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.