Are American car buyers prone to buying new automobiles right off of dealer lots because they are too impatient to wait a few weeks for a built-to-order car? To hear Automotive News tell it in a recent report, that’s exactly the situation. But look across the pond: The reason Europeans place orders for 50 percent of their new cars, unlike Americans and their 5 percent, might not have as much to do with being more leisurely with their time than it does with their attitude toward dealers.
According to AN, American consumers want immediate satisfaction upon visiting a dealership, so they look through the lot and pick a car that best serves their needs. They don’t want the hassle of waiting for a car to show up—and indeed there is a waiting period. As one example, General Motors says the average time it takes from order to delivery of one of its vehicles is 28-42 days; Americans allegedly want the convenience of getting a car today.
But there are other causes. Last year, Time published an article that sampled 10,000 people and asked them about the dealership experience. Three quarters said, “If given the opportunity, they would consider making their entire car-buying process an online affair, including financing, and home delivery.” However, long delivery times still served as a major factor to those customers when considering ordering online.
Consumers want an experience like they have when they go onto Amazon. Low pressure. They search through their options at their leisure, find the product they want, click order, and have the purchase show up in a reasonable amount of time.
Dealership horror stories litter the internet, and you yourself probably have experienced or know someone who’s experienced the ineptitude of dealership salespeople. With that, even those that have attempted to order a car through a dealership have found the situation difficult. One Redditor described their ordering order that was laced with incompetency and delays due to dealership error.
The European dealership experience is similar to the dealership experience everyone wants, because unlike American sales, European car sales are rooted in a post-war mentality, when stocking cars on lots required a financial investment many dealerships couldn’t afford. That process, in addition to the modern digital sales age, means Europeans, unlike Americans, never got used to shopping for cars off a lot.
Still, since U.S. consumers remain rather obligated to conduct business with dealerships one way or another, why aren’t more Americans throwing down their money for built-to-order cars? A key piece is dealerships’ general resistance to any sort of structural change.
Although Tesla, for example, sells its cars in a much more exclusive price range than the average buyer frequents, and to a customer base more influenced by the tech world, it too has demonstrated how customers don’t mind avoiding the franchised dealer model entirely. A Tesla spokesperson told me almost 100 percent of the company’s clients custom-order their cars. And because of that, those customers are quite satisfied with the experience.
Where Tesla can truly become a leader is if the company can deliver on its upcoming Model 3, which is marketed toward the everyday Camry consumer. When the car debuted, Tesla racked up more than 350,000 deposits, and if it can deliver in a reasonable fashion, without many of the issues the Model S and Model X were plagued with, then it could help this paradigm shift.
Two other outliers in U.S. built-to-order sales are Porsche and Mini. While sticking to the traditional dealer model, both deal in high volumes of custom-ordered cars due likely to a more inclusive one-on-one dealership experience similar to that of Tesla. However, the majority of other automakers don’t yet subscribe to these types of customer experiences.
Dealerships have a stranglehold on the automotive market, and in recent years, the National Automobile Dealers Association in the U.S. has blocked legislation to make it easier for built-to-order direct sales. Why? Because this system returns $570 billion a year—and thereby incentivizes dealerships to keep the status quo and the outdated model of how cars are sold to the public, including the reasons people hate shopping for cars.
Dealerships are an archaic model, and more and more manufacturers are coming to this conclusion. In addition to Tesla, companies like Mercedes-Benz, Audi, and Daimler have begun opening flagship experience stores in city centers around the world rather than traditional dealership lots, similar to that of an Apple store rather than a traditional dealership.
We spoke to an early Tesla adopter who said, “The buying experience has been so positive that I will never buy a car from a dealer again. I know most of the sales associates and some of the service advisers at [several Chicago-area Tesla boutiques]. If I email them a question after hours they usually get right back to me, even late at night on the weekend. They know more about their vehicles than any dealership salesman I’ve ever run into.”
Indeed, the stereotypical dealership experience causes buyers to want to get in and get out as quickly as possible so they don’t have to deal with salespeople haggling over sometimes fictitious prices, or encounter other negative connotations dealerships are known for. And this in-and-out mentality decreases the number of built-to-order cars, because you need to spend more time at a dealership to do so. And who wants to spend more time with someone you inherently don’t trust?