I always thought it was infuriating that you can't buy a car directly from the factory and you are forced to give some asshole a month's salary when buying a car for no other reason than it is tradition. Tesla only does what we should have been doing since internet became a thing, actually we could have been doing it over the phone all along. Order car, send check, get call when your car is ready, go pick it up from the factory.
You mean a "pick it up from a distribution point", otherwise you'd have to travel a lot to go to the actual factory. But the distribution point should also have support staff, technicians, service, for all eventualities. Which means, they will turn into dealerships themselves.
This also happened in the malls. Tesla had a ground breaking new strategy to sell their cars in malls. I have one near my home town in the Brea mall. Then, the car industry lobbied to make it illegal to open a car dealership in malls because they were threatened by such a good strategy. You can still find tesla stores in places where they were built before the ban was put into effect.
What price did your Tesla cost out door ? Because he promised 200 thousand Tesla to rental car dealership , $35k and the Tesla truck he got $1,000 down 5 years later and nothing came , oh hsve you received your Tesla ?
@@XXXonly69 I bought January 2021 and received it 15 days later. Out the door I believe it was $37,000 but I later had to pay taxes on it which I think was around $2000 maybe a little less than $2k I dont remember
Buying a car at most American dealerships is about as pleasant as getting a prostate exam or a colonoscopy. I understand that a lot of peoples livelihoods depend on this inefficient sales model, but there should be some way to make the experience more pleasant for the consumer.
The problem is that with car dealerships there’s little reason besides price in deciding which dealer to purchase from that’s why they make the pricing unclear until the end.
Absolutely not. Cut out the middle man completely. Their jobs serve no purpose except to add costs onto the consumer and make the system less efficient.
"there should be some way to make the experience more pleasant for the consumer." - yes there is a way, the consumers should REQUIRE it. If they don't, there is no such way.
When i buy a car, it can cost max 500 euros - even when i could afford more. No need to visit dealers, lol. In 21 years i have saved soooo much money not having a quickly depreciating car.
FYI, another reason for the laws favoring dealerships is how the automakers abused them in the past. i.e. the Big 3 automakers used to make them sign deals agreeing to buy a specific number of automobiles from them each year, or else they'd get cut off and no longer be a Ford/GM/etc. dealership and no longer get any supplies from them. This effectively made the Big 3 automakers recession proof, because the dealerships had to buy 1,000 or however many vehicles from them each year even if they weren't selling. When politicians cracked down on this and passed laws protecting dealerships they swung the pendulum too far in favor of the dealerships, resulting in the issues with Tesla that you outline.
@@nothandmade9686 I love the Free market, says capitalist, makes up all the rules to make it not Free and so stupid not even a patent troll could come up with them. Haha yes, and telling that to ppl they will tell you that you dont know how Capitalism works.
@@yudistiraliem135 capitalism has free markets. This is a law passed by the government to protect dealerships, that is the exact opposite of free markets.
I learned long ago how to deal with pushy car salesmen: "Stop talking. You can either sell me the vehicle I'm interested in or I can go elsewhere. Got it?" Yes, it's rude as hell, but it shuts their bulls**t down real quick.
I don’t think many people would complain about buying from dealerships if they weren’t such a negative atmosphere connected to them. No one enjoys dealing with dealership salespeople. Once again, greed takes precedent.
The negative experience is a function of the Dealerships' business model, which empowers and incentivizes them to extract mark-ups and make recurring revenue on repairs. Dealerships will need a different revenue source to remove the incentives underlying bad customer experiences.
@@AudiTTQuattro2003 my last ICE car I bought for $5,000 less than MSRP because I took advantage of timing and bought something that few people want (manual transmission). There is nothing easier than walking into a dealer and paying full list price. That is what you are essentially doing with a Tesla. The "agony" of finding a bargain is what people seem to be complaining about. They'd rather force everyone to pay full list price than allow a group of us use our skills to pay less I guess.
Texas Gigafactory should've been placed 10 ft away from a state border, allowing it to technically move the cars just over state lines then back in to get around texas law.
Capital One does a pre-approved system for specific cars so we went online selected the car we saw in person, got the quote and walked in prepared to fight for the price. 5 thousand dollar was the closest they would get then said it was dealership fees. They had us in their lobby for 2 hours before we said fuck it and left, only to have them call us back and provide the price on the pre-approval slip. They were rude about it too but then complain to Honda and Capital One, not take it out on people tired of the insane prices for "extras".
I remember getting a lease on my car in early 2020. I was so happy to have “completed” the paperwork online prior to showing up at the dealership. The paperwork online took about 45 mins to get completed after uploading and pulling documents to then just show up at the dealership and pick up my vehicle. Long story short I spent 9:30am to 4pm at the dealership that day. I hated it so much.
This is not a disadvantage for Tesla; it's a 10% pricing advantage against brand competitors who have no choice but to use their dealership networks. 10% in the automotive industry is HUGE.
One new trick that Tesla just started trying, is opening Tesla stores and service centers on native land. The states can't stop it. They have at least one in new mexico i believe.
This was the comment I was looking for! I don't think this important piece of information was mentioned in the video. More due diligence should have been done than just cursory research.
Tesla's relationship with its customers is like that with its employees -- aligned rather than adversarial. In much the same way that Tesla employees are made stakeholders through stock options, owners tend to feel common cause with the company as well -- partly because the product itself is so awesome, but also because you can participate in development efforts like FSD. I look forward to all my interactions with team Tesla, and I can tell they appreciate me (perhaps from the length of my order book -- lots of FSD-optioned CyberTrucks).
Idk, but I have stock options questionable when you have no say in the direction of the company. Like you may work hard af but the leadership screws up, or you're lazy af but the leadership is brilliant
I think the “no haggle” buying experience for cars in the US was pioneered by Saturn Corporation. (1985-2010). This GM subsidiary sold cars at a fixed price and for this alone I was prepared to buy one. You knew before you bought the car what the price would be and what the options could be at what price. It is very intimidating to buy a car I think. Before you walk in the door you know that most of what happens next will be either unfamiliar or incomprehensible to you, and that some salesperson is just about to take advantage of you…
One thing I would like to add: Beside the car sales, the dealership is there to service cars. They have access to all restricted car parts (think of brand - specific pyro-fuses in electric cars). If there would be a law that require all car parts to be sold to everyone, then any entrepreneurial car mechanic could setup a multi - brand car service centre. This change in law will eventually mark the end of car dealership. At the moment the category is protected by the laws, but they have became so unloved and so out of place that a change can be easily envisioned now.
I bought my Tesla 3 at a gallery here in Houston. Actually, I went in and looked at the cars. Said I wanted to buy a model 3.. The guy there asked me if I had a phone. Yep. So I went online and he stepped me through the process. Thus I was inside the gallery when I purchased it. Could have been across the street, in my house or on an airplane. FU Texas State government.
All the broken teslas proves the claim that they "don't require maintenance and won't break down" completely false. The claims haven't aged well. People are just now understanding they're gonna be spending 25k to replace a batter. That's more than an engine!
Going to a car dealership is one of the worst experiences out there. You can only walk in there if you are willing to pay cash (to avoid the tricks) and are willing to walk (making it clear that you intend to). I rarely drive and mostly ride my bicycle. But if I were to buy a new vehicle, I would go the EV route and have them drop it off at my place. What a crazy idea making you go to a dealership. Oil changes are just a trick to get you into the dealership so they can work their mind games on you.
I like going to dealerships most of times I get financing for a car I get zero down with a slightly inflated price and a couple things that I don't really need...my last car deal was on a used Honda Civic with 82k miles on it Zero down with iffy 590 credit score 17500 it was used they added a $1500 extended warranty that I couldn't even understand what was actually covered and $1000 gap insurance (I'm looking at the paperwork work again to try to drop it and get refunded) there's like $6k of loan interest making the total loan $27k on a used 2018 civic with 82k miles on it(the car had 130k on it 6 months later but still looks pretty good the loan was spread out over 5.5 years so it's $440 a month which looks pretty reasonable
So Elon can just get his brother to open a dealership and pay him $1 a year in commissions. Or he should have done a Bezos and leveraged his decision to build the factory in Texas with an agreement to be able to sell there.
having bought a tesla, I can tell you that the experience was much more painless and seamless. I didn't have to spend hours and hours haggling at the dealership, signing forms, etc.
Liked your video, as still has both thumb up and thumb down. As a personal form of protest against YT, I'm not voting anymore the videos without the thumb down counter; I rather leave a note in the comment. Thanks for the video. Living in Europe, I didn't know about Tesla and the car dealers in the US. Yes, I avoid going to a car dealer even if I need to buy a car. Yes, the US dealership law needs an update...
I’ve “only” bought two cars from dealerships and I have to say that it was a decent experience, no pressure tactics or up selling. Maybe salesmen are slimmier in America. I agree that saving around 10% by cutting out dealerships would be nice though.
I remember walking into the international mall in Tampa back when Tesla's share price was in the low $200s and thinking about buying like 20 shares I didn't 😒 second worse decision other than me buying VTI in a Roth rather than Amazon when Amazon was $215 a share. Finger was on the button of the mouse, than I heard Jim Cramer go on and on about them not being profitable 🤦.
You can buy a MacBook at an Apple Store or at the local Best Buy. Unlike car dealers, Best Buy does not add their own "Additional Dealer Markup" or charge you mandatory fees for dealer-applied "Nitrogen Filled Tires" or "Underbody Protection". They can sell you their own equipment protection / insurance plans or even AppleCare, but it is OPTIONAL. Prices are similar to what Apple Stores charge since Apple controls the minimum selling price, but Best Buy can offer gift cards as incentives for shopping with them. Car shopping should be like that.
Old laws that need updating. Remember laws catch up depending on what consumer behavior is doing. Sooner or later legacy dealerships and manufacturers won't be able to do anything as change becomes inevitable.
There is a scheme here in Europe, where one customer leave the dealership is a SUV while paying a monthly amount of money that normally would pay for a small city car. I call this scheme "Ride now, cry later", because the customer - after three years, at the end of the low monthly payments, must pay half of the price of the large car all together, or surrender the car, with nothing due back. And it is not all. The customer must agree to not drive more than 10k km in the period, and to pay (without appeal) for damages like dirty seats or paint scratches, and avoid excessive use of brake pads and clutch disk; these can amount to many thousands at the end of the period. It is unbelievable how many people fall in this trap; mainly because of their vanity, they find themselves at the wheel not of a car, but of a massive liability, forced to ask friends to remove their shoes when it rains, before they ride their car... The freedom you are entitled in an old banger, you won't believe!
These Tesla buyers who paid full MSRP for the car and think they had a great buying experience. If you walk into a traditional car dealership and pay full the window sticker price you will have the same "great experience"
Change should be expected in every business. A business model like dealerships has created opportunities for business and jobs. Now this is in the process of change, but will take time. Great video. Not many service vehicles at dealerships.
Excellent video. My interactions since buying a Tesla have been so pain free. My ICE driver friends really think I’m paying too much for my Tesla, when they’re the ones being nickled and dimed. Jokes on them!
The funny part is that other automakers are going to take advantage of Tesla's pioneering. 30 years from now, direct sale will likely be the norm for all manufacturers, 90% of new car sales will be BEV or PHEV, and Tesla will be defunct or marginalized, in the same vein as Delorean. Tesla is putting in all the work to overcome franchise laws, figure out how to make practical BEVs, and ultimately the major manufacturers will take advantage of Tesla's work and many of them will make better cars or sell at lower prices or both.
I think that argument is about a year out of date. Tesla’s new gigafactories are a game changer. It is going to be difficult for the legacy carmakers to catch Tesla. Tesla is probably safer than GM at the moment. Of course, when you have huge fixed costs like any carmaker, you are vulnerable to many problems, and mistakes can put you out of business, so there are no guarantees. It wasn’t so long ago that GM was bankrupt.
Tesla is constantly expanding and will have 2 more giga factories running in 2022, while other carmakers are just starting to build their EV factories. They also have very little debt and almost unlimited financial resources, where as GM and Ford have debt that is over $100B. Tesla is 8-10 years ahead when it comes to EV's.
I live in a small city of 100k and the richest person is not a lawyer, doctor or some finance person, but the owner of car dealerships. They bought and run like 200 dealerships.
I think Tesla also realized that being able to sell directly to consumers allows almost everybody took purchase one. The problem with these luxury spaceship cars if they were forced to be sold in a dealership, the dealership would realize these things are crazy performance and charge like another 30 grand on top of them. And also because the demand is so high they can buy only a little bit of them and do some insider trading with other dealerships.
Doesn't matter if the manufacturer sells it or not. Still going to be sales/finance/service/parts departments as well as property costs. The amount of money they'd have to spend to build a sales network like the existing would cost so much that at best you'd pay the same as you would to an independent dealer.
In summary, most people does know what they did regarding to safety. It's sound like business practice in 50s rather than the revolution one. EV is quite complex engineering and has serious challenge in long-term uses. Like a regular heavy machine, without proper maintenance service, the machine is likely to cremate themselves in any time, then customer need to buy a new one instead of fix it..... sound familiar?
The other side of the coin of the franchise dealership model is that you can actually bargain with them as they are competing amongst themselves. The last thing a car dealer wants is to see you and your deposit walk out the door to another dealer selling the same car. I get is that some people don't like haggling a price and it can be stressful, but if you have effectively 'one size fits all' pricing then the last thing a manufacturer has is your financial interests in mind. The price in a fixed price model will always be the most expensive price possible with maximum margins for the manufacturer and the consumer gets 'bent over' as a result. The result is that if you want a Tesla then you will always be paying the maximum price regardless of where you buy it. I'm not saying car dealerships are great places to be - they tend to be a battlefield with the consumer walking in with a target on their forehead and wallet. But at least you as the consumer has the power of your deposit and signature to negotiate a price that is better than the maximum sticker price which is what you will always pay with companies like Tesla.
Maximum price? Isn't that what competition is for? Tesla knows that if it overcharges for its cars, people will buy other cars. If it has a fixed prices for a range of models, then consumers can compare features across models at their leisure at home and are far more likely to come to a conclusion that suits their needs. Car Dealerships inherently rise prices for consumers by introducing a middle man - unless the car dealer is regularly selling at a loss (which would be unsustainable) it has to sell cars at a higher price than it bought them - with a financial incentive for overcharging people. Before the internet, I could maybe see an argument for car dealerships - consumers wouldn't necessarily have access to all the information that goes into buying a car, nor a means to customise elements of their purchase, so maybe they added value to the transaction. Both of those things can now be achieved online fairly easily by a price comparison website or even just manufacturers doing what Tesla does.
Everyone is free to pay full MSRP if they can't handle the stress of asking for or offering an alternative price. I really don't understand the consternation about this and wanting everyone to pay more for a car because they don't like negotiating themselves. When it comes down to it, it's people's personal greed that is causing them all this stress.
Then there is no middle man that can help you. So if a nozzle or whatever is broken you need a new batterypack for $21000 (see youtube) in place of a repair of $700. In some states you can get the parts back in others not (us). This means in practice you have to pay a multibillion corporation whatever they want, no senotor will help you (us). This could mean that like printer ink you are forced to overpay while being lied to. You might need a right to repair.
The dealership model is why legacy auto makers are screwed. They dont make much profit off their car sales, their profit comes from parts and financing. Also, dealer markups will drive EV prices beyond range of eligibility for tax incentives.
I only bought two new cars Before Tesla ('BT'), and both were bad experiences -- not horrible in themselves, but leaving me regretting that I'd gotten a bad deal. In contrast, I look forward to my interactions with Tesla staff, not just because they don't take advantage of me financially, but Tesla staff is different -- as if we're part of the same team (true in my case being a shareholder).
They take advantage of you more than any car company in the world. They fix there prices at huge mark ups hence they're the most profitable car company in the world!!
@@kiwiboyreviews42 exactly people think it’s no markup with tesla because the middleman is out but in fact it’s a bigger markup because they can say it’s mrsp for any price they quote.and in the price is the extra price of owning stores and staff that operate the site.
It really make me angry that dealerships are taking advantage of the current shortage to put on multi-thousands of dollars in additional dealer markup. I wish the consumers would wake up and demand direct sale. I hope all those greedy dealerships go bankrupt.
tesla also makes cars that are pretty good as a car,this in important because there are other afordable electric cars like nissan leaf,however those are made for emision compliance and not to be good products
Texas Agricultural law says that if you grow it in the state of Texas, you can sell it, no matter the local law. Apply the same logic to guns and trucks, and Tesla has their out.
Factories sell the cars for about 5-10k the rest is profit for the dealership. This law created minions for the big car companies. Thank you government.
I think dealerships are valuable, whose to say once dealerships are extinct and car manufacturers can sell straight to consumers they don’t just jack up the price
Dealers don't make any money on selling cars. It's all in the service department. Eventually that will die off with ICE cars. They need to figure out their role in the future - customers still like the idea of going to a dealer, picking out a car from a large inventory, and immediately driving it home. People also like the idea of getting a "deal" because they outsmarted the salesman - that may be delusion, but alot of people have the mentality that they never pay retail - that's not going to change.
I think it’s awesome that you can buy direct, but where is the savings? I bought a Honda Civic new a few years ago for half what the cheapest Tesla sells for, and I haven’t come near to paying the price of the car for fuel, maintenance, etc.
I'd like to buy a Tesla, but the price doesn't make sense for me. If they're selling directly to consumers, why is the cost more than the other brands with middlemen? Shouldn't the price be less?
Of course there a lot of reasons why dealerships made sense…. With no internet, you would want to see a car in person. Also, cars used to need much more maintenance, and there were fewer independent garages around… and you needed someplace that had the parts for your car All these factors have been changing…. And finally, someone came along and saw it was possible to just skip having dealers. Fwiw… there are some TV manufacturers that essentially are not available in retail stores. Things are changing
this sales disruption is long needed. good on Elon. my wife and I have already decided that when our two Lexuses poop out, (will take a long time) we will be Tesla owners. even the mighty Toyota cannot compete with Tesla.
Not a free market when interest rates are set. Who gets bailed out. Who is not too big to fail. A bankers license to create money. The current interesting thing is Tesla entering the insurance market state by state then country by country
I have a tesla and I will never buy another ICE vehicle again. EVs are the future and Tesla is ahead. Tesla already has the advantage of the supercharger network and being able to sell cheaper due to no dealer markup. If these dealer laws don't change , the auto makers are gonna be in trouble and we the tax payers are gonna have to bail them out again.
Try getting warranty work or getting parts in any decent length of time. The franchises act As parts and service centers. Also in a 50k car most dealers are lucky to make 1000$ but in exchange I can drop off a car and pick up a loaner and get my vehicle back in a few days not with teala you wait months to get someone to show up then tell you it needs to go back to a service center and they have a spot open in 2 months. 4 months of payments and still no car and had to buy another car to drive while waiting......so convenient
Besides social media Tesla does not advertise creating a desire to want to by a Tesla. The majority of people unlike major car manufacturers like Ford or Chevy that spend millions on marketing campaigns creating a brand and image creating a want... if they market their vehicles and Tesla doesn't consumers will in most circumstances always choose other vehicles besides Tesla. Tesla needs to advertise on T.V. Superbowl, NBA etc. When I see a Tesla I see no true desire to buy one. To many other vehicles to choose one. The lower priced Tesla are Ok but you need to create a help, need & want to grab the market share. Image is created spending the advertising dollars. You can't assume they will buy a Tesla when these other manufacturers spend millions better car or not. Doesn't take a rocket scientist to figure this out!
I would love to see every car dealership in America go under, that’s how much I hate them
Yeh they dont even have the excuse of supporting tons of American factory workers anymore
@@claudeyaz this comment Right here
Best comment 😆🏆
It's happening
Inevitable, no?
I always thought it was infuriating that you can't buy a car directly from the factory and you are forced to give some asshole a month's salary when buying a car for no other reason than it is tradition. Tesla only does what we should have been doing since internet became a thing, actually we could have been doing it over the phone all along. Order car, send check, get call when your car is ready, go pick it up from the factory.
Probably because dealership are expensive to setup and run so it’s owned my the wealthy which has a lot of influence in local/state politics
You mean a "pick it up from a distribution point", otherwise you'd have to travel a lot to go to the actual factory. But the distribution point should also have support staff, technicians, service, for all eventualities. Which means, they will turn into dealerships themselves.
@@CameraMystique except that it’s car company owned dealership
@john...right so the money leaves town and goes to some other state instead of staying in your town ....sounds great....
@@hdtripp6218 oh man you must be a trump h!llb!lly
This also happened in the malls. Tesla had a ground breaking new strategy to sell their cars in malls. I have one near my home town in the Brea mall. Then, the car industry lobbied to make it illegal to open a car dealership in malls because they were threatened by such a good strategy. You can still find tesla stores in places where they were built before the ban was put into effect.
The Tesla “showroom” here if very popular as well
Theres a mall in PA that sells them. Was just there last weekend to shop shoes
Bought a Tesla early this year and it was the best car buying experience I’ve ever had
Ofcourse i belive in you anonimous youtuber whitout contend
@@johandagger Don't drink and comment folks
What price did your Tesla cost out door ? Because he promised 200 thousand Tesla to rental car dealership , $35k and the Tesla truck he got $1,000 down 5 years later and nothing came , oh hsve you received your Tesla ?
@@XXXonly69 I bought January 2021 and received it 15 days later. Out the door I believe it was $37,000 but I later had to pay taxes on it which I think was around $2000 maybe a little less than $2k I dont remember
@@kodeypatterson8973 refurbish ? Or new ? 100 thousand Tesla to car rental agencies, early 2022 that’s hasn’t happened stock went up , then back down
Buying a car at most American dealerships is about as pleasant as getting a prostate exam or a colonoscopy. I understand that a lot of peoples livelihoods depend on this inefficient sales model, but there should be some way to make the experience more pleasant for the consumer.
The problem is that with car dealerships there’s little reason besides price in deciding which dealer to purchase from that’s why they make the pricing unclear until the end.
Absolutely not. Cut out the middle man completely. Their jobs serve no purpose except to add costs onto the consumer and make the system less efficient.
Just bought a Silverado yesterday at a Chevy dealership. I hope I never have to step foot in a dealership ever again.
"there should be some way to make the experience more pleasant for the consumer." - yes there is a way, the consumers should REQUIRE it. If they don't, there is no such way.
When i buy a car, it can cost max 500 euros - even when i could afford more. No need to visit dealers, lol. In 21 years i have saved soooo much money not having a quickly depreciating car.
FYI, another reason for the laws favoring dealerships is how the automakers abused them in the past. i.e. the Big 3 automakers used to make them sign deals agreeing to buy a specific number of automobiles from them each year, or else they'd get cut off and no longer be a Ford/GM/etc. dealership and no longer get any supplies from them. This effectively made the Big 3 automakers recession proof, because the dealerships had to buy 1,000 or however many vehicles from them each year even if they weren't selling. When politicians cracked down on this and passed laws protecting dealerships they swung the pendulum too far in favor of the dealerships, resulting in the issues with Tesla that you outline.
God bless capitalism
It's not capitalism because it is not a free market.
@@nothandmade9686 I love the Free market, says capitalist, makes up all the rules to make it not Free and so stupid not even a patent troll could come up with them.
Haha yes, and telling that to ppl they will tell you that you dont know how Capitalism works.
@@nothandmade9686 it’s capitalism, just not free market capitalism.
@@yudistiraliem135 capitalism has free markets. This is a law passed by the government to protect dealerships, that is the exact opposite of free markets.
I learned long ago how to deal with pushy car salesmen: "Stop talking. You can either sell me the vehicle I'm interested in or I can go elsewhere. Got it?" Yes, it's rude as hell, but it shuts their bulls**t down real quick.
As a consumer, I hate dealing with car dealers... I would love to buy my next car from Amazon or Costco.
I don’t think many people would complain about buying from dealerships if they weren’t such a negative atmosphere connected to them. No one enjoys dealing with dealership salespeople. Once again, greed takes precedent.
The negative experience is a function of the Dealerships' business model, which empowers and incentivizes them to extract mark-ups and make recurring revenue on repairs. Dealerships will need a different revenue source to remove the incentives underlying bad customer experiences.
@@AudiTTQuattro2003 my last ICE car I bought for $5,000 less than MSRP because I took advantage of timing and bought something that few people want (manual transmission). There is nothing easier than walking into a dealer and paying full list price. That is what you are essentially doing with a Tesla. The "agony" of finding a bargain is what people seem to be complaining about. They'd rather force everyone to pay full list price than allow a group of us use our skills to pay less I guess.
The dealers get loads of 'factory money' from the brand owner to shift volume too.
Dealerships are like estate agents.
Functionally useless and can be replaced by a comparison website yet persist due to tradition and lobbying
By that same logic a grocery store is a scam.
@@samsonsoturian6013 good point
@@samsonsoturian6013 assertions are not arguments
well, not exactly, especially if dealing abroad.
@@MBarberfan4life you should talk.
Actually, you shouldn't. Because your no good at rhetoric.
Going to a car dealer is like being thrown into a room full of pickpockets with money inside your jacket and try to survive for the next 5 hours.
Texas Gigafactory should've been placed 10 ft away from a state border, allowing it to technically move the cars just over state lines then back in to get around texas law.
Capital One does a pre-approved system for specific cars so we went online selected the car we saw in person, got the quote and walked in prepared to fight for the price. 5 thousand dollar was the closest they would get then said it was dealership fees. They had us in their lobby for 2 hours before we said fuck it and left, only to have them call us back and provide the price on the pre-approval slip. They were rude about it too but then complain to Honda and Capital One, not take it out on people tired of the insane prices for "extras".
You still bought the car from that dealer. They didn't learn a thing.
I remember getting a lease on my car in early 2020. I was so happy to have “completed” the paperwork online prior to showing up at the dealership. The paperwork online took about 45 mins to get completed after uploading and pulling documents to then just show up at the dealership and pick up my vehicle.
Long story short I spent 9:30am to 4pm at the dealership that day. I hated it so much.
Main reason I want a Tesla, I don't even care if it's electric
That's a massive waste of money
@@samsonsoturian6013 I've given the government more 🤷
@@yes3858 and yet, that cash goes towards something far more useful
@@yes3858
someone: that is a waste of money
you: I've wasted more money before 🤷
@@samsonsoturian6013 Driving it is likely cheaper. If you drive enough it can pay for itself eventually relative to getting an ICE car.
This is not a disadvantage for Tesla; it's a 10% pricing advantage against brand competitors who have no choice but to use their dealership networks. 10% in the automotive industry is HUGE.
One new trick that Tesla just started trying, is opening Tesla stores and service centers on native land.
The states can't stop it. They have at least one in new mexico i believe.
This was the comment I was looking for!
I don't think this important piece of information was mentioned in the video. More due diligence should have been done than just cursory research.
Tesla's relationship with its customers is like that with its employees -- aligned rather than adversarial. In much the same way that Tesla employees are made stakeholders through stock options, owners tend to feel common cause with the company as well -- partly because the product itself is so awesome, but also because you can participate in development efforts like FSD. I look forward to all my interactions with team Tesla, and I can tell they appreciate me (perhaps from the length of my order book -- lots of FSD-optioned CyberTrucks).
Idk, but I have stock options questionable when you have no say in the direction of the company. Like you may work hard af but the leadership screws up, or you're lazy af but the leadership is brilliant
Tesla aren't that awesome.
i've heard TSLA has pretty bad labor relations.
I think the “no haggle” buying experience for cars in the US was pioneered by Saturn Corporation. (1985-2010). This GM subsidiary sold cars at a fixed price and for this alone I was prepared to buy one. You knew before you bought the car what the price would be and what the options could be at what price. It is very intimidating to buy a car I think. Before you walk in the door you know that most of what happens next will be either unfamiliar or incomprehensible to you, and that some salesperson is just about to take advantage of you…
One thing I would like to add:
Beside the car sales, the dealership is there to service cars. They have access to all restricted car parts (think of brand - specific pyro-fuses in electric cars). If there would be a law that require all car parts to be sold to everyone, then any entrepreneurial car mechanic could setup a multi - brand car service centre. This change in law will eventually mark the end of car dealership. At the moment the category is protected by the laws, but they have became so unloved and so out of place that a change can be easily envisioned now.
Which world do you live in?
I bought my Tesla 3 at a gallery here in Houston.
Actually, I went in and looked at the cars. Said I wanted to buy a model 3..
The guy there asked me if I had a phone. Yep. So I went online and he stepped me through the process. Thus I was inside the gallery when I purchased it. Could have been across the street, in my house or on an airplane. FU Texas State government.
Car dealership business reminds me of the private health insurance business--inefficient middlemen adding additional unnecessary costs to consumers.
The corrupt auto industry is being called out by Tesla! Finally, we the consumers have a chance at a fair and equitable deal!
All the broken teslas proves the claim that they "don't require maintenance and won't break down" completely false. The claims haven't aged well. People are just now understanding they're gonna be spending 25k to replace a batter. That's more than an engine!
Going to a car dealership is one of the worst experiences out there. You can only walk in there if you are willing to pay cash (to avoid the tricks) and are willing to walk (making it clear that you intend to). I rarely drive and mostly ride my bicycle. But if I were to buy a new vehicle, I would go the EV route and have them drop it off at my place. What a crazy idea making you go to a dealership. Oil changes are just a trick to get you into the dealership so they can work their mind games on you.
I like going to dealerships most of times I get financing for a car I get zero down with a slightly inflated price and a couple things that I don't really need...my last car deal was on a used Honda Civic with 82k miles on it Zero down with iffy 590 credit score 17500 it was used they added a $1500 extended warranty that I couldn't even understand what was actually covered and $1000 gap insurance (I'm looking at the paperwork work again to try to drop it and get refunded) there's like $6k of loan interest making the total loan $27k on a used 2018 civic with 82k miles on it(the car had 130k on it 6 months later but still looks pretty good the loan was spread out over 5.5 years so it's $440 a month which looks pretty reasonable
So Elon can just get his brother to open a dealership and pay him $1 a year in commissions. Or he should have done a Bezos and leveraged his decision to build the factory in Texas with an agreement to be able to sell there.
I really enjoy this channel’s content. Very informative, well explained and entertaining.
This problem is worldwide. Good on Tesla!
having bought a tesla, I can tell you that the experience was much more painless and seamless. I didn't have to spend hours and hours haggling at the dealership, signing forms, etc.
You don't have to haggle at a dealership either. You can just go in and buy whatever you want at MSRP.
@@nightfire454 Have you tried that with a Corvette?
@@nightfire454 lmao not in anyway true
Since finding this channel a few months ago it has way become my favourite on UA-cam
Keep up the good work
Liked your video, as still has both thumb up and thumb down. As a personal form of protest against YT, I'm not voting anymore the videos without the thumb down counter; I rather leave a note in the comment.
Thanks for the video. Living in Europe, I didn't know about Tesla and the car dealers in the US. Yes, I avoid going to a car dealer even if I need to buy a car. Yes, the US dealership law needs an update...
I’ve “only” bought two cars from dealerships and I have to say that it was a decent experience, no pressure tactics or up selling. Maybe salesmen are slimmier in America. I agree that saving around 10% by cutting out dealerships would be nice though.
Dealerships are a bottleneck in the supply chain
What does that make Walmart? Also, lose the buzzwords
@@samsonsoturian6013, we get it: you work at a dealership.
@@MBarberfan4life I drive a bus, you own Tesla shares, and literally no one cares if you go belly up. Now shut up.
In my country, dealerships are owned by the manufacturer. Some dealerships are in the same building as the car maintenance shop.
I remember walking into the international mall in Tampa back when Tesla's share price was in the low $200s and thinking about buying like 20 shares I didn't 😒 second worse decision other than me buying VTI in a Roth rather than Amazon when Amazon was $215 a share. Finger was on the button of the mouse, than I heard Jim Cramer go on and on about them not being profitable 🤦.
Buy when Cramer says sell and sell when that moron says buy. Worst analyst pumper of all time. Just look at his didi and rivian pumps!
Always do the opposite of what Jim Cramer says
Listening to Cramer will lose you money.
Cramer is another CNBC circus act. Head clown 🤡.
You can buy a MacBook at an Apple Store or at the local Best Buy. Unlike car dealers, Best Buy does not add their own "Additional Dealer Markup" or charge you mandatory fees for dealer-applied "Nitrogen Filled Tires" or "Underbody Protection". They can sell you their own equipment protection / insurance plans or even AppleCare, but it is OPTIONAL. Prices are similar to what Apple Stores charge since Apple controls the minimum selling price, but Best Buy can offer gift cards as incentives for shopping with them.
Car shopping should be like that.
Old laws that need updating. Remember laws catch up depending on what consumer behavior is doing. Sooner or later legacy dealerships and manufacturers won't be able to do anything as change becomes inevitable.
There is a scheme here in Europe, where one customer leave the dealership is a SUV while paying a monthly amount of money that normally would pay for a small city car. I call this scheme "Ride now, cry later", because the customer - after three years, at the end of the low monthly payments, must pay half of the price of the large car all together, or surrender the car, with nothing due back.
And it is not all. The customer must agree to not drive more than 10k km in the period, and to pay (without appeal) for damages like dirty seats or paint scratches, and avoid excessive use of brake pads and clutch disk; these can amount to many thousands at the end of the period.
It is unbelievable how many people fall in this trap; mainly because of their vanity, they find themselves at the wheel not of a car, but of a massive liability, forced to ask friends to remove their shoes when it rains, before they ride their car...
The freedom you are entitled in an old banger, you won't believe!
You clearly have no clue about what leasing means and how it is meant to use.
These Tesla buyers who paid full MSRP for the car and think they had a great buying experience. If you walk into a traditional car dealership and pay full the window sticker price you will have the same "great experience"
Dealerships main existence is to continuously extract much money from consumers as long as possible.
Hate the dealerships and I am ready to buy my first Tesla.
Change should be expected in every business. A business model like dealerships has created opportunities for business and jobs. Now this is in the process of change, but will take time. Great video. Not many service vehicles at dealerships.
Dealership days are numbered, thanks to Tesla
There's now a Tesla gallery in Grand Rapids, Michigan as well.
This is the best part of this industry wide disruption. I hope other Auto mfg’s start doing this.
Excellent video. My interactions since buying a Tesla have been so pain free. My ICE driver friends really think I’m paying too much for my Tesla, when they’re the ones being nickled and dimed. Jokes on them!
So when another manufacturer sells directly to consumers, it's undercutting... When Tesla does it, it's pioneering. Got it.
You didnt get the point
Tesla didn't invent selling cars to consumers lol. The laws existed from all the other people who tried it. Delorean and Studebaker comes to mind
Buying a tesla has been a great experience. These boomer laws need to change as theres literally no need for d stealerships.
Really interesting topic and awesome video!
Nice clean video. Good one bro
Used car sakes will also increasingly go on line. Look at Carvana and Vroom.
The funny part is that other automakers are going to take advantage of Tesla's pioneering. 30 years from now, direct sale will likely be the norm for all manufacturers, 90% of new car sales will be BEV or PHEV, and Tesla will be defunct or marginalized, in the same vein as Delorean. Tesla is putting in all the work to overcome franchise laws, figure out how to make practical BEVs, and ultimately the major manufacturers will take advantage of Tesla's work and many of them will make better cars or sell at lower prices or both.
I think that argument is about a year out of date. Tesla’s new gigafactories are a game changer. It is going to be difficult for the legacy carmakers to catch Tesla. Tesla is probably safer than GM at the moment. Of course, when you have huge fixed costs like any carmaker, you are vulnerable to many problems, and mistakes can put you out of business, so there are no guarantees. It wasn’t so long ago that GM was bankrupt.
Tesla is constantly expanding and will have 2 more giga factories running in 2022, while other carmakers are just starting to build their EV factories. They also have very little debt and almost unlimited financial resources, where as GM and Ford have debt that is over $100B. Tesla is 8-10 years ahead when it comes to EV's.
Man ur content is so awesome👏
I live in a small city of 100k and the richest person is not a lawyer, doctor or some finance person, but the owner of car dealerships. They bought and run like 200 dealerships.
I think Tesla also realized that being able to sell directly to consumers allows almost everybody took purchase one. The problem with these luxury spaceship cars if they were forced to be sold in a dealership, the dealership would realize these things are crazy performance and charge like another 30 grand on top of them. And also because the demand is so high they can buy only a little bit of them and do some insider trading with other dealerships.
Thus is new to me.......Had noting but bad experiences with car dealerships.
Doesn't matter if the manufacturer sells it or not. Still going to be sales/finance/service/parts departments as well as property costs. The amount of money they'd have to spend to build a sales network like the existing would cost so much that at best you'd pay the same as you would to an independent dealer.
In summary, most people does know what they did regarding to safety. It's sound like business practice in 50s rather than the revolution one.
EV is quite complex engineering and has serious challenge in long-term uses. Like a regular heavy machine, without proper maintenance service, the machine is likely to cremate themselves in any time, then customer need to buy a new one instead of fix it.....
sound familiar?
The other side of the coin of the franchise dealership model is that you can actually bargain with them as they are competing amongst themselves. The last thing a car dealer wants is to see you and your deposit walk out the door to another dealer selling the same car. I get is that some people don't like haggling a price and it can be stressful, but if you have effectively 'one size fits all' pricing then the last thing a manufacturer has is your financial interests in mind. The price in a fixed price model will always be the most expensive price possible with maximum margins for the manufacturer and the consumer gets 'bent over' as a result.
The result is that if you want a Tesla then you will always be paying the maximum price regardless of where you buy it.
I'm not saying car dealerships are great places to be - they tend to be a battlefield with the consumer walking in with a target on their forehead and wallet. But at least you as the consumer has the power of your deposit and signature to negotiate a price that is better than the maximum sticker price which is what you will always pay with companies like Tesla.
Maximum price? Isn't that what competition is for? Tesla knows that if it overcharges for its cars, people will buy other cars. If it has a fixed prices for a range of models, then consumers can compare features across models at their leisure at home and are far more likely to come to a conclusion that suits their needs.
Car Dealerships inherently rise prices for consumers by introducing a middle man - unless the car dealer is regularly selling at a loss (which would be unsustainable) it has to sell cars at a higher price than it bought them - with a financial incentive for overcharging people. Before the internet, I could maybe see an argument for car dealerships - consumers wouldn't necessarily have access to all the information that goes into buying a car, nor a means to customise elements of their purchase, so maybe they added value to the transaction. Both of those things can now be achieved online fairly easily by a price comparison website or even just manufacturers doing what Tesla does.
Everyone is free to pay full MSRP if they can't handle the stress of asking for or offering an alternative price. I really don't understand the consternation about this and wanting everyone to pay more for a car because they don't like negotiating themselves. When it comes down to it, it's people's personal greed that is causing them all this stress.
no one can ban tesla now
Then there is no middle man that can help you. So if a nozzle or whatever is broken you need a new batterypack for $21000 (see youtube) in place of a repair of $700. In some states you can get the parts back in others not (us). This means in practice you have to pay a multibillion corporation whatever they want, no senotor will help you (us). This could mean that like printer ink you are forced to overpay while being lied to. You might need a right to repair.
Tesla doesn't allow third parties to repair Teslas
The dealership model is why legacy auto makers are screwed. They dont make much profit off their car sales, their profit comes from parts and financing. Also, dealer markups will drive EV prices beyond range of eligibility for tax incentives.
I love this one. He doing great keep it up.
I only bought two new cars Before Tesla ('BT'), and both were bad experiences -- not horrible in themselves, but leaving me regretting that I'd gotten a bad deal. In contrast, I look forward to my interactions with Tesla staff, not just because they don't take advantage of me financially, but Tesla staff is different -- as if we're part of the same team (true in my case being a shareholder).
They take advantage of you more than any car company in the world. They fix there prices at huge mark ups hence they're the most profitable car company in the world!!
@@kiwiboyreviews42 exactly people think it’s no markup with tesla because the middleman is out but in fact it’s a bigger markup because they can say it’s mrsp for any price they quote.and in the price is the extra price of owning stores and staff that operate the site.
Great video thanks
It really make me angry that dealerships are taking advantage of the current shortage to put on multi-thousands of dollars in additional dealer markup. I wish the consumers would wake up and demand direct sale. I hope all those greedy dealerships go bankrupt.
Didn't Tesla raise their cars price ?
tesla also makes cars that are pretty good as a car,this in important because there are other afordable electric cars like nissan leaf,however those are made for emision compliance and not to be good products
500% respect for Tesla
While Tesla would not undercut any franchises, it is still unfair that Ford cannot sell direct to consumer. Completely unfair
amazing video!
Not all dealerships are horrible last year I bought a 2018 Honda Civic with 20k miles for $11k
your exception to the rule, doesnt mena the rule does not exist.
Texas Agricultural law says that if you grow it in the state of Texas, you can sell it, no matter the local law. Apply the same logic to guns and trucks, and Tesla has their out.
You either die a hero or live long enough to see yourself become the villain -
amazon / apple / facebook etc..
Factories sell the cars for about 5-10k the rest is profit for the dealership. This law created minions for the big car companies. Thank you government.
I think the consumer should have a choice to buy from the manufacturer or a dealer if the choice is given
I think dealerships are valuable, whose to say once dealerships are extinct and car manufacturers can sell straight to consumers they don’t just jack up the price
Same can be said with any other product.
Rather them than a dealership
Dealers don't make any money on selling cars. It's all in the service department. Eventually that will die off with ICE cars. They need to figure out their role in the future - customers still like the idea of going to a dealer, picking out a car from a large inventory, and immediately driving it home. People also like the idea of getting a "deal" because they outsmarted the salesman - that may be delusion, but alot of people have the mentality that they never pay retail - that's not going to change.
I think it’s awesome that you can buy direct, but where is the savings? I bought a Honda Civic new a few years ago for half what the cheapest Tesla sells for, and I haven’t come near to paying the price of the car for fuel, maintenance, etc.
Legislating the supply chain of a legal good seems mad as heck. Clearly government over reach.
If people had to buy a Telsa through auto dealerships, they would cost over 100k minimum solely because of the demand !
I'd like to buy a Tesla, but the price doesn't make sense for me. If they're selling directly to consumers, why is the cost more than the other brands with middlemen? Shouldn't the price be less?
Tesla should consider leaving Texas. The state is beholden to the oil industry.
My next car will be lightly used from a private seller so I don’t have to step foot in a dealership
Of course there a lot of reasons why dealerships made sense…. With no internet, you would want to see a car in person. Also, cars used to need much more maintenance, and there were fewer independent garages around… and you needed someplace that had the parts for your car
All these factors have been changing…. And finally, someone came along and saw it was possible to just skip having dealers. Fwiw… there are some TV manufacturers that essentially are not available in retail stores. Things are changing
this sales disruption is long needed. good on Elon. my wife and I have already decided that when our two Lexuses poop out, (will take a long time) we will be Tesla owners. even the mighty Toyota cannot compete with Tesla.
Not a free market when interest rates are set. Who gets bailed out. Who is not too big to fail. A bankers license to create money. The current interesting thing is Tesla entering the insurance market state by state then country by country
Their vehicles are great from what I see and I would want one if I get an electric car, but their business practices are a deal breaker unfortunately.
care to elab on these "Business practices"?
I have a tesla and I will never buy another ICE vehicle again. EVs are the future and Tesla is ahead. Tesla already has the advantage of the supercharger network and being able to sell cheaper due to no dealer markup. If these dealer laws don't change , the auto makers are gonna be in trouble and we the tax payers are gonna have to bail them out again.
Auto industries have dragged their feet for decades. That’s not Tesla’s fault.
I love how we are okay with following a law from 1930. Makes no sense
When they triple the battery life and stop making the car out of cheap plastic I’ll buy 100%
Nothing & No One can stop the progress. They can try, they will drown in their own game.
Dealership is the worst business practice of modern America.
Try getting warranty work or getting parts in any decent length of time. The franchises act As parts and service centers. Also in a 50k car most dealers are lucky to make 1000$ but in exchange I can drop off a car and pick up a loaner and get my vehicle back in a few days not with teala you wait months to get someone to show up then tell you it needs to go back to a service center and they have a spot open in 2 months. 4 months of payments and still no car and had to buy another car to drive while waiting......so convenient
Besides social media Tesla does not advertise creating a desire to want to by a Tesla. The majority of people unlike major car manufacturers like Ford or Chevy that spend millions on marketing campaigns creating a brand and image creating a want... if they market their vehicles and Tesla doesn't consumers will in most circumstances always choose other vehicles besides Tesla. Tesla needs to advertise on T.V. Superbowl, NBA etc. When I see a Tesla I see no true desire to buy one. To many other vehicles to choose one. The lower priced Tesla are Ok but you need to create a help, need & want to grab the market share. Image is created spending the advertising dollars. You can't assume they will buy a Tesla when these other manufacturers spend millions better car or not. Doesn't take a rocket scientist to figure this out!
Imagine other auto makers can direct sale. Many will lose jobs and real estate values. Its a disasters but it makes more sense.
This is good information