[Rumford]

There are some interesting comments in here about how tough the struggle is for car dealerships, but I don't think that necessarily justifies their existence or mitigates the point of this article.

If what the dealerships do is valuable enough to the customer, they would exist even without the ban on direct sales. But I think we can all intuit that if the ban were lifted, buying a car would be a very different (and better) experience.

[venning]

We often moan about the taxi industry, the hotel industry, or the dealer associations but, in doing so, we miss something very important. The players in that industry often existed for years or decades in a state of government-backed protection without realizing it. Taxi drivers didn't necessarily lobby for market restrictions; they took advantage of the oligopoly, sure, but not necessarily consciously.

If you live in a state of believing that the market is actually fair and others have an equal shot at participating in it, then someone else entering the market in defiance of the existing protections appears to be unfair.

It's hard to believe that you didn't enter into a job market and win a wage fairly. That, instead, you were unfairly advantaged by artificial pressures in that market much bigger and more entrenched than you.

Essentially, the incumbents have been lied to for years and, now that new logistical realities are changing the status quo, it is very hard for them to understand why this is happening. They think someone must be cheating.

---

To expand on joosters' analogy of taking a fence down elsewhere in this thread [1], it's not necessarily bad if we take the fence down, we just need to realize that doing so may have serious consequences in the near-term. Having such a strong, deep-rooted artificial pressure in a market so abruptly removed may result in a painful readjustment of the market that hurts a lot of people.

(My other comments weren't meant as a defense of dealers, only intended to elucidate their operations.)

[1] https://news.ycombinator.com/item?id=10463745

[grandalf]

Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread.

I mention this b/c I don't think it's a gradual accident... The dealers forced Ford to shut down factory stores in Oklahoma not too long ago. This is a turf battle.

[AnimalMuppet]

Some fences need to remain. Take barbers/hairdressers, for instance. It turns out that a barbershop can be a great place for spreading head lice. You want your barber/hairdresser to be trained to prevent that. That's part of what their licensing is about.

So, are there any aspects of being a car dealer that are worthwhile fences? Offhand, I can't think of any, but that doesn't mean there are none.

[drzaiusapelord]

>. Taxi drivers didn't necessarily lobby for market restrictions

Drivers are out in the street protesting anything that allows ride sharing and demanding further restrictions. The idea that employees are innocents is riduculous. This ignores 100+ years of unions, associations, legislation, etc. Its the rank and file demanding these laws, not shadowy men cutting backroom deals. If these deals get made its because the rank and file have a enough political capital to make them happen.

>Essentially, the incumbents have been lied to for years

This seems to be politically biased. These people know exactly what they're doing. When the Chicago Teacher's Union marches and claims low pay (instead they are some of the highest paid teachers in the nation), they know exactly what they are doing. When cab drivers block streets to protest Uber, they know exactly what they are doing.

[300bps]

I agree that the ban should be lifted. And I think car dealerships would survive without it.

I recently spent some time on many car companies' websites and navigating the options is extremely difficult. They use all their marketing jargon like sDrive vs. xDrive or 4MATIC or whatever else other nonsense. They don't explain well what any of them mean, and I was left googling the definitions of everything.

Then you get to being actually able to see the car with the various options that you're interested in. The article decries the fact that dealerships have "$100 billion of unsold dealer inventory" but that inventory has a purpose. Some people need a car right away and they aren't picky about it being the exact thing that they want. Some people want to actually see, feel and use the options they are considering.

So I'm against the government-sanctioned ban on direct sales but I think that car dealerships would serve a purpose and survive without it.

[ethbro]

To compare and contrast the two methods of research/purchase: both online and in person feature the same marketing jargon.

Online: You can perform further self-guided research to discern what these terms actually mean and whether you need those features or not. Furthermore, you can see what other people thought about those features.

In Person: You can have the salesperson explain those terms to you. Except... do you really trust someone with a direct financial interest in your purchasing a new car to help you figure out whether you need features and whether this car is the right car for you?

[Rumford]

You're probably right. For example: Even though you can buy a Thinkpad directly from Lenovo, Best Buy still exists.

[sliverstorm]

If what the dealerships do is valuable enough to the customer, they would exist even without the ban on direct sales.

Can you really make that assumption? Customers act selfishly, and game theory applies here.

For example, you try a shoe on in the store and then buy it online for less. The store provided something valuable to you, but you still bought the shoe online. Eventually the store will go out of business if many people do this, and we lose a valuable service because we each act in our own self interest.

It's not hard for me to imagine that protections could be good in some cases.

[xacaxulu]

Then other companies will realize that this is valuable and will let you try on multiple shoes and mail back the ones you don't like (Zappos/Amazon). This competition ends up being a net positive for the consumer.

[nether]

"I sure wish I could have bought my Tesla from a dealer" - no one ever.

[SilasX]

That dynamic actually explains why all big-ticket retailers -- not just car dealers -- need to change business models to something like, "You pay for self-service showroom access to a variety of products, then make your actual purchase from [a level near] the OEM with minimal margin."

The only reason I tolerate(d) any interaction with car salesmen at all is the intangibles you get from a test drive. I would much rather just have some kind of option where I can try out car models at some place that doesn't have financial incentive to make me buy one of them.

[afarrell]

Indeed, if working for a car dealership is as stressful as described, then that means that the institution of the car dealership deserves to fade into the dustbin of the market.