Why You Can't Buy a Car Direct From the Factory
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.
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid