Two reasons. 1)effective marketing 2)the Motor Companies make billions of dollars in interest by making the dealer's pay interest on the inflated price.
Not just that, the manufacturers are making a killing on trucks and SUV's. Dealers struggle to make a few hundred dollars on a new trucks while the factory makes 10's of thousands of dollars off us. Dealers take it in the shorts when you look at ROI for new vehicles. That is how it is now so we just deal with it, been in the business for 35 years, it is a pain, and not much fun any more.
Hence the push for dealers to take in used inventory, I'm guessing? Between my truck and my wife's SUV, we probably get about 2-3 flyers in the mail a month each from dealers who want to buy our vehicles.
It is a fact that without used vehicle sales dealerships would go out of business tomorrow. The mailer thing is nothing more than advertising to get customers in the door, promises of huge trade in values are just empty. In this business for the most part you have two types of dealers, one who will say and tell you anything to get you in the door and then have a three ring circus show selling you the vehicle or you find dealers who are transparent and candid about the transaction. Reviews are one of the ways to sift through some of that. There is plenty of pre-owned vehicles available, manufacturers are sitting on thousands of vehicles (off lease, factory demos) trying to control the auction prices, in an effort to force dealers to pay top dollar. Manufacturers are squeezing the life out of dealers.
Apparently the new 3.0 powerstroke in the f150 is getting same to worse mileage than the ecodiesel in the dodge. Worse yet it's only marginally better than the 2.7 ecoboost. To top it off you can only get it in the limited and up trim which means it starts in at $45k. As a 3.0 diesel grand Cherokee owner I'm a bit underwhelmed by the numbers and pricing bs. Of ford. I am also kinda shopping for a replacement vehicle that can tow around 7k.... My jeep does that great but it is a Chrysler that's falling apart around the merc engine.
Why do we need dealers any way? I should be able to order a vehicle right from the manufacturer and either pick it up or have it delivered without paying a middle man. The only thing a dealer is good for is hyper inflated prices on OEM parts and warranty/recall work. I’m sure the manufacturer can setup a system to have service, recalls, and warranty work done without a typical dealer network.
Shit why don't they just do what the clothing industry does...MSRP it for twice as much as it's worth and then have constant 50% off clearance sales. We know that tactic works quite well on women.
I want to be able to go in person and see the different options/colors/packages. I have no problem paying someone for that convenience just as I do with clothes/gear/sunglasses/whatever.
Valid point...maybe the manufactures could set up a place in every big city to view the product, instead of having 5-10 dealers in every city and be able to order it right there too.
Because the manufacturers know that competition drives sales. That's why they have so many dealers next to each other.
Its way more complicated than that. Sounds good in theory only, but not practical. Too much to type and not worth it to me.
That's exactly the way it works in places like Manhattan and San Francisco. A small showroom and cars are ordered to your specs. Or high end exotics like Ferrari where you're not just "walking the lot." Tesla seems to make it work.