Tesla wins in North Carolina, paves the way for direct-to-consumer sales | Hacker News Reader

Tesla wins in North Carolina, paves the way for direct-to-consumer sales

engadget.com

254 pointsww52083 comments

For those who are not aware, buying cars in the US is a terrible experience, and has stayed that way for many years.

http://www.npr.org/blogs/money/2013/02/12/171814201/episode-... http://www.npr.org/blogs/money/2013/02/19/172402376/why-buyi...

Not a fan of dealer commercials either.

I have to wonder at what point these repetitive ads diminish in value. How many times do you need to see a truck hauling a heavy load, slogging through mud to a husky voice over?

GM had a $3.1B ad budget last year, 2nd only to P&G. http://www.businessinsider.com/the-35-companies-that-spent-1...

I don't think GM makes dealer commercials as they are the manufacturer.

Although they may not make the commercials directly, in print there is often "co-op" money available to dealers when certain criteria is meet by said ad... I imagine there is a similar system for television adverts.

Your descriptions sound like manufacturer commercials; Dealer commercials are the ones with jingles and usually the owner of the dealership yelling things at you for 30 seconds straight.

As someone who just purchased a car at a dealer: it really is.

I'm majorly hoping that Tesla paves the way to change that. Once prices come down to the ~$30k range and a larger percentage of consumers have the option of buying through Tesla, I think we'll be seeing a dramatic paradigm shift away from the horrible dealer experience.

Although there's still a long way to go, I'm excited for Tesla.

The last car I bought was a surprisingly pleasant experience. But I was deciding between two cars at different dealers. And I bought the one from the dealer that was the best experience. I probably would have been happy with either car, but the buying experience doesn't have to suck.

The thing I figured out is: don't buy cars at dealerships.

As someone who just purchased a car at a dealer: it really wasn't. The only part that wasn't awesome was due to the fact that I wanted a very specific configuration the dealer could only find one of, there was some extra wait and hassle. But that is just the price I pay for being picky.

Moral of the story: anecdotes != data

You can skip a lot of that by using something like Costco, Carwoo, or just contacting fleet sales departments.

Thanks for the recommendations of Costco and fleet sales departments. Those are what I would use for my next car.

I tried Carwoo for my parents buying a new car. Since it was an all cash deal, and they were shopping for a new car, the cars and quotes were directly comparable. After visiting a couple dealerships from Carwoo, we had the same shitty experience as we would have without Carwoo. Salesmanship, adding several thousand dollars of "extra but very necessary fees not included in the Carwoo quote", exploding contract price, etc. I was embarrassed that my parent's car buying experience was that bad in 2012, and it cost them a couple weekends on the phone, driving out there, hearing that somehow the quote was not the final quote, etc.

In the end we just ended up at CarMax for a fair price and a decent buying experience.

Time and time again, Carmax is fantastic experience. I have bought 8+ cars from them, and have never had a bad experience (either used or new cars).

The best thing I've ever seen were the BMW (and presumably other manufacturer) military/diplomatic sales deals out of Germany. 10-30% below US prices for some models, and 50+% below the local market prices in some countries. You email them, they send you a selector PDF, you reply with what you want and the price, and they take a deposit.

You have to be deployed military (although not necessarily to Europe), a contractor on specific orders, etc. to use the program, but it's pretty awesome if you can.

Is it like that for motorbikes as well? Here in Australia we pay an extra $3000 for Harley's!

Harleys are just really expensive. It's more about the whole Harley image than it is about the machine. Like any other designer label.

Many Harleys also retain their value pretty darn well, considering.

Whatever, having purchased six cars in the last ten years I never remembered a bad experience. Bad cars at times but on a whole if the system was so bad then how would you explain sales?

they cannot all be bad. Perhaps people confuse used car sales from no name dealers with new car sales or big dealers?

I am quite sure I can point at any industry and say the experience sucks when dealing with them if I look in the right places.

Even as I wrote this I was at a loss trying to think of even anyone I know who had a bad time.

"Bad cars at times but on a whole if the system was so bad then how would you explain sales?"

People consider cars to be necessities. There is significant legislation already in place that protects the dealer model. Thus, if you want to buy a car, you have few options other than dealerships.

You do understand that the dealer model came about to allow the manufactures to maintain production without having to directly deal with changing of sales patterns throughout the year don't you?

The Faustian bargain if you will was dealerships were given certain deals by the manufacturers to protect their ability to profit. States got involved later, where there was money to license such as well as to keep manufacturers from stepping into a solid market to brush aside the dealers who forged it.

It was a solution fit for its time and still is in many cases. When Tesla's support falters who you going to yell at? Fellow disgruntled owners on a message board? Not saying it will, but you who goes to bat for you when sales are direct?

Fisker failed, and you don't see dealerships reverse engineering the electrical system or building battery packs.

Quite frankly, if the company fails, you are out of luck, dealerships or no dealerships.

This is quite silly. Car manufacturers sell directly throughout the rest of the world. It's working for them quite well.

We can have distributors without having them protected by extensive federal and state law, though in such a case distributors would be fewer. Protections originated in the 1920s, when dealers invested in the manufacturers and could be yanked by carmakers into buying cars they couldn't sell. Dealers began lobbying governments to maintain and increase protective laws, and have done so successfully ever since even though carmakers have long stopped seeking investment from their dealers.

> However, theory and evidence suggest that the protection that automobile dealers have obtained from local legislatures has been to the detriment not only of manufacturers, but also of consumers, resulting in higher cost of retailing and higher prices for cars, inflexibility of the dealer network, and a lack of innovation in car distribution.

http://faculty.som.yale.edu/FionaScottMorton/documents/State...

"You do understand that the dealer model came about to allow the manufactures to maintain production without having to directly deal with changing of sales patterns throughout the year don't you?"

I do, and it is entirely irrelevant to my point. You asked for an explanation of how sales can be good, even when the dealership experience is bad. I provided an explanation that depended on the existence of legislation to protect dealers. I wasn't debating the merits of the legislation to protect dealers, just noting that it exists.

Are you serious? It's a monopoly for the car dealers. Manufacturers can't sell directly so car dealers get all of the sales.

> Bad cars at times but on a whole if the system was so bad then how would you explain sales?

How else does one get around the US than with a car? The car manufacturers made sure light rail sucks in the US and instead we have massive funding for highways. How would I buy a car without going through a dealer?

> Even as I wrote this I was at a loss trying to think of even anyone I know who had a bad time.

You are the first person I've ever heard that didn't have a bad experience. Hordes of comedians have made jokes about the car dealership experience that it isn't even funny any more. Every sitcom usually has an episode about it at some point when material is running out. For example: Bill Cosby wearing ragged clothing to buy a car for Theo before a friend calls him "Doctor" in front of the sales guy.

By the time you get to the dealer, you have already guaranteed yourself a bad experience (unless your goal for the day is just a test drive). The key is to contact multiple dealers with the same fairly specific request. You'll be passed on to the most desperate salesperson on duty, because no one wants to be in a competition. The desperate salesperson at each dealership, however, will know he's in a competition, and he'll act like it. If you're especially brutal with the poor bastard he'll throw in free delivery, and you'll never actually have to go to the dealership.

EDIT: I see lots of CarMax recommendations. Maybe they've just automated the process I've described.

And target the end of month where sales is looking to meet quota.

I called a few places near the end of the month asking for quotes on an exact make/model, ended up walking into both, walking out of both, and striking a decent deal with one. The only thing that really ticked me is that upon careful inspection of papers there was a random $1000 tagged along that shouldn't be. Always, always, always take your time, read everything, and bring a calculator if you have to!!!

Imagine if we had to buy software like cars.

"Come visit to Weber Software Emporium. Here you can discuss and look to buy Microsoft 8 for the low low price of $999* (plus shipping fees, dealer installation fee, boxing fee, and a rustproof fee for a total of $1,299)."

shudders

Its moving in that direction... Msoft, Apple and Polaroid are all going the way of brick and mortar.

Polaroid?

I didn't realize app stores were brick and mortar.

Is that not how many businesses and government purchase enterprise licenses of Microsoft software?

In addition to this it seems to be common to purchase one license with hardware and a second license for the same software (but potentially a different edition) from a dealer.

Absolutely. I've been trying to buy KMS license for MS Project for 10 users on a Terminal Server farm with 100 KMS licensed Office Professional users. It's been a month-long nightmare already. I've bought two cars within 2 hours each.

Difference is there are no 50 state laws requiring independent dealers to sell your wares.

I work for a company that resells microsoft software and that's pretty much what we do right now.

Well, that's precisely how it works for some software. Try buying the Cisco AnyConnect client for example. http://www.cisco.com/cisco/web/support/model/tsd_software_an...

And that's why we switched to OpenVPN

Yes, but there is no law that it has to be that way. That's just how Cisco chose to implement it.

Is that how it works now? Microsoft store would equivalent of Telsa's showrooms and Frys,BestBuy,Walmart would be the dealerships.

this is basically ingram micro's entire software business.

If imagine if cars were more like software.

Your car would get 1,000 miles per gallon but crash every two weeks.

shudders

Also don't forget there would be laws preventing anyone else from selling Microsoft products in the area, and Microsoft wouldn't be able to sell to you.

There is a white house petition to allow tesla to sell directly to consumers in all 50 states. Please sign.

https://petitions.whitehouse.gov/petition/allow-tesla-motors...

Why make a petition that allows it for Tesla, and not one that allows the same thing for every constructor ?

Do these petition sites actually ever do anything? All I can think when I see them is "wow what a clever data mine".

The petition site here is WhiteHouse.gov and has done quite a few things in past.

Other sites though, I have similar thoughts!

Examples please? It's an honest question; I really can't think of anything.

The white house released the recipe for their honey ale in response to a petition:

http://m.whitehouse.gov/blog/2012/09/01/ale-chief-white-hous...

Hahaha. I'm glad that one didn't require a FOIA req.

I'm a big Tesla fan, but is it really the job of the white house to tell states how to regulate commerce? I could be wrong but it doesn't seem like this is an interstate commerce issue if Tesla is trying to actually open shops in each state.

https://en.wikipedia.org/wiki/Commerce_Clause#Role_of_the_po...

If we assume that growing wheat on your own land for the purpose of eating it is interstate commerce, I would have no problem believing that a multi-state company selling cars in each state is interstate commerce.

http://en.wikipedia.org/wiki/Wickard_v._Filburn

I suppose due to precedent that decision can't be overturned since it was over 60 years ago. But it still blows my mind that the Court ruled that explicitly not engaging in interstate commerce, or commerce of any kind, is in itself, interstate commerce.

> I suppose due to precedent that decision can't be overturned since it was over 60 years ago.

It can be and the Supreme Court has done it before, but you will need a slate of judges that will willingly curtail their own reach and that of the rest of the federal government. Good luck with that.

Uh, the Rehnquist and Roberts courts have spent collectively two decades scaling back all the power the liberal courts decided for themselves in the 1960's and 1970's.

The Court, like many other parts of the government, has systematically increased its power and influence over the years.

No matter what your opinion is on the recent gay marriage rulings, you should read the dissenting opinions that warn of the new power the court has ruled for itself through the decisions.

Scalia’s dissent is wonderfully written and very much worth reading (whether or not you agree with him, as you say). I cannot offer the same praise for the other two.

Better yet, don't - they're talking a load of self-serving bullshit. Scalia and the other justices who wrote dissenting opinions in that case were quite happy to overrule Congress a day earlier and declare that the Voting Rights Act no longer necessary. Their interest in restricting the reach of the Supreme Court only applies to overturning laws they don't like.

Supreme Court precedent is much more fluid than that, though it operates on cycles measured in decades. Stare decisis doesn't mean that precedent can't be overturned, but that it takes a damn good reason to do so. Look at the date on the Wickard decision (1942). It was a World War II case, decided when the government was gearing up for a war that would ultimately eat up almost a third of US GDP (federal spending spiked from 20% of GDP before and after the war to well over 50%).

It is extremely unlikely that it would be upheld today. Indeed, I tend to think of the Roberts court as having overruled Wickard sub silentio in the Obamacare opinion. The Roberts court rejected the Commerce Clause justification for the individual mandate (the government had argued that not buying insurance effected interstate commerce). It was ultimately upheld on different grounds (that the government had power to tax people who didn't purchase insurance).

I agree, I have a philosophical reservation with tacitly granting the White House a power that I don't believe it should have (nor should it feel it has). Nevertheless, when I created my taskforce clone of this petition (ooh, another opportunity to spam my own activism site! [1]), I set the objective as simply hearing a clear message from representatives of the federal government to states. That doesn't solve the problem, but I think state governments need to feel some more pressure to stand up to the lobbying interests of car dealership associations.

[1] https://usa.brianstaskforce.com/task/383/prevent-states-from...

I am all for the free market, but this should really be hashed out on the state level. You really don't want the federal government involved.

Why not? You'd have to pass laws in every state, which would be extremely difficult. Why not just pass one federal law instead?

> Why not just pass one federal law instead?

You really think it'll be some simple thing like "no dealerships are ok" and that's that? No, that's not how things work in Washington. Everybody would get to add a little bit and more than likely it'll say "Tesla no dealerships are ok" or some other crap granting special rights to somebody. That's just how things go.

Pass.

I would rather existing state laws are overturned in court, so we're subtracting, not adding.

For the love of god, when will people realize that the vast majority of those petitions do absolutely nothing, except perhaps give the signers a nice warm feeling of having done something (when they actually haven't)?

The petition is quite awful too. The law should allow any manufacturer to sell directly. The petition won't do anything, but at least it gives this issue publicity.

Occasionally, it seems, Americans remember what markets are supposed to look like. Bravo!

I think its ridiculous that they need to be fighting for their right to sell direct. Car dealer mafia, i mean lobby, is in full effect here.

So, judging by the text of the article, the cost of the government's backing is a test drive in a shiny car.

Please tell me there's more to the story than that.

The story certainly implies that, but it's also quite likely that it was the opportunity for Tesla to argue their case face to face with the legislators that caused the change.

I'm sure it was a combination of both. Having that same chat in a local diner instead of in one of the cars would surely not be as effective.

Sure, but you're not going to like it. the decision hasn't been made in Tesla's favour yet, it's just been delayed. reading between the lines, what just happened is that tesla has signaled their willingness to bribe the legislators, and the legislators have given them some time to do so. it's a fight between two parties that each have a lot of money, they're going to keep milking this.

I also found that to be hilariously depressing. It's like they couldn't consider the other viewpoint until they tested out one of their cars and got chummy with Musk.

I dream of a world where kids idolize Elon Musk like they do pop stars and movie stars. Most influential person of our time. And so my man crush continues.

He is the real-life incarnation of Tony Stark.

Jon Favreau is friends with Elon, and actually based the current incarnation of Tony Stark after Elon (note the Roadster in Tony's garage in the first Iron Man, along with Elon's cameo appearance about an electric aircraft in Iron Man 2).

http://www.mnn.com/lifestyle/arts-culture/stories/tesla-ceo-...

Hell, I'm 30 and Elon is my hero. No bullshit, all execution.

Great to see Tesla changing the industry.

It's disappointing to see New York (whom I view as a progressively similar to California) attempting to block Tesla though[0].

[0] http://money.cnn.com/2013/06/21/autos/tesla-new-york/index.h...

Think about all the potential car dealers you just put out of business...

Please donate to support your local car dealer... C'mon people, don't be so mean !

I'd support my local car dealer... Unless they were trying their best to put a green car company out of business over greed. Luckily my locals are not :)

Think about the money saved which can now be spent productively instead of funneled to politically connected businesses.

Broken business models propped up with legislation need to be put out of business.

That is a bigger and better benefit than being able to buy a Tesla.

Same argument people make over record stores and piracy. It is a business model whos time has come and gone.

Steve Blank: Strangling Innovation: Tesla versus “Rent Seekers” http://steveblank.com/2013/06/24/tesla-versus-rent-seekers/

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