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> why does the extra money go to the dealership rather than the manufacturer?

Because my understanding is they own the cars, once they're delivered from the manufacturer. They own the asset.

It's because they're collecting rents from having state legislation pretty much guarantee they're the only way to buy a car brand (other than Tesla). And though collusion might be hard to prove, it's pretty obvious to a shopper that the price transparency from the Internet is just as potent a weapon for dealers as it is for shoppers.

People are also buying up all the inventory of available cars and flipping them at CarMax for a profit. Look on CarMax and you see loads of brand new cars with 3-6K markup. That's who the dealerships are competing with.

>but why does the extra money go to the dealership rather than the manufacturer?

Because the manaufacturer decided to not raise the price. This means the next person now has the ability to raise the price.