How These Companies Are Taking Over Car Dealerships

Car dealerships have been mom and pop businesses for much of their existence. But the industry has been slowly consolidating. Six publicly traded dealership groups - AutoNation, Lithia Motors, Group1, Sonic Automotive, Penske, and Asbury - have been on a shopping spree, buying up a small but growing share of dealerships. These larger groups have been wildly profitable. But they face challenges. Tesla, Rivian and others are trying to sell cars directly. Consumers and automakers have been rebuking dealers for record high prices. But these groups have a lot of opportunity to expand further - they only control a small share of the total dealership market. They are also going online.

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How These Companies Are Taking Over Car Dealerships

[johnpatrick]

Dealing with car dealers are always ranked near the bottom in consumer surveys for many reasons.

[superaa]

I took my Corolla to the dealer for a simple air bag recall.An hour later, I was told my car needed $2300 worth of repairs, including a new water pump, which was strange since I bought a new water pump a few months before.I knew it was a ripoff, but took it to my mechanic to be sure.He laughed and said I did not need any of that stuff.

[kay]

"The only reason dealers exist is a franchise law lobbied by dealers..." Yeah time for change. Let the manufacturers sell directly to consumers and cut some middle-man cost.

[noahsebastian]

It's also terrible that the government has made a mandatory middleman! The franchise dealership law needs to be scrap.

[og]

Dealerships are useless now over pricing every single car way above sticker price. Car manufacturers need to start selling straight to the buyers

[arun]

dealerships still only exist because they lobby for favorable laws. i see no value for the customer from dealerships, just adds a greedy middleman between me and the product i want to buy.

[nickwinn]

I saw a video the other day about a dealership marking up cars 70% over MSRP. There should be a cap on market adjustments that dealers can add on to the price of new cars.

[SirEricArthurBlair]

What dealerships have done during this chip shortage is ridiculous. It is also terrible that the government has made a mandatory middle man. The franchise dealership model needs competition. Direct to consumer sales is that competition. We need to end the franchise dealership law. The government shouldn’t mandate a middle man.

[MrBadgas]

If I owned a dealership, I would jump at the chance to sell to these guys. Direct sales is the future.

[akreation]

Mandating a middle man is equivalent to profiteering. They are basically guaranteeing the profiteers merchandise will make it into their possession.

[williamrori]

Have dealerships tried not being utter trash? Might be a good thing to try.

[PhilipMurray]

You aren't tested until a company you own and believe in is down 30-40-50% from its highs. You will question your conviction, your strategy, your process. The market has a way of finding your breaking point. Nothing tests your conviction like falling stock prices.

[SkyBridgeRE]

The era of small business is coming to an end by design

[dianastacey]

No one wants to go look at a car. Instead we want to buy online, with some kind of warranty like a dishwasher would have, and have it delivered. I have dreaded buying cars my entire life, and we changed to looking for a good salesman instead of a car going from dealer to dealer. When my husband was on chemo they said oops we messed up you have to come back again for the paperwork. They wasted tons of our time and he was sick there for hours waiting for them to do what? I refuse to buy the old way and my current car was bought from a friend.

[johnpatrick]

I have been not much good for car dealers in my life. I am 62 and my first and only new car was in 1984. No dealers or new cars before or after that year and my current car purchased from my aunt in 2009 is now 22 years old like new and a 2004 pickup I bought in 2012. To be fair all of my motorcycles, sailboats, and airplanes were bought used as well and not from dealers. I like depreciated values.

[rolandsuch]

Here in Germany many dealers are actually owned by the manufacturers, evenso, we still have dealers, both independent and manufacturer owned.

[madboyreadynow]

Yes we are in the last days of dealerships as we know it. Many electric car manufacturers have a retail store you can go ask questions but you will have to place and order and at times wait months or more than a year to have your car delivered. In the future it will be more like Amazon. Your car will be delivered next day or with in the week.

[grisellimay]

Dealer association groups and their lobbies are literally cancerous for American consumers. And they’re only becoming more consolidated and although the chip shortage is partly to blame fore the massive increase in used car values these massive groups are also partly to blame because they were the first to run to auction with lots of cash to outbid each other just to keep inventory on their lots. Drove up costs even more as a result

[Dear_Mr._Isaiah_Deringer]

*00:08* Calling a car dealerships a _"Mom-and-Pop"_ small business is a bit farfetched. In most communities the owners would be top earners in their region and more often than not they own the franchise for more than one brand and subsequent dealerships.

[BuckeyeBallistics]

Everyone saying GOOD, close the dealerships- this will cause your repair costs and even basic automotive maintenance costs to skyrocket. 16, 000 less new car dealers is 16, 000 less repair shops. All the non dealership repair shops will be slammed and be able to charge whatever they want. Bigger picture here people, automotive repair costs are already ridiculous. I'm a mechanic so this isn't a problem for me- but for most of you it will be a masisve problem, including having to wait a month to get basic work performed while you wait in line, and for twice the price...