31–40 of 224 posts
What prompted this law in the first place? Can someone from the US shed some light on this? I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
http://motherjones.com/politics/2009/02/why-you-cant-buy-new...
What prompted this law in the first place? Can someone from the US shed some light on this? 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.
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The ban was created after Tesla started selling, and now it only lifted the ban for zero emission vehicles as far as I can tell (didn't read the whole bill). If Ford or GM wanted to sell direct, they couldn't. 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 dea…
"The ban was created after Tesla started selling, and now it only lifted the ban for zero emission vehicles as far as I can tell (didn't read the whole bill). If Ford or GM wanted to sell direct, they couldn't." 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…
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.
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Right, these laws made sense 50-60 years ago, but now all the dealerships are established and Tesla as a new unproven company that has a comparative low volume of sales can't simply get dealerships to sell their cars plus it may violate agreements with competing car companies that they also sale. In this case there is no established Tesla franchises that would lose, and Tesla can't simply just get dealers to start se…
It would probably make sense to rewrite the laws to somehow say that car manufacturers can't compete with existing dealer franchises within a certain mile/population radius and can't revoke dealer franchises simply to open up new territory for themselves. But to say that no auto manufacturer can operate direct sales is silly since there are now new car companies being formed.
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Oh, it's easy. It's through things like regulatory capture, funding campaigns and thus having direct access to congressional workers, having people appointed to regulatory bodies that are partial to your stance and/or other means of influencing non-elected officials. Basically, if you can't beat them through normal market means, pass laws so they can't beat you. Sounds cynical but take note, back when cars were first…
Your explanation doesn't really make sense. 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…
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They're amazingly common in the U.S. 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. [1] http://www.justice.gov/atr/public/eag/246374.htm
I'm no fan of car dealerships but a lot of the hate has to do with the fact that it's such a penny-pinching business (for both consumer and dealer) at most mainstream brand dealers. From what I've heard, if you go into a BMW dealer the experience is usually quite good. 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.
What prompted this law in the first place? Can someone from the US shed some light on this? I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
http://www.npr.org/blogs/money/2013/02/12/171814201/episode-...
The NJ car dealers are extremely rich and powerful so this is quite a significant event. It's too bad that it takes something as exceptional as a Tesla to incentivize the public to fix the system, but at least it is happening. Disclosure: I think my current car might be my last non-Tesla
Tesla didn't do anything really. Christie has national ambitions and knows that keeping Tesla out of the NJ market and bending over to support the current NJ regime won't play well on the national stage. 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.
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It would probably make sense to rewrite the laws to somehow say that car manufacturers can't compete with existing dealer franchises within a certain mile/population radius and can't revoke dealer franchises simply to open up new territory for themselves. But to say that no auto manufacturer can operate direct sales is silly since there are now new car companies being formed.
Why would you need any kind of such laws in a free market?
What prompted this law in the first place? Can someone from the US shed some light on this? I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
The regulatory capture argument someone made below is hard to square with the history: http://www.americanbar.org/publications/franchise_lawyer/201... . At first, cars were sold directly to consumers by manufacturers, and independent dealerships were rare. It's really hard to explain using a regulatory capture or lobbying model how car manufacturers, huge incredibly profitable companies at the time, lost their bid to…
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 ?