Sometimes a buzzword is so ubiquitous that it’s easy to assume its subject will succeed, and today ‘agency model’ is one such example.
Referring to the transition from retailers handling car sales to car makers doing so – paying retailers a handling fee rather than commission – it is, in its most boiled-down form, driven by car makers chasing greater profits.
Yes, there are theoretical advantages to car buyers: the entire process, both online and in person, should be seamless and customer service consistent. And that shouldn’t be underestimated, as buying a car has often felt like entering the lion’s den.
But the reality is that car makers hope to take more control of the sales process as a result, reducing and even removing discounting and better controlling the flow of supply and demand.