Consumers hate the new-car buying experience. They hate the haggling and the cheesy sales tactics, and they hate leaving feeling ripped off, even if they drove off with a good deal. Car salespeople are the least trusted professionals in the nation, even beating out members of Congress for the dubious title.
But for 80 years, that’s been the only game in town. If you’ve ever bought a new car, you’ve had to do it at a car dealer and on its terms. Unless you recently bought a Tesla, that is.
The direct-sales model Tesla uses threatens the very existence of car dealers. The electric-car company markets its cars through stores called galleries and over the Internet. There’s no dickering, bait-and-switch or trade-ins, and no sales people if you don’t want them. All prices are set, you pick the features and options you want from a menu and your car is delivered to your door. The entire experience is often described as being as easy as buying from the Apple Store. John Voelcker, editor of Green Car Reports, says that if Tesla’s direct-sales model catches on, it could be a huge “crack in the dam” for dealers as consumers will naturally gravitate to the better car-buying experience.
“The dealers are afraid that the public will find that this is a process that is vastly more appealing,” says Voelcker. “And if Tesla gets big and is selling 500,000 cars in 10 years, then people are going to talk about their experience, and others will demand the same when they buy. The dealers know this.”
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