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Reply #6: I think the idea is that more dealers than a market needs drives down prices. [View All]

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LeftyMom Donating Member (1000+ posts) Send PM | Profile | Ignore Sun May-03-09 03:50 PM
Response to Reply #2
6. I think the idea is that more dealers than a market needs drives down prices.
To make up an example: I live in Sacramento, CA. If I decide tomorrow I want to buy a Chevy Malibu, there are 93 2009 Malibus at five dealers listed on Cars.com within 30 miles of my house, so I can totally shop around, threaten to go to another dealer if I don't get a good deal, and generally play them off of each other to get the price down. If there were only two or three Chevy dealers in town, that would limit my ability to negotiate the price down, but would not reduce my access to the product in any significant way.

I think it's probably more complicated than that, but if I'm not mistaken that's the argument for reducing the number of dealers.
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