Will traditional car dealerships be obsolete in 10 years? A study by the San Francisco company RethinkX found that car dealerships could become obsolete in 10 years. The study concluded that a rise in electric cars and ride-sharing services will eliminate the need for dealerships. In ten years, Tesla Motors, Volvo, Cadillac, and other automotive companies will all sell their cars online. Until that time, however, they will still be located in traditional car dealerships.nTesla MotorsnThe future of the automotive industry is bright for electric cars and battery-powered cars. Sales of Tesla cars have been boosted by early adopters, scarcity, and lower prices. But those advantages won’t last forever. Competition may come along with lower prices and more features relevant to consumer needs. Until then, the future of the automotive industry will remain bleak. But this doesn’t mean that Tesla is doomed to failure.nThe automotive industry is highly competitive, and Tesla’s growth has exceeded that of the major automakers. Last year, Tesla sold $5.1 billion of cars, well ahead of Ford and GM. And Tesla’s revenue is on the rise. In Q1 2020, it generated more than $5 billion of revenue. To surpass GM and Ford, it would need to increase sales by 27.5 percent a year.nWhile there are major rivals in the automobile industry, Tesla is likely to be the biggest disruptor. In its non-franchise model, the California-based company sells vehicles directly to consumers. In contrast to traditional car dealerships, Tesla sells cars through a website or Tesla stores. These stores will replace traditional car dealerships. And they’ll likely be more efficient, too.nWhile Tesla’s success has prompted some to speculate that traditional car dealerships are destined to become irrelevant, it is possible that the technology of electric cars will be ubiquitous by 2025. The company has set its sights on $35 billion in automotive sales. It would have to grow at an average of 27.5% a year to catch up with Ford, which is expected to happen by 2025.nVolvonWill traditional car dealerships become obsolete by 2024? The answer to this question is probably not. While they are unlikely to go away anytime soon, they will be around for at least the next decade. In that timeframe, the basic business model of these establishments is under threat, especially with the rise of Internet companies such as Tesla. This is because Tesla has spent 4 years creating its car, so they want to offer an experience that is tailored to the consumer.nThere have been some studies that predict that car dealerships will be obsolete by 2025. One study says that electric vehicles and ride sharing will be so popular, that dealerships will become irrelevant. Others, however, believe that the car dealership will still exist. Whatever happens, a good dealership will remain a vital part of the automotive industry. The next big question is how this will be achieved. There is no one answer that fits everyone’s needs.nWhile the future of car sales is uncertain, some major automakers are investing heavily in electric vehicle technology. Recently, Volkswagen admitted to rigging diesel cars to hide illegally high emissions. The company plans to invest tens of billions of dollars in battery factories, build a worldwide network of charging stations, and roll out 80 new electric models by 2025. But the company says this is not a new pledge and is mindful of different paths to zero emissions.nCadillacnIf current sales trends are to be believed, around 40% of Cadillac car dealerships will be obsolete by 2025. The brand is planning to convert its entire lineup to electric cars by 2030 and has already outlined plans to build a high-volume electric vehicle. Cadillac dealers are also making big investments in updating their service bays and showrooms in anticipation of a rapid transition to battery-powered vehicles. While these changes may seem drastic, the long-term health of the Cadillac brand is not in doubt.nThe new, all-electric, electric vehicle, the Cadillac Celestiq, will be a big step forward for the brand. It will be built by hand on a small assembly line by craftspeople. The car’s design will be based on what customers request when ordering, similar to the Rolls-Royce method. Cadillac car dealerships will become obsolete by 2025 if they don’t adapt and rethink their business model.nWhile one in six Cadillac car dealerships will close their doors, many of the brand’s competitors are also making these moves. The company has invested $200,000 in its new XT6 crossover, and it’s betting on this car to keep its momentum. Another new product that Cadillac will launch in 2025 is the XT6, an all-electric crossover. Until that happens, Cadillac car dealerships will remain open, selling vehicles at dealerships, but not directly to consumers.nVolvo’s move away from traditional car dealershipsnDespite its shift to online sales, Volvo is not abandoning brick-and-mortar car dealerships. Its push to sell cars online is partly a response to consumers’ desire for convenience and comfort in making large purchases online. Dealers will still play a role in delivering cars purchased online, servicing them, and selling parts and accessories. But it is likely to see a big boost in sales through subscription models, which will bundle vehicle maintenance with monthly car payments.nThe company has announced plans to phase out the internal combustion engine by 2025, but does not mention hybrid or plug-in electric vehicles. While electric cars will likely outnumber conventional cars by 2030, the transition to electric vehicles is likely to take decades. While this may sound like good news for consumers, it may not be the best time for legacy automakers to give up their brick-and-mortar stores.nHowever, the company’s decision to completely shift its marketing and sales strategy is not without precedent. Tesla, the California electric automaker, has a business model that has caught on. The company plans to ban all gas engines by 2030, but will only do so in Europe. Meanwhile, GM, whose parent company, GM, has said it plans to sell only electric vehicles, is also making waves in the auto industry. In the near future, Volvo plans to sell its electric vehicles online. This move will also help Volvo transition its dealer network to a service operation, with dealerships only handling sales, maintenance, and service.nTesla’s store modelnTraditional car dealerships have become obsolete with the advent of EVs and the company has reformed their store models to mimic their online presence. Instead of having cars parked on the parking lot, Tesla stores focus on educating customers about electric vehicles. The staff is comprised of Tesla specialists rather than desperate salespeople. Their staff has different jobs, and buyers cannot purchase a Tesla from them.nTraditional car dealerships will become irrelevant by 2025 if Tesla’s new store model is successful. Tesla stores are reminiscent of Apple stores. There is almost no inventory in the Tesla store; customers must order their cars separately from the manufacturer. Instead of selling cars, Tesla stores offer related products and services. Soon, they will sell solar panels. The Tesla store model will become ubiquitous by 2025, and the car company’s competitors will be forced to adjust their business models to compete.nMoreover, the company is struggling to convince lawmakers to pass laws and rules to promote its business model. Texas, for example, offers a $2,500 rebate for electric vehicles, but Tesla does not qualify for it because it does not sell its cars through franchised dealerships. Additionally, the National Automobile Dealers Association, whose members have long opposed Tesla’s direct sales model, has urged state and local governments to require Tesla to sell its vehicles through traditional dealerships. They also argue that dealerships are vital to local economies.nOnline car salesnUntil recently, traditional car dealerships were slow to adapt to the internet. However, with the help of free websites, buyers could find detailed information on a wide variety of cars, and manufacturers had a faster feedback loop, learning more about customers’ needs and preferences. While online car sales were not yet easy, the process of researching a car, qualifying for financing, and searching dealer inventories became routine. Meanwhile, laws prohibiting automakers from operating dealerships are slowly changing.nWhile there are some dealerships already selling cars online, this new practice has not yet been fully embraced by the majority of car manufacturers. Although the National Automobile Dealers Association did not approve the new sales method, dealerships have since grown to more than 100 locations, increasing their potential customer base and revenue streams. Even Tesla has started selling their cars online, which means the car sales process is much more efficient than before.nHowever, dealers should not panic. Traditional car dealerships will probably not be obsolete by 2025, as dealers have huge political power. However, a recent Cox Automotive study found that consumers were extremely satisfied with their shopping experience in 2020. Despite this, their time spent in dealerships declined, indicating that e-commerce will likely be the core of car sales by the end of this decade.nA common excuse for a car dealer to refuse to sell a vehicle to a person from out of state is a fear of the attorney general. Not only can a dealer be fined, their franchise license may also be revoked. To avoid this, consumers should consider threatening to file a complaint with the state attorney general or better business bureau. They can also leave negative reviews on review sites that rate dealers. Most dealers value a good online reputation and therefore do not want to risk losing it.nKeeping a paper trailnThere are many reasons for keeping a paper trail when selling a car, but one of the most important is to ensure that the transfer of ownership goes smoothly. The transfer of ownership of a car involves transferring the title from one owner to another. Once the buyer buys the car, the seller must turn in the license plates to the DMV so that the vehicle is no longer registered in his or her name.nThe bill of sale confirms that the person selling the car has legally purchased it. The bill of sale for a vehicle is a hybrid legal document that details the car’s sale and transfers ownership. It is also necessary to retain these documents for your state’s Department of Motor Vehicles (DMV).nGetting a car dealer to refuse to sell a car to out of state customersnIt’s not always easy to get a car dealer to refuse to sell if you live out of state. There are several ways to do this. First, you can try to contact your state’s attorney general or contact your local media to let them know of the problem. You can also threaten to file a complaint with the MVA or the better business bureau. If that doesn’t work, consider hiring a lawyer or contacting the local news. But, most dealerships are smart enough to handle complaints without having to resort to legal action.nUsing the «As Is» version of a car dealer’s warrantynWhen selling a car to an out-of-state customer, you may be considering the «As Is» version of the car dealer’s warranty. This option can help you eliminate the implied warranties in some states. But make sure that you are not in violation of any state law. You can check the FTC’s website to find out more.nFirst, if the car is still under the manufacturer’s warranty, you should disclose that information to the buyer. You also should disclose if the warranty on any part of the car is valid. Otherwise, the buyer could get stuck paying for repairs. Using the «As Is» version of the car dealer’s warranty when selling a car to an out-of-state customer may not be the best option for your customers.nAnother important factor to keep in mind when using the «As Is» version of the car dealer’s warranty when selling a vehicle to out-of-state customers is to make sure that the Buyers Guide reflects any changes made to the vehicle. A signed Buyers Guide is essential for protecting both parties. In addition, it must include a signature line.