites of car companies to check prices and customization features. In that process, I noticed that in all of the brands’ websites, it is indeed possible to "build" the customized car features as you want, then get a final price plus around $1200 freight.
However, there is never a "buy" or "purchase" or "cart" button – the end game is always a contact form to reach out to the dealers closer to me. I got curious to understand in more detail how does that works. Since there is always a freight shipping estimate, I would have assumed that the company would be able to ship those cars directly, for the online pricing plus the freight, and get them delivered. But then I do not get:
why do I need to contact the closest dealers if I am shopping for the car directly in the brand companies’ websites? Would it be because the brands deliver the freight to the dealership I pay & get the car there?
if so, then would I have to pay extra on top of the online price (besides, of course, taxes)?
In case I am getting this all wrong, I would love to have an explanation of how does this process work, meaning the process of "building" a personalized new car on the brands’ websites, paying the freight and actually getting the car.
Car manufacturers in the US have in the past lobbied to legally disallow direct sales, in their eyes to ‘ensure local dealerships that can support customers’, in the eyes of the foreign competition to ‘disable a foreign company to sell cars in the US market’. They were pretty successful in many states, and so - depending where you live - you are forced to buy from a dealership.
That could be good or bad, but that’s the reason you cannot buy online from the manufacturer.
PS: Tesla is having a bad fight about that, because they would like to sell directly - so far with little success.
Correct answer by Aganju on August 17, 2021
As mentioned by others, a local dealer is required for most auto brands. However, you don't have to travel to the dealership in some cases:
Systems like Toyota’s SmartPath, General Motors’ Shop.Click.Drive and the Hyundai Drive program allow buyers to complete the entire car searching and buying process without ever setting foot in a dealership.
They coordinate touchless test drives — dealers drop the car off at your home or office and pick it up a few hours later. They’ll deliver the car the same way if you buy it.
Answered by Orange Coast- reinstate Monica on August 17, 2021
Dealers
Repeating the other answers, the franchise agreements and/or state laws require all brands, except Tesla, sell through a franchised dealer.
Order vs Lot
Generally, most Americans buy a vehicle off the lot of a dealer. The online configuration tool will offer to find a similarly configured vehicle in inventory. If you do not like any of the vehicles available, you can order it. You do this through the salesperson of a dealer. An ordered vehicle can nominally take 2-3 months to arrive.
However, due to various reasons, including COVID-related microchip shortages, demand from rental car fleets, and the fact that summer is around the time of the model year changeover, it may be difficult to order. Manufacturers are simply not taking any dealer orders on many models.
Price
You will generally pay significantly more than the MSRP of the base, i.e. absolute cheapest configuration. However, price you pay for a car configured will be the configured MSRP from the website-fixed manufacturer discounts-negotiation+freight and dealer fees+tax and registration.
Traditionally, the negotiation factor is substantial on all vehicles. (Tesla is an exception where negotiation isn't allowed, as well as a few specific dealers.) However, due to COVID, high-demand pickup trucks, certain sports cars (Corvette) and some specific cars, have no negotiation room right now, which is an exceptional circumstance.
Very roughly, MSRP out the door is reasonable. That is, fixed discounts+negotiation = freight and dealer fees+taxes and registration.
States have different regulations and market conditions setting dealer fees, and taxes and registration fees vary by state and county. Many websites will give you an average price of what people are currently paying, prior to fees and taxes. The dealer should be able to easily provide an out-the-door price for budgeting and to begin negotiations.
Internet sales
In terms of delivery, you could always negotiate over the phone and e-mail. Some dealers liked it and were good at it, some basically refused to. Most people visited at least one dealer to examine and test drive a car, then negotiated with dealers within, e.g. a 100 mile radius.
COVID forced all dealers to adopt remote deals. After purchase, if you are a reasonable distance from a dealer, they should be happy to send a shuttle or deliver the vehicle, something that was true prior to COVID.
Answered by user71659 on August 17, 2021
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