The Car Buying Guide for Extreme Savers

Why You Can't Buy a Car Direct From the Factory

How great would it be if you could just visit a manufacturer's web site, configure your vehicle exactly as you want, and purchase it with complete price transparency without having to go through a dealership?

Most car buyers would prefer it this way, but it's actually illegal to do so.

With so much shopping being done online, many people wonder why you can't just buy a car directly from the factory - it would make the car shopping process so much easier.

It all goes back to the days of Henry Ford when mass vehicle production first began. Back then, it made sense to sell cars through a network of independent dealers.

By doing so, Ford created a buffer to cushion fluctuations in sales. Ford's customers were actually the dealers, who would need to purchase and store up to 60 days worth of vehicle inventory. Since there were no options on vehicles back then, there was no need for special orders and the franchise system made sense.

Over the years, the dealers became more powerful and formed strong lobbying groups to ensure States made it illegal for consumers to purchase vehicles without dealer involvement. So although you may see services such as CarsDirect that claim you can buy vehicles online, dealers always remain involved.

And it doesn't look like this will change anytime soon. If anything, the franchise laws have gotten even stricter, thanks to the political clout that dealers have in most States.

My Recommendation for New Car Shoppers

TrueCar No-Haggle and Edmunds Price Promise are the quickest way to see the lowest prices available on new cars in your area. Both tools provide upfront prices from local dealers, and the deals are usually really good. It should be the first step you take when negotiating car prices. You should follow that up with my checklist to make sure you get the best possible deal.
- Gregg Fidan

Gregg Fidan

About the Author: Gregg Fidan

Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.

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