Tesla can't sell cars directly in NJ...

weilke said:
Does that include the usual ripoffs like charging interest points on top of a loan they handed to a lender or is that purely on the cars ?
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TOTAL dealership sales (new, used, F&I, parts, service, detail, etc.) vs net
 
weilke said:
Does that include the usual ripoffs like charging interest points on top of a loan they handed to a lender or is that purely on the cars ?
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Why is that a ripoff? The F&I dept did the legwork to find someone to buy your paper. That time is worth $. The margin on new cars is ridiculously low.
 
pilot_dude said:
Why is that a ripoff? The F&I dept did the legwork to find someone to buy your paper. That time is worth $. The margin on new cars is ridiculously low.
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Still doesn't mean that dealers need to be protected by legislated "barriers to entry."

Let the market sort it out.
 
NJ has another problem with plug-in electric cars.

They don't permit self-serve refueling.
 
Jimmy cooper said:
Ahhhh yes let the market sort it out. The market always governs itself correctly, like in 2005-2008 .
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When left to itself, yes...yes, it does. When politicians monkey around with it and try and protect people from themselves, then it doesn't work.
 
weilke said:
Probably not. Tesla will set up someone in their organization as their 'dealer' with a dealer license and sell the cars pretty much the same way as they do at other stores. The only difference will be that the salespeople will be employees of a 'small business' and get their health insurance from a local plan rather than some budget priced Florida HMO.
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Yeah, there are plenty of ways to deal with this and stay in business.
 
Unfortunately, they won't be able to deal with the problem in the way I'd like them to deal with it. Simply don't sell cars in those states, but do set up showrooms just across the state line.
 
Henning said:
So, "profit is good" except when it's a car dealer? Interesting thing, the only thing covered under these laws are new cars, and new cars aren't the big money maker for most dealerships, parts and service is, next comes used cars, then new.
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I would think financing may be somewhere on that list, too.
 
PPC1052 said:
I would think financing may be somewhere on that list, too.
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I include F&I into the new and used sales. Even back end on new car deals isn't as good as on used. There was a program through 'The Finance Company' that let us stick Airmen with whatever car in trade for half their pay for the rest of their enlistment, it was a horrible deal, but it made money; I wouldn't sell under that plan. Anybody who does more than 30days in the car business has a stop in hell coming to them lol, how long that stop is depends on your actions.;) If the kid had a parent with good credit though who could consign, I could sell them a new Cavalier with a good warranty for a much smaller payment on factory financing. I hardly made anything off those deals either, they were all 'minis' that paid $400.
 
Jimmy cooper said:
Ahhhh yes let the market sort it out. The market always governs itself correctly, like in 2005-2008 .
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Although your statement was made with tongue in cheek, that market correction worked flawlessly. The people in the market for long term gain didn't get hurt much(like me), and the ones in there flipping around, and trying to hedge got socked in the balls.

If you're referring to the housing market, that was aided and abetted by the Dem legislature monkeying with the levers of industry and commerce. The results were pre-ordained. Again, people with long term investment goals(like me) bought during the lull. I bought two major properties during that time, and it's been great for me. Others who speculated or flipped got the butthurt, and in most cases it was well deserved.

Live on paper, die on paper. Market efficiency will win out, unless the pols have their hands on the levers, then all bets are off.
 
Henning said:
I include F&I into the new and used sales. Even back end on new car deals isn't as good as on used. There was a program through 'The Finance Company' that let us stick Airmen with whatever car in trade for half their pay for the rest of their enlistment, it was a horrible deal, but it made money; I wouldn't sell under that plan. Anybody who does more than 30days in the car business has a stop in hell coming to them lol, how long that stop is depends on your actions.;) If the kid had a parent with good credit though who could consign, I could sell them a new Cavalier with a good warranty for a much smaller payment on factory financing. I hardly made anything off those deals either, they were all 'minis' that paid $400.
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I've been in the business (many facets) and have NEVER heard of a mini paying $400.
Nor am I the only one: http://blogs.motortrend.com/1402_car_salesman_confidential_how_to_get_paid.html

EDIT* here's another article showing the bovine scat you're spewing

http://www.autocheatsheet.com/car-salesman/how-car-salesman-get-paid.html

From your comments I have to wonder if you ever actually worked in a dealership :dunno:
 
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pilot_dude said:
I've been in the business (many facets) and have NEVER heard of a mini paying $400.
Nor am I the only one: http://blogs.motortrend.com/1402_car_salesman_confidential_how_to_get_paid.html

From your comments I have to wonder if you ever actually worked in a dealership :dunno:
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At Landrum Chevrolet/Pontiac/Olds, Burkburnet TX in the 90s, I don't know that any of our sales force got 25% on a new car, nor any that got back end, that was split between the F&I guy, Sales Manager, and General Manager. New cars were 12% IIRC and a Cavalier deal on factory financing was a skinny deal for the dealership and wouldn't pay the salesman crap, so in order to incentivize moving them he made a minimum deal pay $400.

Used car was different especially with B&C paper, that was when we could make some back end.
 
pilot_dude said:
Why is that a ripoff? The F&I dept did the legwork to find someone to buy your paper. That time is worth $. The margin on new cars is ridiculously low.
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What is a ripoff is that the dealerships represent to the buyer that 'because of your credit we can only get you 8.5%' when on the backside they get the money for 5 relying on the ignorant buyers not understanding that they could get the money for 5.5 at a credit union. See, when I was younger, I was at the receiving end of this scam, I got good advice and financed the vehicle independently instead.

If I go through a mortgage broker, I know what the origination fee is. I have no problem paying someone for their legwork, i do have a problem with people lying.

The margin on new cars is not my problem.
 
Jimmy cooper said:
Ahhhh yes let the market sort it out. The market always governs itself correctly, like in 2005-2008 .
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You mean when the government distorted the market by trying to make housing "affordable for everyone"? Every time the government gets involved in a market it results in a bubble. Look at the student loan bubble.
 
docmirror said:
Although your statement was made with tongue in cheek, that market correction worked flawlessly. The people in the market for long term gain didn't get hurt much(like me), and the ones in there flipping around, and trying to hedge got socked in the balls.

If you're referring to the housing market, that was aided and abetted by the Dem legislature monkeying with the levers of industry and commerce. The results were pre-ordained. Again, people with long term investment goals(like me) bought during the lull. I bought two major properties during that time, and it's been great for me. Others who speculated or flipped got the butthurt, and in most cases it was well deserved.

Live on paper, die on paper. Market efficiency will win out, unless the pols have their hands on the levers, then all bets are off.
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The book is called, " the big short" you need to read it. Best seller. Explains it well. De regulation caused the problem,plain and simple.
 
Jimmy cooper said:
The book is called, " the big short" you need to read it. Best seller. Explains it well. De regulation caused the problem,plain and simple.
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Other than marrying a CNBC bimbo and living in Berkley what gives him knowledge of the subject?
 
weilke said:
What is a ripoff is that the dealerships represent to the buyer that 'because of your credit we can only get you 8.5%' when on the backside they get the money for 5 relying on the ignorant buyers not understanding that they could get the money for 5.5 at a credit union. See, when I was younger, I was at the receiving end of this scam, I got good advice and financed the vehicle independently instead.

If I go through a mortgage broker, I know what the origination fee is. I have no problem paying someone for their legwork, i do have a problem with people lying.

The margin on new cars is not my problem.
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I agree they should be upfront about it but since everybody (slight exaggeration) wants everything for free it wouldn't fly.

Actually the margin is your problem as it leads to the tactics we're discussing.
 
Jimmy cooper said:
The book is called, " the big short" you need to read it. Best seller. Explains it well. De regulation caused the problem,plain and simple.
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Don't need to. I know what caused it. If we are talking about the same 'it'. If the feds are going to de-reg something then do it and stick with it. You can't unring the dereg bell once the people losing money want to socialize losses. To borrow from M Antoinette, let them eat cake.
 
Jimmy cooper said:
According to the article I read tesla has no dealers and wants to sell direct. It's a high end car over a hundred grand which a select customer base will buy. Musk also is coming out with a lower priced car. Family's have owned Ford, GM dealerships with many many locations for years. Investors also own many many fast food joints like mc Donald's or Burger King verses just one person owning each one as it used to be. It's all about money and politics. I think musk should be able to market the car as he sees fit. It's ' Merica ain't it?
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My goodness Jimmy. Next you'll be saying the Koch brothers can spend their money on whatever they want. You're defending capitalism? ;)
 
pilot_dude said:
Other than marrying a CNBC bimbo and living in Berkley what gives him knowledge of the subject?
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LOL. Reminds me of a CNBC commercial I heard today, "Tune in as I talk to local purveyors of capital. CEOs, ... " Proceeded to list off jobs that only exist at the largest of companies.

I guess someone forgot to tell her 70% or more of the economy is small businesses and few small biz owners bother calling themselves any if those titles.

CNBC is clueless most of the time.

I used to enjoy watching the doofuses on Fast Money screw up their trades almost daily back when I paid to pipe that stupidity into my home. And Cramer... He's entertaining as heck but barely a mediocre stock picker without his temper and insider knowledge he had in his heyday.

They still have that show on Options? I laughed at that one. They'd describe trades only a very savvy and careful person should attempt, like it was no big deal. Granted it's not that hard, but you screw up with a small amount of money on an options trade and you could have just bet the farm.
 
Didn't GM try selling new cars directly on ebay at one time? I don't think it lasted long.
 
Blackhawk said:
Of course it won't make abuse impossible. I'm just saying that your suggestion that dealers are there to "protect" us is a bunch of self serving crap. Why have dealers there to "protect" us when they are currently the ones abusing and shafting us?
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I never said dealers were there to protect you. They are not; rather, they exist for the purpose of conducting a successful business.
 
SCCutler said:
I never said dealers were there to protect you. They are not; rather, they exist for the purpose of conducting a successful business.
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So are you saying Tesla cannot "conduct successful business" on their own without the assistance of a dealer?
 
Gary said:
Well... apparently Tesla can, however, a group of Ohio senators believe they shouldn't have the opportunity.

http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_260

I thought government shouldn't pick winners/losers in the private sector?

Gary
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:confused: Whatchu talkin bout? We have an entire electoral process that is set up to allow the private sector the ability to buy the legislation that best suits them. The financial winners are who pick the winners and they buy the referees to make sure the major calls go in their favor. Why do you think we're still slurping oil?
 
Henning said:
:confused: Whatchu talkin bout? We have an entire electoral process that is set up to allow the private sector the ability to buy the legislation that best suits them. The financial winners are who pick the winners and they buy the referees to make sure the major calls go in their favor. Why do you think we're still slurping oil?
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:rofl::rofl::rofl:

Should have put the sarcasm smiles there! Understand your point, but seems that all I hear is how the "free market" is self correcting - particularly from the right. Yet, here is a new business model that a group of state senators (republicans, BTW) that wish to legislate them out of business. Agreed, money talks, BS walks.

Gary
 
asgcpa said:
It seems nuts. Never really thought about the direct sale of autos on the net. Interesting points here
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weilke said:
What is a ripoff is that the dealerships represent to the buyer that 'because of your credit we can only get you 8.5%' when on the backside they get the money for 5 relying on the ignorant buyers not understanding that they could get the money for 5.5 at a credit union. See, when I was younger, I was at the receiving end of this scam, I got good advice and financed the vehicle independently instead.

If I go through a mortgage broker, I know what the origination fee is. I have no problem paying someone for their legwork, i do have a problem with people lying.

The margin on new cars is not my problem.
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The margin on new cars in Atlanta would make you feel sorry for dealers!:D

Yes, dealers have markup on financing, but, at least for the last 10 years it's a different than you describe. Banks offer dealers better rates than they offer directly to consumers. I asked my local bank last week what their rates were on auto loans, she just laughed and said they couldn't compete with our rates, they were actually 3.9-4.9 for 60 months depending on credit and they don't take anyone under a 650 FICO, under any circumstances. With good credit, I can get a buy rate of 1.9 for up to 72 months. If I offer the customer 2.9% which is at least 1 point lower than the bank rate, am I wrong? If I use the 1.9 I would still earn a "flat" probably $2-400.00 depending on the bank and the amount financed.
We finance about 70% of the cars we sell and most of those customers have talked to at least one other finance source.
 
You need to find a better dealer to deal with. :D

Blackhawk said:
Yeah, and auto dealers REALLY care about consumers so they try to shaft them with things like $500 "rust protection", or $300 for spraying 3M fabric guard on some seats, or "customer service fees", or service contracts, or the way women are ripped off by dealers... I could go on. The day we get rid of car dealers consumers will probably save $2000+ on vehicles.
Heck, if I want to purchase a $30,000 entertainment system on line I can do it. If I want to purchase a $20,000 new car? No can do.
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pilot_dude said:
A good dealership has a sales to net of about 1.5%. A great dealership approaches about 3%.
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That's about right, the few exceptions I know of in the Ford business do a huge parts and service business compared to sales and they approach 5%. They are my heroes! :yes: ;)
 
Gary said:
:rofl::rofl::rofl:

Should have put the sarcasm smiles there! Understand your point, but seems that all I hear is how the "free market" is self correcting - particularly from the right. Yet, here is a new business model that a group of state senators (republicans, BTW) that wish to legislate them out of business. Agreed, money talks, BS walks.

Gary
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Look, the 'self correcting market' fantasy died in 2010 when Greenspan was called before congress to testify as to what went wrong and he said "There is a flaw in it..." basically that people are not altruistic and these same people swindle markets until they collapse. The self correction is the same as that of any Ponzi scheme, it runs out of suckers to put in more money, and the people with the most money who started it walk away with all the money.

I don't know why we still buy into this 'The market will regulate itself" drivel anymore. It has NEVER happened, not once, at least not as it should or is sold. Boom and bust is not a proper system of self regulating especially when it leads to more homeless and hungry and people in prison on the 'bust' cycle. 'Self Regulating Markets' are a lie because they are constantly manipulated by thieves, liars, and fools.

Markets can only self regulate when capital is a tool, not its own commodity.
 
denverpilot said:
So are you saying Tesla cannot "conduct successful business" on their own without the assistance of a dealer?
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Nope, not at all. I was saying that dealers' function is to conduct successful business. Nothing there at all about Tesla.
 
Gary said:
Well... apparently Tesla can, however, a group of Ohio senators believe they shouldn't have the opportunity.

http://www.legislature.state.oh.us/bills.cfm?ID=130_SB_260

I thought government shouldn't pick winners/losers in the private sector?

Gary
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Yep, politics as usual.
Ohio Senator Tom Patton (R-Strongsville) has proposed legislation to prevent auto manufacturers from opening dealerships in the state, a move seemingly targeted at electric car manufacturer Tesla Motors.
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Last December, Sen. Patton inserted Amendment AM-0443 into Senate Bill 137 (SB 137) —a bill meant to reduce accidents involving maintenance workers and emergency crews on Ohio highways — at the request of Ohio Automobile Dealers Association (OADA) lobbyists.

Campaign finance reports reveal that Patton received at least $42,825 from state and national auto dealership owners, employees, and political action committees (PACs) between 2002 and 2013.
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http://mediatrackers.org/ohio/2014/01/08/ohio-republican-kill-tesla-dealerships
 
Jalopnik just published a rather humorous/sad bit on the topic:


Elon Musk 'Doesn't Get What It Takes To Do Business In New Jersey'

"This Musk guy, he wants all the profits for himself," says Tom Dougherty, a 25-year veteran of the business who now works in sales at the BMW dealership in upscale Princeton, New Jersey. "They wanted to go direct, which means no sales force. That's cutting out a lot of people. No way that's gonna fly."


In a state whose entire existence seems to revolve around getting the right people paid, you're damn right it's not gonna fly.
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643223622591293477.jpg
 
Keep in mind NJ still doesn't have self-serve gas. If they don't think you're qualified to pump gas, it's no wonder they think you're incapable of buying a car without a dealer...
 
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