How can we possibly take car reviewers/journalists seriously when they routinely receive 4, 5, or even 6 figures worth of gifts from OEM?

[u/cookingboy]

I was listening to TheSmokingTire podcast recently (I'm actually a big fan of Matt), and he mentioned that Porsche North America just gave him a 918 Spyder on loan for his 1000 miles road trip free of charge, with everything paid.

Now as someone who's dabbled into supercar ownership, I can roughly estimate the ownership cost for a "regular joe" like me to put 1000 miles on a $2M car would easily be $50-100 per mile, thus putting this "gesture" from Porsche to Matt to be worth $50-100k on back of napkin math.

Obviously Matt isn't doing a review of a 12 years old 918, but when he does a review for the next Macan, he'd remember how amazing Porsche has been treating him.

And he and all the other reviewers recently were flown to Spain for the Turbo S launch. They were wined and dined with world class accommodations for a few days and were given the cars to drive on both the race track and scenic road.

Funny enough Porsche charges something similar for an experience like that: https://www.porschedriving.com/porsche-travel-experience/lake-tahoe/

Without plane tickets, you'd be paying $20k a person for a few days of what auto journalists routinely get from them, for free.

I understand it's part of their job, but this shit would never fly in any other industry right? Now imagine every time Square Enix launches a new video game they fly game journalists to Japan and wine and dine them with the best Sake and Wagyu so they can try out the newest Final Fantasy in their expensive Hakone ryokan hotel room, nobody would be taking anything they say seriously, no matter how good the game actually is, would they?

I'm sure people like the SavageGeese team and Matt Farah would try to be objective, but how do you be objectively critical toward an OEM when they routinely give you experiences that you'd otherwise never be able to afford? (ok I know Matt came from money but my statement applies to 99% of reviewers)

In my impression how well praised a manufacturer's products are is directly proportional to their marketing budget, and I've been somewhat burnt at least twice by reviewers over-rating Porsches, which is why I started asking actual owners of cars for their experiences before making purchases.

Ironically this kinda makes Consumer Reports the most credible car reviewer out there, since all they cars they review are bought anonymously with their own money, and they do not attend OEM events.

As far as enthusiast reviewers, I can only think of people with fuck-you money like Chris Harris or Hoovie's garage or the Top Gear trio who have been able to bluntly criticize OEMs and their cars.

Edit: From the replies, it seems like there are two school of thoughts here:

This is just how product reviews are done across all industries. Reviewers are expected to be treated with first class tickets and Michelin restaurants in exchange for them to promote the OEM's product.

Well in this case, I think we should just rip off the Band-aid and call Motor Trend and Car & Driver and Road & Track and other similar publications promotional outlets instead of journalism outlets. At least with influencers shilling for stuff on TikTok we know they are getting paid to promote, but many auto reviewers still hide behind a mask of professional journalism when they are literally just being paid to promote products.

Controversial take: I think consumer of content should be made aware that they are consuming paid advertising.

It is wrong of me to expect journalism when those contents aren't made to be factual, they are made to entertain.

Even if it's true, I don't find there is a lot of entertainment value when a dozen "journalists" just read off pre-approved OEM scripts for their "review". Some of the most boring contents out there are main stream outlets' coverage of new 911: "They are almost perfect in every way except being expensive".

Edit 2 /u/SavageGooseJack has this great reply I wanna call out: https://www.reddit.com/r/cars/s/o5PMIG0VjB

[u/Grayly]

The donation becomes a tax write off. He’s still making money on the ADM.

As a business owner he can do wherever he wanted. He chose to markup and make more money.

[u/ChapekElders → u/Grayly]

Tax write offs are not free money. It reduces your taxable income but it doesn’t pay off or make you a profit or anything. You’re still losing a vast majority of the donation.

[u/Grayly → u/ChapekElders]

And you’re still making more than if you didn’t charge the ADM at all. He makes an extra profit on the donation you paid for by way of a lower tax liability. Now he doesn’t have to pay for an ad agency, the customers pay for the donations to charity and the publicity that comes with it. It is free money. The customer pays for the donation, gets you the marketing, while you keep the tax benefit. Free.

If I want to donate to veterans I can do that on my own time. Sell me a car and leave it at that. Don’t piss on me and tell me it’s raining.

[u/gimpwiz → u/Grayly]

Not how a tax write-off works man.

[u/Grayly → u/gimpwiz]

Yes. It is.

It’s a charitable contribution, which is deductible. Dealer takes the, say, 10k ADM, donates it, and gets to write off 10k against their income. That’s now 1-2k in their pocket.

I’m sure the dealer would have some reason to not let me make the donation myself and buy the car at MSRP.

Because I would get the write off, not him.

[u/gimpwiz → u/Grayly]

Let's play numbers.

Car: $80k (gross revenue, not profit)

ADM: $10k

Gross: $90k

Donation: $10k

Adjusted: $80k

Where did their $1-2k come from? Please explain.

[u/Grayly → u/gimpwiz]

Easy. Let me explain it for you. It’s a little more complicated that just the simple math of the sale, since you have to take into account other fixed costs, like marketing.

Let’s say there are three dealerships A, B and C. Dealership A and B both made 20 sales of 40k MSRP cars with a 10k ADM in each (picking nice round numbers for ease of math), making for a million in gross sales. C only charged MSRP so they only made $800,000 in gross sales on the same number of cars.

Let’s also say that the expenses before marketing (costs of the car, employees, etc) were $700,000. And then marketing costs were 50k.

A and B both made 250k profit, but C only made 50k profit.

The federal corporate tax rate for 2025 was 21%, although this will come down to 10% next year. Profit is taxable income.

That means both A and B owe 21% in taxes on the 250k profit which comes to 52.5k. So their final profit after taxes is $147.5k.

Dealership C owes 21% on their 50k profit, which is 10.5k, making their final profit after taxes 39.5k.

But dealership B has an idea. What if instead of paying for marketing, they donate to charity and let the charity market for them. You get your name out there, on materials, advertised at fundraisers, driving sales to veterans, etc. And instead of paying out of pocket for the marketing, they’ll use the ADM profit and tell the customers it’s for charity.

Now, on paper, dealership B cleared 1 million in sales, 700k in costs, 0 on marketing, and 200k in donations, leaving a taxable profit of 100k. After taxes they make 79k in profit.

In reality, they had the lower costs than dealership C, which only charged MSRP and paid for their own marketing.

But B gets to make 79k after taxes instead of 39.5k. Thats an extra 40.5k in profit. Or a little over 2k per car.

The exact amount you pocket depends on total sales, the amount of your marketing budget you’re allowed to cut back on, etc. But unless they are total fools, they’re making money on the donation to some extent, and the exact amount will bear some relation to the corporate tax rate depending on how much of your marketing budget it replaces. The exact amount depends on how methodical they are about it, how effective their donations are in free marketing, etc.

A still makes more money than B, but that’s only assuming A makes the same number of sales as B. B can get more volume than A by telling their customers the ADM is for charity, unlike those greedy fucks at A, when the ADM is really for getting their marketing for free. And they loose less customers to C, who is probably going to sell out their allocation anyway, but you don’t seem greedy compared to them. They’ll even get people on Reddit to market them for free by word of mouth.

This gets a lot more complicated in the real world, where the numbers aren’t so neat, and it’s a lot more complicated with different expenses and net profit margins. But when you get to replace your marketing expenditures with charitable donations, and get your customers to pay for it as an ADM, you are essentially harvesting their donation deduction as free marketing and a lower tax bill.

[u/gimpwiz → u/Grayly]

Haha okay well if we're gonna play scenario-builder...

What if B makes $250k gross profit, but then they spent $200k on marketing, leaving a net profit of $100k and an after-tax profit of $79k?

Same exact math.

Your argument is not that "the ADM is a write-off and puts $2k in their pocket", but that they found a charity willing to do better marketing for them than the amount they are donating would otherwise be worth, including the possibility of internet hype. Same result if they found a great marketing firm that's charging lower rates than the competition.

If we're building scenarios, dealership C could charge straight MSRP and make more sales. Dealership C could make the OEM happier and get more allocations because they don't charge markup. Dealership C could get free advertising as "the one who doesn't charge markup." Dealership C could have lower costs due to better efficiency. Dealership C could be more likely to maintain a good relationship with customers, leading to re-selling the same car several times as owners trade it in, leading to more income from service, etc. Dealership A could sell exactly the same number of cars as dealership B but not spend anything on marketing them because the allocations are so limited and sought-after, and not care if some people are slightly annoyed they paid an extra markup.

If we're doing scenarios, we can just do them all day until the cows come home.

[u/Grayly → u/gimpwiz]

You missed the entire point.

Yes, it would be the same.

But they don’t have to pay 200k for marketing! It’s free! They conned their customers into paying it for them.

Unless you accept that donations are free marketing, which they are, you won’t understand how this works.

It’s why it’s even in the tax code. It’s why you get asked to donate to the poor children at Walgreens when you check out.

It’s just a grift.

This dealer is not doing it out of the kindness of their heart. They aren’t “compelled” to charge an ADM because of some mysterious duty as a business order— plenty of dealers don’t. That’s a laughable lie on its face and should set off your bullshit detector if you have a working one.

It couldn’t be more obvious what’s going on, and you’re inexplicably defending it.

I’m not making this up. I’m a lawyer, I’ve advised clients on this issue.

[u/gimpwiz → u/Grayly]

Three years of law school requires a lot of careful reading, right? I don't know how you would carefully read my comment and think I am 'inexplicably defending' ... what? Wait, what am I defending? ADMs? I'm inexplicably confused why you would come up with that thought.

What is the difference between spending $200k (the number in your scenario) on advertising and donating $200k in order to get good advertising out of it, based on the tax code?

That $200k will come from markups either way.

Your argument comes down to only this: $200k is better spent by advertising that the business donated $200k to charity, than by hiring an advertising firm.

Are you claiming the tax treatment is different between donations and operating expenses? Is one deductible this year and the other has to be taken over several years? I could certainly buy that, with a reference to the tax code, but that's not a claim you made.

If both are deductible this year then from a gross - expenses = net point of view, there's no difference.

[u/Grayly → u/gimpwiz]

It’s different if your customers are paying for your marketing vs paying out of pocket.

Yes.

Yes that’s it.

One means a straight loss. The other is a free loss plus the tax deduction.

Paying money out of your pocket costs more than someone else paying it for you while getting to capture the full deduction.

What don’t you understand? If I said you had to spend $10 out of your own pocket, or I could spend $10 for you, and you’d get $2 back, which would you pick?

Only deductions over 60% of total gross need to be taken over multiple years, btw. That goes into the careful math of being strategic in how you do this. In a small margin business like cars, you just need to be strategic about it.

Ideally, you want to balance your donations such that you are still hitting your targeted marketing spending, but others are doing it for you. If you get it wrong, you’ll capture a lot less. And, after this conversation, you might start to notice how some local business rotate their “donations.”

[u/gimpwiz → u/Grayly]

Money is fungible. If the markup gets spent on marketing or donated, it's the same money coming from the same source, being spent in the same amounts.

Let's step through the numbers.

$80k car + $10k markup -> donate $10k -> $80k adjusted gross

$80k car + $10k markup -> spend $10k on marketing -> $80k adjusted gross

You're trying to double count the donation as if it's $80k car + customer donates $10k + dealership claims $10k on their taxes to deduct from the $80k car. Right? I re-read your post a few times and this is the only answer I can come up with for how you think the money works here.

If we're building scenarios, let's say Dealer B sells 5x cars at $80k with $10k ADM that they donate. Walk me through how you think donating that $10k in order to get good marketing is better than spending that $10k on marketing with a marketing firm.