FTC rules in favor of Tesla Director-To-Consumer sales; Legal

Chester Copperpot

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Well hot diggity damn.

FTC Rules In Favor Of Tesla, Direct-To-Consumer Sales Legal - TechDrive - The Latest In Tech & Transport

In 2014, General Motors backed a Michigan law that banned the direct sale of automobiles to consumers. It wasn’t alone; New Jersey and other states have also put similar laws in place. Tesla has experienced meteoric success with its high quality electric vehicles which have caused automakers and dealer networks to quiver in their boots as their formerly secure position in the market was threatened.

A direct sale model involves no haggling, meaning that consumers are able to purchase the car for what it is actually worth instead of having to negotiate their way down to what still may not be a fair price. If Tesla can sell directly to the consumer, the pipeline of sales from the automaker to the dealer and then to the consumer would be disrupted.

The Federal Trade Commission’s (FTC) new ruling prevents dealers from having a monopoly of the sale of vehicles. It argues that this was not only done in favor of Tesla but in defense of all business entities who desire to sell their products directly.
In their public statement, the FTC asserts “blanket prohibitions on direct manufacturer sales to consumers are an anomaly within the larger economy.” The impetus for FTC’s statement is that Michigan State Legislature allowed Elio, a manufacturer of highly efficient three-wheelers, to sell direct. With this amount of inconsistency circulating among state lawmakers and courts, the FTC needed to step in and create a more universal policy.

This ruling changes everything for consumers, dealers, and automakers. Consumers have received additional protection because the dealer network is no longer a fact of life, which means in some cases shoppers can buy cars for the price that is listed. Additionally, automakers have the freedom to choose how they sell their cars, and this increases competition which promotes economic growth. Finally, the vise grip independent dealers hold is finally being challenged, which should cause a dramatic shift in the way drivers purchase their vehicles.

Tesla has not only pioneered new technology in the automotive world, but it turns out that it has also blown open the doors to a new era of economic competition.

As someone in a comment said "Potentially no more thousands of square miles of lots with cars with options nobody wants that dealers end up selling at a loss anyway" if this starts a trend with all manufactures cutting out the dealer.

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Flyn

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Gone_2022

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Good. I had stopped by a tesla store in oak brook to check them out, see what it is all about. You can get a pre owned, loaner car, or order one new from the factory. The customer service was exceptional. And I was just some joe off the street no appointment.
 

guspech750

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Good. I had stopped by a tesla store in oak brook to check them out, see what it is all about. You can get a pre owned, loaner car, or order one new from the factory. The customer service was exceptional. And I was just some joe off the street no appointment.


Yes, my wife and I stopped off at the Oak Brook store last year. We were treated like gods. Not one ounce of sales pressure.


About time a company came in and broke the status quo. Tesla put the beat down on douchy politicians and automobile dealers.
 
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