State Dealer Laws Add Up to $5,000 to New Car Prices, ICLE Study Finds

[SpaceEVDriver]

One of many reasons I will only be buying direct to consumer from now on. Dealers are destroying the US automotive industry. In my area, there’s an additional ~$5k ADM on every new and used car simply by nature that there’s only one dealer of each brand (and it’s mostly the same monopolistic dealer), so there’s absolutely no competition.

https://laweconcenter.org/state-dealer-laws-add-up-to-5000-to-new-car-prices-icle-study-finds/

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[The Weatherman]

Yep. Agree 100% with the opinion.

And it will never change in my life time.

 

[boggle]

@Ford Motor Company these are your dealers. Worth noting this was the most egregious when I went to buy my Pro. Had two others asking for $5K and $10K before finally moving my reservation to one with no ADM.

 

[husky10101]

One of many reasons I will only be buying direct to consumer from now on. Dealers are destroying the US automotive industry. In my area, there’s an additional ~$5k ADM on every new and used car simply by nature that there’s only one dealer of each brand (and it’s mostly the same monopolistic dealer), so there’s absolutely no competition.

https://laweconcenter.org/state-dealer-laws-add-up-to-5000-to-new-car-prices-icle-study-finds/

I wonder of Oregon will charge this $5,000.00 fee if bought out of state when registering?

 

[SpaceEVDriver]

I wonder of Oregon will charge this $5,000.00 fee if bought out of state when registering?

It's not a state fee. It's a dealer markup and extra charges for junk like locking lug nuts just because they can. Some states might add their own state sales tax to new vehicles purchased out of state, but that's dependent on each state.

 

[husky10101]

It's not a state fee. It's a dealer markup and extra charges for junk like locking lug nuts just because they can. Some states might add their own state sales tax to new vehicles purchased out of state, but that's dependent on each state.

I've bought several vehicles from out of state in my 55 years of driving and haven't run across any out of state charging their sales tax. I pay my states tax when registering. Not to say this can't happen in a state I haven't purchased from, like the far east coast.

 

[rugedraw]

I was gonna pop off, but what's the point? I'm just a degenarate "stealership" employee. Heaven forbid a for-profit business tries to make some money.

 

[SpaceEVDriver]

I was gonna pop off, but what's the point? I'm just a degenarate "stealership" employee. Heaven forbid a for-profit business tries to make some money.

It's not the employees. It's the dealership owners and lobbying groups hiding behind anti-competition laws that force consumers (who need a vehicle in this vehicle-centric society) to purchase from dealerships that's the problem. I have no problem with a business making honest money. But the legally-protected monopolies that dealerships enjoy are anti-consumer, not pro-consumer. Allowing direct-to-consumer would introduce competition and benefit the consumer.

 

[rugedraw]

It's not the employees. It's the dealership owners and lobbying groups hiding behind anti-competition laws that force consumers (who need a vehicle in this vehicle-centric society) to purchase from dealerships that's the problem. I have no problem with a business making honest money. But the legally-protected monopolies that dealerships enjoy are anti-consumer, not pro-consumer. Allowing direct-to-consumer would introduce competition and benefit the consumer.

Direct to customer means you pay MSRP, so be careful what you wish for. That one time a consumer payed over MSRP because of supply and demand issues gets erased the next time you buy a vehicle and get $5k off of it. But hey, if you want to deal directly with the factory and pay MSRP for the rest of your life on every vehicle you ever buy, that is something you are free to aspire to do. If you would just do that when you walked into a dealer, there would not be any ADMs or 4 hour long processes to buy a car.

 

[SpaceEVDriver]

Direct to customer means you pay MSRP, so be careful what you wish for. That one time a consumer payed over MSRP because of supply and demand issues gets erased the next time you buy a vehicle and get $5k off of it. But hey, if you want to deal directly with the factory and pay MSRP for the rest of your life on every vehicle you ever buy, that is something you are free to aspire to do. If you would just do that when you walked into a dealer, there would not be any ADMs or 4 hour long processes to buy a car.

But I'm not free to do that. That's exactly the problem.

I'm forced to argue with a salesman, his manager, his lender, his upseller, etc. I can't even just pay MSRP at any dealer within a 2-hour drive because they have all colluded to add a $5k adm to all vehicles. And on top of that, they all add extra garbage costing $1500+ to every vehicle.

Make it possible for me to order from the manufacturer directly and pay MSRP without a middleman charging me their adm and for worthless junk like underbody spray, "nitrogen," and lug nuts that I'm just going to remove as soon as I get home and maybe we'll see some competition from dealers, finally.

The point of the article is that dealerships increase the cost of vehicles by an average of $5k. I have never received $5k worth of benefits from a dealership.

 

[rugedraw]

But I'm not free to do that. That's exactly the problem.

I'm forced to argue with a salesman, his manager, his lender, his upseller, etc. I can't even just pay MSRP at any dealer within a 2-hour drive because they have all colluded to add a $5k adm to all vehicles. And on top of that, they all add extra garbage costing $1500+ to every vehicle.

Make it possible for me to order from the manufacturer directly and pay MSRP without a middleman charging me their adm and for worthless junk like underbody spray, "nitrogen," and lug nuts that I'm just going to remove as soon as I get home and maybe we'll see some competition from dealers, finally.

The point of the article is that dealerships increase the cost of vehicles by an average of $5k. I have never received $5k worth of benefits from a dealership.

I can't speak intelligently on what that store in particular is doing or trying to do. However, you do not have to buy from them. There are plenty of dealers that will sell you the vehicle with thousands in dicounts and then you can pay $1,000 or so to have it shipped to your door step. You'd still be saving thousands of dollars over dealing with your local store. If they are indeed engaged in some kind of shady nonsense, they will have to stop when people stop buying from them.

I did it myself when I bought my F150. My local dealer (who I used to work for) would not sell me a truck without a mark-up. So I drove 4 hours to a dealer in a smaller market and got $3k off in the height of the COVID crapshow.

I'll tell you what: I can contact me old store right now and get you whatever you want if you're willing to pay MSRP. Granger will sell you a factory order at 3% below invoice plus any and all rebates you qualify for.

Edit: Same thing when I bought the Bronco Sport for my girl. To get the deal I wanted, I had to deal with a dealer in Jacksonville over 350 miles away. I didn't feel like driving there, so we paid a tow company $550 to bring it to Miami. Still saved thousands from buying locally.

 

[RLXXI]

@Ford Motor Company these are your dealers. Worth noting this was the most egregious when I went to buy my Pro. Had two others asking for $5K and $10K before finally moving my reservation to one with no ADM.

That was 3 years ago when demand exceeded supply, I got my new Flash at a local dealer that had it transferred in from an out of state dealer because they didn't have what I wanted.

Paid $11,000.00 under MSRP not including the 7500 rebate that I didn't get.

 

[RLXXI]

But I'm not free to do that. That's exactly the problem.

I'm forced to argue with a salesman, his manager, his lender, his upseller, etc. I can't even just pay MSRP at any dealer within a 2-hour drive because they have all colluded to add a $5k adm to all vehicles. And on top of that, they all add extra garbage costing $1500+ to every vehicle.

Make it possible for me to order from the manufacturer directly and pay MSRP without a middleman charging me their adm and for worthless junk like underbody spray, "nitrogen," and lug nuts that I'm just going to remove as soon as I get home and maybe we'll see some competition from dealers, finally.

The point of the article is that dealerships increase the cost of vehicles by an average of $5k. I have never received $5k worth of benefits from a dealership.

Not all dealers, sounds to me like your dealer has a monopoly in your area. Search else where using the intarwebs and either fly/drive out to where it is and drive it back. Or you could have it delivered by one o those auto transport companies.

Dealers are all independent for profit stores, they are not associated with Ford except that big blue oval out front the dealer way up on a pole.

My local found my truck 3 states away and had it delivered for me, $11k under msrp.

 

[WillGrey1907]

I've worked with a handful of really good salespeople over the decades, but the dealerships generally are the problem when there is a problem (one time it was the general manager I had to threaten to sue because I put the money down, we had a signed deal, and he told the salespeople to call me back for an additional $15k markup, to which I said no I will get a court to order specific performance). Competition is usually good for the consumer, state mandated monopolies are not.

 

[fhteagle]

If you (incorrectly) believe that stealerships increase consumer choice and competition, there is a very simple way to (dis)prove it. Repeal all goverment enforced monopoly must buy through the markup middleman laws, and let _real_ competition drive the market. If there is actual danger of independent shops being squashed by the OEM (there isn't), then replace the law with a much more sensible law that OEMs can only sell direct at advertised MSRP, dealers can still negotiate a different price if they want. Until that happens, the argument that a stealership is somehow a good, proper, moral capitalist entity is entirely moot and largely wrong.

The public in states that have less idiotic stealership mandates have very clearly spoken than the "haggling" psychological games played by stealerships are unwelcome, unnecessary, and wasteful. The sooner these parasites are no longer able to mess up reservations, launches, and EV sales, the better off we all will be.

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