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Applied Economics: Dealerships Mean Lower Prices for EVs

When it comes to purchasing an electric vehicle, the benefits of your local dealership are many. At a dealership, trained experts can help walk the customer through the many (and steadily increasing) options to find the type of car that best suits their needs. The customer can also rely on their local dealer for service and maintenance which can be more difficult to come by when a vehicle is purchased through the manufacturer.

But there is an additional benefit that comes with your local dealership: cost savings. The idea that competition for customers forces prices lower makes logical sense, but we now have proven, peer-reviewed economic data to back it up.

A study titled “Spatial competition in automobile retailing” and published in the academic journal Applied Economics found that the proximity of dealers selling the same make and model of a vehicle affected the final price – to the customers’ benefit.

Economists T. Randolph Beard, George Ford, and Lawrence J. Spiwak studied a large sample of purchases in Texas and found that customers save on average $460 on a new car when dealerships are located close to one another. The price of the vehicle also matters on how much one saves, with more savings for the more expensive vehicles.

The study confirms the experiences of customers who look to their local dealership for assistance when purchasing a new vehicle and shows how local dealerships are even more important when it comes to EVs. Not only will local dealerships help the customer find the right EV for their needs, they’ll do it at a lower price.

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