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Legacy Dealerships getting desperate

Legacy Dealerships getting desperate

According to the Wall Street Journal, legacy dealerships are telling customers to buy a new car from them, and then turn your older, upside down financially, car back to the finance company.

https://www.wsj.com/articles/dealerships-give-car-buyers-some-advice-jus...

They sell one more car this way, and get their monthly commission bonuses, but the customer may have their credit severly damaged in the process.

ICE is feeling the pain, and dealing with it in self destructive ways.

Geico | February 16, 2020

To keep it short and sweet, MSRP pricing set by the manufacture is the recommended price to sale the vehicle no matter where the car goes. A dealership in LA has the charge MSRP, whereas a dealership In a small town in SC can charge under MSRP and make the same margin. The cost to run a dealership varies drastically state to state, and city to town.

Tesla charged us MSRP no matter where the car is delivered. The direct to consumer model is a fasad, think of it like Apple phones. Why are the the same price whether you drive to an Apple store or go to your local Walmart?

Tesla is fooling everyone, the dealer model is better for a whole host of reasons.

jimglas | February 16, 2020

no
its not

Madatgascar | February 16, 2020

@mabuck, can you list a few reasons the dealership model is better? I can’t think of any.

jimglas | February 16, 2020

mabuck is a FUD troll

Geico | February 16, 2020

Yep, Jimglas, just ignore reason and logic and call me a troll when I give a perfectly logical and well thought out response to why Tesla is overcharging for vehicles in certain parts of the country.

The dealers in my area have this Tesla doesn’t have:
-loaner vehicles
-same day service
-state inspections
-overall better customer service

To each their own though. If you like taking delivery of a Tesla in a rush in a parking lot and then be told to email or text if you have any issues, with no customer service rep to call over your vehicle then Tesla is the way to go.

jimglas | February 16, 2020

so sell your tesla
lifes to short to be miserable

Geico | February 16, 2020

I will in 4 years when I get my money’s worth, but there is no need to be rude over my bad experience. I know people would rather have the current model, and to each their own. I hope they change their bad habits.

Madatgascar | February 16, 2020

Ah, I got it. Yes, my 6 Tesla purchases took an average of about 25 minutes. Never bought a car from a dealership in anything less than 2 hours. What seemed like a plus to me might be a minus to others.

It’s true Tesla doesn’t work as well as a traditional auto dealer with the telephone. Took me a while to adjust to sending texts and using the app to schedule service. Service has been phenomenal for me and the newer cars hardly need any. Again, different strokes for different folks.

Dealers had their chance to sell EVs and they blew it. They continue to anti-sell their EV inventory. As the world switches to EV, they are in danger of obsolescence.

Madatgascar | February 16, 2020

Oh yeah, on loaner vehicles - I get Uber credits instead. Saves me parking costs and hassle, and I can work while being driven. Remind me the downside?
Same day service - I get this if I have an emergency
State inspections - you mean smog inspections? Umm....

Geico | February 16, 2020

Yes you are correct Madagascar in regards to Tesla doesn’t work as well as a typical dealership.

My local dealership texts me and calls me to keep me updated on my Chrysler in service. I can text back as well. I know the service manager personally.

Most consumers enjoy that level of service. Tesla is the McDonald’s drive through approach. Each have their own flaws but like I said, many more pros to the dealership model.

Another example is with the Tesla model, the service centers are few and far between. Not sure if more sales will help that. But driving 2 hours to get service work is a pain. Having local dealerships is a huge plus for that reason. If one has bad service, I can go to the next nearest dealership 30 minutes away.

I prefer the dealerships approach. Others do not. To each their own.

Geico | February 16, 2020

I live two hours from service center, uber credits serve no benefit and make it even more of a haste to own a Tesla and get work done. Now if I need to get back to work same day I have to rent a car myself.

Not everyone lives 15 minutes from a SS

Geico | February 16, 2020

I canceled my last service appointment on a reccurent squeaks because they sent me a bill for approval (on a recurrent item.) and I was honestly sick of driving two hours for the same problem which this would make It the 4th time. I have no one to call and just don’t feel like dealing with it. I have to email or text someone who can’t help me or understand my problem.

Just one more example. Mobile service isn’t available in my area either. Big surprise.

SamO | February 16, 2020

Stealership model is a quick way to get fleeced by unscrupulous shitbags. Anyone advocating their position is a astroturfing troll.

Don’t believe me?

https://www.statista.com/chart/12420/americas-most-and-least-trusted-pro...

Congressmen and auto dealers are the least trusted of any profession.

Meanwhile, Tesla has the highest satisfaction with its customers.

https://cleantechnica.com/2019/02/01/tesla-model-3-most-loved-car-in-usa/

SO | February 16, 2020

The dealer Model is better for everyone?

Uh no.

I used to give mabuck the benefit of the doubt with some of his other posts. Now I see that was a mistake.

Geico | February 16, 2020

You know what they say, you don’t know what you have until it’s gone @SamO

Both have their pros and cons, and after my ownership experience the dealer model has many more pros.

A big part of customer satisfaction being low in dealerships is because people don’t understand or are willing to understand the complicated nature of buying and selling vehicles. There are certainly aspects of the dealer model that could be improved, but if those areas are improved will bring unintended consequences like all the dealers selling a car at MSRP with no exception.

The dealer will
-pay me fair value for trade in
-allow me a host of financing options
-same day service
-personalizes customer service
-many more Warrenty and add on options
-etc.

Geico | February 16, 2020

Tesla says go pound sand, and won’t even take a trade in.

Hmmmm ?

SamO | February 16, 2020

Blah blah blah.

Keep astroturfing the dealers but everyone knows they are garbage.

Numbers don’t lie, but people paid by dealerships do.

Geico | February 16, 2020

Everyone knows their garbage? Sure, I don’t like being sold on warranties I know I won’t need but when 50% of people say yes I’ll take the warranty I don’t blame them for selling it to me. When they come in and say you need new windshield wipers and air filter I know what they are doing, but the fact you get that level of service and options is nice. Everyone has to make a little money.

I can guarantee you Tesla is making more money per car than the legacy automakers are selling to dealerships and then to consumer. I guarantee you that!

FISHEV | February 16, 2020

Never had an issue with the car dealers especially on the service end where lounges, shuttles, people handing you their cards with their name, email and cell numbers on it. Where you get assigned to a single service person so they are familiar with you and your car. Good service. And if you don’t, the manager’s office is right there.

I’d think the direct sales model would mean more profit for the mfg and if the manufacturing is also capturing the lucrative service dollars, again more money for the mfg. Tesla SCs are full. As the cars age out of warranty more and more of that becomes high profit service dollars. Same on the charging, as 70% of new Tesla’s pay for charging and more of them depend on SC charging. Ka-Ching.

Tesla’s service model is poor while the dealerships service model is excellent. Tesla has most of it in place not sure why they just don’t add some people and improve communications. There are the inside guys at service desks, the outside guys at service desks, the lounge. No shuttle. Tesla needs to do the shuttle. Tesla needs to run its service on a proven successful model.

Since its mostly hiring more people to answer the phone, as the Tesla’s roll out of free warranty work into for pay service, maybe Tesla will hire more service people.

akgolf | February 16, 2020

Look it’s a troll fest!

Earl and Nagin ... | February 16, 2020

To @mabuck's credit, In rural areas where he/she apparently lives, I've found automobile dealers to actually be upstanding members of the community, not big-business blood-suckers as are found in big cities. In some small towns, they are one of the strongest commercial establishments in the town and play a big role in keeping the town alive economically. Many actually are upstanding members of the community with true bi-directional loyalty with their customer base. Having a local dealer saves rural people from taking several days off to travel to a big city to buy and service their vehicles.
This is one of the reasons that dealer interests against Tesla hold such a strong position in some smaller, more rural states.
What @mabuck says is totally ridiculous when talking about big city, big businesses such as Galpin Ford, Rydell Chevy, Longo Toyota, and Cal Worthington in the LA area, or Ron Price, the Putnam Group, etc in San Francisco Bay area. These, of course, dominate the sale of automobiles nationwide.
@FISHEV, of course, is just a bottom-feeder aquatic troll.

TeslaTap.com | February 16, 2020

Wow - this is first I've heard of someone preferring the old dealer "screw the customer" service over Tesla. Most dealer service visits want to upsell you on something, or worse, claim something is broken that is just fine, so they can pad the bill.

Tesla offers Mobile service, so they come to my house or work and do the work. So much nicer than waiting in a dealer's grubby lounge for hours for that quarterly oil and filter change. No matter how new your car is, the salespeople accost you to dump that lemon they just sold you and buy the latest shiny new object.

SamO | February 16, 2020

But think of the little league sponsorships. Lulz.

Geico | February 16, 2020

@earl an nagin

Thanks and you are absolutely correct. The local dealerships do a lot for the community and are upstanding parts of local economies. There isn't enough good I could say about my local dealerships, family owned and operated and one of the few business's I know that gives to charity every year.

@FishEV glad you haven't ever had an issue with dealerships either. Most people don't have issues, and the old way of selling vehicles is long outdated with consumers being able to search for the best price nationwide. My local dealership has a guarantee in writing that if you find the exact same vehicle two weeks after delivery for a lower price they will cut you a check for the difference. They care about making sure you feel you're getting the best deal.

Geico | February 16, 2020

Tesla's Service center also charges $40 more per hour for service than my local car dealerships. $165/hr vs $120/hr. Talk about a MAJOR rip off. I hope my car doesn't have any issues after warranty runs out.

Geico | February 16, 2020

Tesla also tries to sell 2019 manufactured vehicles in 2020 to buyers at the 2019 price. When they are making a killing off you, talk about shady business practices. At least the dealerships discount old models heavily to move them and if you order a vehicle as new, it won't show up as a 2019 build. How stupid can they be?

Madatgascar | February 16, 2020

@Earl and Nagin is correct, rural and big city dealerships are night and day. I’ve tried both. Dealerships have also come a long way since the dark days when they earned themselves the “least trusted profession” rap. Lately they are highly motivated to score well on customer satisfaction surveys and do a much better job at what they do.

Still, the Tesla sales experience is much more painless. There are a lot of things they are doing better when it comes to service. The rangers are awesome. I’m confident that as they grow, the penetration into more remote areas will bring better service to folks like @mabuck.

jordanrichard | February 16, 2020

Mabuck, Tesla doesn’t charge you anything different when the calendar changes, nor do they make changes to the cars by a set date. Why don’t you explain how GM can sell you a car earmark for 2021 come this summer? You actually get screwed when it comes to trading your car in because it will have more miles on it than a 2021 model that was actually built in 2021.

Also BTW, just a little news flash, Tesla can not force you to buy anything.

Geico | February 16, 2020

@Jordanrichard

Because the year a car is manufactured affects the age and value. When the date changes to 2020, a 2019 is now last year's model.

Yes, they don't force you but just putting the vin in people's account and not telling them "hey we are gonna put last years model in even though you ordered in 2020" is very unethical. What if someone missed it and mistakenly took delivery on a 2019 in 2020?

All automakers sale the prior year 6 months in advanced because it is a sales tactic, and again for that very reason the car looks and appears newer. If I were shopping a used Tesla and saw a 2019 and 2018, I would assume the 2019 would be slightly more valuable.

Why is it I have to explain the most common things to people who can't take their head out of the Tesla sandbox and try to even explain how good their customer service is? Tesla is doing a lot of things wrong and needs to fix it asap.

Geico | February 16, 2020

*Sorry, the new year 6 months in advanced*

And you tell me, up to what point is it acceptable to sell a 2018 tesla by your "they don't change anything" Logic? By your logic they could put a 2018 Tesla in a 2020 order.

andy.connor.e | February 16, 2020

All the dealer model does is add another middle man to the sale, where the manufacturer makes a profit, and the dealer has to make a profit off the consumer. If Apple phones are the same price off apple directly and in walmart, then that means that Apple is getting a higher margin of profit by not selling it to walmart, and then walmart has to make a profit after buying it from Apple. Which actually makes sense, because Apple will sell hundreds of phones to Walmart rather than a single consumer buying it from Apple. Manufacturing and shipping logistics and packaging can be more mass produced sending tons of products to one location so ya, it would make more sense that walmart gets some sort of a wholesale price so they can sell it at the same price as Apple off their website so that way they can eliminate competing with one-another in terms of pricing.

Uncle Paul | February 16, 2020

What has any of this got to do with my OP that dealerships are telling customers to buy a new car from them, then turn their old, underwater cars to the lenders.

They are self destructive.

People going into legacy dealerships often get fleeced by the money grubbers.

andy.connor.e | February 16, 2020

Cant read the article. But best advice is dont ever take advice from the person who is trying to sell you something you dont need.

Geico | February 16, 2020

Andy.Connor.E

Think about it a little harder before you counter my statement. Come on now!

Walmart has to ship the phones to all their stores nationwide after buying it from Apple. They may buy it in bulk, and store it in a centralized location, but they also have to ship it all over the country and sale the end product individually. Lol. Really think hard about this now.

Tesla is doing the exact same thing, but without the Walmart involved. Dealerships make the same margin as Walmart does, oftentimes selling the product for exactly what the dealer would sale it for anyway.

Walmart and apple also try to sale you a warranty after the fact. Applecare?

Geico | February 16, 2020

UnclePaul

Because before ignorant people can say dealerships are going away, they first have to understand why they aren't going away and how they work. If you really cared to understand and didn't have a one sided agenda towards Tesla, maybe you would have actually said "ahhh" after reading all your posts and maybe had a change of mind.

But like many on this forum, it seems very few can clearly think for themselves and be persuaded to change their mind.

Geico | February 16, 2020

@Andy

To go more in depth as well, It takes a huge burden off a company like Apple to try and get into a space it isn't familiar with. Albeit apple has done a decent job with it, they are a manufacturing and technology company. Not a retail store.

Tesla is the same way, except they are doing both very badly. They are trying to be the dealer and manufacturer, in an industry where no other car maker does that and for good reason. There are too many variables and it will just end up costing them more in the long run. Kind of like the government running the postal service, hasn't made a profit and is more expensive.

The dealership model works for the consumer and the manufacturing at better efficiency. Tesla will adopt it soon once they finally come to terms with their terrible service.

crt6598 | February 16, 2020

This is another bad sales attempt by ICE dealerships to move their inventory. I still get emails from some of them about their “upcoming blockbuster sales”, and even service emails for previously owned cars that I no longer own (do they even have/check/update their records?).

I do not miss their service department literally charging at least $100 for a mere diagnostic check, or $200 to swap out the 12v battery.

Now Tesla service may not be as large, but they’ve come a long way, and have expanded their network of partnerships with third party companies, giving them a business boost.

As an example, My M3 sustained a driver side rear flat tire. I noticed the tire was flat after working late until almost 11pm. Needless to say I was not optimistic about getting this fixed at that time of night.

I then used the Tesla app (which apparently has now been updated) and requested tire repair under the roadside assistance section. I received a text back within five minutes of completing the request for roadside service, and then received a follow up email to authorize and e-sign the terms of the service.

The responding truck was not a Tesla service truck (as their vans have a full tire changing/mounting/balancing set up onboard). In under one hour a repair person (third party) arrived at my location, removed my wheel, and mounted a loaner wheel and tire on my car.

The repair person stated that my wheel would be taken to the nearest service center (for me pick up) where it would be either repaired or replaced depending on the severity of the damage (medium sized screw in the tread). Nevertheless I was on my way home in a little over an hour after initializing the request for roadside service.

Overall this service experience was seamless and really makes owning a Tesla just a bit more worth it, and it now makes service what I as an owner expect it to be...reliable.

In stark contrast, If this were an ICE car, a similar roadside repair option would certainly NOT include contacting the vehicle’s manufacturer, or the dealer (and certainly not at that time of night). This would more than likely be a AAA call or some other company, to which the repair/replacement cost would be high (never mind getting a loaner wheel?).

I still have the loaner wheel (an 18”, my car has 19”s) on the car (service scheduled for next week), thank you Tesla Service, you guys rock!!.

So ICE dealerships can try all the casino card counting tricks they want, eventually they will be thrown out by the new pit boss. This is what happens when they fail to adapt, innovate, and overcome.

andy.connor.e | February 16, 2020

they sell pretty much every car they produce. seems to be working fine

andy.connor.e | February 16, 2020

once apple sells the phone to walmart it doesnt matter what other costs walmart has. Apple sold the phones. GM, Toyota etc... dont care what happens to the car after they sell it. Instead of selling it to a dealer, Tesla is selling it to consumers. They're doing fine. If they were bad at it, they wouldnt be selling them.

TranzNDance | February 16, 2020

I thought this was an interesting mix of words from the article:

To get rid of the Soul, the dealership told her, she should have the lender repossess it.

Ross1 | February 17, 2020

@ mabuck | February 16, 2020

"Tesla's Service center also charges $40 more per hour for service than my local car dealerships. $165/hr vs $120/hr. Talk about a MAJOR rip off. I hope my car doesn't have any issues after warranty runs out."

Are you fair dinkum? That much?
Last I checked Americans were getting $7 an hour in restaurants (Tips??), 2 weeks holidays, hardly any long weekends... in Aus we get so much more but dont pay car service rates like that. Maybe German brands, I wouldnt know.

David N | February 17, 2020

mabuck,
I don’t know your story but I get the impression you’ve had bad expierances with Tesla. I’m sorry for that.
A two hour ride everytime work needs to be done can certainly frazzle anyone’s patience with the company.
I wish you well with the Chrysler and the dealer. It’s is true that large dealerships today and trying to be user friendly. Most of all of our large dealerships have customer lounges with free Wi-Fi , complimentary beverages, breakfast pastries, kids play area, 30 min oil and lube service, text and email notifications ect.....
I assume you’ll stay with ICU from now on, meaning you won’t be looking at getting a Rivian, a faraday ect.....
They don’t any dealers anywhere.
Even though it didn’t work out, Thank you for giving Tesla a try. Peace.

jordanrichard | February 17, 2020

Mabuck, you confidently didn’t address my real world example of people getting screwed with their car’s value by selling next year’s model 6 months early. Here is a an example. John buys a 2021 Mustang in June 2020. Sally buys a 2021 Mustang in June 2021. Come 2025 both go to trade in their respective cars which puts the age of both cars at 4 years old. Problem is, John’s car has 15,0000 more miles on it because he had it for 1 year longer. Who do you think will get more for their trade in on their 4 year old car?

Geico | February 17, 2020

Jordanrichard, did you not understand or think about what I just said? The reason they do it ahead of time is marketing - to perceive the car is newer than it is, which only helps the value of the car in the used market. When you own a 2021 in 2020 you're technically "ahead of the game" and it's just a marking gimmick.

Tesla, is doing it backwards. They are trying to sell people the 2019 car in 2020 and again by your logic where does it end? I guess they can try to sale a 2018 model in 2020 who cares nothing has changed right??

andy.connor.e | February 17, 2020

Tesla sells a 2019 car in 2020 because thats when it was built. Tesla has not and does not do model years. Its the year it was made. Fortunately for Tesla though, your car can improve via software updates. And the car gets shipped directly to you from the factory essentially. Whereas a dealer, who knows how long its been sitting idle in the parking lot exposed to the elements.

tdwin2000 | February 17, 2020

I had my model 3 in for a windshield replacement. It needed to be there overnight. I didn't expect that nor did I expect a loaner but without asking they gave me a Model S loaner until the next day when my car was fixed. I can understand the frustration of many as the Model 3 is getting SO popular that they need to increase the amount of service centers Tesla currently has. However a lot of the things Tesla does are MUCH. better than a Legacy car dealer. Tesla has mobile service trucks. They can do most anything needed since a Tesla is easier to service than an ICE car. My friend had a flat tire beyond repairing it. They asked before they came out what model car he had. The truck that showed up had a bunch of new tires on it. They changed his on the spot with a brand new tire. I'd like to see a Legacy dealer that does that.

akgolf | February 17, 2020

Years ago I bought a new Toyota and we still have one. I still like my wife’s Toyota, but they really seem to be resistant to going all electric. Probably our last one.

The local dealer convinced me to purchase an extended warranty. When something went wrong and I called the number on the card they gave me, it wasn’t purchased. The dealer pocketed the money, I assume betting it would never be used.

Yeah I like local dealerships.

hcwhy | February 17, 2020

I had a friend who worked at the local Toyota Dealer. The person who writes up your repair ticket is on commission. 'nuff said.

jimglas | February 17, 2020

mabuck
sell your tesla
buy a kia
you will be much happier

rxlawdude | February 17, 2020

@mabuck. Latest addition to the twit filter. Thanks, TeslaTap for the Chrome browser extension!

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