Jessica Mendoza

Welcome to The Journal, our show about money, business, and power.

I'm Jessica Mendoza.

It's Thursday, May 28th.

Coming up on the show, will traditional car dealerships become obsolete?

Pretty much anyone who's bought a new car knows how joyless the process can be.

Yeah, I remember I've only ever bought a new car once.

And I remember just spending the entire day, it felt like, at the dealership.

I was drinking a lot of coffee from the machines that they had there, and other people were sitting around waiting.

It wasn't my favorite day, I

I would say, even though I went home with a car, you know what I mean?

But car dealerships didn't always have such a bad rap among consumers.

Back in the mid-1900s, when this dealership sales model got started, they were primarily mom-and-pop businesses.

And over time, they were seen as a fixture of American communities.

Dealerships would work with a single big automaker, like Ford, General Motors, or Chrysler.

And they operated as a franchise, with salespeople earning commissions and dealers turning profits with each car sold.

Dealerships began to grow and influence.

They sponsored baseball games and fundraisers in their communities, and also lobbied for laws that cemented their role in the car buying process.

Eventually, state lawmakers around the country codified this system, that consumers have to buy their new cars from a dealer, not from the manufacturer directly.

This system has been in place for generations, and it became a thriving industry.

To be clear, there are still small mom and pop dealerships.