No more haggling. No let-me-talk-to-my-manager. No driving across town in hope of a better price.
Few would mourn the death of the traditional car-buying experience. The haggling and the I-have-to-talk-to-my-manager routine. The multi-hour wait for financing as you sit through sales pitches for extras like leather protection and roof racks.We’re already seeing a dramatic shift in the way we buy cars. Companies like Tesla TSLA, +5.71% and Carvana CVNA, +2.43% are using the direct-to-consumer model.
In short: The traditional dealership no longer makes sense. And the car-buying experience will be better for it. Then Covid caused a microchip shortage. Production slowed. Suddenly, that 900-car lot was stocked with just 50. Manufacturers discovered that sales were as strong as they ever were. Buyers were perfectly comfortable test-driving a model at the dealership, then ordering exactly what they wanted from the factory.
Begin with the demise of that 900-car lot. Dealers will have little choice to convert from shopping centers to test drive and ordering sites. The real estate of that suburban dealership Auto Row can be put to better use — the economics are simply too compelling.
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