Adam Ruins Everything – The Real Reason Car Dealerships Are the Worst

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That’s why all these car dealers tried to stop Tesla from selling directly to consumers.¬†Manufacturers selling straight to the customer at least has the possibility of being cheaper, while mandating unnecessary middle men working for a second, separate profit driven company is basically guaranteed to introduce even more costs per sale.

When cars first started to be sold, the dealer was necessary. The cars required distribution and local maintenance, and the auto manufacturers just were not equipped to provide it. So they began licencing independent dealers to handle that end of the business.

That worked well until the Great Depression. Car sales began to slip, and auto manufacturers were not happy with sale declines. So they began to force local dealers to buy inventory they could not sell, threatening to take their dealerships if they didn’t play along.

With no other recourse, dealers wen’t to their state governments to get those franchise laws put in place to protect their business.

But those laws, to solve a temporary problem, stayed on the books and slowly became bloated with dumb provisions. And as the dealers got more and more profitable, they were able to start lobbying to keep these dumb, anti-competitive, anti-consumer laws.

So now, thanks to the greed of both auto-manufacturers and auto-dealers, buying a car sucks.

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