Dealer Groups Sue Tesla, State Agencies Over EV Maker's Ohio Retail License

The enemy of your enemy is not necessarily your friend. Tesla sells cars at full sticker. The website cost calculator tries to convince the (naive) prospective customer that a $1,000 per month payment equates to $600 for a variety of bogus reasons. And if you want to buy a Tesla, then there's only one place to go. Who more closely resembles the monopolist in this equation?

@Pch101 Yes, Tesla sells cars at full sticker. If you don't like that, then go buy a different car. There are a lot of cars you can choose besides Tesla. The only place I can buy an Auntie Anne's pretzel is at Auntie Anne's, but that doesn't make Auntie Anne a monopolist.

@srh +1. What you said.

@srh People complain about dealers because they feel overcharged. As it turns out, Tesla will overcharge you, too. People complain about dealers because of the games that they play with numbers. As it turns out, Tesla's sales model revolves around trying to convince you that your payment is lower than what it really is. The difference is that you can't play Tesla dealers against one another, since there is no competition among Tesla outlets. This is actually worse than the system that consumers love to hate. If one is going to refer to the car sales business as a "cartel", then it would make sense to know an ubercartel when it's hiding in plain sight. There's no retail competition for Tesla sales, which far more closely resembles a monopoly than a system with thousands of independent dealers.

@Pch101 I don't complain about dealerships because I feel overcharged. I'm pretty sure I did quite well on the last couple of cars I bought. I'd complain about the dealerships trying to use the power of the state to force another car company to only be able to sell its cars through independent dealerships. If that model works for them, they should have at it, but if not for Tesla, then why should Tesla have to? Why should a consumer only be able to buy a car from a middleman?

@PCH101: You're playing fast and loose with words. Tesla won't overcharge you - it's just that a Model S is expensive. Tesla's advertised cost calculator may or may not be accurate, but it doesn't alter the actual sales contract. Everyone understands the difference between advertising and actual cost to the consumer. The competition for Tesla is... everybody else; they don't need to compete against themselves, and neither do the consumers.

@Pch101 It's funny how those who loathe the usual dealers will feel warm and fuzzy about Tesla when it engages in similar practices. If the local Chevy dealer tried to convince you that your $500 payment was $300, you'd be calling the Better Business Bureau and complaining across the internet. Yet when Elon Musk does it, you want to be his best friend. All car dealers should be regarded with suspicion. Tesla is no exception. The company-owned model invariably leads to higher prices, and the reasons for that should be obvious.

@Pch101 "If that model works for them, they should have at it, but if not for Tesla, then why should Tesla have to? Why should a consumer only be able to buy a car from a middleman?" I seriously doubt that the dealers care about Tesla, per se. Their concern is that Tesla sets a precedent for the major automakers. What dealers don't want is to have the suppliers of their inventory cherry pick their best territories once the dealers have gone to the trouble and expense of building a franchise. If you spent a couple million bucks and a lot of time building a business, then you wouldn't want the multibillion dollar corporation that controls your product and livelihood to start competing against you, either -- you couldn't possibly win.

@Pch101 Good point. The FTC doesn't allow franchise dealers to conspire to fix prices. The way around that is for the factory to own all of its outlets so they can LEGALLY set prices. The average consumers, and most on this thread, don't understand that. Saturn dealers could fix prices legally in their own markets. Tesla wants to be able to do that nationally. Consumers benefit from being able to play Chevy dealers off against each other. There are some folks who consider themselves enlightened who think fixed pricing is a way to please auto consumers. Be careful what you wish for....... But these dealers are just making fools of themselves.

@Pch101 There's currently a 2-3 month wait for Model S. If dealers were selling it, you can bet it'd have a healthy added dealer markup attached. Same thing if they manage to produce a 35k Model E. You'd never see them for MSRP.

And this is a big part of why we still have dealerships.

Would you prefer that they bumped the sticker price up by 10 grand and then gave you a $10k discount?

@bikegoesbaa What a deal!

Scion has no-haggle pricing, and so did Saturn. Why does it bother you with Tesla? Is it just the high price?

@SCE to AUX Or why limit the discussion to just cars? When was the last time you haggled price in a grocery store?

@SCE to AUX The largest percent discount I ever got on a new car was from Saturn. All I had to do was ask what incentives were being offered.

@SCE to AUX Scion and Saturn are both failures. The kids are buying Kias and potential Saturn buyers instead flocked to Camry, Accord, Fusion, etc. They eschewed the Saturn purchase experience for something else.

@ruggles Actually, Scion pricing is NOT "no haggle" especially if you have a trade in. The financing is still a hassle for most folks. Why? Because most Scion buyers don't have fast trackable credit scores. A surprising number of Scions are NOT bought by Gen Y, but by "geritol setters" like myself, who pay cash.

@ruggles Scion pure price = dealer quotes a no haggle price on the new Scion, and quotes a realistic trade in offer. No haggling, no discussion. The margins on a Scion aren't worth the dealers time to haggle back and forth over $50 or $100. If you can fog a mirror or have a parent to co-sign, anyone can get a loan thru the TFS captive or their local bank.

you think you are not paying more than "full sticker" at a dealership? ROFL. Any number you see at a dealership is way over the true cost and minimum price the dealer will sell the car to you for. I love people like you who think you are getting a good deal. LOL. dealers love you too.

@ruggles Saturn was junk. the cars were horribly built, full of problems, cheapo GM interiors, etc... They did not sell because they sucked. The dealership experience was the only thing Saturn customers loved.

Yup! Those greedy dealer who make about 3% net profit on sales.

@ruggles >> Yup! Those greedy dealer who make about 3% net profit on sales. Yet somehow manage to make enough to become billionaires: http://en.wikipedia.org/wiki/Herb_Chambers

@ruggles If they add value and/or are truly necessary to the car sales process then surely they can make it without using the courts to mandate their own existence, right?

@bikegoesbaa The territories that are most lucrative are also the most desirable territories to poach. The OEMs are generally not interested in retail, since they have better skill sets in production and because the returns are low. But if they were going to take a few territories, then they would want the best ones. The average dealer would not be able to take on a multibillion dollar automaker that also has the power to deprive them of their inventory. If you spent $1-2 million to set up a franchise, then you would want to protect it, too.

@mcs Yes, how DARE anyone actually work hard, build a business, and reap the rewards of their hard work. That stinks of...CAPITALISM.

@ruggles source?