Volvo’s New Plan: Bad for the Buyer?

2016 Volvo XC90

By trying to be different, Volvo is enacting a plan that many have already tried.

In the past I’ve been in full agreement with the concept behind Volvo’s plan. It probably is time that the way we purchase cars begins to change. The thing is, the change suggested could actually end up hurting consumers financially.

News is making the rounds this week about Volvo’s new marketing plan, which cuts out most auto-show participation and introduces online car buying to customers. The theory of shoppers being able to build their ideal cars online, then order with the push of a button, makes sense. But is the convenience really a good thing?

An article on Yahoo Finance said,

With the increased emphasis on selling vehicles online, some are wondering if we’re seeing the beginning of the end to the old-fashioned way to buy a car. But Volvo is assuring its dealers they aren’t going to be put out to pasture anytime soon.

GM, Toyota, and perhaps most famously, Tesla have attempted the online car-sales strategy. Tesla is the only one that has seen success selling direct to consumers without a third-party dealer network. Volvo’s plan doesn’t eliminate dealers, so I’m leery about how the scheme will play out.

Volvo hasn’t announced specifics, but if dealers are involved, we can assume they will coordinate delivery, financing and trade-ins after the purchase price has been set. This is where I see trouble.

Car buying is complex because there are three major factors to consider: the price, the financing and the trade-in. All are negotiable, and it’s best to work with a dealer to get the best deal on all three. Buying online will limit negotiation power and trap the buyer into paying whatever price the automaker deems appropriate.

On the positive side, it will save the buyer a great amount of time.

That strategy sounds great for the dealer and for the automaker, but not for the consumer who wants to save as much money as possible.

Buying a car through your dealer may take some time, but if you are a savvy shopper, they can help you save a lot of money.

Would you want to buy a car online and bypass dealers?

-tgriffith

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