Let’s also remember for ever 1 bad dealer there are 20 bad customers who will happily abandon your deal or cut you out if the local guy beats your price by $0.50.
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Sorry to be the bearer of bad news but car dealerships dont survive on new car sales. They survive on Service, F& I products and Used Car sales…
You sound like you are from the financial industry. Research on GPB Capital and read through some of their articles BUT DO NOT BE SOLD TO THEM. Just use for information. This product is NOT BEING RECOMMENDED/
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I happen to like this idea - what I think you’re going to have trouble with more than anything else is two things: (1) car dealer lobby, and (2) manufacturers.
The car dealer lobby is obvious - no one is going to want you to be the person who consistently undercuts every single other dealer around you. They exercise an immense amount of power as @ursus noted.
The manufacturer is usually happy to let dealers do as they please, however no brand is going to want their product driven to the bottom on price that quickly all the time - I could see them yanking or not even approving the franchise license. A high volume race to the bottom could have far reaching consequences on incentives, lease money factors, and especially residual values.
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Yea other dealer owners/groups will simply not allow it. My colleague did some marketing work for Mercedes years ago and a newer franchise up in New England was doing a lot of aggressive deals at volume. It took one call from Herb Chambers to Mercedes HQ and that was done with.
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Yup. Totally agree. I was just taking a shorthand approach. Lol.
BTW, I think our deals are way less than 10-15%. At least it seems that way since every salesperson I have ever interacted with is totally baffled by what I’m saying. 
In rural areas, not even 10% of the buyers lease. They automatically say “you have nothing to show for your money with a lease”. True to a certain degree. Just a different mindset. They buy to own for 10 years or longer.
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I agree with the points already made re: car dealer lobby. They’re rigorously enforcing the laws they helped shape, even more so now they’ve seen what Tesla can do (semi-successfully) in selling direct to consumers. I think it would be very difficult to make a new dealership work.
Having said that, do we even need to? We have a number of respected brokers and dealers here. We vote with our wallets. They offer transparent pricing since they have to be! otherwise we’d pull it apart and call them out on it. Being upfront about numbers, getting rid of the small print and not adding on bullshit extras all helps to make the buying process simpler, easier and more enjoyable and I think supporting the businesses that already offer that is the best way.
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With being a new car dealer you get stuck with whatever turds the manufacture wants you to sell. If we own a chevy store and sell lots of SUV’s and trucks the manufacture will force you to take the trax’s and other none selling vehicles to make it difficult. You must also signup a year in advance for the factory bonus pool money and not know month to month or quarter to quarter what your sales goal will be. If you are ok packing rate 2% on every GM finance deal and beg customer not to pay off for 3 months as well as selling marked up warranty’s and putting tint on every car. Service and parts will be very important as well. Do you do 29.99 oil changes to sell $250 air filters and fluid flushes. Are you going to stick with a strict 60 day turn on used cars. What is your DOC Fee $0-$999? Around here dealers have to deal with Dave Smith and Dennis Dillon on the GM side and it would be hard to compete…
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I don’t even want to own a car or a house, let alone a part of a business!
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Yup. Not gonna name anyone, but I’ve seen people sign really mediocre/bad deals with dealers on here just because the dealers had established a good reputation. I’m sure that for every “hackr” deal which we see, there’s a lot more bad ones to tip the scales. I’m not complaining though - customers who put in research will benefit from the ones who just want a quick deal.
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So basically an Infiniti dealership pushing $240 a month qx60’s and 299.99 and zero down Q50’s? I’m in! Any Infiniti location will do
i think the biggest misconception of average car buyers that us in sales have 10,000 in front end in every deal to discount and take off and make money off it.
for example, a chevy cruze has $700 in front end profit from COST to MSRP. you take 1,000 off MSRP before rebate and you’re already negative $300.
you can’t sell 100s of -300 deals and be profitable. this is why you pay retail for cereal and only a limited amount of coupons circulate.
good in theory, but there’s a reason there’s only 1 like me or @Cody_Carter or @ChevyPhil per store.
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Haha we would crush the store… I was $250K in the hole last year.
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So the consensus is we will let the industry ride, and we will as leasehackrs, be the 1% that gets good deals, no point in getting into a losing business model ! Thank you all, we didn’t do a crowdfund but we did crowdsource ideas.
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