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Tesla CEO Elon Musk
Assembly Consumer Affairs Committee votes 4-0 to allow Tesla to sell cars directly to customers

Tesla Motors has been the subject of a statewide ban on direct car sales in the state of New Jersey since April 1. The ban was the result of the state Motor Vehicle Commission’s (MVC) decision to enforce a 1970s law that required new vehicles to be sold through a dealership.
 
However, a new bill by the New Jersey Assembly Consumer Affairs Committee would allow Tesla to resume its direct cars sales in the state. The bipartisan committee voted 4-0 to give Tesla a reprieve as long as the company follows a few simple rules. Tesla would be limited to just four stores in the state (for now) and would be required to have at least one facility to service Tesla vehicles.
 
“New Jersey prides itself as being pro-business, pro-innovative and pro-jobs. And this is a company that is an American company, an American idea,” said bill sponsor Tim Eustace (D-Bergen). “I think we would be mistaken if we didn’t’ reverse the idea that the MVC made, making it illegal to sell Teslas in New Jersey.”


Tesla Model S
 
Tesla CEO Musk has long rallied against the dealership model and says that these “middlemen” don’t have customers’ best interests in mind. Musk points to the fact that dealerships make a large portion of their profits from vehicle services (repairs, routine maintenance, etc.), but electric vehicles like the Model S require far less maintenance than conventional automobiles, lessening the need for middlemen.
 
This latest move by New Jersey comes after Musk lashed out at Governor Chris Christie, stating, “Anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind.” Musk even invoked “Bridgegate” by stating that if selling through dealerships ensures “consumer protection”, then “Gov. Christie has a bridge closure he wants to sell you.”


New Jersey Governor Chris Christie
 
More recently a number of directors for the Federal Trade Commission have come out in direct support for Tesla’s direct sales model in two separate blog postings. The FTC noted that the market should determine if a direct sales model is beneficial to customers. “Our point has not been that new methods of sale are necessarily superior to the traditional methods—just that the determination should be made through the competitive process,” said the FTC directors in an April blog posting.

“We hope lawmakers will recognize efforts by auto dealers and others to bar new sources of competition for what they are—expressions of a lack of confidence in the competitive process that can only make consumers worse off.”

Source: nj.com



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RE: Just a thought
By Brandon Hill (blog) on 6/6/2014 11:05:26 AM , Rating: 2
quote:
But now I realize the REAL reason Tesla should get everyone's support; nobody likes car dealerships, it's such a huge hassle when the salesmen/women swarm like vultures the moment you step on the lot.


Speaking to that:

quote:
Americans hate car shopping so much they'd rather give up sex and do taxes


http://www.autoblog.com/2014/06/03/americans-hate-...


RE: Just a thought
By atechfan on 6/6/2014 12:10:52 PM , Rating: 2
I do my taxes online, I just plug in the numbers, the website does the calculations, and submits the info to Revenue Canada for me. I always get back a pretty good chunk of change too. So I would do taxes every week if I kept getting such a big payout for such little work.

Giving up sex for a month? Must be people who don't get it anyway being polled. How is avoiding a bit of haggling worth that? Hell, why avoid haggling if it can save you a couple grand? And how in the hell does giving up a phone for a weekend compare to giving up sex for a month? That link baffled me.


RE: Just a thought
By kattanna on 6/6/2014 12:24:36 PM , Rating: 1
LOL

quote:
And how in the hell does giving up a phone for a weekend compare to giving up sex for a month?


maybe they were talking to married men, so its possible they werent missing anything from that month

;>)


RE: Just a thought
By Brandon Hill (blog) on 6/6/2014 1:09:32 PM , Rating: 1
This man unfortunately speaks the truth :)


RE: Just a thought
By Spuke on 6/6/2014 1:34:47 PM , Rating: 2
Carsdirect.com guys. No haggling. Prices are already discounted and they apply any factory rebates. I bought a car through them back in 2004 and it was as painless as it gets.


RE: Just a thought
By Brandon Hill (blog) on 6/6/2014 1:59:21 PM , Rating: 2
When I bought my last car, I was able to beat the Carsdirect price that I initially researched with some haggling and the fact that they were clearing out '13 models to make room for the '14s.

It sure was a pain in the ass though.


RE: Just a thought
By Mint on 6/6/2014 2:28:21 PM , Rating: 5
Haggling doesn't save you a couple of grand. It prevents you from being overcharged a couple grand.


RE: Just a thought
By Solandri on 6/6/2014 7:28:18 PM , Rating: 1
quote:
Haggling doesn't save you a couple of grand. It prevents you from being overcharged a couple grand.

Such a one-sided view of how markets work. The market price is the average of all haggled deals, not the minimum. If you are bad at haggling or don't haggle, you are overcharged a couple grand. If you are good at haggling, you save a couple grand.

It's just obnoxious to declare the best-haggled deal to be the market price, and label everything higher as "overcharging". A dealer could use your same logic and declare the worst-haggled deal to be the market price, and label everything lower as ripping them off.

Dealers only agree to such well-haggled deals because they're the exception, not the norm, and there is some advertising value in a buyer telling his friends "I got a great deal at..." If dealers were forced to set a fixed price, it would never be as low as a well-haggled deal. They wouldn't be able to make a living with such a small margin.

If you do your research and negotiate a great deal on a car, that deal was only possible because the dealer was able to rip off someone who didn't do their research. If everyone does their research, or the item is so cheap, or the volume of sales is large enough that the time spent haggling each individual sale wastes more money than it makes, then a fixed price becomes more optimal.

One can argue that cars have passed this point and a fixed price would be a more optimal way to sell them (especially given that you can purchase them on the Internet now). But declaring that haggling only results in all but the best hagglers being overcharged is simply naive.


RE: Just a thought
By spamreader1 on 6/9/2014 6:31:14 PM , Rating: 2
I read, blah blah blah, I'm happy pissing about with a sales guy that goes back and forth to a room in the back for 14 hours to walk away feeling like I won something when I drive away in my new car that I got for two thousand less that that shmuck who only spent 4 hours at the dealership.


RE: Just a thought
By Mint on 6/11/2014 2:53:21 PM , Rating: 2
quote:
If you are bad at haggling or don't haggle, you are overcharged a couple grand. If you are good at haggling, you save a couple grand.
You're making a lot of silly assumptions here.

There is a cap as to how much you can haggle downwards, as no salesman will sell you a car at a loss (outside of rare circumstances). But there's almost no limit to how much a car salesman can overcharge.

The MSRP is overcharging, and well above market price. Nothing more is needed to justify my statement.


RE: Just a thought
By therealnickdanger on 6/11/2014 3:26:19 PM , Rating: 2
quote:
There is a cap as to how much you can haggle downwards, as no salesman will sell you a car at a loss (outside of rare circumstances).


Actually, dealerships will often sell vehicles at a loss in order to get rid of inventory. Just like how banks will dump property at a loss rather than hold out for someone to market value, car dealerships are working with borrowed inventory. The longer they keep a car on their lot, the more it costs them. This is why having a solid core of buyers is critical for any dealership - to ensure that you just get enough inventory of the right vehicles that you know will sell.

Anyone else remember back when you would just order your muscle car from the factory, customized just how you want it? There's no reason that can't happen again.


RE: Just a thought
By Brockway on 6/6/2014 3:09:13 PM , Rating: 1
People don't like buying cars?! Car shopping is awesome, all the research and test drives. If I had more disposable income I'd do it more often.

I think its a big sign of whats wrong with the US right now, people (and politicians) don't want to haggle. They just want to buy their cars, houses, and insurance off a government web site for a set price without any thinking or consideration.


RE: Just a thought
By ritualm on 6/6/2014 8:55:55 PM , Rating: 2
It's not a test drive when the salesman says "you must follow my instructions. you cannot make any left turns whatsoever".

My worst personal experiences of all time - including police "interviews" - pale compared to that of buying a car at the dealership. Even when I know exactly what I want, I'm still forced to haggle and deal with these commission-fueled clowns.

So when the dealership association says their model is designed to "protect consumers", you can tell they're lying with their eyes wide open.


RE: Just a thought
By Manch on 6/9/2014 10:09:40 AM , Rating: 2
I was half reading your comment half reviewing spreadsheet numbers. For a minute I thought you said I do my taxes and sex online. Spit my coffee out laughing. Even though you didnt say that, Im still laughing. Now I need to clean my desk off and get more coffee....


RE: Just a thought
By alpha754293 on 6/9/2014 2:27:48 PM , Rating: 2
DISCLAIMER: The views and opinions expressed here are solely that of my own and are not representative of Ford Motor Company or its affiliates.

Canada Revenue Agency has a MUCH better handle on both Federal and Provincial taxes than IRS and the various Departments of Treasury in the States.

You can call them up and ask them a question and they've made it a point/mission to answer you within the first two minutes, and if it's a more detailed question, they refer you to the backline support people. And if there's a question that they can't answer right away, they'll go research it and call you back and tell you EXACTLY how to do within a couple of days. (I had to ask them how to report my US 401(k) contributions on my Canadian taxes, and they got back to me in like 3 days, and tell me all the forms that I needed and how to fill it out. It was awesome! And the guy gave me his name so if I have more questions, I can call him back for further clarification.)

They've already figured that it's MUCH better to educate the masses so that they'll do it right, rather than having them correct it for them.


RE: Just a thought
By Guspaz on 6/9/2014 8:11:29 PM , Rating: 2
CRA doesn't have much of a handle on provincial taxes, because if they did, I wouldn't have to fill out a complete duplicate set of taxes for the Quebec government... with slightly different numbers and slips for all of them, minimizing the amount of shared data.

Luckily, using online tax software makes it pretty easy, so it only takes half an hour to an hour to do my taxes each year. It was much more painful when I did it on paper.


RE: Just a thought
By Rage187 on 6/10/2014 8:58:16 AM , Rating: 2
I do my sex online as well!


RE: Just a thought
By Grimer21 on 6/6/2014 12:30:46 PM , Rating: 2
Haha, thanks for the humorous article.

Seriously though, while I can't speak for everyone else out there, in my particular case I pretty much already know what car I want to buy before I go to the lot. I just go there to see the car in person and maybe take it for a test drive. But, of course, the salesman comes sauntering out asking condescending questions and trying to be my friend at the same time... it's a very unpleasant experience and one that hopefully some day I never have to endure again.


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