Cars have always had delivery fees. Delivering something that weighs several tons is not cheap.
But he added that franchise-dealer opposition would be a violation of interstate commerce, and that is unconstitutional.
"Good luck with that," Musk said.
Sounds like Musk likes to pick and choose the laws he follows.
Source: https://www.businessinsider.com/tesla-is-eliminating-most-of...
Next time try buying a Honda or a Subaru. There's almost no wiggle-room in price.
Honda in the past. They may not move as much, but they definitely move.
Insider Tip: The internet desk is usually separate from the floor desk at your average dealership. When you know exactly which car you want to buy, negotiate through the internet desk only at several dealerships. But be prepared to walk if they try to pull a bait & switch when you show up to purchase.
As it stands, we are an unorganized mob who the middlemen and manufacturers are squabbling over and each making a profit. But it's becoming pretty clear we'll be able to program the middlemen cheaper/better in the near future (or services can just offer direct-online shopping), so should that remaining profit go to the manufacturer or the consumer? Tesla's being pretty generous now (or appears to be), but future (and present) direct online shippers may benefit greatly from the organizational imbalance. This is the same argument for collectively-purchased (government) healthcare, I believe.
(And yes, companies obviously should be compensated according to their risk and willingness to invest at scarce times - Tesla certainly deserves big praise from many angles - but examining this relationship from a societal standpoint and collectively bargaining for the end consumer (advocating for the poorest of us) is important too)
I may be a weird consumer but whenever I buy something expensive I always think about the unrelated things my money is paying for. So for example when I visit a car dealership I notice the big land footprint, the shiny offices, and well dressed salespeople—and I think to myself how much of my car purchase is going towards the upkeep of this crap, none of which I like or want.
If I want to learn about the car, I'd much rather access the manufacturer's website and read/watch independent reviews.
If I want to test drive a car I'd be willing to travel further to test drive one directly from the manufacturer. Or better still, just don't test drive it at all—you won't learn anything in an hour that you couldn't learn from a reviewer. The true character of a car usually takes a week or more to surface.
If I want to buy a car, I'd much rather buy it directly from the manufacturer and either pick it up from a central depot (to save money) or have it delivered directly to my home and detailed on my driveway (for a fee based on distance).
The only problem is that dealers usually only have cars with the most popular engines available, so you often can't actually try the car you want to buy...
Personally? yeah, I think renting a car is the way to go, if you want to evaluate how you will feel about the car later. A 20 minute test drive, to me, is like laying on a mattress for 20 minutes in a store and expecting to know what it will feel like to sleep on.
Remember: you're not special. You're just another meat bag that fits within a bell curve of normalness.
Edit: to the one person who voted me down, I was wrong. You aren't a meat bag, you are special.
I trust the guy at my local camera store to explain the pros and cons of a Canon vs a Fuji, I obviously don't expect they guy at my local Honda dealer to explain the pros and cons of a Honda vs a Toyota.
Camera stores is a great example. The vast majority of salespeople know how to convince you that a product suits your needs, but would have very little clue what is important to get the best outcome. They're not photographers—or if they are, chances are they're no more of a photography expert than you.
Perhaps the worst is "high end" hi-fi salespeople. These slick operators are great at convincing you to buy the unnecessarily expensive product and the criminally overpriced accessories. Unfortunately for the customer, most of the things that matter in making a good system aren't sold in a cardboard box with a big profit margin, so you'll never hear about them from a hi-fi salesperson.
There are only a few things that excite me more about a Model 3 than electric cars from established brands (particularly the upcoming Kia Niro EV) and a big one is the sales process.
Consumer price discrimination isn't something that should be occurring.
After all I'm not saying that car makers can't have "deals" but the price of any new car for sale—on special or a regular—should be published and not negotiated.
This doesn't make sense to me.
Thinking about it, my last three laptops were bought with a discount, just by not being afraid to ask for some.
When you're buying one laptop, of course not. You're talking a $3000 purchase vs a $40,000+ purchase. You negotiate on cars, because getting a thousand or two off is a huge deal for a lot of people.
The "No haggle" thing that Tesla is doing works fine for their $60,000-$120,000 cars. People spending that kind of cash on a car are probably not going to bat an eye at an extra thousand or two. Anybody spending that much money on a car isn't buying it because they have a limited budget, and are not trying to maximize their value.
I don't think it's going to work as well on their lower priced cars. People who don't have a $50-60k budget for a car don't have tons of money to throw around.
Haggling is stupid. Cars are usually overpriced because the expectation of haggling is priced in. I'd rather Tesla put a $35K price tag on their Model 3 knowing that's exactly what I'll pay than put a $38K tag knowing that I'll try to haggle it down to $35k.
A random citizen buying a single car isn't comparable to a corporation negotiating a volume discount.
Tesla doesn't let anybody else fix their cars. So you have to take it to their... what, repair center?
Dealerships may or may not have your best pricing interests in mind, so forcing them to exist is not particularly useful.
It says move all sales to online, but it only says closing many stores.
A car transporter carries 11 cars and can drive say 500 miles per day at a cost of $500 per day (including driver, fuel, and vehicle rental).
If the average delivery distance from factory to customer is 1500 miles, then transport cost works out to $136. Add to that the 'last mile delivery' which is probably going to involve a $20 per hour employee driving to the customers premises, doing a 2 hour training and handover process, and catching an uber home. Call that 4 hours, or $80 + $30 for the Uber.
Total delivery cost with an efficient delivery network could be $246.
Assume a 20% 'failure rate' (ie. where the customer rejects the car), and in those cases double the cost (returning the vehicle) and fold it into the amount the other customers have to pay, and you arrive at $369
https://www.youtube.com/watch?v=-inPRBhonfY https://www.youtube.com/watch?v=MXoOEuH9Jag
That feel to me awfully low. Can you be more specific on how you get to $500 for all that? Renting a car can cost me more than 100$ a day for similar distances. I can't imagine 11x that would cost less than half of it and on top of that include the wage of someone that have to drive full time.
That's barely his cost and doesn't consider anything else (administrative and etc..). I feel like it would be closer to 1500$ a day.
But there's a difference between the OSD MSRP discount. (i.e. buying off the OSD price sheet) and the standalone "Destination Fee" line item. Further, even though Volvo ships the car back to the the states for free for you, it's up to the dealership (and potentially your negotiation skills) whether they still add that destination fee to the final bill.
P.S. by "dude" I meant that the man just drove the car to the owner's place from their Fremont factory (30 min).
Car haulers don't make sense for sparse local deliveries.
Then Tesla registered the car improperly and took months to correct.
Most Tesla owners I talk to say the same thing, they love the car and hate everything else about dealing with Tesla. I can't imaging removing dealerships is going to make this any better with customers.
edit: This was an honest question, and instead of downvoting, perhaps you could enlighten me?
They are certainly pitching the idea that "buy and return" is the new "test drive". So the question is "Do you have to pay the delivery fee?"
>and then return it for free.
which implies that there's no financial loss on your end.
They should at least have phrased it in terms of "and you're only out the initial delivery fee".
Edit: I don't know what the actual status is. One commenter mentioned a delivery fee that's separate from the headline price; I was just going off the earlier discussion.
Even if that wasn't the case when you go to a dealership that delivery cost is part of the price. Claiming the car is $35,000 when it's literally impossible to buy it for that is a bit misleading.
The price of the monthly subscription(s) alone is a very significant proportion of my gas consumption (I'm a leasure only driver, I do maybe 5000 miles per year, the bulk of it is done in 4 to 5 road trips)
In Spain, the standing cost of a residential electricity contract that is sufficient to charge a Tesla (i.e. above the regular Spanish 3000W default contract) is similarly a significant portion of the gas price.
OTOH, I do know many people who paid delivery fees for customized luxury cars. The $35k Model 3, however, is not a luxury car and is barely customizable, even to the extent of available add-on packages.
This was the first google result that came up for "car destination fee" :- A "destination charge" is a fee that the manufacturer charges to deliver a vehicle from the factory to the dealership, and that is passed on by the dealer to the consumer; it is not included in the MSRP of the vehicle. Destination charges are typically not negotiable.
You may be doing that thing where you assume parent, and indeed everyone, is in the same country you are in, subject to the same laws, regulations, and traditional rorts.
As to why you’d want to: if you ask someone to quote bottom line, and they do, then you can start picking their line items apart to go lower. Or if you quote high, you can use line items as justification for it to some buyers.
But why? If I want a lower price I don’t care where they have to shave it from to do that do I? I don’t care about how they’ve arrived at a price or how it’s accounted for if I just want it be lower.
I say I want that price to be lower in order for me to buy and they say yes or no depending on if it’s worth it for them.
A more thorough discussion can bring down the offer they are willing to accept. You don’t have to care about the details to use them in a negotiation.
So why would you ever use the former approach? It’s strictly worse.
"Can you reduce bottom line by x" is like saying, "the documentation is a bit vague, can you improve it please?"
"Can you reduce line item n by x" is like saying, "there's no way the user could possibly intuit that the sampling period may be truncated to precisely hit the target value after the specified duration. Given that the programming language itself has no specification, this longstanding behavior must be explained clearly in the user docs."
Which response do you suppose will be more likely to lead to an improvement in the docs? It's probably the one that shows evidence you know your domain and how to assess quality there.
Of course, that analogy is the dream. In reality the car salesperson will come back with the reduced line item but with adjustments somewhere else. And it's hard to keep track of because, for example, how would an increase in the down payment affect your idea of the "total bottom line?"
This would be like a developer countering by saying, "Ok, but to clarify that section of the docs I added threading to the event loop." And then every single developer suddenly becomes some kind of darkworld saboteur, and you finally give in by saying, "I guess this is just how software gets made..."
Line itemisation is very silly for cars. All I need to know is how much does it cost me to get the car. I don't care that some of that money goes to person A and some of it to person B. Irrelevant to me!
But you would have already told them, "As long as I can afford..." So they'll spend the entire exchange trying to optimize for the maximum amount they think you can afford. They can try to convince you they've optimized when they really haven't, and they can try to pick a vehicle of a lower quality and persuade you that the price drop is the optimization.
If your response to every trick is to respond, "No, please try again to optimize for TCO," they'll eventually interpret your behavior as the equivalent of an ad-blocker. Then they'll either persuade you to reveal more data or move on to a customer who negotiates on their terms.
There is a difference simply because the results are different, whether due to the need to save face, behavior psychology, sales training, or more intangible factors.
What I'm saying is that either OP will accidentally give away information at the outset that virtually guarantees overpayment-- "Here's what I can afford"-- or robotically repeat a fair price calculated ahead of time and request TCO optimization until they are thrown out of the dealership.
It'd be like going to a shell game and requesting to pay $7 so your kid can have 10 guesses at where the shell is. Then when they ignore you, start asking what's wrong with that, I mean, those are the odds, no? I've even rounding up for that pure profit. Why wouldn't someone with a big crowd of good faith players want to accept that?
You have to be pretty bad at negotiating to be hit with a delivery fee since in my neck of the woods, aka SoCal, most dealers will waive that for everyone.
I recalled this wrong — I looked at the sticker for my car 3 years ago and it was $795. I think $500 was for my previous vehicle, and that was a long long time ago :)