2

Interested in buying a brand new car (in the US) for the first time, I went browsing through the websites of car companies to check prices and customization features. In that process, I noticed that in all of the brands' websites, it is indeed possible to "build" the customized car features as you want, then get a final price plus around $1200 freight.

However, there is never a "buy" or "purchase" or "cart" button - the end game is always a contact form to reach out to the dealers closer to me. I got curious to understand in more detail how does that works. Since there is always a freight shipping estimate, I would have assumed that the company would be able to ship those cars directly, for the online pricing plus the freight, and get them delivered. But then I do not get:

  • why do I need to contact the closest dealers if I am shopping for the car directly in the brand companies' websites? Would it be because the brands deliver the freight to the dealership I pay & get the car there?

  • if so, then would I have to pay extra on top of the online price (besides, of course, taxes)?

In case I am getting this all wrong, I would love to have an explanation of how does this process work, meaning the process of "building" a personalized new car on the brands' websites, paying the freight and actually getting the car.

6
  • Ignoring the argument against buying any new car at all, buying a car like this is probably a bad idea. When the car is already on the dealer's lot, they have already purchased the car from the manufacturer (for far less than the MSRP you are seeing on the website). At that point, the dealer has an incentive to move the car off their lot as soon as possible, meaning you can negotiate the price down to some extent. If you were to order the car from the manufacturer, no one has any incentive to lower the price shown.
    – chepner
    Jul 2 at 17:11
  • My guess would be that you would pay the inflated freight cost because your car is shipped outside of any regularly scheduled or bulk purchase made by a dealer. (Which is not to say that a spot might not open up in such a shipment, but again, there's no incentive on the manufacturer's part to pass that savings on to you.)
    – chepner
    Jul 2 at 17:13
  • @chepner while at this point I just really want to understand how buying it like that works, I do appreciate your insight. Curiously, what I have been seeing currently is dealers with prices significantly greater than the MSRP on brand new cars, sometimes even greater than MSRP+freight - which I doubt could be forced even to the MSRP level, much less lower, by any negotiation.
    – AndraSol
    Jul 2 at 17:19
  • My experience (limited) is that the "shipping charge" is a fixed amount applied to all vehicles sold, irrespective of actual travel distance for that vehicle. Here in Toronto cars can come from an Ontario plant 60 miles away, or from Mexico, to the same dealership.
    – DJohnM
    Jul 2 at 17:39
  • Really? The MSRP is usually a "base" price, without any options that might increase the price. On the lot, you see a variety of cars that may include some or all such options (finding a "vanilla" car might actually be difficult), resulting in a seemingly higher sticker price. You can virtually always negotiate the sticker price down, though.
    – chepner
    Jul 2 at 17:39
3

Car manufacturers in the US have in the past lobbied to legally disallow direct sales, in their eyes to ‘ensure local dealerships that can support customers’, in the eyes of the foreign competition to ‘disable a foreign company to sell cars in the US market’. They were pretty successful in many states, and so - depending where you live - you are forced to buy from a dealership.
That could be good or bad, but that’s the reason you cannot buy online from the manufacturer.

PS: Tesla is having a bad fight about that, because they would like to sell directly - so far with little success.

1
  • 1
    The end result is that to get a "custom" car, you take your build specs to a dealer and ask if they have a car that matches. If you go outside the most popular options, the likely answer is no, and you'll have to wait for a long time for the dealer to place an order and have it built and shipped. Also, any MSRP may or not be honored by the dealer.
    – pboss3010
    Jul 2 at 17:58
1

As mentioned by others, a local dealer is required for most auto brands. However, you don't have to travel to the dealership in some cases:

Systems like Toyota’s SmartPath, General Motors’ Shop.Click.Drive and the Hyundai Drive program allow buyers to complete the entire car searching and buying process without ever setting foot in a dealership.

They coordinate touchless test drives — dealers drop the car off at your home or office and pick it up a few hours later. They’ll deliver the car the same way if you buy it.

-1

Dealers

Repeating the other answers, the franchise agreements and/or state laws require all brands, except Tesla, sell through a franchised dealer.

Order vs Lot

Generally, most Americans buy a vehicle off the lot of a dealer. The online configuration tool will offer to find a similarly configured vehicle in inventory. If you do not like any of the vehicles available, you can order it. You do this through the salesperson of a dealer. An ordered vehicle can nominally take 2-3 months to arrive.

However, due to various reasons, including COVID-related microchip shortages, demand from rental car fleets, and the fact that summer is around the time of the model year changeover, it may be difficult to order. Manufacturers are simply not taking any dealer orders on many models.

Price

You will generally pay significantly more than the MSRP of the base, i.e. absolute cheapest configuration. However, price you pay for a car configured will be the configured MSRP from the website-fixed manufacturer discounts-negotiation+freight and dealer fees+tax and registration.

Traditionally, the negotiation factor is substantial on all vehicles. (Tesla is an exception where negotiation isn't allowed, as well as a few specific dealers.) However, due to COVID, high-demand pickup trucks, certain sports cars (Corvette) and some specific cars, have no negotiation room right now, which is an exceptional circumstance.

Very roughly, MSRP out the door is reasonable. That is, fixed discounts+negotiation = freight and dealer fees+taxes and registration.

States have different regulations and market conditions setting dealer fees, and taxes and registration fees vary by state and county. Many websites will give you an average price of what people are currently paying, prior to fees and taxes. The dealer should be able to easily provide an out-the-door price for budgeting and to begin negotiations.

Internet sales

In terms of delivery, you could always negotiate over the phone and e-mail. Some dealers liked it and were good at it, some basically refused to. Most people visited at least one dealer to examine and test drive a car, then negotiated with dealers within, e.g. a 100 mile radius.

COVID forced all dealers to adopt remote deals. After purchase, if you are a reasonable distance from a dealer, they should be happy to send a shuttle or deliver the vehicle, something that was true prior to COVID.

5
  • I don’t think Tesla has any exemption from any of the dealership laws, last I heard Tesla can’t direct sell for delivery to some states.
    – quid
    Jul 3 at 3:35
  • @quid Tesla isn't exempt from state law, but does not have agreements with franchisees which prohibit direct sales. Edited to add the "and/or"
    – user71659
    Jul 3 at 5:29
  • So “state laws require all brands, except Tesla” isn’t accurate. That first bit needs a bigger edit than and/or.
    – quid
    Jul 3 at 15:40
  • @quid Nope, it's right as written. All existing legacy automakers have franchise agreements that limit direct sales and ownership of dealers. This is standard in any franchise agreement. Tesla is the only automaker without restrictive franchise agreements. However, unrestricted direct ownership is contrary to law in 18 states. Thus, what I have written is correct.
    – user71659
    Jul 4 at 7:44
  • Write that in the answer. What you wrote in the answer is ambiguous on its best day.
    – quid
    Jul 4 at 15:50

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