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- Haggling and high markups are common in car dealerships, particularly during times of shortage.
- A Wall Street analyst recalled his recent attempts to purchase a new vehicle that nearly cost him thousands of dollars more than the sticker price.
- He said that the process at Tesla would have been just as simple as Amazon Prime.
Adam Jonas, a longtime Tesla fan, recently went car shopping and found out what Tesla fans love about the automaker. Buying a Tesla was much easier than shopping in a traditional dealership.
Morgan Stanley's analyst claimed he received the usual dealership treatment at a brand's unnamed sales lot.
Jonas said that after calling to make sure the truck was available, but it was limited supply, he also wanted to know if the dealer would sell it at the price he asked for. He wrote this in a Wednesday note to his clients. When he arrived, the salesperson wanted to charge thousands more than the suggested retail price of the vehicle. This is common practice at dealerships today.
Jonas did his homework.
Jonas explained: "I took a breath and slowly said, 'You're right, I was worried that this could be a problem.' And handed him my smartphone with a screen shot showing the dealer price compared to the MSRP of this specific stock number. He sat down and looked at the screen of the phone, saying with a straight-faced: "Ok, I guess that is the price." I asked him: 'Look, I get it. You are just doing your work. Is this how it really works?
In an age of limited incentives and discounts, this is a common experience for car buyers. It left Jonas wishing for Tesla's Cybertruck, assuming that the product would replace what he had been looking for.
"Tesla’s sales process is an advantage in the market: While much attention has been given to Tesla’s constantly changing prices this year, within a region, all customers pay the same amount for the vehicle," Jonas stated. "There is no haggling. There is no arbitrage between shops. "It's a smooth, seamless process that creates an increasingly visible difference between the traditional car-buying experience and the Tesla Experience."
Jonas also says that Tesla owns the entire product cycle, from design to production and sales. This makes "shopping as easy as Amazon Prime".
There are many advantages to the dealership-model that legacy automakers have enjoyed for decades. They don't need to hire or train their sales staff. The car can be marked as sold the moment it reaches the dealer's lot, avoiding the production-to-sales gap that Tesla sometimes experiences at the end a quarter. The company also has a network of charging stations and service centers for electric vehicles.
The times are changing. Automakers are having friction with their dealers as Tesla and other startups concentrate on direct sales and Americans lose interest in dealerships and tactics.
Ford, for instance, told its franchisees that they had to switch to electric vehicles without any negotiations or marksups or else leave the network.
Ford CEO Jim Farley stated at the time that "we want to work together with our dealers but there are some things our customers demand which are non-negotiable."
Ford and everyone else will be lucky to have Jonas back in a Ford dealership, unless Elon Musk is able to get Tesla's Cybertruck on the market.
You can contact this reporter at grapier@insider.com to share your experiences, whether they were good or bad. Contact this reporter by emailing grapier@insider.com
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By: grapier@businessinsider.com (Graham Rapier)
Title: A Wall Street analyst was haggled at a car dealership — and it left him wishing he had bought a Tesla
Sourced From: www.businessinsider.com/tesla-shopping-experience-big-advantage-adam-jonas-2023-6
Published Date: Thu, 08 Jun 2023 14:48:01 +0000
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