Gov. DeSantis signs bill banning most direct-to-consumer auto sales
floridapolitics.com
floridapolitics.com
So this is the reason given in the article, but what are good reasons, if any, to prevent direct-to-customer sales? I haven't bought a new car yet, but seems like every anecdotal story I get of people buying cars is always that their dealership tried to push every useless feature or additional warranty that they could.
Same goes for maintenance, I have had many more terrible experiences with dealerships than local garages as the former tends to have a more captive customer base whereas the local garage is incentivized to actually keep you satisfied or you'll just go elsewhere.
Does car company now have less power? ( with subscription and OTA updates , I think they have more power than ever)
Yes, we do. The "Big Three" of Ford, GM, and Chrysler now face significant competition in the US from Japanese, German, Korean, etc. carmakers.
All new electric car companies too
Tesla and Rivian, for example, wouldn't even be able to exist without this, the cost of setting up new dealerships is enormous otherwise.
We really need to get right-to-repair laws passed and enabled.
because cars require service, someone needs to do that service, be trained and have master techs on that service. How do you handle lemon laws without dealerships?
Just look at the nightmare tesla has been for owners with years of bad repairs, delays, etc.
OEMs provide a bunch of stuff that is adhoc to making new crs like long life spans for part productions, having dealerships service recalls, and so on. there's a lot of non-new-sale-stuff that is done
My cars have had no trouble getting service at independent mechanics.
> How do you handle lemon laws without dealerships?
The same way we handle them with dealerships? The organization that sold you the car is responsible for the fixes, or refunding the vehicle if it can't be fixed.
Have you ever worked at an indy? We rely heavily on dealerships for anything from borrowing specialty tooling, local parts departments, knowledge and advise etc.
> The organization that sold you the car is responsible for the fixes, or refunding the vehicle if it can't be fixed.
Totally.
I think it's six of one half a dozen of the other. Car manufacturers generally coalesce around the efficiency of having new sales, parts departments, repair departments all in one building in many localities spread all over the place.
What makes it impossible for the manufacturer to provide such things?
If Ford chose to do away with dealerships, they couldn't provide regional parts and training facilities? (Hell, they'd probably already need to buy out a dealership or two for every major city or region already, anyways.)
It's not back to square one; it removes a middleman layer, one that most folks hate dealing with. You buy a car at a set price that's the same for everyone from a salaried employee, not from an intermediary who'll make up a price and pocket a commission off screwing you if you're not good at haggling.
Why exactly must this be an independent business motivated to collect rents on top of what the manufacturer is already making? Hard to see how that could do anything but drive prices up to keep more fingers in the pie.
The same could be said of basically anything. Consumers could choose to do anything. Suppliers anything. Now we are anarchists. yay!
But we don't we live in a heavily regulated society, and what seems to work fairly well is having a dealership system. Now we could just remove the word dealership and require OEMs to provide everything that the dealership does, and I would be fine with that, but IMO this is a shorthand for that.
But dealerships run contrary to that. They see distribution of capital away from the OEMs in an equalizing way. This is recognized and understood by lawmakers, which is why the Teslas of the world are still free to do as they please. The question is really: What's special about GM, Ford, etc.?
This is a simple just world fallacy. Most of the times the reason something exists is that it's the best available alternative, but there are definitely times when a systems exists because it is entrenched regulatory capture and rent-seeking, e.g. dealerships and healthcare insurance.
You have to critically evaluate complex systems on a case-by-case basis and see where the money flows to make a determination whether it's good for society as a whole.
Any time I need to go through a dealer for a product (unique appliances or equipment), I know I’m about to pay more than I should.
It's absolute nightmarish when they don't try to upsell me or berate me for not knowing how cars work, like a RAM service center did to me in the past.
Car dealership owners are one of the most reliable Republican constituencies. They make outrageous amounts of money through government-mandated rent-seeking and donate to Republican candidates 6-to-1. What we see here is nothing more than a quid-pro-quo, a handout to the dealership owners in exchange for their loyal monetary support over the years.
So yes, it's not about protecting the consumer. Dealerships are of course actually terrible, as everyone knows. This is about protecting the dealership owners.
https://slate.com/news-and-politics/2023/05/rich-republicans...
https://www.flsenate.gov/Session/Bill/2023/637/?Tab=VoteHist...
required disclaimer: i don't like republicans either
I think a better way of understanding how the two parties feel about regulation of specific industries is to look into how different states regulate those different industries. This doesn't work well for very regional industries (think coal or I guess logging, for example), but car dealerships are everywhere.
Realtors on the other hand, I've had some good interactions there, the last 2 I used saved me money and got me more for my dollars, at least.
Around here, a lot of properties get listed and sold by the local law office. Granted, they don't put in the same kind of marketing effort that Realtors generally do, but when the market is hot buyers will search high and low to find your property for sale anyway.
Unless the market is weak and one needs someone working 24/7 to find a buyer, going straight to a lawyer to sell a property/buy a property is a no-brainer. You are going to need one anyway.
Car dealerships are mostly useless. If you've done even cursory research, you probably know more about the car you're buying than the salesperson. Their only purpose is to extract money from you.
Actually several reasons and overpriced, excessive, or unnecessary maintenance is one of them
The reason dealerships are surprisingly powerful politically is they are usually family owned and operated so they have much wider discretion over political donations and/or bribes.
IMO danger of them disappearing is what we see with tech and luxury brands who go through a ton of effort to enforce their MAP and are not particularly motivated to make things repairable.
That being said, they are middlemen and there is defiantly a balance.
Many of the laws about warranties were due to poor behavior of manufacturers. In the US, repair parts need to be available for at least 10 years for cars. In the past, the manufacturer could just decide that they didn't want to sell repair parts - just buy a new car.
The Great Depression reduced the number of car manufacturers by about 95%. Which brings me to a more important point. A number of laws were passed to prevent the Great Depression from happening again. Repealing several of them gave us the 2008 financial crisis. Making exceptions to the Securities Acts of the 1930s lets us all relearn the history of why those laws were passed in the first place with all the crypto scams. These laws exist for a very good reason and repealing them is only good for con artists and crooks. The rest of us get screwed.
Modern car dealerships in America are the embodiment of modern rent-seeking. Every department treats every other department as the enemy. Each department that touches an item (spare part, used car, tires, floormats, whatever) has to raise the price 30% to cover overhead and the need to be a profit center. Sears went through this exact same behavior as it crashed and burned. Jack Walsh used the same behaviors to make General Electric the darling of Wall Street.
> tried to push every useless feature or additional warranty that they could.
Every sales rep that works on commission works this way. Salaried sales reps don't. Any commissioned sales rep that refuses to work this way ends up quitting very very quickly.
Disclaimer: I used to work for General Motors which used to be the largest car manufacturer and the very reason that many of the dealership & warranty laws were passed in the first place.
If there are other concerns(maybe availability of parts etc.), addressing those directly should be a better option, no ?
edit: It's true.
""" But as Florida Politics noted previously, lobbyists, including Taylor Biehl and Jeff Sharkey of Tallahassee-based Capitol Alliance Group, hammered out a deal adding language to the bill that should keep Tesla galleries open.
The change confirms newer manufacturers like Tesla, Rivian and Lucid are authorized to hold a franchise dealer license for direct sales of EVs if they are not otherwise prohibited under federal law. That carve-out apparently does not extend to traditional manufacturers such as GM, Ford, Honda and Toyota, all of which now make battery-powered cars. """
They are now in the same relationship but are using politicians to maintain the status quo relationship. It definitely is not a healthy sign for the efficiencies of business in the USA.
> The change confirms newer manufacturers like Tesla, Rivian and Lucid are authorized to hold a franchise dealer license for direct sales of EVs if they are not otherwise prohibited under federal law. That carve-out apparently does not extend to traditional manufacturers such as GM, Ford, Honda and Toyota, all of which now make battery-powered cars.
It's basically a protection racket for existing dealerships for traditional automakers, to ensure they don't get any bright ideas to avoid ~~middleman~~ dealership markups by directly selling the vehicles.
Dealers are in the loop
Their service centers charge way over average for repairs as well.
There is no reason a car dealership needs to exist in 2023!
There has to be some kind of conflict of interest here. Elon was literally blasting out the DeSantis presidential announcement to his millions of Twitter followers, and he continues to act as a mouthpiece for Republican ideology.
I think people with enough money to have major political influence play “teammates” with any party who gives them what they want.
Striking down the McCain-Feingold act was a major blow to American politics. Quid pro quo is only illegal if bribery can be proven, so it effectively has no teeth even though we can all witness the corruption in plain sight.
There’s hardly any serious politicians to vote for at the national stage, because winning is the only priority and corruption is how you win. McConnell stated this plainly when he went after the McCain-Feingold act.
"We do it because we'd like to win. We'd like to win. There's nothing inherently wrong with wanting to win," McConnell says.[1]
[1] https://www.npr.org/2020/11/24/938449068/essential-mitch-the...
We now know why he hosted DeSantis's presidential election campaign opener.
He should run for president with Martin Shkreli for VP running mate.
[1] https://slate.com/news-and-politics/2023/05/rich-republicans...
They don't care about red or blue, only green matters.
Someone posted the other day about the (likely apocryphal) story of a California statesman who struggled to find a place to live in SF because of high rents and his limited resources. 10-15 years later that same politician is a multi-millionaire while making less than most starting engineers in SF and with none of the equity. It’s astounding how wealthy people get after becoming “public servants.” Ugh.
> That first taste of triumph only whetted the appetite. By the 1930s, with another war effort in the works, dealers went state by state. “At that time, there was lots of attention being paid to small business as having inherent virtue and the need to protect mom-and-pop shops,” Daniel Crane, a professor at the University of Michigan Law School, told me. “They embraced that story, and were extremely successful at getting legislatures in all 50 states to strictly regulate how cars were sold.” In 17 states, it is outright illegal for car manufacturers to sell cars at all.
To reference a separate issue currently trending on HN -- were we still living in the "freedom to contract" era, there would be no way that states could ban non-compete agreements. At base, the problem inherent in the "freedom to contract" ideal is that in many situations the parties to a contract are not equal in bargaining power, and perverse results happen as a result of ignoring that reality.
It may also not be such a big deal for most automakers like Ford, which have historically always sold through dealerships. It would likely cost more than a few million in lobbying to undermine these laws, and multiply that by 50 states, it may be a battle not worth fighting. Unlike Tesla, which has always sold direct-to-consumer, and has notably never paid for advertising, direct-to-consumer is very much their business model, so they have a much stronger interest in maintaining the status quo.
This is not an isolated instance, this isn't even the most egregious.
Good luck changing it but...