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Court: Car Dealers Can't Stop Tesla From Selling In Massachusetts
curtwoodward writes: Many states have laws that prevent car manufacturers from operating their own dealerships, a throwback to the days when Detroit tried to undercut its franchise dealers by opening company-owned shops. But dealers have taken those laws to the extreme as they battle new competition from Tesla, which is selling its cars direct to the public. In some states, dealers have succeeded in limiting Tesla's direct-sales model. But not in Massachusetts (PDF): the state's Supreme Court says the dealers don't have any right to sue Tesla for unfair competition, since they're not Tesla dealers. No harm, no foul.
More like just State Supreme Court. SCOTUS stands for (S)upreme (C)ourt (O)f (T)he (U)nited (S)tates.
actually, Supreme Judicial Court is the highest court, the highest "appeals" court in Massachusetts; whereas Trial Court is the ordinary court in Massachusetts and General Court is the legislature; and wherease, Supreme Court of New York is the ordinary trial court, and Court of Appeals is the highest NY State appellate court.
This terminology all varies by state (and/or by commonwealth or provident plantation)
Historical reasons. Manufacturers could book a sale when they shiped a car to a dealership. Want to keep your dealership franchise? You'll accept X cars per month. You figure out how to sell them. So now manufacturers have stable 'sales' figures to make investors happy.
After some time, laws were passed against these abuses. But the same laws protected dealership franchises, so they persist.
Have gnu, will travel.
I see you can learn something from this example.
The original post indicates he didn't go in uninformed. A classic negotiation tactic is to let the other side go first. Asking a salesman to show you something is a good opening move for an expensive purchase even if you know exactly why you are there and what you want to buy. When the salesperson went immediately to the product of the day, that gave away that they were acting in bad faith.
A number of other states modified their laws. Most of them started with wording stating that companies could not compete with their own franchises, but the franchises in a number of states had the wording changed so that all car companies have to sell through franchises rather than branches.
I had a friend who worked in the finance dept of a car dealership. People would spend 2 hours trying to wangle the best possible deal from the salesman, beat him down, get free floor mats, whatever. Then they would walk into my friends office. How does $400 a month sound for payments? OK sure. And in 2 seconds they would agree to a loan at 12% where the banks would have given them 5%. And the dealer would earn an extra $3k on the car loan.
I went into a dealer just about 3 weeks ago, told the salesman I wanted a new car, was trading in my truck, and wanted to spend no more than $130 a month over 3 years. He almost fainted and then basically called me crazy. The sales manager even tried to get me to lease a car instead of buying. Ended up walking out of there with a new car(end of the model year) for $125 a month for 3 years with $10,300 trade in on my truck (KBB value around $9900 and needed about $2k worth of work-not including some cosmetic body work) and $2k down. Think I end up paying about $300 in interest if I take all 3 years, but plan to pay it off sooner. I save more in gas than my monthly payments cost. The trick was knowing what we wanted and refusing to budge from it.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
It actually makes a lot of sense if you think about it in historical context.
The car manufacturers originally offered a franchise model. Only after the franchisees had successfully set up the market did the manufacturers try to come in and eat their lunch with corporate stores. The anti-competition laws were put in place to prevent the car manufacturers from undercutting those who had built their client base for them. In the case of Tesla this issue doesn't exist because Tesla has never franchised.
A more modern example is companies like RoadRunner and @Home. They built out most of the cable modem infrastructure under contract to companies like Comcast and Time Warner who thought there was too much risk involved. Once the cable companies saw how easy it was, they refused to renew the licenses to use their lines and set up their own cable modem service. The laws in the automotive space are designed to prevent this kind of scenario.
For anyone out there reading this: Not saying Nidi62 got a bad deal but generally you want to negotiate the price of the car, not the payments. If you negotiate price then you can figure out financing /payment separately. You can still walk in knowing you only want to spend 130 a month, and it is very easy to know the price that 130 a month is equal to. A common trick is for car sales people to negotiate you a monthly payment but you are still missing a) the down payment and b) the term of the payment and c) what you actually paid for the car (cash price) d) real or implied interest rate.
For example, who cares if $125/mo is below budget if the car you are buying is not worth that. OR if they would sell it to you for at a lower "price" and you obtain outside financing to make the payments work. The point is - if you negotiate on price then you can use your outside financing or the dealers financing if it is better. If you negotiated payment then you either a) wasted time negotiating interest rate, term, monthly payment, down payment separately all to arrive at something that equals a price or b) those variables are not nailed down and the dealer can use the final variables to screw you in what you thought was a done deal.
Nidi62 may have got a good deal - who knows - but what he/she did is not the optimal way to negotiate with a dealership.