Why it’s Illegal to Buy a Car from Toyota 

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Nothing says “we’re a useful part of society” like “you’re legally required to buy from us”

It's difficult to express just how much I despise walking into any car dealership. It is a crooked but legalized way of doing business.

I wish these companies success. THere's no buying experience worse than a car dealership.

Tesla: wants to sell cars Customer: wants to buy car Car dealership: hey wait that’s illegal! Where’s my cut!?

As someone who follows the car market closely, I feel like this did miss acknowledging that 2022 was a deeply anomalous year for the automotive market and things are looking decidedly less rosy for dealers now--which is good, because they're awful and literally everyone should cheer their downfall.

Yes, why can't I order my next new car online from Walmart, Amazon or some online site ? I don't want to use a dealership - their markups hike new car prices into unaffordibility. This video was well researched - thanks for this.

Lobbying = legal bribery

I predict that if dealerships did not exist, consumers would not see the 9-11% depreciation from driving off the lot. This depreciation is a direct indicator of the actual value dealerships steal from a transaction.

Dealerships are a leech that contribute very little to the economy. Any money they might donate to charity is just money that was forcefully taken from customers and car makers in the first place.

To a European, American laws on car imports and selling are insane. Can't imagine having to wait over 20+ years to import a car from another country.

One advantage of ordering from the manufacturer is you can often customise down to an insane level since it's mostly build to order, right down to the colour of the stitching on the seats. The disadvantage is you might have to wait a few weeks, or even months if its a popular model.

Dealer markups over MSRP are the ultimate slap in the face.

In Utah, they law says that manufacturers that only produce EV's don't have to go through a dealership. At the time it was enacted, only Tesla qualified but as EV's become more popular and ICE's get phased out, that's likely going be most or all car manufacturers. For once we are using the shortsightedness of corporations for good.

I wonder if dealers are behind the recent 'no one want's to buy EVs' push that reached washington recently.

Is anybody else getting more and more upset and jaded the more they learn about just how much the 1% of society is allowed to take advantage of everybody else with governmental impunity?

Props to Tesla for changing this archaic law

I was shocked to see Dave Smith being mentioned in a RU-vid video as a north Idaho native, I remember riding through the silver valley, from Mullan to Smelterville, and counting something like 30 lots owned by Dave Smith Motors, it's honestly incredible

The American auto buying expierance is archaic, outdated, wastefull and stressfull amoung other things. Franchise laws need to go for the betterment of our society. I'm also sick of seeing car ads every where. Imagine how much cheaper cars would be if you weren't paying for the extra bloat of dealer markups due to ridiculous amounts of overhead and advertising for a product that's marketed to us like we need to buy a new one monthly when it acuallity it's more like multiple years.

ProTip: Watch this video at 1.5 Playback Speed.

Car dealerships are one of the worst parasites. Legit can't even buy what I want. If there is miraculously a stock of the car your looking for you have to deal with their bullshit random ass fees and markups because they can attitude. They are also to blame for every car model becoming gigantic as they are super incentivized to sell bigger and heavier gas guzzlers over traditional or even mini cars.

I bought my car (a Chevrolet Bolt EUV) through what remains the only Mom and Pop dealer in my area. They have actually made it their niche to specialize in selling EVs and have previously been the #1 Volt and Bolt seller in my state. It was honestly a great buying experience. But unfortunately that seems more the exception rather than the rule

Kinda wondering how much the concentration of dealership ownership contributed to the surge of prices on cars 🏷️🤔

"30% less than than mississippi" damn never seen anybody take a jab at mississippi that quick

In the modern age, these middlemen are no longer useful, and do not need protection. Back when you had to physically arrive at where you wanted to buy stuff from, dealerships played a pivotal role (even if the governments were fucking stupid, because that's what governments inevitably become). It's simply not the case any more.

10:52 "In Michigan, Tesla can “market” its cars by opening “showrooms” and offering test drives, so long as the actual “sale” technically occurs out of state. In Connecticut, Tesla drivers can lease but not buy. And in New Mexico, the company opened dealerships on tribal land, where most state laws don’t apply. In Texas, its cars must first be exported out of state and then re-imported to a local buyer. Tesla salespeople can’t legally mention prices or even direct buyers to the company’s website."

The Amazon car buying service is just a referral to traditional dealers. You still get the joy of sitting in the finance office while the price you agreed to with the salesperson mysteriously grows by $7000.

Polymatter is literally one of my favorite content creators. In this crazy world filled with opinions anyone creating quality content based on economics is welcome. Most people never even read the budgets and decisions they complain about. More information is a blessing, and Polymatter definitely spreads valuable info by bucketfuls.

I cannot begin to imagine the mindset of someone with enough money to buy a $100,000 pick up truck, but who is also willing to put the time, energy, and resources into buying plane tickets, flying potentially cross country, and taking a shuttle bus, just to get a bit of a bargain.

great introduction! for some reason Kellogg, ID is a place thats always in the back of my mind. its just so unlike any place ive ever been. ive passed through many times, and its just such a bizarre place. i was unconsciously aware of the fact the town was just a giant car dealership. but honestly i never had even processed the town's name. if some said kellogg, id ask "where is that?", but if they said "the Dave Smith town" id say "ohh i know exactly where that is!"

This whole topic just infuriates me. There's literally no purpose in car dealerships existing, they simply jack up the price for customers and make the process more of a hassle than it should be.

Recently a video went viral of a $55 million wedding in Paris, the bride is heiress to chain of Mercedes car dealership in Florida

Bought a Tesla in November, single best car buying experience I've ever had. I'll never step foot on a dealership again.

I'm 54 and my whole life almost everyone I've known has thought car dealerships are sleezy. Granted, some dealers are better to deal with. They do work hard, are honest and do value your business. Too many others lie through their teeth, are lazy and take great pride in ripping people off.

This video fails to mention that the largest profit center for a car dealer is their finance department. In short, dealers can negotiate better rates with banks due to bulk borrowing, then charge a buy back rate to the costumers. Not to mention add-ons to the loan like gap insurance and myriad other unneeded “services” to pad the loan. Most car dealerships, like most airlines, have become banks themselves.

I remember growing up in Seattle hearing the radio advertisements for Dave's in Kellogg, Idaho... back when AM/FM radio was a thing.

there is this little dead town in the south of Illinois but despite it's long time decline, it has a thriving new and used car dealership that spans a good 10 acres as you get to the north end of the town; Guetterman Motors. The dealership is almost as old as the dealership in Carbondale, 13 times it's size.

It's not illegal in Australia though, car makers have their own showrooms. They're even mentioned on the number plate holder after the car is brought.

I though Kellog would sell breakfast cereals.

Sometime around 2007 we decided to purchase a nice Chevy pickup. We visited 3 local dealers and had to suffer through their obnoxious sales routines. We knew there was a rebate offer for the vehicle, but they each claimed no rebates existed. Someone told us about Dave Smith. We drove 8 hours to visit the dealer, and it was quite amazing to say the least. They had the same truck for $5000 less than the other dealers. They also acknowledged the rebate offer as well. No pushy sales tactics and no back and forth on monthly payments. Just as we were getting into the vehicle, paperwork signed and all, the salesman came back out with an envelope. They found another rebate that they hadn’t realized existed, or it was a new one that day….not sure which. Either way, it was an envelope with $1500 cash. I hate the car dealer routine and refuse to go through it. I’ve since purchased multiple vehicles there and will continue to do so.

This is why Tesla is legally not allowed to sell cars in some states. Because they don’t use middlemen dealers

“Ford Superduty” Shows a GMC

where's the "free market" ?

The second dealership you showed is in Aventura Florida, I you just tilt the camera 90° to the left, you'd see it's not a small town

watching the preview caught me so off guard because my home town isn’t far from Kellogg. many of my peers’ parents and even people I went to high school with now work there.

Auto dependency from the top down has never been consumer choice. All a structured market to keep autos profitable.

How is forcing a middle man a good thing? If we're changing fees for realtors we should change fir dealers

In Massachusetts there's a highway with a ton of car dealerships on it the dealership's on it. It's called the Boston Providence Highway are some people simply call it Route 1 (pronounced root). Many of the Ernie Boch car dealership commercials from back in the day used to say come see us at Route 1 on the Auto Mile because the car many dealerships spanning across 4 towns.

0:33 and 0:50 Right off Interstate 90 = not exactly NOWHERE. Note that the Spokane airport is on the FAR SIDE of the Spokane Metroplex from Kellog - likely 20-30 minutes of that "hour drive away" is within the Spokane area.

There's a lot of shady shit in car prices, like adding things such as back-up cameras and mirror lights, which ostensibly sell safety, but actually are unnecessary cost drivers. Any single car company is likely a bigger camera seller than GoPro, or Canon.

My dad bought a Tesla few months ago in NY, easiest car buying experience ever

Kellogg also has a pretty big ski resort with the longest gondola in America, along with a couple breweries and restaurants in the resort area of downtown (not what you showed)

Wow Kellogg is a random place to mention. I’ve stayed there for a snowboarding trip multiple times. It’s really random to see all those cars in the middle of nowhere

And then we ask ourselves why the middle class doesn't exist anymore.

Car dealerships are not in the business of selling automobiles any more, they sell loans, primarily. The cars are almost completely immaterial at this point, except as a vehicle to sell somebody a high interest loan, where the dealership often gets a couple points on any loan they are able to facilitate via their vehicle sales. Try to pay cash for any car these days, or get financing on your own. The sales manager is not going to be happy, and will work extra hard to sell you on nonsense value-adds (like tinting, paint protection wraps, or theft recovery product) at 2x market rate. Because again, they farm out the tint/wrap to lowest bidder and keep 50% or more of the cost. Automotive sales need to go back to direct sales, and the sooner the better.

Kellogg, ID is the nearest town to Silver Mountain ski resort, so it's not the middle on nowhere per se but it's close

Very glad that Dacia in Europe exist. Their prices are fixed. You exactly pay the list price no discount or markup. If a dealer does that they loose their contract. Ok you have a destination fee but that was also not very high. Ordered a car in december 2021 and recieved it in april 2022. Paid 18650€ for seven seats, keyless entry, led headlights, propane kit installed, rear view camera and parking sensors, alloy wheels, rain sensing wipers, a specific colour, touch screen navigation, heated seats, cruise control and much more. Yes the engine isn't the most powerfull but it's a great familiy car. Dacia Jogger. Maybe some manufacturer should think about such a business modell too. In Europe Dacia is very popular for three reasons. The cars are very reliable and have a high resell value. Value for money is extremly high The customers don't feel cheated.

I like how Mississippi is the measure of how low the income is.

Part of the reason Dave Smith got so big was because my Dad bought millions of dollars worth of cars/trucks from him in the 70s/80s when Dad was a manager at Bunker Hill mine. Smith probably wouldn't have made it without those purchases. Dealers from everywhere tried to get Bunker Hill's business but my Dad stuck with the local dealer.

All of these conversations miss why dealerships exist in the first place - in the early 20th century there was no way for the auto makers to manage the logistics of selling and servicing their vehicles in the towns the buyers were in. So the dealer network was created. A local business designed to service the needs of the local customer. Then the auto maker only had to worry about the distribution of vehicles and parts (which were moved to a third party as well) and they (manufacturers) were immune from managing the local economics. Without the local dealers you would never have had small town dealers and (more importantly) warranty service available for people. Making car ownership that much more of a barrier for rural people. Today there is not as much need. Computer systems can manage the logistics to a level of perfection that no other method provides and with internet sales you can nearly eliminate the local new car experience completely. The only issue is service. If you think it is hard to get a service appointment from a dealer in your city, think about how hard it must be if you live in a town of 4000 people. Then think about if the decision wasn’t up to a member of the community whose family may have been doing it for 70 years, but a faceless corporation that doesn’t care about anything except the profitability matrix. It’s a complex issue and any easy solution will leave tens of thousands of losers. But the current method only makes an unfair wealth balance as well. So we need a not-simple solution.

I drive a Model 3 and live in Michigan. I took the train to Chicago, took an Uber to the Tesla showroom there, and drove my car back home. I live 20 miles away from a Tesla showroom in MI but… had to go 300 miles away to get one. So stupid!

So let me get this straight, people would buy a car thats cheaper in Idaho, then what? Drive all the way back which alone might close the gap in the price of buying local???

Just FYI, Oregon no longer has mandatory assisted pumping, hooray! This means we won't look 'special' when we go to Washington/Cali

Dealerships had their place in the past. it made sense when the internet wasn´t around to have there good selection on cars while comparing it to other dealers. perfect for asking questions and maybe also a Test ride. But now a lot of these things can be done over the internet. And the easy ordering process makes it much easier to go directly to the manufacturer. and this way possibly both the buyer and Manufacturer get better prices while you cut out the middleman which became a lot like a leech.

I worked at a dealership for 4 years. I quit due to the hours they require from their sales consultants and the unscrupulous pricing with add ons, bait and switch advertising and markups. The business there is slow and the lot is overflowing with cars. I feel like dealerships are on the same path as Blockbuster was.

Buying a Hyundai from Amazon is not directly from Amazon- they send your order to a dealer who has the car in stock and then they carry out the sale and arrange shipping to you (is my understanding)

“FrEe mARkEt”

Dave Smith is something of a legend. Just imagine Main Street USA with cars for sale parked on the sidewalk.

0:37 Why did you show listings of GMC Sierras when you were talking about Ford Superduties?

Nada is a great way to describe what they’re doing for society

It is crazy that a distributor makes the same, or even more profit than the company that produces what they distribute. You gotta love how the laws won't be changed because the dealership benefits an area, even though it harms all who have to shop there.

Wow. Kellogg, ID and Ashland, OR. Two of my favorite places to mountain bike. haha.

You ought to do a video on the "Brief Silver Spike". That's an interesting story.

GREAT STUFF! I actually drove through Kellogg Idaho in 2020 during the supposed "car & truck shortages"....I was shocked @ the massive anounts of vehicles sitting around Kellogg when dealers in Coeur d'Alene (25 miles to the west) or Spokane (65 miles west) were kind of vacant....Same thing for Lewiston Idaho, the Nissan dealer had a "parking lot sale" but, took much of their inventory off site and hid it in a nearby industrial park. I tend to always buy "new/used" from private owners myself. Lots of "Smoke & Mirrors" in the auto industry.

Thanks for all the awesome content!!

12 minute video, ads at the beginning, two ad breaks in the middle, and then an ad read at the end.

He saw the clips of that massive wedding and got to work! Love to see it :D

I just bought a car from a well known car company that doesn’t use dealerships. Best buying experience for a car ever. No hassle, no negotiations, no sleezy middleman markup, no finance scams, mostly done online, courteous and responsive representatives, exactly as described. Never buying from a dealer again if I can avoid it. They are useless and expensive and untrustworthy.

Imagine if one entity controlled all aspects before it gets to the consumer.. would that be called a Monopoly?

Very interesting, great jobs once again

He says Ford Super duty and shows a picture of GMC Sierra Denali. Also Kellogg Idaho is home to Hoffman Boots, one of the best pole climbing boot makers on the planet.

Literally live long enough to become the villain.

The model of the American car dealership is already scandalous enough as it has been for decades. But I feel as though their greed is what is doing them under. Mainly when it comes to the "market adjustment" aka dealer markups they are adding onto prices these days. People are quite frankly tired of it and some would rather drive an older vehicle into the ground than to put up with that miserable experience of buying new from a dealer.

I live in Spokane and never knew that the Dave Smith in Kellogg is the biggest in the nation...

It's funny I can go on say the Toyota website, find a car I want, pop in options, color scheme, and get an actual price. Then what... I still have to go to a dealership to get the car? How much of a percentage upcharge is the dealer getting for doing literally nothing except saving a parking spot for the car? So the problem with dealers is that they're really not doing anything, my last experience about 6 years ago was that we wanted all weather mats in the car, due to a child this was non-negotiable. The color my wife wanted was also high up there but wouldn't you know it, the color she absolutely hated had the mats and the one she liked didn't. So my question for them was why can't you just swap the floor mats? It's the exact same make and model just in a different color, you can't print up a new sheet to show that they have different mats? What there are laws against that? (they claim) yet the same dealership can add foam trim around the doors and market it as a "scratch protector" for $400 (and also claim they can't remove it).

i am pretty sure dealers are universally disliked. Such an unpleasant buying experience, not to mention they often try to scam you with ambiguous fees and useless warranties

Land of the free and the brave, unless companies with political ties can't profit off you, then we'll get the government to force you into giving us your money

As a person from eastern Washington, drive to Kellogg and it’s worth the drive. Cheap deals !!!!

Not sure I understand the business model here... car buyers from all across America will fly to Spokane, shuttle to Kellogg, buy a car (or pick up a car already bought), and then drive back home? I could see it if they live in Idaho or even a bordering state... but further afield than that? Is it worth the time, money and hassle? Is it THAT MUCH cheaper than buying at the local dealer? I probably misunderstood.

Although the cost of servicing an EV is generally lower, the difference isn't night and day, for example in the first 6 year service life of the car, an MG 4 Excite 51 will rack up a service bill of $1499 while a Toyota Corolla ZR Hybrid hatch will rack up $1605, a difference of $106 over the 6 years (These are Australian figures). Dealers also have the benefit of locking in EV customers with servicing (and repairs especially) compared to an ICE vehicle.

There NEEDS to be heavily restrictive regulation on markups and anti consumor profit motives. NADA needs to be abolished and dealers should be abolished or heavily controlled by the company they operate under.

So how is it fair if dealer have all benefits by law no risks op money londering scheme?

Wow f this garbage, I'm definitely never buying a car through a dealership.

Yoooo I'm a sales consultant at DSM. It's wild to see half the valley at work every day. Sell close to cost and #1 comes naturally through repeat and referral. Truly a unique spot. Cmon down and ask for Evan! 😂

As someone from Kellogg, not inaccurate, there are mines and a ski resort as well. 😂

Dealers do add some tiny value in that the do the work of meeting up the customer with the product. If they did a good job, would they need legal protection to be exclusive? Why would a manufacturer want the work of showing the cars, if the dealers do a good job?

Never underestimate the governments ability to ruin markets.

This country loves monopolies.

Here in mexico almost all new car dealers are directly from the company own dealer

Had a recall issue dealt with at the dealership and was recommended $6K+ in work and yet they failed to identify my rear wiper needed replacing despite their 20 point inspection that found no issues with the car or the wiper blade. Was their a wiper issue? Yes, the blade was hanging off the wiper 😂 Classic dealership.