Cars have become commodities now that consumers have loads of pricing information at their fingertips that even ten years ago they didn’t have.  Sites like TrueCar have come online recently to make the pricing of cars even more transparent and further swing the power toward consumers.  A Chevy Aveo at one dealer is no different than a Chevy Aveo at the one 5 miles away, yet many dealers continue to cling to business models that are loaded with fixed costs and obscure pricing methods/systems that are from a bygone era.

The Economist has a good analysis of the situation on their website comparing car dealers of today with travel agencies a decade ago.

Kicking the tyres. May 22nd 2009. From Economist.com

To top it off, there are reports today of dealerships that are lobbying in Washington (and politicians lobbying on their behalf) to stay open even thought General Motors or Chrysler have terminated their franchises.  Perhaps a better idea for the “new” Chrysler and GM would have been to terminate all dealer agreements and market automobiles using a new system that doesn’t have so many built-in costs…maybe we’ll get there someday (or maybe I’m way off base) but with the government now involved I expect it to be a slow process.