On a recent perusing of Reddit, I encountered a discussion about how difficult it still is to buy a new car these days. Inventories remain low, therefore dealership markups are still a thing to contend with. Basic supply and demand: whichever party has the power can dictate the terms.
Of course, that doesn’t mean people can’t complain about it. Especially those who want to buy a new car, but not exactly in a hurry to do so. These buyers can wait it out and try different dealerships to get the best price possible. But that in itself can be a time consuming, frustrating process. You’re begging people to shut up and take your money, yet they won’t do it. One Reddit commenter summed it up perfectly: “I just fundamentally can't bring my self to go beg some asshole to take my 60K.”
I think that is a big reason why the Tesla Model Y is the best selling vehicle - in the world - for the first quarter of 2023. Tesla sells cars directly to the customer, one price (that can change periodically), no markups or discounts. You can do the entire transaction on your smartphone, never needing to talk to a dealership salesperson. There isn’t a finance manager to upsell you on extended warranties either. In a time when when finding a car at MSRP is akin to hitting the lottery, the Tesla method of selling is highly attractive.
The pendulum will eventually swing back in the customer’s favor. Unless the traditional automaker constrain supply intentionally. That would be too cynical. I don’t think the automakers can sell (especially) electric vehicles while still relying on the dealership/markups method. Tesla’s direct-sale model will simply continue to eat their proverbial lunch. Those with the money and patience want low hassle above all else.
Two on a hill.