New Jersey legalizes direct Tesla sales
blog.caranddriver.com
blog.caranddriver.com
I am disappointed that this move only applies to zero-emission vehicles but hopefully this will lead to future legislation undoing the protection granted to dealerships.
[0]http://islandia.law.yale.edu/ayres/Ayres%20Siegelman%20Race%...
It is!
> People often forget that dealerships often abuse their power and take advantage of consumers.
I doubt many people forget that. Car salesmen have some of the worst reputations of any profession in the US. Purchasing a car can be nerve-wracking. The research I felt compelled to do beforehand felt like I was preparing myself for battle, because I knew the incentives were diametrically opposed.
Now with invoice price in mind, send emails to all dealers in your area. Simply explain you want X car @ X price and that you are emailing many dealers and will move forward with the dealer that has the best deal. Its important that you compare cars across dealers by the difference from invoice price as small options will change the price of the car slightly.
As you get quotes, you can forward those to other dealers if they have the specific color you want, etc.
Once you lock in a price, take care of financing through your local credit union. Show up to dealer, decline all warranties/addons, sign the papers making sure price is the same you agree, and off you go.
Just did this about a month ago and it worked out great. Remember to calculate exactly how much DMV fees will be(usually around 2-3 hundred dollars) which will likely be on top of the price you negotiated unless you specify otherwise.
Don't tell them you have a trade in until you show up at the dealer to buy. Then you can negotiate the trade in value without them trying to move numbers around with the car price.
I like this approach because there is zero advantage to negotiating the car price in person. Via email you can take your time to research and also field many more offers and quotes than you would ever be able to if you visited each dealer physically.
In my case, I worked with 3 dealerships (one where I test drove the vehicle and 2 other fleet managers. I ended up going with the original dealer because I had more rapport, he was flexible on pricing and agreed to complete the paperwork and hand over the keys at our house (we had newborns) - I had no idea this was even possible, and was a nice completion to the purchase experience.
[1] http://www.edmunds.com/car-buying/blast-fax-car-buying.html
The dealer refused to skip the 2 hours of paperwork ("It's required by the state" he said) and said the fleet broker was a scam. She left, called the fleet broker on the way home, and had her car the next day. The paperwork took 5 minutes, standing at her front door.
I have always wanted to take a cashier's check to a dealership and tell them "that car, this check, keys in my hand in 15 minutes or I leave." But I think I'll skip that show, entertaining as it might be, and use a fleet broker.
You certainly can do well with traditional dealers if you're prepared. It's just crazy that you even have to worry about it.
Not long ago, one could have argued that the dealership model was the best you could do. Now it's impossible to argue that, since the best car-buying experience out there doesn't involve dealers.
I'm not in love with the dealership model but its not a choice for 99% of buyers.
I didn't say just go buy a Tesla. I said that Tesla is the best way to buy a car. I didn't say it was an option for everybody, and "the best way" doesn't require it to be.
They'll all give you a form letter "come in and talk with us" message. Apparently cost-plus isn't that appealing to them, and they'd rather lose the sale and wait for a higher-margin purchaser.
Also 200-300 for DMV is for a $2000 car in CA or a $6000 car in OK. $200-300 sounds extraordinarily low based on my purchases in both the midwest (MO, TX, OK) and west coast (CA 10%+).
The $200-300 is just registration + any fees.
The problem is that you can't get exactly what car you want (all the options, color, etc...). Why? Because you're only limited to what dealers have in stock. You can't even wait a few months for what you. It's just not an option for most cars aside from Tesla.
You can turn the tables around quite easily and stress free (and have some fun in the process). Here is a car-shopping tactic I learned in a negotiation class some four years ago, used when shopping for a new car a few months later, and got a significant discount to the original ask. It really works well.
Shop towards the quarter-end. If you can help it, shop as close to the quarter-end as you can. If it's raining - even better. It's incredible what sales guys will do to get one more car out of the lot before quarter-end on a rainy day with no one in the showroom.
Get Consumer Reports Wholesale Price report. This gives you a good approximation for what dealer pays to get the car.
Compile a list of dealerships in 20-50 mile radius. For some brands you can even see their inventory online, which is fantastic.
Call dealers one by one. Be very professional, polite and don’t get emotional. Here is the script -
- I need to buy a new car. I am paying cash and can buy today.
- I am looking for $Make and $Model in $Color and I see you have $N cars like that on the lot. I've checked the Consumer Reports Wholesale Price which lists this vehicle at $X. The additional cost for $Options is $Y, which makes the total cost to dealer to $Z.
- Please call me back and tell me the best price you can offer out the door [1]. Do not include taxes, title, or tags which I will handle on my own.
As you get quotes from the dealers, thank them for their time and inform them of the lowest quote you currently have. They will sure call you back. Be prepared that some dealers will get really pissed and emotional, but just remain professional and polite. There is really no need to lie or waste anyone's time, the process works itself out beautifully. You’ll get a great deal before you even step foot in the dealership.
If you are leasing or financing, it doesn't work as smoothly (more levers to pull), but it is doable. I also don't think it would work as well for high-end brands with fewer dealers around.
[1] This is part of car dealer lingo and for some reason it resonates really well.
Secondly: this tactic works even better near the end of the month. Salesmen have sales goals; if s/he is a little short of that goal (or the next tier), you bet they'll do everything, including throwing in their grandma, to clinch the deal.
"Pick out a car, negotiate your best price, take your time. The day you're supposed to pick it up, call them up and say, "I thought my vehicle was worth more, I think it's worth $1000 more."
In their mind, that car is sold, the manager counted it, the salesperson is counting their commission already, and the minute you turn it around on them, they will not let that sale go. If they can give you another $500, trust me - they'll do it."
Recently I've had both an extremely bad and an okay experience at car dealerships. In one case, the salesman was so pushy as to repeatedly argue with my as to my decision to not buy a car that day, even when I was up front in my first contact with him saying I was looking that day, not buying, and would be back in a day or two after I'd done my own research on what they presented to me. I left not just angry, but infuriated. A few weeks later I bought a different make of car at a different dealership, and the experience was fairly smooth. Even so, there's a lingering feeling that I may not have paid enough attention and they may have changed the deal slightly on one portion of the deal while I was busy focusing on another part. I have so little trust of that industry at this point that I find it nearly impossible to trust any good experience.
I understand that there shouldn't be an expectation that I will automatically get the best deal just by showing up, but there's so much purposeful obfuscation and complexity in the process that it's hard not to walk away confused and angry (even if it takes a while to settle in).
Don't worry we're reminded everytime we interact with them. Nothing says captive monopoly like an auto dealership. I'm buying a new car soon and am dreading the experience. I'm leaning towards a used car that's still on warranty because of how bad the dealership experience is and the various ways they try to scam you (hidden costs, poor financing, insulting your credit score to hike interest, trade-in scams, MSRP games, overpriced dealer add-ons, etc).
I watched as a salesman did a "pull the keys" at a Jeep dealership. It was so obviously fake. Another salesman just walked up, took the keys from my salesman, and said, "We have others interested in this game" to pressure me. I saw that guy through the glass walls. He didn't have a customer. He just pocketed them and looked at once once in a while in anticipation.
Not to mention how they treat women like shit. The things my wife puts up at the dealership is inexcusable. They tried to get her to pay, out of pocket, a engine rebuild for a car on warranty. I pretty much had to yell at them to honor it and call my lawyer.
I'm pretty critical of Tesla, but I do think their no-haggle Saturn-like policy is excellent. If Tesla survives long enough to sell an affordable electric with great range, its a no-brainer buy for me.
I've bought multiple cars in my life. I don't understand this in the slightest. Every experience I've had has been only slightly more involved than purchasing anything else, as it should be for the cost.
The dealership world is hyper-competitive. Know the value of the car you want, and what you're willing to pay. Let them know that. If they can't do it, go elsewhere. Don't pay for anything you didn't ask for.
Like practically every other consumer experience, the buyer has all the power. You're the one signing the cheque. They want your business.
>poor financing
Most companies offer 0% financing. Where else can you get that?
You say you should know the value of the car and what you're willing to pay. How can you be sure that what you're willing to pay is reasonable? What if what you're willing to pay is a thousand dollars too high because you screwed something up? You can mitigate this with more research, but it's a lot of work compared to buying most things.
You're right that the buyer ultimately has the power (as long as the buyer doesn't need a car right now and has a reasonable choice of dealers in his area), but you have to wield it. This is not true in most areas. I don't need to do research and look up tips for getting the best deal out of my local Safeway. I just go buy stuff (after getting a loyalty card). My power works invisibly to ensure I get a reasonably good deal on almost everything. To the extent that there are tricks, it's simple stuff like "when there are two identical items from different brands, buy the cheaper one." When buying a car, you still have the power, but you have to go out of your way to wield it, or else you'll get screwed.
People want an experience where they just go in, pay, and walk out with a good deal. You can get a good deal from car dealers if you put in the work, but it's that very fact that you have to put in the work that people don't like.
Like anything else, have alternative financing lined up before you start that conversation. This reduces the financing issue to one question: "Can you beat this rate?"
Secondly, I'd highly recommend going through internet/fleet sales at any dealership. Typically, these people are paid primarily in total-volume and less in sales-price-over-invoice, which gives them a great incentive to do the deal on your terms (as long as you don't abuse their time). The added bonus is these people also tend to be just fine negotiating the preliminaries over more convenient email. In contrast, every dollar you negotiate the lot salesman down is generally a dollar out of his pocket.
Somehow car dealers in the U.S. have managed to enshrine this sleazy sales model into state laws, which is certainly an amazing feat of lobbying.
Also, having moved from programming to sales/marketing, I'm a bit more sympathetic towards the "call me" model of selling. There's a lot of companies (like mine) that aren't deliberately withholding information, but instead are training and enabling reps to walk you through a process that can't be navigated with blog posts and product pages alone. We do monitoring, and most of our customers treat our sales reps and pre-sales engineers as free consultants. Nothing magical about it, but talking to a human is valuable for problems like "how to a unify monitoring for my 1,000 servers are 24 teams which runs apps that are a result of 17 acquisitions".
Of course, you're cutting off the cohort of people who just don't want to talk to a salesperson - so you'll never convert those - but you're converting at a far higher rate with people who need explanations and a salesperson to help them navigate the internal blockers at the company.
There is a good joel-on-software post about this - essentially once the price goes above a set level - maybe $2000 all in - then the price has to jump because enterprise-y sales means that the buyer has to justify it to their purchasing, which means needing a salesperson to do all the grunt work to help.
A lot of people in the no-touch SaaS model think this is nuts - but the fact is different models work for different people. Just because two companies have similar-sounding products, it doesn't mean they are in the same market. Gmail and Exchange server essentially do the same thing, but the markets are mostly different, with only a small overlap.
I've designed complex electronic devices via product pages (data sheets) and other online information sources, and sold them to the Federal government through GSA procurement. I'm pretty sure I can "navigate" your "process" without wasting time schmoozing your sales guys on the telephone.
If you have a competitor who doesn't make me do that, they have a strong advantage over your company, right out of the gate. Just saying.
The more common scenario is that there are a ton of people involved, and it's not easy / worthwhile for the person who kicked this off to convince them all. Where the sales rep provides value there is they can help the you sell. You make an intro, they'll pull together a bunch of materials and demos and other crap to convince your coworkers that it's important.
We do have a self-serve path which is about as easy as anybody else's, and our prices are stated up front. Most people can navigate that technically, but the larger organizations almost never take that route because of organizational / political concerns.
It's a perversion of originally customer-friendly laws. The regulations were from an era where being able to be sure you have a local presence to service your car was very, very important.
It's like I heard a collective "bitch please" come from the banks, food wholesalers, defense contractors, insurance companies, immigration lawyers, patent attorneys, entertainment industry, telcos, etc. etc.
nobody is going to make you call them for $100/month. ~$3k/month or ~$10k lump sum is roughly the threshold for enterprise sales that require you to talk to someone.
they do this because anyone who pays anything less than that for an enterprise service or product is going to be a demanding, unreasonable, cheapskate, entitled, caustic asshole because they're not used to spending large amounts and the money is probably coming out of their pocket (small business or soho customer). nobody on earth wants to deal with that kind of customer.
the phone call is designed to filter people out who get annoyed at needing to talk to someone. if you don't want to talk to anyone, you don't want to spend real money, because people who spend real money want to talk to real someones, usually multiple someones, the more someones the better. nobody wants to deal with the 'in between' customer who is too big for their consumer britches but won't step up to spend money for a real solution where real people on the other end of the line give a shit about their problems.
One has a plain-as-day pricing table with a $100 / month plan and a big blue "Buy now" button. The other company's Pricing page has $100/month plan with "Buy now" button and additional text: "Call us if you want to pay less".
For some reason people that don't like to negotiate don't want to pay sticker price either.
Not only that but the sticker prices are usually artificially high since they are expecting negotiation with high prices for random add-ons like paint protection or other things nobody asked for.
2. I am not sure how is your opinion about price is related to the experience at the dealership. Sticker prices for all cars are available online, and you can make a decision if the car worth that price well in advance. Once you make that decision nothing is stopping you from having a great car buying experience.
Franchises were purchased with the understanding that they wouldn't compete with manufacturers. I think the correct law would be to grandfather the old manufacturers in but let new ones sell direct. I guess a zero-emissions exception makes sense to eventually phase out dealerships and immediately allow Tesla.
Also I'm no so anti-dealership. It's not the easiest business and most of them have low margins.
Aren't corporations selling directly to consumers known for doing the same?
There should be zero limitations on direct to consumer sales for any manufacturer of any product.
Texas is talking about doing a similar thing. The bill here would allow Tesla to open "as many as 12 stores in Texas".
What incentive does Elon Musk have to lobby for other companies? If he's doing the lobbying work, why wouldn't he structure the regulations to favor his organization?
I don't think the fear here is that they would "undercut them". I would do business directly with Ford, Toyota, etc. even if the price were the same. That's what they're afraid of.
The perversion of the law is that Tesla has never had franchisees, and they're still being blocked by the laws in many states, contrary to the original intention.
I hate buying from dealers as much as anyone, but the law as I understand it makes some sense. I'm sure it varies from state to state and doesn't make sense in some.
This is easily resolved on the contract level. Knowing this, nobody with half a brain would start a franchise unless the parent company guaranteed the territory. That's how it works in virtually every other franchising market.
Currently Most people don't pay the same price. The price you pay depends on how much the sales person can wrangle out of you. A fixed price from the manufacturer threatens the jobs and livelihood of car salesmen.
I am not defending the auto dealers. I am a Tesla stock holder. I am merely pointing out their enemy's position. This is part of why the limit on the # of stores puts the dealerships at ease.
The current franchise model serves dealers well, but it really shortchanges customers, to the point that I'd even pay a bit more to buy my car from company directly.
I am not defending the auto dealerships. I think their days are numbered and they will be put out of business. I am long Tesla stock. I am merely pointing out their perspective. There is plenty of anti-trust precedent regarding manufacturers competing unfairly with retailers.
Movie studios and movie theaters.
http://en.wikipedia.org/wiki/United_States_v._Paramount_Pict....
Standard Oil http://en.wikipedia.org/wiki/Standard_Oil_Co._of_New_Jersey_...
Just google Sherman antitrust act.
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So even drugs or guns producers should be able to sell directly to customers as long as they meet all requirements.
I also like the idea of requiring gun owners to buy liability insurance, in the event their gun is used to shoot or kill someone, or damage property; especially in the case of all these "accidental" shootings (which, really, are negligence on the part of the weapon owner).
Well, we already have laws that make the possession of heroin illegal. They are broken all the time. With regards to the original point about silly laws that prevent us from spending our money and free time in ways that don't harm others, if person A is walking down the street and person B illegally uses heroin on the same street, person A is not likely to be harmed. You can't really say the same about person B and his/her machine gun.
You haven't solved the problem by moving the solution further up the chain, but you have prevented responsible, law-abiding folks from acquiring a machine gun.
Laws against possession of heroin and laws against possession of fire arms work the same way with a lot of the same externalities. So it is odd that you would point to the failure of one to advocate for the other.
That does not mean that someone who really wants a machine gun cannot get one - but that it takes a lot more effort to get one. Effort that many deranged and unstable people are not willing or able to dedicate the effort to see to fruition. Even in the age of anonymous online exchanges gun import rates are puny compared to firearm availability in the US.
I think it is sound psychology to believe if you make it really hard to get something that an irrational actor will be less likely to pursue destructive behavior. The difference between firearms and drugs is that drug users are recurrent customers and can form an underground economy, the sociopath with a machine gun is often a one time shopper. Seems more economics than anything else as to why it is more infeasible to maintain a firearms black market at scale comparable to the drug market, regardless of ethics.
Did you mean second amendment? Or do you mean that the pro-gun lobby does not have a right to free speech? If it didn't have implications beyond gun control, I might even support it. It is really sad that the only people in the pro-gun lobby are industry shills. Anybody who deviates ever so slightly from the official message gets effectively shut down by the lobby as not being one of them.
But where does one draw the line? Cars can be deadly weapons too! And plastic forks! Maybe it's somewhere around "objects whose sole designed purpose is to kill large numbers of humans in a short period of time".
Isn't there a base level evolutionary incentive for everyone to have as few objects like that near them as possible?
Among them, one that the media appears to not even know about: New Mexico (maybe they don't realize it's a state).
In NM, the NMADA (New Mexico Automobile Dealers Association) has basically crafted the laws such that no manufacturer can have a single store OR service center anywhere in the state. All have to be franchises. Because, you know, we have to protect the dealer franchises, otherwise we might have better consumer choice and better consumer experiences and that would be a nightmare.
If one owns a Tesla in New Mexico, and ever needs service, a Ranger has to drive down from Denver. If they're available. If the weather cooperates.
Range anxiety? Meh. RANGER anxiety is a huge problem.
Imagine finding out you could not buy an iPhone or even find a Genius Bar in the State of New Mexico because the franchises selling other mobile phones had bought the legislature and banned iPhone from the state. That's the situation with Tesla. And nobody knows about it, and nobody seems to be doing a damn thing about it.
What they don't tell you is they cannot open it. And that there is NO WAY it is opening soon.
How do I know? Well, I contacted the Governor of New Mexico's office, and I contacted the Global VP of Sales/Service at Tesla. That got me a call from a Tesla regional manager who told me plainly, "New Mexico is worse than Texas" and that the laws are set up in such a way that there isn't much that can be done. The law on the books states that the dealerships are protected by the force of the State Police and should any young whippersnapper auto manufacturer, say, Tesla, come sneakin' into town and try to set up shop, well the dealers will be there with the full force of the state government behind them, to make sure Tesla crawls back into the hole it came from . . . in some other state.
The New Mexico legislature won't consider new proposed laws until Jan 2016. You can bet I will be working on my representative in Santa Fe to introduce a meaningful law modeled after the legislation recently passed in other states that has allowed Tesla to do business including service its existing customers.
It is remarkable how protectionist these auto dealers are. They're staring into the future and the future is staring right back, and the future has no sympathy. They must know they're on the wrong side of history. They don't care.
Good for you for pushing against the dealers. This stuff seems to be changing at a (relatively, for political stuff) rapid pace at the moment. NJ now, looks like CT soon, VA just relented a bit and allowed a store, and it looks like things are moving in Texas. Maybe seeing other states ditch these laws will help push things in New Mexico.
SpaceX haven't expanded significantly in NM, and this might partly be the reason.
I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
In reality, these were consumer and economic protection laws. States didn't like how much money was flowing from their economies to Detroit, and by making direct consumer sales illegal they gave a lot of leverage to franchises, which are local businesses. They also justified the laws on consumer protection grounds--local car dealers would be a lot more responsive to customers than a megacorp in Detroit.
As for the "planned economy" aspect--remember that the ideas of what constituted unreasonable interference in the economy were very different back then. The revolution of applying economics principles to government didn't really happen until the 1960's and 1970's. Before that, quite extensive interventions in the economy were routine. For example, prior to the 1970's, the Civil Aeronautics Board set airline ticket prices! That would be amazingly controversial in the U.S. today, on either side of the aisle, but was par for course back in the day.
But the actions to prevent Tesla from selling direct now, today, have definitely been the result of regulatory capture.
The original interventions created a kind of local businessman, who knew he owed his existence to these local regulations.
And now that these laws have been made unnecessary due to the availability of both information and exposure -- and incontrovertibly unnecessary in the case of for instance a large city or densely populated state, where healthy competition exists -- the reason that they hang on and prevent companies from Tesla from opening shop is absolutely regulatory capture.
There doesn't seem to be much disagreement about the facts, just the definition of "regulatory capture".
The idea which "regulatory capture" describes is when regulations fail to do what they are intended to do, when instead of restricting they empower.
But the regulations have not "failed", they are still restricting manufacturers and empowering dealers, so this isn't "regulatory capture", just bog-standard monopoly-granting.
> Regulatory capture is a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating
Enforcing barriers to entry is a huge aspect of regulatory capture. A regulation that creates $1 million/year of compliance costs nominally "restricts" all players (and certainly doesn't "empower" them), but that money is often a pittance for large companies while effectively squashing new entrants, greatly to the large companies' benefit.
That seems to make sense. What's different about Palo Alto, CA that they're ok with money flowing directly there? Is it because dealerships have become unnecessary middlemen putting more $ on the cost before it reaches consumer hands?
[1] In fact, I imagine lots of state legislators hate Palo Alto for making middle class jobs in their states obsolete while creating a few high paying jobs in California and diverting the difference to shareholders in New York. We're talking about a state hollowed out by deindustrialization, where the promise of better jobs to replace the ones lost was made decades ago, and still has yet to materialize.
A large economy will have consumers spending millions on google ads and iTunes content, and none of it will end up in the tax coffers of the local country.
This is better off for everyone except for the politicians who want to throw money around.
The eventual result will be make-work schemes like the local dealer franchises. Expect enforced-local entities in some countries where an office is created and people do meaningless work so the tax revenues can be domiciled. In other words, the exact same model as the car dealerships.
It's bad but people hate being exposed to the market, because it systematically punishes laziness. Most people will vote for a politician to make it easier for them to be lazy, even if it ultimately makes them worse off.
In reference to local car dealers part. So states were mainly only interested in the money, but then justified it under the guise of consumer protections.
Is that fair to say ? Or did states really care about consumer protections ?
And in the pursuit of truthiness, and not creating a false dichotomy, are both those wrong ?
As for whether these justifications are wrong--it's hard to say. From a jobs point of view, it's probably still not a win for NJ for those dealerships to shut down and have NJ money flow over the internet directly to California. The consumer protection angle is a lot weaker in a day and age where Tesla can monitor your car's stats over the internet.
Consumers will pay less for their cars, and the extra $1000-$2000 dealerships make on each car, will remain in the consumer's pocket. This is better on the whole.
Dealerships are market inefficiencies, as they create no real value or "wealth"[1]. They give nothing to consumers in return for the $1-$2k extra that consumers pay for each car.
[1] As defined by Paul Graham in: http://paulgraham.com/wealth.html
This is very surprising complaint to hear - the whole capitalist economy is filled with inefficiencies! (and Paul Graham is hardly saying something novel here).
But to say that no auto manufacturer can operate direct sales is silly since there are now new car companies being formed.
While I do think market interventions are sometimes justified, in this case it seems we are protecting dealers for their own sake.
i never understand why people are so anti-dealership. yes there are stories about bad ones but to be honest just how would anyone expect these places to be in business if they were consistently bad.
long term, without a dealership model if you have a problem with your tesla your likely up the creek unless they agree with you. there have been some well publicized cases where it took getting media involved to get cars bought back or fixed. dealerships want to preserve their customers as many sell more than one brand, manufactures can easily write off one consumer.
http://www.npr.org/blogs/money/2013/02/12/171814201/episode-...
In the more generic case, states have these laws on the books to protect the local franchise dealers. These people buy cars from a particular manufacturer, usually multiple brands. In order to protect these dealers from the perceived threat that an automaker could come in and sell direct (thus undercutting their business), laws were enacted to require a franchise to sell vehicles. Thus Ford couldn't come in and sell vehicles unless they created their own franchise, which would raise their costs to be on par with the independent franchises. I think the justification for the protection is the local jobs and businesses.
Which is a damn shame. When shopping for a car every manufacturer currently has a 'build your own' tool online where you can build you car to spec and you get a rough estimate. However, in my experience, this estimate is never honored by dealers.
The last car I purchased had an item on the sticker price called 'Dealer improvements' that was $6000, and after talking to the dealer he would "cut me a break and not charge me anything" so I would be getting the car for $6000 less right off the bat. When I inquired as to what exactly did they improve he refused to answer in detail.
I'm sure my experiences are not unique. I would love to just press an Order button at the end of the vehicle builder and have it delivered to my door or somewhere close to my home.
The problem with getting rid of dealers is that most people will still want somewhere to test drive, someone local to handle paperwork, and there would need to be a service network in any case. Tesla will still have dealers. They'll just be owned by the company. And the experience will doubtless be comparable to existing high-end car dealers.
I just don't think this blanket ban is the way forward, but rather some regulation/comparison about what a store (dealer or manufacture owned) actually pays for cars, so you can clearly see if manufacture owned stores are not getting unfair advantage. I suppose that competition between manufacturs would be the driving force in that case. It's certainly possible.
My own experience was something along the lines of this: Figure out what the car cost on Fords webpage, go to a dealer, get a quote, negotiate a little. Repeat with 2 other dealers and see what you get, and let it be known what offer you have so far (they usually demand some proof, so you better be telling the truth). I ended up paying 15% less than the standard quoted price, which could have been better, but I wanted to buy from a dealer with a great reputation.
I don't think that's it... having dealerships does nothing to stop the manufacturer from changing prices to whatever they want.
So why didn't you go elsewhere?
His living depends on the commission he earns from selling you the car. If you feel the people are dishonest, why do business with them?
The "build your car" tools on the websites always represent the "as low as" price. It assumes all possible rebates, many of which you aren't eligible for. If you were a military veteran who recently graduated college with great credit and an account at a credit union with a pre-existing arrangement with that dealership, and are also trading in a same-brand car while trying to purchase a model with flagging sales, then tada, you can easily get the "as advertised" price.
Edit: this is incorrect. See replies.
Wrong. The "build your car" tool is generally the MSRP, since it's on the manufacturers site, which will be substantially higher than price you'll have to pay at the dealer.
I had somehow mentally conflated the "browse our cars on the lot" page that many dealerships have with the "build your car on our site" page.
Thanks for the correction.
See Obamacare, eVerify, FMLA etc.
[1] https://news.google.com/newspapers?nid=1454&dat=20010301&id=...
Sounds cynical but take note, back when cars were first coming out the laws that were passed in response to them were designed to impede the adoption, not promote.
Consider: who would benefit most from the removal of these laws? The obvious answer is the General Motors Corporation. They could own their own dealerships, getting better control of customer experience and a bigger cut of the profits. It's not like they're short on capital such that they would be forced to franchise anyway. As the largest automaker in the world for most of the last century, they would get a significantly outsized benefit compared to any competitor.
Now for a rhetorical question. Who has more political power in the U.S: car dealerships in aggregate or General Motors? Answer: General Motors, of course!
Another rhetorical question: Does Tesla have more political power in New Jersey than GM as well, given that the exception was carved out specifically regarding the type of vehicle they produce?
edit: New Jersey is no stranger to economic protectionism. They actually prohibit self-service auto refueling as a jobs program, which would seem to be more threatened by Tesla than car dealerships. I'm not trying to argue that it doesn't exist, just that it doesn't explain what's going on here.
GM was facing a nearly impossible 50 state battle, spanning thousands of politicians, in trying to do anything about the dealership cartels. Instead, GM was ultimately ok with a truce with them so long as GM could control issuing (or revoking) the dealer licenses.
Also, if it were just a political fight between businesse interests, GM could just go over the states' heads: people frequently buy cars across state lines, so the commerce clause reasoning for a law prohibiting these laws wouldn't even be as tortured as it usually is.
What makes you so sure?
The one interesting thing I did find is that many disabled motorists have a very hard time using self-service pumps – while still being able to drive safely with vehicle modifications. The Americans with Disabilities Act even has a requirement that gas stations provide refueling assistance, with some exceptions. (http://www.ada.gov/gasserve.htm)
That still doesn't mean self-service should be banned. At most, it's argument for requiring gas stations to have >=1 full-service pump.
The other funny thing is that many NJ natives seem to really like using full-service pumps and want to keep the ban. And because they have low gas taxes and import so much fuel, NJ still has some of the cheapest gas in the country. So, there's not much political will to change it – despite the inanity.
Why not ban ATM's to provide bank teller employment? Or ban self-checkout at grocery stores? Let's not forget all of those poor elevator operators out of work.
Maybe we should go around breaking windows to create work for local glaziers? (http://en.wikipedia.org/wiki/Parable_of_the_broken_window)
I appreciate the sentiment of wanting to provide low-skill employment opportunities, but this is not the way to do it. It's provably bad logic.
Mandating it is absurd. That people would go so far as incarcerate people for pumping their own gas goes way beyond resolving an inconvenience and well into normalizing bureaucratic oppression. (Yes, that sounds overstated - but really, jail time for pumping gas? it's not about the pumping, it's about something being very wrong & dangerous about the mindset that thinks jail time for pumping gas is reasonable.)
The idea is that car manufacturers would be able to undercut dealerships on prices and thus bankrupt the dealerships[1].
So it's just classic protectionism. The question why the law should protect entities that everyone hates is the baffling part.
But certainly I don't see why a manufacturer who doesn't have an existing dealer network shouldn't be able to sell in whatever way it chooses.
At this point; the dealers know that you know what the invoice price or KBB value of a car is, and what kind of loan rate you can get elsewhere. They might want to sell you a warranty or the like, but at that point you've already negotiated the price of the car, know your loan rate, and can just say no to the extras and move on.
It's not - it's probably better than your average Dodge dealership, but there's nothing inherently different about BMW dealers - they make their money on services and accessories that you don't need like most other dealerships. They'll overcharge you for an oil change (which is typically cheaper, but not much, at an indie mechanic - but it's irrelevant because changing a BMW's oil is so so simple your grandmother can do it) like any other place, but they might offer you some muffins while you wait in the lobby. BMWNA (BMW's North American operations) will keep the dealerships in line if they start watering down the brand value, but you usually have to go through a long and arduous complaint process to get them listening.
I'm not sure about "everyone hates dealers", but having never purchased a car, I have no idea why a car store is different from a computer store. What's special about dealerships?
http://motherjones.com/politics/2009/02/why-you-cant-buy-new...
Disclosure: I think my current car might be my last non-Tesla
His story was different when Tesla was first banned. But then he wasn't running for national office.
That was 11 months ago. I'm pretty sure Chris Christie's political ambitions haven't radically altered in the meantime.
The original "ban" was a perfectly reasonable reading by a regulatory body of the existing law. Regulatory bodies shouldn't be in the business of rewriting unpopular laws; that's the legislature's job, which appears to be what happened here.
Thank you. This point needs to be made 100x more often. These days it seems that the regulators & judges bail out the legislatures mistakes all too often. The onus is on people to convince their elected representatives to rewrite laws that are flawed or outdated.
It is a very contentious subject, but some people argue that part of the reason the existing big manufactures don't put enough effort into making and offering ZEV is because they can't rely on the dealers to actually sell them. Reasons given for this is that the ZEV compete directly with the hybrid and gas vehicles on which the dealers have far greater inventory and profit margins, so they have little to no incentive to sell the ZEV.
If ZEV subsidiaries of the manufacturers could be guaranteed a chance to sell them then that might be cause for them to spend more effort on making them work.
The auto industry is ripe for disruption. The sooner the dealership model is replaced by something more consumer friendly, the better.
> It is worth examining the history of these laws to understand why they exist, as the auto dealer franchise laws were originally put in place for a just cause and are now being twisted to an unjust purpose. Many decades ago, the incumbent auto manufacturers sold franchises to generate capital and gain a salesforce. The franchisees then further invested a lot of their money and time in building up the dealerships. That’s a fair deal and it should not be broken. However, some of the big auto companies later engaged in pressure tactics to get the franchisees to sell their dealerships back at a low price. The franchisees rightly sought protection from their state legislatures, which resulted in the laws on the books today throughout the United States (these laws are not present anywhere else in the world).
The intent was simply to prevent a fair and longstanding deal between an existing auto company and its dealers from being broken, not to prevent a new company that has no franchisees from selling directly to consumers. In most states, the laws are reasonable and clear. In a handful of states, the laws were written in an overzealous or ambiguous manner. When all auto companies sold through franchises, this didn’t really matter. However, when Tesla came along as a new company with no existing franchisees, the auto dealers, who possess vastly more resources and influence than Tesla, nonetheless sought to force us to sell through them.
http://www.nada.org/getthefacts
Their big arguments are price competition and 'customer advocacy'.
I'm not under the impression that they work very hard at either.
Our policymakers make no sense at all, I'd like to replace most of them.
How will the balance of power manifest when Google, Apple, Uber, others with deep pockets start selling cars without haggling or BS in a 'car store'?
The future is bright after all!
Hooray for dismantling pointless regulation, but why leave this part in then?
Because that is another thing that will crush dealers. Gas car manufacturers will not update ECU software unless the car is either in warranty or its an actual recall.
The consensus in NL is that you're better off with a Porsche Panamera than a Tesla, most likely with a less painful (although still painful) amortisation.
Certainly, if you're taller than 180cm, drive before you buy into the hype.
2. Ok? Why?
3. I am, in fact, 182cm, and was just in a Model S yesterday. I had tons of headroom. I've driven them with a helmet on and had no issue.
Though I will note, on the ride home yesterday, I sat in the back seat. When I rested my head on the headrest (which I almost never do in a car), I noticed my head brushed the sloping roofline, which is a common problem in sloped roof designs like the CLS and Panamera and A7. In fact, because I have a long torso, I find that my head often scrapes the roof in the driver's seat of (taller) friend's cars, until I adjust the seat downwards.
Just be careful, because odds are good that you will want to buy one after doing so, and they are not cheap.
I'm 190cm tall and I own a Model S and it's extremely comfortable for me, both as driver and passenger.
If it's a real concern get the panoramic roof which gains you another 3-4" of headroom.
But not sure why comparing to the Panamera is a good example, because it has a low and sloping roofline, and is only a 4 seater. Weird choice.
1) The Model S sells almost exactly the same number of units as the Panamera in Holland. I have absolutely no clue why you're claiming consensus when the market says it's a toss-up.
2) I'm tall. I'm a Tesla owner. My partner is also tall. He's also a Tesla owner. It's one of the best cars for tall folks on the market.
I have no clue what you're on about. You appear to be talking out of your ass for no obvious reason, except that you dislike Tesla. Get a life.