Shopping for a car at a car dealership is an endeavor that most people do not enjoy. Whether facing pressure from a car salesperson to buy a car or haggling over the price, buying a car is often an awkward and stressful process. However, as the coronavirus (COVID-19) pandemic showed, all of this is unnecessary, for the car buying process can be completed online. Moreover, the pandemic proves that car salespeople are a dying breed.
Will car dealerships and car salespeople go away?
You can buy almost anything that you want online, whether it’s computers, smartphones, furniture, or appliances. With a simple search and a few clicks, you can place an order, and it will be quickly shipped to you. If you can shop for nearly anything else online, why shouldn’t you be able to do the same with a new car? Until the pandemic, you mostly couldn’t do this without face-to-face interactions with car salespeople at a car dealership.
For one, car dealerships were slow to adopt and make full use of the technology to complete the car buying process online. Furthermore, the dealership business model is propped up by archaic laws that have been in place for decades. In many states, automotive companies are not allowed to sell their vehicles directly to consumers. State laws require them to sell cars through dealerships.
Archaic and protectionist car dealership laws
Tesla doesn’t have any traditional car dealerships. The automaker famously had lawsuits in states such as Texas and Connecticut that ban direct car sales to customers. For the most part, Tesla successfully navigated around this problem with its retail centers and other means. Now, other automakers are following suit with the direct sales/retail center model, such as EV automaker Rivian with its Rivan Hubs.
As people realize that direct sales online are more viable and affordable than haggling with a car salesperson at a dealership, there could be pressure to do away with the protectionist dealership laws. As reported by the Washington Post, the Federal Trade Commission (FTC) recommends that automotive companies should be allowed to sell cars directly to consumers. Goldman Sachs estimates that this would save consumers an average of $2,225 on a $26,000 car.
However, the dealership lobby, led by the National Automobile Dealership Association (NADA), is very powerful. It spends millions of dollars every year in its lobbying efforts. It will likely put up a strong fight to keep the protectionist dealership laws.
Online car shopping vs. car salesperson at a dealership
The pandemic forced car dealerships, like many other businesses, to conduct transactions online. This awakened many car shoppers, as they realized that they didn’t have to deal with a car salesperson. Customers can conduct the car buying process online, including choosing the car make and model, colors and features, and any accessories. Also, some dealerships deliver purchased cars directly to the homes of customers.
In many ways, the job functions of car salespeople are now obsolete. You can shop for a car and do your own research online without any assistance — or pressure — from a car salesperson. Furthermore, NADA reported that employment at car dealerships dropped significantly since the start of the pandemic. Additionally, dealerships reduced their number of finance managers.
Is a car salesperson the least trusted job/profession in the U.S.?
It’s not a stretch to say that most people do not trust car salespeople. As reported by Forbes, Gallup conducted a poll about the most and least trusted professions in the United States — in terms of honesty and ethical standards. For the poll, the only job/profession that ranks lower for trustworthiness than car salespeople are members of Congress. 44% of people gave car salespeople a low/very low rating of honesty and ethics. In comparison, only 8% gave the profession a high/very high rating.