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

Because they sell direct. It's politics pure and simple. Auto dealers lobby exerts big pressure.
 
Because AZ, TX, and NJ all have bought and paid for politicians who have friends in the auto dealer business. There really isn't any other reason. Just pure corruption.
 
Creating jobs! It doesnt help the consumer. But thats not what matters on tv,
 
You have to love politics. The dealers have the money,money means power politically .
 
You guys should look into the prosthetics world in the USA. Amputees are royally screwed here.
 
I'm not sure how it works when there is no dealer network already in place, but most states have pretty complex franchise laws regarding dealership/manufacturer relationships. Even though they were disregarded for GM and Chrysler during their bankruptcies. :rolleyes: Generally, it's to keep the playing field level and stop the manufacturers from selling direct and side stepping the dealers that have large investments in the franchises. Having to compete against the manufacturer is not a good position to be in for a dealer, I don't know if Tesla has dealers or not.
Of course Ford bought several dealerships and consolidated them and failed miserably, so it wasn't as scary as we thought! :rofl:
Franchise laws vary by state, New York and a couple other states get paid more for parts on warranty claims than other states. :dunno:
 
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?
 
It is easy to just squawk, "politics," but that is not the genesis of auto dealer laws. It is actually a consumer-protection measure.

There is nothing at all that precludesTesla from establishing dealers in Texas.
 
SCCutler said:
It is easy to just squawk, "politics," but that is not the genesis of auto dealer laws. It is actually a consumer-protection measure.

There is nothing at all that precludesTesla from establishing dealers in Texas.
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Nothing at all to do with consumer protection. It is about dealer protection. How is it that consumers can not be protected by on-line purchases??? Load of crap.
 
Because if a consumer buys from shadycarsales.com and spends money and gets nothing who does he go after?

A brick and mortar store has a place to serve a subpoena if the company is breaking laws on purchases that equate to a years salary for many people.
 
Captain said:
Because if a consumer buys from shadycarsales.com and spends money and gets nothing who does he go after?



A brick and mortar store has a place to serve a subpoena if the company is breaking laws on purchases that equate to a years salary for many people.
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Yea, that's why various auto dealer associations have spent big bucks lobbying for this legislation in multiple states.

Because they really, really care about the consumer, deep down inside. (ROLF)
 
Blackhawk said:
Nothing at all to do with consumer protection. It is about dealer protection. How is it that consumers can not be protected by on-line purchases??? Load of crap.
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Auto dealer licensing predates the Internet by many decades in most states.

There may be some cause for revisions... but I'd have to be convinced.

ElPaso Pilot said:
Yea, that's why various auto dealer associations have spent big bucks lobbying for this legislation in multiple states.

Because they really, really care about the consumer, deep down inside. (ROLF)
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It is not their job to "care about consumers," except (of course) to the extent the failure to do so hurts their bottom-line. That's why people have and can exercise choices.

Intellectual exercise: Can you imagine a circumstance when it might be unfair to existing dealers to have competitors selling under different rules?
 
SCCutler said:
Intellectual exercise: Can you imagine a circumstance when it might be unfair to existing dealers to have competitors selling under different rules?
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It seems nuts. Never really thought about the direct sale of autos on the net. Interesting points here
 
I've been following this since Tesla became a contender. To begin with, I don't see Tesla competing against Ford or GM at this point, and neither do the dealerships. Their fear is that Tesla's direct-to-consumer model will start the crack in the dike which will lead to their downfall. I was surprised to learn that dealership laws have been in place since the 1930s.

There is absolutely no reason to force manufacturers to sell through, and consumers to buy through, a dealership in this day and age....other than to produce profits for the dealership and raise prices for the consumer.
 
SCCutler said:
Intellectual exercise: Can you imagine a circumstance when it might be unfair to existing dealers to have competitors selling under different rules?
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Intellectual exercise:

The restaurant association in your city, which consists solely of sit down, brick and mortar restaurants, lobbies the city to pass an ordinance banning popular online Chinese and pizza delivery from outside the city limits, because those owners unfairly compete with those businesses who chose to build within the city and carry the burden of city ordinances and taxes.

How about if we get rid of Amazon, too?
 
ElPaso Pilot said:
How about if we get rid of Amazon, too?
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Amazon has, in fact, been an issue against brick-and-mortar stores. Sales tax has been the lever, with B&M stores claiming that Amazon has made them uncompetitive because Amazon doesn't pay sales tax. (Noted that that is changing and that Amazon will be charging sales tax in many states going forward).

DC City Council voted to impose a much higher minimum wage on "big box" stores to "protect" the small merchants. Small merchants were to have a much lower minimum wage than Walmart. After Walmart stopped their projects in DC, the mayor vetoed the bill.

If y'all think the car-sales/dealer licensing thing is complex, take a look at the regulation, distribution, and sale of adult beverages in many states. Middlemen are required by state law in many states, with the exception of sales at wineries themselves.
 
Same reason you don't have self-serve gas in NJ. Strong local lobby by the auto dealers and the small gas station owners.
 
flyingron said:
Same reason you don't have self-serve gas in NJ. Strong local lobby by the auto dealers and the small gas station owners.
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And a jobs program for the state (wrapped up in the "for your safety" argument)
 
ElPaso Pilot said:
Intellectual exercise:

The restaurant association in your city, which consists solely of sit down, brick and mortar restaurants, lobbies the city to pass an ordinance banning popular online Chinese and pizza delivery from outside the city limits, because those owners unfairly compete with those businesses who chose to build within the city and carry the burden of city ordinances and taxes.
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Not really an apt comparison - the sale of consumables like food, vs. durable goods like automobiles.

But, good food for thought (see what I did there?).
 
So stupid I was just at the tesla store in short hills nj I guess all those guys are losing their jobs


Sent from my iPhone using Tapatalk
 
SCCutler said:
Not really an apt comparison - the sale of consumables like food, vs. durable goods like automobiles.



But, good food for thought (see what I did there?).
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I did see what you did there.

But still don't agree that we need dealers aligning with big(ger) government to protect their (un)competitive position.

Say, how many states still won't let you buy a car on Sunday??? Dealers are just looking out to protect your sacred religious duties, you know. ;)
 
SCCutler said:
Not really an apt comparison - the sale of consumables like food, vs. durable goods like automobiles.

But, good food for thought (see what I did there?).
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There are no Quality Farm and Fleets inside city limits around here. Are we not allowed to order a lawn tractor from Farm and Fleet online and have it delivered to our house even if Home Depot carries the same thing?
 
SCCutler said:
Auto dealer licensing predates the Internet by many decades in most states.

There may be some cause for revisions... but I'd have to be convinced.



It is not their job to "care about consumers," except (of course) to the extent the failure to do so hurts their bottom-line. That's why people have and can exercise choices.

Intellectual exercise: Can you imagine a circumstance when it might be unfair to existing dealers to have competitors selling under different rules?
Click to expand...
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.
 
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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"Now, they put that TruCoat on at the factory..."
 
I am seeing a lot of apples and thumbtacks comparisons.

It is logically meaningless to suggest that, because some dealers abuse their customers, doing business without a dealer will somehow make abuse impossible.
 
SCCutler said:
I am seeing a lot of apples and thumbtacks comparisons.

It is logically meaningless to suggest that, because some dealers abuse their customers, doing business without a dealer will somehow make abuse impossible.
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And the manufacturer will do more abuse selling direct? This is dealer rent seeking plain and simple.
 
SCCutler said:
I am seeing a lot of apples and thumbtacks comparisons.

It is logically meaningless to suggest that, because some dealers abuse their customers, doing business without a dealer will somehow make abuse impossible.
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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?
 
I've got a great and novel idea. If car dealers are so great at protecting us, get rid of the protection for car dealers. People will recognize the value they get from car dealers and chose them. Unless this really is not the case.
 
I would argue buying direct from the manufacturer actually provides more consumer protection. If you think about this, if one disreputable Chevy dealer rips off a bunch of customers that one dealer gets a lot of bad publicity, perhaps a channel 4 news special report or their scam goes viral online. They'll loose sales, maybe even go under.

Now if Chevy sold cars directly and a bunch of people got ripped-off somehow this isn't just some po-dunk town crooked dealer this is GM. This is national headlines, this is gov agency investigations. They can't afford to take chances like this to fleece a few thousand bucks off a couple of sheeple.


Now as for the need for dealers, I'm sure back in the pre-internet days that the dealer was a primary source of information. That and some car magazines and such. Today? When I am car shopping I show up at the dealership already knowing more than the salesman seems to know about the car including the typical sale prices. I am there partly to test drive to see if I like the feel of the car beyond what I can read and because the dealership is the only place I can buy the car.

Not worth all the dealer markup to me. I'd much rather buy direct from any manufacturer.
 
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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I walked into the local Ford showroom several years ago after finding the car I wanted on the lot. Once I was inside a salesman asked if he could help me, and I walked him outside to show him the car I wanted and asked him to shoot me the best price. I added that I didn't want to go through the "I have to talk to my manager" routine...I just wanted to know his best price. We went back inside and he stepped away for a minute and came back with a price. I said thanks a lot, told him I appreciated his help and went to leave. "Wait, let me talk with my manager..." I just don't understand why he would throw away what could have been a perfectly good sale.

I'm not a bargain hunter. I want people to make a good living where they should, and I'm not opposed to paying a fair price. I have never seen the added value of auto dealerships. I'm sure that there are people who do get some service/value from their dealer sales person...I've just never been one of them.
 
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These rules are great for the manufacturers as well, going to make upstarts like Elio's job harder. I'd be planning to sell Elios off a flatbed trailer in a rest area just over the PA border.
 
Gerhardt said:
I've been following this since Tesla became a contender. To begin with, I don't see Tesla competing against Ford or GM at this point, and neither do the dealerships. Their fear is that Tesla's direct-to-consumer model will start the crack in the dike which will lead to their downfall. I was surprised to learn that dealership laws have been in place since the 1930s.

There is absolutely no reason to force manufacturers to sell through, and consumers to buy through, a dealership in this day and age....other than to produce profits for the dealership and raise prices for the consumer.
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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.
 
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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True, but it's still a huge money maker for them. If it wasn't they wouldn't be pushing so hard to ensure their hold over the sales chain.

And I do think there is a place for dealerships. There are customers who want people to walk them through the sales process. To show them how electric windows work, because they've never had them before. And the big one...the ability to walk onto a lot and leave with a new vehicle in less than 2 hours. I LIKE being able to look at 20 different versions of the same model, each with different colors and packages. And the dealer and sales person deserve to be compensated for that.

What they don't deserve is the ability to force others to follow their sales model.
 
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Reminds me of this This American Life episode on car dealer where Manufacturers, Sales Managers, and Salesmen (and a few women) are pitted against each other, with everyone lying. I can't think of goofier way of doing business. http://www.thisamericanlife.org/radio-archives/episode/513/transcript

For Tesla in particular, take a page from the brewing industry, where the brewery is forced to go through a distributor - no direct sales. And 'lo, captive distributors pop-up. It means more paperwork and accounting, but the results are the same. See Two Brothers Brewing Company as an example.
 
Profit is good for everyone. However, using the legislature to protect one profit over another profit, to the overall detriment to the buying public is bad. Look at the airline industry. Strong, and costly protected mode right up until deregulation. Now, the industry is fluid, but you can still buy a 1st class ticket, go in style, arrive ahead, and pay for that, or you can fly Spirit or JetBlue in steerage. The market is liberated, and that cost PanAm it's business cause they didn't or wouldn't adapt, and the consumer said they needed to.

Look at how open and liberated the internet market is. Companies come and go, there are three or four reliable standards, there are companies getting fat, and some dying and being replaced, there is turnover, and there is robust activity. Start regulating it, and stagnation will begin. Same with the dealer network issues.

Here's a page directly from the DMV of Texas re being a dealer:

Texas is a very big state, and reliable vehicles are a necessity for getting around its wide-open spaces. With so many Texans owning motor vehicles, the auto sales industry boasts high-volume turnover.

To regulate this trade, the state subjects Texas automobile dealers to many legal restrictions and requirements. Number one among the requirements is that you fill out application forms―stacks of them.

The Texas Department of Transportation offers a dealer manual, and a dealer an Independent (GDN) Licensing page that will help you understand all requirements and regulations.
***************************
In addition to the forms to fill out, there is a bond to buy, and fees to be paid. The total comes in about $2000 to get started, before you even put up your name on a sign(which has tight regulations as well).

I don't see much value in the state car dealer restrictions, and certainly not sufficient value that they should be protected by state law. Consumer protection can go overboard if it looses it's 'consumer' theme, and becomes a protection for the distributor, which is the case in the auto dealer miasma.
 
A good dealership has a sales to net of about 1.5%. A great dealership approaches about 3%.
 
marcoseddi said:
So stupid I was just at the tesla store in short hills nj I guess all those guys are losing their jobs
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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.
 
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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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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