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Why The Dealership Model Doesn't Work for EVs - Add Your Story Here

Why The Dealership Model Doesn't Work for EVs - Add Your Story Here

I have several stories as to why the dealership model doesn't work well for EVs. Please add your story here.

Ford Dealer Tells Me I Don't Want a CMAX Energi:
I am the Electric Vehicle Program Manager for an electric utility. I took my father, who wants to buy a plug-in vehicle, to the local Ford dealer to get information on the CMAX plug-in. Our dealer has decided to not carry plug-in vehicles and had no information on the three that Ford offers. I asked to speak with the "buyer" of vehicles. We asked him about the CMAX Energi (plug-in) and he told us we don't want one. He said we want the hybrid version. I explained that we want to support plug-in vehicles and we'd like to purchase a plug-in CMAX Energi. He re-explained that we don't want one and that we want a hybrid. I told him that my job entails helping people understand why plug-in cars are good for our economy, environment, and energy security. He re-explained that I don't want one. We left.

Nissan Recommends Changing the Brake Fluid Annually on a Leaf:
The Leaf doesn't require much maintenance; for some reason the recommended annual service (at the dealer) is to change the brake fluid. You might ask yourself if you've ever owned a car that says you should change the brake fluid annually. Especially one with regenerative braking (done by the motor). You then might ask yourself where this requirement came from.

Local Chevy Dealer "Only Carries the Required Number of Volts":
I've had several people tell me that the local Chevy dealer doesn't want to sell Volts. They only carry the minimum number required and don't promote the vehicle. They have a very limited stock of Volts and limited options. They will, however, gladly show you the wide selection of Super Crew Cap F-150s.

At Test Drive Event, I Knew More About the Cars Than the Dealer:
We hosted a great test drive event where various people from the community came out to drive Leafs, Volts, Focus Electrics, CMAX Energis, and Fusion Energis. Although the dealers provided their sales specialists, I knew more about the vehicles than they did (how regenerative braking works, how much one kWh costs, how far a vehicle can travel on one kWh, where grid energy comes from in our state, how long the battery warranty is for, what is fast charging?, where are the batteries?, fuel cost differential between gas and electric versions, what is required at home for charging?, L1 vs L2, etc.). They sales reps were wonderful people - but they still don't understand the cars.

DallasTXModelS | December 18, 2013

Ford sells F-150 trucks not Chevrolet.

jvs11560 | December 18, 2013

Dear Tjohnson...I have a family member that is the sales manager at a Chevy dealership. The volt has been fairly consistent in sales. As a matter of fact, her loaner is now a volt. Some dealership can't seem to get rid of them, and others are constantly swapping them out. They have a great lease program and have consistently sold approx 2000 volts a month. I drove it. Although it's no model S, it's a nice car. and...a great value.

I wish Tesla would lease the Model S.

Kleist | December 18, 2013

@jvs11560 - your wish came true... Tesla has a lease program.

Panoz | December 19, 2013

@jvs11560: I beg to differ, the Volt is NOT a great value. The $30K or so car actually costs the US taxpayer over $100K for everyone sold (at a loss, of course). No one in their right mind would buy a Volt at its TRUE cost...but such is the government's management of business.

redacted | December 19, 2013

A leaf costs more to build than a Tesla?

redacted | December 19, 2013

Volt. Yeah that's what I meant.

Bighorn | December 19, 2013

@Panoz
Any car can look super expensive if your amortize R&D over an abbreviated time horizon. Consider the source and then think about it.

Gizmotoy | December 19, 2013

Tesla's showroom concept isn't infallible, either. I got a ridiculous amount of bad information from the associates in the showroom.

Fortunately you can find the answer to pretty much anything on the Internet and we don't have to trust the sales representatives any more, no matter what sales model is used.

AmpedRealtor | December 19, 2013

Folks, why do you think dealers push people away from EVs? The reason is simple... dealers make all of their money on service. EVs have very little to service. Tesla's model of offering service as an "at cost" option, not allowing the service centers to make a profit, would never work for a dealership that makes most of its profit from service. This is the underlying reason why dealerships are loathe to sell EVs and why Tesla is selling direct.

evpro | December 19, 2013

I agree. I have visited the Nissan and Mits dealers here in Spokane, they are uninformed and unenthusiastic about their EVs. Would much rather sell you something else, probably because the profit margins and service requirements are better (for them).

This despite the fact that we have relatively cheap electricity (mostly from hydro and wind) and short commutes. IMO, there needs to be an educational outreach effort made (demo the cars at the big regional shopping malls) but the salespeople can't afford to leave the showroom or they might miss a dinosaur sale.

TeslaTap.com | December 19, 2013

One of the reason so many car buyers hate dealers, is how they
steer buyers to the car that generates the most revenue for the dealer, and not the best choice for the car buyer. This means the highest-profit vehicles that are also the most unreliable. This generates revenues for both sales and service at the dealership. It doesn't even matter if the car is a lemon and requires lots of warranty service, as the dealer gets to stick it to the manufacturer and still comes out ahead.

Before Tesla, we all accepted that's the way it's done, and painfully lived with it. Even if you're one of the smart ones who research and determine the best car to buy, you likely have plenty of relatives that are just not car savvy and end up with really poor choices.

Tesla's sales model is so refreshing and pleasant, no wonder the dealers are doing everything they can to hurt Tesla and take away our rights to buy what we want how we want.

AmpedRealtor | December 19, 2013

@ Panoz,

Can you please back that up with data?

jkn | December 19, 2013

tjohnson,

Changing brake fluid is not a bad idea:
Once I saw a minor motorbike accident. His front brake locked while he was driving. Luckily no cars nearby. Brake fluid absorbs moisture from air. Moisture causes rust in the system. This can lock moving parts. This is more likely to happen if brakes are not used much. (That motorbike had been in storage over winter.)

Brian H | December 19, 2013

Kleist;
A buy-back guarantee is not the same as a lease program.

bonaire | December 19, 2013

@Panoz, while you are wrong about the taxpayer situation, the R&D spent on the Volt of about $1 billion is roughly the mount of money spent by Tesla in the 10 years leading up to the Model S. Tesla is ordering $500 more in machinery to build more cars. So, in terms of investment, more Volts have been sold per $1 billion invested than Tesla vehicles.

The volt design began in 2007 prior to the recession and financial bail out.

Dramsey | December 19, 2013

The ignorance of salesmen at dealerships for vendors with only one electric car model hardly repudiates the "dealer model" for electric cars.

The fact that most auto dealers are scumbags repudiates the "dealer model" for electric cars.

Panoz | December 19, 2013

@Amped: Sure. There are lots of articles, here are a few. Some refute the others, just get popcorn and watch the politics unfold!

$250K per volt: http://jalopnik.com/5870507/report-every-chevy-volt-has-over-250000-in-g...

$250K per volt: http://reason.com/blog/2011/12/21/congratulations-taxpayers-chevy-volt-is

Article on the Volt subsidies: http://www.washingtonpost.com/wp-dyn/content/article/2010/11/12/AR201011...

Article saying $250K only true so far: http://www.politifact.com/ohio/statements/2012/jan/31/jim-jordan/jim-jor...

Article on poor sales figures that affect subsidy numbers: http://www.policymic.com/articles/4982/chevy-volt-on-hold-government-sub...

Pungoteague_Dave | December 19, 2013

@tjohnson,

There may be lots of reasons to dislike the dealer model, but none of your examples support that thought.

You example of a bad Ford salesman is just that. What does one idiot salesperson have to do with the dealership model?

Nissan's brake fluid change recommendation has nothing to do with dealers, it is in the manufacturer's service schedule. Brake fluid absorbs water and deteriorates faster than other automotive fluids. We replace all hydraulic fluids on all of our vehicles and farm implements every three years. Most service manuals suggest 24 or 36 months without considering mileage - it is a pure time thing.

Your Volt example is addressed above. Plenty of Chevy dealers do well with the Volt.

Your comment about dealer knowledge is also highly specific to the individual and in my experience, applies to TM too. I have known great car salespeople and terrible ones. That has nothing to do with whether dealers work if not. I have had almost zero correct answers to questions from TM showroom reps, who seem picked more for looks than expertise. The rep who took me on my first test drive in a Model S was taking delivery of her new Honda Fit that same day, and was more jazzed about that than the car we were driving. She answered every single question incorrectly. People are people and they have limits. They can't know everything and almost no one we come into contact with at Tesla can afford to buy one, so I often find myself "helping" them understand details. For example, when I commented to the head of service at a TM Service Center that my car suspension had dropped to normal overnight, causing a hard chassis bump on exiting our driveway, he responded "they aren't supposed to stay elevated." He was of course, wrong and clueless on this, and eventually researched and acknowledged his mistake. That is one example of many that we have experienced, and does not say anything about the dealership model vs the TM customer sales and support model.

Our most recent Porsche, MB and BMW car and motorcycle purchases were excellent experiences, with reps and follow up service every bit as good, and in some cases, less amateur than the Model S experience. Not that we would ever give up the S for an ICE now that we have it, but the ordering and delivery process was, by far, the most difficult, interactively disruptive, and miscued car purchase process that I have ever experienced with any marque. A year in, it may be better, but a year ago, TM couldn't even deliver a car in Maryland of Virginia with plates, and I was pulled over five times, ticketed once, and had to spend a day in court - TM's fault and nothing that has ever happened to us when a real dealer delivered a car. I don't love the dealer model, see it as a dinosaur, but let's not exaggerate the negatives therein, nor ignore the issues that TM has had with its model.

shop | December 20, 2013

Another point about dealers - sometime in 2014 we are going to start to see demand for used Tesla Model S, both on the sell side and buy side. Traditionally dealers help with this process by having their own used car lots and doing whatever mechanical tuneups to the cars before selling them.

Is Tesla going to wade into the used Model S market? If not, are they going to recertify used Model S? Hmmm.

Kleist | December 20, 2013

"Is Tesla going to wade into the used Model S market?"
To some degree they are already in today with the loaner sales. However the real answer we'll get in about 3 years when the first "lease" cars come back - this could be very beneficial and lucrative for the service centers.

Gizmotoy | December 20, 2013

@Kleist: I expect they get something going before that. Certainly those cars will be a huge driver, but so will the Model X. A lot of S owners are going to want to switch, and it would be smart for Tesla to try to capitalize on that.

NKYTA | December 20, 2013

@PD, you said "You example of a bad Ford salesman is just that. What does one idiot salesperson have to do with the dealership model?"

And then you said "Not that we would ever give up the S for an ICE now that we have it, but the ordering and delivery process was, by far, the most difficult, interactively disruptive, and miscued car purchase process that I have ever experienced with any marque. "

Sorry about your bad experience.

My reservation, design, finalization, purchase and delivery was by far the best car buying process I have ever been through...from what I've heard on the forums, it sounds like I'm in the majority. If you take out my design process (in which I hemmed and hawed on options/packages) I think I spent a total of 4 hours. My reservation was put in four years ago, delivered 12/22/12.
:-)

AmpedRealtor | December 20, 2013

+1 NKYTA

Buying a Model S has been the most painless process ever. It was only a tad more complicated than buying an iPhone. I hate price shopping, wasting time at a dealership negotiating and then getting the upsell from the finance guy, etc. With Tesla you just configure online, reserve, pay for it, it gets delivered to your door. Easy peasy. What's not to like?

omarsultan.ca.us | December 20, 2013

There is no financial incentive for a dealer to sell EVs over ICEs. The ICE is going to be much more profitable over the lifetime of the car. Until that gets fixed somehow, I don't see how EV volume will pick up through traditional dealerships.

O

PaceyWhitter | December 20, 2013

Panoz,

You need to read the articles, not just the headlines:

"This figure also wouldn't pass an MBA accounting course as it assumes that you're only going to sell 6,000 cars. Ever. It's artificially low because some of these subsidies are 20-year grants. If they sell only 6,000 cars a year for 20 years that number comes down to $25,000 per car."

Note that the article was from 2011. Chevy has sold over 60,000 Volt's so far.

KOL2000 | December 20, 2013

I have never met a car salesman that has either added value to the process of buying a car or knew anything more about the car than me. It's about time a company had the common sense to remove these worthless thieves from the equation.

They are a parasitic species that aims to rape you and steal your wallet. I'm happy that I will never ever buy another car from a dealer.

Low CG | December 20, 2013

I've bought 10 cars the old fashioned way (going to a dealership and enduring that day-long root canal) and 1 the Tesla way (on-line). Tesla's took 15 minutes and was fun and painless. It’s understandable that dealerships are scared to death of the Tesla sales model. But instead of fighting it (and looking silly) they should adapt.

avanti | December 20, 2013

@PD -- I agree with your larger point -- none of the OP's stories are particularly relevant to his or her actual point. However, to your comment about the brake fluid issue: I doubt very much that Nissan recommends *annual* brake fluid replacement. The story probably refers to a "dealer recommendation". It is very common for dealers to publish self-serving service "recommendations" that go far beyond what the manufacturer actually recommends. These recommendations should simply be ignored.

@AmpedRealtor -- If you like a "no negotiation" approach to car buying, you local ICE dealer would be delighted to accommodate: Just write a check for the sticker price and you will be out of there in no time. What's not to like?

Say what you will about the dealer network vs Tesla's approach, but at the end of the day, writing a check for sticker price is exactly what you did when you bought your MS. You might argue that you saved the overhead of supporting the dealer network, but it remains to be demonstrated that Tesla's approach is more cost-efficient in the long run. We all know what we want to believe, but the data just aren't there yet.

Mathew98 | December 20, 2013

@avanti - "We all know what we want to believe, but the data just aren't there yet."

What data do you need?

Dealers overhead costs for:
+ salaries for all the sales people
+ salaries for receptionists and other support staffs
+ salaries for "finance" managers
+ pyramid scheme payment to kick it up to each manager and the general manager
+ monthly rent for the dealer lot
+ finance costs for the huge inventory of cars sitting in the lot for weeks/months
+ promotional or advertising budget to attract customers to the show room.

Now which of the above items does Telsa incur without the traditional dealership model? I'll give ya the TM showroom rental cost and salaries for the TM reps in the store.

AmpedRealtor | December 20, 2013

@ avanti,

"Say what you will about the dealer network vs Tesla's approach, but at the end of the day, writing a check for sticker price is exactly what you did when you bought your MS. You might argue that you saved the overhead of supporting the dealer network..."

Tesla would have to either absorb the dealer overhead (lower profit margins) or pass the overhead onto the consumer by way of higher cost (reduced sales numbers). Selling direct solves both of these issues and is a net win for Tesla.

"If you like a "no negotiation" approach to car buying, you local ICE dealer would be delighted to accommodate: Just write a check for the sticker price and you will be out of there in no time. What's not to like?"

Tesla's model is uniform and applied equally to all purchasers of its vehicles. I pay the same price as someone on the other side of the country. When you know there is not even the remote chance of getting a better deal elsewhere, it's okay to pay full price. I believe Saturn had the same "no negotiation" policy for their vehicles, but I've never wanted to buy a Saturn so I don't really know from first hand experience.

I prefer the Tesla way. It's uniform, simple, and scalable.

Mel. | December 20, 2013

Avanti, now what was your story?

avanti | December 20, 2013

@Mathew98: "What data do you need?"

Um. How about something more than baseless wishful thinking?

Your list is almost completely apples and oranges.

Ignoring the "pyramid scheme" snarkiness, there is nothing on your list that Tesla won't eventually require. Happily, at its current tiny scale, demand exceeds supply, so silly things like advertising, inventory so consumers can see what they are buying and so on are currently unnecessary. But it is very obvious that if the company ever comes anywhere near the scale that we all want it to, all those things will be required, as will receptionists, finance managers, and salaries for sales people. Having all those people working for Tesla rather than the dealers is mostly immaterial.

If, for example, the market didn't value readily-available inventory, dealers who didn't keep large inventories would have become common. They have not. To enter the mainstream market, Tesla will either have to conform (in which case they will have all the same expenses), or they will have to change the market's mind (in which case the dealers will follow suit and shed the expenses).

@ AmpedRealtor: "When you know there is not even the remote chance of getting a better deal elsewhere, it's okay to pay full price."

With all respect, I am having trouble making sense of this argument. If you wish to be treated like a king and are willing to pay top dollar for it, that's fair enough. But, why does my preference to haggle and pay less somehow spoil your pleasure? As I said, I can assure you that if you are a "sticker price" buyer, your dealer experience will generally be a very pleasant one, no matter how badly they treat hagglers like me.

When all is said and done, the only structural differences between the Tesla model and the dealer model are (a) Tesla's local sales presence is managed centrally, rather than having profit-motivated dealer/owners making local decisions; (b) The capital for that local presence needs to come from the corporation, rather than local entrepreneurs and their funders; and (c) the profits (if any) attributable to the local operations flow to the manufacturer rather than staying local.

Which model works most efficiently? I have no idea, and neither do you. I am glad for the experiment.

avanti | December 20, 2013

@MEL: "Avanti, now what was your story?"

Good question.

Pros:
--Friendly, young, hip sales staff that weren't wearing ties. Reasonably low pressure.
--Nice display of a rolling chassis--very interesting.
--Lots of enthusiasm from folks who were proud to work for Tesla.

Cons:
--Had to travel to a distant city.
--Had to wait for weeks to have my test drive
--Couldn't drive the car I was interested in. Had to proceed on faith.

Neutral:
--Same annoying follow up calls that I would have gotten from a dealer.
--My sales person didn't know any more than I did. Par for the course dealer or no.

I am completely sincere in saying that I really don't know which model is better.

Mel. | December 20, 2013

Avanti, I understand your position . Thanks.

AmpedUP | December 20, 2013

The dealer model is one I welcome as a thing of the past. I am SO tired of the usual dealer nonsense. My last ICE car purchase was a 6 hour ordeal I will not soon forget.

Mathew98 | December 20, 2013

@avanti - Based on your response you obviously have no first hand experience working within a dealership. The point with the pyramid payment kicking up to all the managers based on every sale is true.

There's no need for "finance" managers whose sole job is to upsell every kind of unnecessary but costly add on items. How about the anti corrosion package that only cost you $1,495? Of course it is nothing more than a $10 under body spray.

TM will not need any commission based sales people, finance manager, and "special finance" AKA ripoff special managers.

The hourly waged show room reps and delivery special replace the sales people and finance managers from siphoning any portion of the proceeds from sales. There's no need to pay a per car bonus to the general manager either.

The whole point of the "build to order" model is to eliminate the huge expense of inventory sitting in a lot. TM in effect eliminated the whole middle layer cost structure of the dealership.

Now do you understand the real reason the NADA is fighting tooth and nail to preserve the current dealership model?

Captain_Zap | December 20, 2013

I was very amused by these Motor Trend articles. They are from a series called "Car Salesman Confidential". Enjoy.

http://blogs.motortrend.com/car-salesman-confidential-green-peas-and-pup...

http://blogs.motortrend.com/111513_car_salesman_confidential_product_kno...

http://blogs.motortrend.com/car-salesman-confidential-how-to-avoid-drain...

http://blogs.motortrend.com/car-salesman-confidential-how-you-car-salesm...

http://blogs.motortrend.com/car-salesman-confidential-fair-market-value-...

http://www.motortrend.com/features/editorial/1307_4_things_you_should_ne...

Why should we have to know all that just to buy a car?
I think I experienced everything on the following lists during my two visits to a dealership plus a couple of the other tactics from above articles.

http://blogs.motortrend.com/1312_car_salesman_confidential_beware_these_...

http://blogs.motortrend.com/car_salesman_confidential_110113.html

There are many more. Just search for car salesman confidential on your search engine.

avanti | December 20, 2013

@Mathew98 -- Based on your response you obviously have no first hand experience working within a dealership.

Well, I will have to plead guilty on that count. If you will permit me a touch of tit-for-tat snarkiness, your response sounds like you have no first hand experience working in a free-market economy.

The point with the pyramid payment kicking up to all the managers based on every sale is true.

What you call "pyramid payments" others call "commission-based compensation". Does this sometimes cause impolite behavior? Probably. Does it save consumers money? Probably--at least the smart ones.

There's no need for "finance" managers whose sole job is to upsell every kind of unnecessary but costly add on items. How about the anti corrosion package that only cost you $1,495? Of course it is nothing more than a $10 under body spray.

Instead there (apparently) is a need to solicit interest-free loans from overly-enthusiastic early adopters and to sell over-priced service contracts (where they are legal) to enthusiasts who apparently are willing to pay most any price for "peace of mind". (Please don't get me wrong. I have no problem at all with Tesla doing this. I am a capitalist to the core. But it is just substituting one kind of stupid-tax for another.)

TM will not need any commission based sales people, finance manager, and "special finance" AKA ripoff special managers.
The hourly waged show room reps and delivery special replace the sales people and finance managers from siphoning any portion of the proceeds from sales. There's no need to pay a per car bonus to the general manager either.

So far, yes. We'll see what happens later. As I said, I welcome the experiment.

The whole point of the "build to order" model is to eliminate the huge expense of inventory sitting in a lot. TM in effect eliminated the whole middle layer cost structure of the dealership.

Yes, of course. The trouble is, it is not Tesla that gets to decide whether or not this is a good idea--the market does. I have never made a prediction as to what the market will decide, because I have no idea. Neither do you. The current supply-constrained situation with the MS tells us nothing about this.

Now do you understand the real reason the NADA is fighting tooth and nail to preserve the current dealership model?

I always did. And, like you, I hope that the market gets to decide this, not state legislatures. Let the games begin!

Mel. | December 20, 2013

Avanti,, I thought I understood your position, but you sound very confused. You say you understand the real reason that NADA is fighting blah blah. You are keeping it a secret?

Free enterprise can not coexist with the government backing the car dealers.

avanti | December 20, 2013

@Mel:

Did you read my last paragraph? I PERFECTLY understand why NADA is fighting for government regulations against Tesla. That doesn't mean I want them to win. I am in total agreement with the prevailing opinion around here that Tesla should be allowed their experiment. I am just not at all certain that that experiment will necessarily succeed in the long run.

Mel. | December 20, 2013

Avanti, understand. I just want Tesla to have a chance. It becomes more expensive when they have to lawyer up in multiple states to fight these politicians/ car dealers.

omarsultan.ca.us | December 20, 2013

Avanti:

There is a fundamental shift in business model that you don't seem to be grasping, or would you argue that Amazon and Travelocity will eventually need to hire a bunch of people once they are successful to model themselves after the cost structure of the brick and mortar businesses they have replaced?

@Matthew98 is correct--it is a pyramid scheme as the sales manager gets a cut of the salesperson's sale--there is no one incented to look after the buyer's interests at the dealership. You are probably also in the minority in arguing that adding a bunch of SG&A costs somehow manages to saves the buyer money--how exactly does that work? The dealer has a number of fixed costs he/she must recover, even if they simply want to break even on the sale of the car and make it up on the backend through the service department. Beyond that, you have partially paid the salary of three people (sales person, sales manager, finance manager) who have added little if any value to the transaction--not sure I see the money-saving part. Maybe its the part where they stroke the ego of the buyer and tell them how clever and tenacious they were to get such a good deal.

As far as service contracts, no one solicited anything--buttons showed up on my dashboard--my choice to ignore. The only conversation I have ever had about service contacts is when my DS reminded me I had 30 days from delivery to purchase one if I wanted it. The optional service contracts offer some intrinsic value in they offer a discount off the individual price, as opposed to Simonizing and underbody coating which have hefty markups for minimal value.

Finally, how can you agree that Tesla is not demand constrained yet still wonder if the BTO model is successful or not. The fact that they are ramping production and are still supply constrained would seem to indicate the market thinks its a pretty darn good idea, no?

O

Mathew98 | December 20, 2013

@avanti - "your response sounds like you have no first hand experience working in a free-market economy"

Well, that must be it, genius.

Who is the one spilling out theories and speculations and who is speaking with facts and experience?

It's tough to argue with facts. When in doubt, spread FUD and obfuscate the issues. I would vote for you for any political office.

Pungoteague_Dave | December 20, 2013

This is silly. It is amazing to read the koolaid drinkers relative comparisons of the dealer vs TM sales model, claiming to have been ripped off by dealers.

Here's an irrefutable fact:

if you have purchased a new ICE at some point in your life, and purchased a new Model S at any time, you absolutely paid more profit margin on the Tesla, and it's is not even close, unless you were an absolute rube when buying the ICE. That's combined manufacturer and dealer margin vs TM margin. TM claims 25% margins. Porsche is a distant second, at 18.4%. Audi aims for 8 to 10%. Industry averages are 6 to 15%, with the dealer getting 2.25%. http://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=404

I love TM, own their car, and am buying another, will probably buy several more. But be very clear - they have you accepting the Apple model - charging you more per unit and making you feel good about doing it. Saying that it is better to have one price makes it fairer is to ignore the exorbitant margin that you accept in the deal. As at Apple, they are masters of aura creation. They in fact do spend a lot on advertising, but it is buried in the marketing and G&A lines and does not take conventional forms.

Captain_Zap | December 20, 2013

@PD

It doesn't matter to me how much goes to profit or whatever.
I just want to know that I got the same price as the next guy without having to put up a battle or work out some sort of tactical stragegy.

Maybe your experience is different because you buy so many cars, but for someone who makes that purchase a handfull of times in their life, it is traumatic and you never feel like you paid the right price, no matter how good or bad the price was.

I was a Travel Agent in one of my past lives. That industry has completely changed and there were no legal actions. One has to build a better mousetrap, adapt or move on. I went through several adaptations and just ended up closing the doors. I didn't care for the internet version of the work so I moved on to something else.

Laws have unintended consequences. The real trauma in my family's history was that they just got their hop farm up and running well and then the prohibition started. That was adversity that competition could not overcome.

Al1 | December 20, 2013

Ripoff is about perceived value. 40$ for a sandwich may be ripoff, yet 100,000 for a car may well worth it (in owners' eyes).

I think this whole debate is about dealers not adding value. Neither in the eyes of Tesla, nor in the eyes of Tesla clients.

There are many professions that earn on average more than car dealers. Does this also mean they are more ripoffs?

kidheme | December 20, 2013

I bought my first car as I finished my medical residency in Chicago -- a 1984 Oldsmobile Cutlass Supreme. 29 years later I have two distinct memories of that event. 1. The sticker price was $13,164. 2. It was the most stressful experience of my life --at the time I was taking care of people in the Intensive Care Unit, and this was far worse. The cars I have bought since then have not been quite as bad an experience but the haggling always leaves me with an uncomfortable feeling. I'm sure some people like this but I do not. Just one more reason to buy a Tesla.

Mel. | December 21, 2013

PD, when some one disagrees with you, calling them koolaid drinkers is not the best way to get your point across.

Pungoteague_Dave | December 21, 2013

Agreed, Mel. Sorry if I offended. Koolaid reference is shortcut for blind, unquestioning acceptance of a religious dogma (leading to tragedies like the Jonestown massacre). That's not a fair comparison here, but the religious devotion espoused by some here for Mr. Musk and TM does invite the thought. Fanbois is probably a more appropriate dismissive term. I have a healthy respect but try to keep things a bit more grounded and real than many on this forum, so admit having occasionally used inflammatory terms to incite a response and debate. Probably the worst was calling @robert from Sweden thin-skinned. It had the desired effect, but then got out of hand. I'll try to be more balanced. ;-)

Pungoteague_Dave | December 21, 2013

There are plenty of no-haggle mainstream car dealers. Not defending them, but many do now post the real absolute price. And the internet has completely leveled the playing field. For over ten years, my entire vehicle, motorcycle, and boat buying experience has occurred online, with only the closing at the physical dealer. I agree that things were pretty bad in the 1970-2000 time frame for the car consumer. However, if you are objective about it, car dealers have largely become a lot more consumer friendly in the past decade. This is especially true at the luxury car level, but I have also had seamless experiences buying Ford trucks, VW diesels, etc. it is a matter of you controlling the process, and refusing to be controlled. CarMax has also pushed a healthier model into the mix, so conventional dealers have had to adjust. But they are still dinosaurs. Not because of anything TM is doing, but because of the internet.

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