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Comment by smilekzs | Hacker News Reader

Supply and demand, yadda yadda, sure.

I can accept that the observed behavior on my end is "pay up or wait".

What I cannot accept is that the dealerships are pocketing all the markups.

I think they should be able to mark stuff up all they want. They just shouldn't be able to have laws enabling their status as forced middle men. If a consumer wants to pay extra through a dealership because they value something they provide so be it. If a consumer doesn't want any bullshit though they should be able to easily bypass them and go to the manufacturer directly.

> What I cannot accept is that the dealerships are pocketing all the markups

Why?

I can’t speak for the quoted, but the dealerships are not creating the value that makes the cars desirable. They simply are in the right place at the right time and none of the extra money they get is going to improve the car in the future.

like a real estate agent?

You aren't required to use a real estate agent though (at least in my jurisdiction).

Because it's enforced via regulatory capture. Ford, as an example, has had a hell of a time fighting with it's own dealer networks over behaviors they do not condone. It would be different if Ford could sell direct to consumer.

In many states car dealers are either the single largest or one of the largest groups that donates to state and local politicians. They use those markups to make massive donations to politicians ensuring there are middle men laws on the books guaranteeing they can continue to charge more markups in the future.

Many people would rather their money go to the people actually designing and building the product their buying, ideally maximizing the value of their purchase.

From many consumers perspective they're just paying extra for someone to rip them off in order to be rip them off again later.

If dealership provided an genuine value the should be able to charge what they charge in fair competitive market conditions.

The idea of dealerships was to force car companies to spread the wealth.

For example if you purchase a car at a local dealer all the sales tax goes to the local taxing body (city / sometimes county). This generates a huge amount of money for public services.

Additionally the employees of the dealerships typically live in the same region further spreading the wealth.

Yes buying direct from dealer would be cheaper but eliminating dealerships nationwide would have a devastating effect on local municipalities.

Uhh no that's not at all correct. The taxes are paid to whatever jurisdiction you register your car. If you live in Texas and you buy a car in Wyoming the Taxes get paid to you local tax accessor. It doesn't matter if you buy it from a dealership or a manufacturer.

Manufacturers also have employees in the regions they sell because they need staff for their delivery and service centers at minimum.

The history of how we got here with dealership laws is long and complicated but basically boils down to starting with something useful like a verifiable local agent in a time when many small car manufacturers were selling essentially carts with primitive engines through mail order catalogs. Then slowly gaining political and economic power and protecting that power through local and state laws limiting competition and legally enforced monopolies. In short, corruption.

You'll notice many influential and wealthy lawmakers in state governments own dealerships. Unsurprisingly they're near uniformly anti-taxes and 'big government' so the "but dealership pay taxes" argument rarely holds sway as they're constantly fighting against it.

https://pressbooks.ulib.csuohio.edu/evolution-of-local-deale...

Thanks I stand corrected. I see Laws have changed and local municipalities are now able to capture some of this revenue even with out of state vehicle purchases or direct from dealership purchases

Sales (or use) tax, at least in the U.S., goes to the jurisdiction you reside in. The location you bought it from is irrelevant.

Because they are an oligopoly/they are forced on the economy.

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