Why do car manufacturers have to sell through dealerships

Why Do Car Manufacturers Have To Sell Through Dealerships

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Do you ever wonder why you have to buy cars from dealers instead of the factory?

Many people are baffled that even in this digital age where you can get almost everything online from fancy clothes in another continent to getting even doctorate degrees online, you still have to go to a dealers shop to buy cars.

Why can’t you simply order any auto straight from the manufacturers to your door step? “Why do car manufacturers have to sell through dealerships?”

Well, it would interest you to know that the automobile world works somewhat differently from other fields and purchasing the car of your choice must involve a car dealer as a middle man.

For many decades, the automotive industry has incorporated the role of dealers as a necessity for automobile purchases.

This is because of anti-competitive laws set up by the government of most countries, which prohibit manufacturers from selling directly to customers. So “Why do car manufacturers have to sell through dealerships?” because, that’s the law requires them to  do so, it is the only legal way to sell their automobiles and not fin.   

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Can auto manufacturers sell directly to consumers?

Recently, many indicators have shown that some auto manufacturers desire to sell directly to customers. Sadly, they are prohibited by the franchise laws in most countries and states.

Even in states where direct sales is allowed, many manufacturers shy away because of all the formalities involved.

The manufacturing structure does not even allow for sale support wings which enable auto manufacturers sell directly to customers.

They would have to create a separate customer sales division which would require a lot of investments.

Dealerships however help them expand their business worldwide while reducing costs and formalities, hence dealerships serve a better purpose in comparison to letting auto manufacturers sell directly to customers.

So for now, auto manufacturing companies cannot sell directly to customers.

How do you buy a car directly from a manufacturer?

We all know how exhausting haggling with car dealers or going into extended discussions can be. You may try to buy a car directly from a manufacturer, but unfortunately in most countries, you can’t. 

Fortunately, in some countries in North America, you can order a car from the factory. This is however, only ideal for people who insist on a particular brand or color which they cannot find nearby and the order must still go through a dealer.

In any case, only a few automakers like Honda and Acura can allow orders, though you would have to wait for their quarterly orders which lasts for at least three months. Remember the risk of delivery errors.

If you can wait, the easiest way out is to call the fleet manager not long before the quarterly orders are placed and hope you get your car on time.

So How do you buy a car directly from a manufacturer?, you place your order and wait for a quarter to retrieve it.

Why can’t I buy a car directly from the manufacturer?

You can’t buy cars directly from manufacturers for a few cogent reasons. For one, laws prevent manufacturers from selling directly to customers for protection from extortion and skewed competition.

Coupled with the structure of these organizations and their need to avoid extra costs needed for investment and self-marketing to customers around the world, manufacturers would basically prefer to sell their products through dealers than directly.

So for the cost effectiveness on the part of the manufacturer and coverage and protection from the law from mostly upper class producers, reasonable answers have answered the question “Why can’t I buy a car directly from the manufacturer?”

Let’s now move on the next topic

Can you buy a car directly from the manufacturer in US?

The United States of America is one of the few countries of the world which can allow a customer buy a car directly from the manufacturer. However, this is still very limited to a few states.

The long standing franchise laws prevent manufacturers from selling directly to customers in most states and even those who can still abide by the law, because it protects manufacturers from outside threats and skewed competition; pioneered by Telsa INC which has gone through several legal battles. So get ready for some high price rates and slow service.

Can you buy a car directly from the manufacturer in US? Yes you can, but only if you live in the few states which are allowed access by the law.

Can you buy a car directly from the manufacturer in Canada?

For anyone wondering if they can buy a car from the manufacturer in Canada, there is some good news.

 In this sense, Canada is a very liberal country as it does not have any laws which prohibit manufacturers from selling directly to customers.

Presently, citizens are free to buy cars directly from the manufacturer in Canada and import to the US.

You would however have to check if the vehicle meets the US standards which basically entails getting the manufacturer to verify that the vehicle complies with the country’s standards. You also need a lot of paperwork to clear your car.

If you live in North America and don’t mind the costs and time, the question Can you buy a car directly from the manufacturer in Canada? Is already answered.

Five (5) US States where you can buy a car directly from the manufacturers

The United States permits manufacturers in only a few states to sell directly to customers. Manufacturers in these states enjoy immunity and run their businesses as outlets like other companies.

However, their operations do not bubble so well. Here are the Five (5) US states where you can buy a car directly from the manufacturer. This information is relevant as of the writing of this article, thing might chance in the future.

  1. Georgia
  2. Virginia
  3. Ohio
  4. New Jersey
  5. Maryland

If you live in any of these Five (5) US states where you can buy a car directly from the manufacturer, then you’re in luck. It is important to remember however that sales of auto mobiles here are only limited and are pioneered by Telsa INC.

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