Latest posts by Jon Gabriel (see all)
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There are few retail experiences worse than buying a car. Before setting foot in a dealership, I spend weeks researching makes and models, printing out price sheets and psyching myself up like I’m headed into an MMA bout.
“What if he tries to sell me the extended warranty? I’ll say no! Rustproof undercoating? Spin kick! That lease looks like a pretty good opti… Death grip!”
Despite constant promises of zero haggling and low-pressure sales, I always leave a dealership with a pronounced limp and wondering where my watch went.
In a world of one-click ordering from Amazon and iTunes, why can’t I just purchase the exact car I want on my terms? The answer is simple: Most state governments have made it illegal.
Automobile dealerships are some of the best-connected businesses in local politics. They contribute a large chunk of sales revenue and campaign cash so politicians reward them with sweetheart legislation.
In nearly every state, manufacturers are not allowed to directly sell cars to customers. Instead, those vehicles need to pass through the middleman of a local dealership. And there’s a list of laws to protect new car dealerships from any upstart that might compete in this lucrative market.
This crony capitalism helped scuttle the plans of a successful entrepreneur named Scott Painter. Using the “Dell model” of built-to-order computers, customers would select the exact options desired and Painter would deliver a sparkling new car to their doors. The tangle of protectionist policies stole that opportunity — and significant cost savings — from you and me.
The latest company to drive headlong into the growing wall of red tape is Tesla Motors. The luxury electric car manufacturer sees no reason to create an expensive network of dealerships when they could sell directly to the customer. Not only do the various state laws make that difficult, some states are actively trying to keep Tesla out.
The Austin American-Statesman reveals that Texas isn’t always open for business:
“You can visit one of the two galleries Tesla Motors operates in the state — one in Austin, the other in Houston — but employees can’t tell you how much the car costs. They can’t offer you a test drive. They can’t even give you their website address. And if you buy one, the car is delivered by a third party — in a truck that’s not allowed to have Tesla markings.”
The legislatures in North Carolina, New York and Colorado also have pushed measures intended to keep Teslas out of the hands of their residents.
Tesla is no angel when it comes to government intervention in the free market. The politically connected “green” business has benefited mightily from federal largesse and targeted tax credits. But two wrongs don’t make a right.
State and federal governments must stop choosing winners and losers in the marketplace since the only real loser is the customer. And politicians should step out of the way when innovative entrepreneurs try to radically improve the buying process for you and me.
Follow Jon on Twitter at @ExJon.