It is no surprise that U.S. automobile dealers have been in a tizzy the past few months as the Consumer Financial Protection Bureau (CFPB) has been rattling its swords threatening to ban them from marking up interest rates on car loans, a sacred profit center for dealerships. Using methodology that assumes a person’s race can be determined by their last name and their gender by their first name, the CFPB claims that certain protected classes are being discriminated against in terms of being charged higher interest rates and thus the practice must stop.
What is a surprise is that Congress is equally annoyed with the agency’s strategy and lack of transparency, and recently announced new regulations limiting their power. No matter the outcome, there is a real possibility that the unintended consequences of the CFPB’s actions will be higher car loan rates for you. (Read More…)
Though NASCAR is officially based in Daytona Beach, Florida, the geographic home of American stock car racing is in and around Charlotte, North Carolina, where most of the top NASCAR teams have their race shops. When the state senate voted unanimously to block internet auto sales in NC, since dealer franchise laws there already prevent Tesla from opening its own retail outlets the new legislation would have made it impossible for the company to sell cars there at all. Tesla, in response, has come up with a novel way to lobby lawmakers in a state known for its car enthusiasm: they gave legislators test drives in Tesla’s Model S.
“When you accelerate it, it was the same sort of feeling I got when I test-drove a Mustang Boss back when I was probably 23 years old,” North Carolina House Speaker Thomas Tillis, 53, a Republican, told the Raleigh News & Observer. (Read More…)
The way that the auto industry uses the traditional independent dealer sales channel and proposed alternatives to that process have prompted considerable debate here at TTAC recently. While industry followers watch Tesla’s attempt to change the way automobiles are retailed with their factory owned outlets, General Motors is doing its part to change the retail sales equation, or at least make the negotiating process a bit more user friendly. If buyers want to, they can now complete the entire car buying process and even take delivery without ever stepping foot in a traditional dealership. However, GM says that the program is there to complement the existing retail dealer sales channel, not replace it. By the end of 2013, GM will expand the Shop-Click-Drive online shopping program nationally. (Read More…)
Tesla founder Elon Musk recently announced that it was feasible to build a giant vacuum tube from Los Angeles to San Francisco and transport people the 400 miles between the two cities in 35 minutes. There is a better chance of this so-called “Hyperloop” ever happening than Musk being allowed to sell his electric vehicles directly to the public through his own stores in more than a handful of states. Musk must face reality and stop trying to change franchise dealer laws if he wants Tesla to sell cars through a dealer network that has a true presence in the marketplace. He must embrace the current system and start signing up existing stores.
You might have thunk that car dealers would stop being skunks, what with the economy going thunk and the end of cash for clunk. But noooooooo. If anything, tough times have seen an increase amount of the same old story, same old song and dance down at the car lot. “You pay what we pay is back!” Little Rhody’s Flood Automotive Group proclaimed, before switching to free tires for life. And what of this? WYTV in Ohio reports [breathlessly] that Greenwoods Hubbard Chevrolet brought in the punters by selling used cars for $5. “Denny Denoi, General Manager of Greenwoods Hubbard Chevrolet said, ‘It’s just something that we wanted to do instead of taking some of these older cars to the auction we decided we would just sell them to the people of the Valley.’” That said, “The catch with this $5 car sale is that there were only 3 cars for $5, and those 3 lucky people’s names were actually pulled from a box.” But that’s OK, right? “Denoi said the sale was a success, and that most of the customers left the dealership happy, even though they didn’t get to drive away with a car for $5. ‘There’s [sic] some people who walked away with some great deals and some people who needed some cars that got some good transportation, and for the most part, I think 95-percent of the people are thrilled today.’” I wonder if GM’s new Sales Maven Susan Docherty will take that one national.