4 ms·

Why? I mean... can we not change that?

citizenkeen 8y ago
We could, but dealers spend a lot of money lobbying to make sure we don't.
davidhyde 8y ago
https://en.wikipedia.org/wiki/Lobbying_in_the_United_States https://en.wikipedia.org/wiki/Lobbying_in_the_United_States It can be changed but that costs money: To change the law via lobbying or by challenging the law in court.
JetSpiegel 8y ago
In the US? Good luck out-lobbying GM, Ford, etc.
- notatoad 8y ago
  The point here is that they are out-lobbying Ford and GM. The car companies want to sell direct to consumer, and the dealers have managed to maintain their role as government-mandated middlemen despite that.
  - bluGill 8y ago
    Is that true? We know the car companies cannot sell direct, but would they if they could? Dealers are required to have trained mechanics who actually know to deal with the car.
koolba 8y ago
Because elected officials at the State level receives contributions from dealers in exchange for doing their bidding. The “pro” argument for it is that it keeps more money intra State rather than sending it upstream to the parent company’s home country / State. The con is that you’re shafting consumers and eliminating true competition.
- smogcutter 8y ago
  How do the dealers eliminate competition?
notatoad 8y ago
Probably not. In small towns, the car dealership is one of the most important locally-owned businesses. They sponsor all the community events and contribute to the local politicians. They've got a lot more money to work with than the other typically local-owned businesses like restaurants or retail stores. Pissing off the car dealers is not something any politician - whether red or blue - wants to do if they're going to get rural votes.
- yellow_postit 8y ago
  All it takes is for a few states to change and have a critical mass of direct sales. NJ for example can’t insulate its market forever if neighboring states which are a short drive away offer consumers more options that they want.
longerthoughts 8y ago
Tesla struggling to sell direct in New Jersey is an interesting case study in exactly that. https://www.washingtonpost.com/news/the-switch/wp/2015/03/18/tesla-just-won-a-huge-victory-in-new-jersey/?noredirect=on&utm_term=.991a5ff6d7fb https://www.washingtonpost.com/news/the-switch/wp/2015/03/18...
dx87 8y ago
Some states are working on it. The reason it's illegal in most states is because it's an old law that was created to prevent Ford, Chevy, etc. from using their huge amount of resources to force smaller dealerships out of business. It's like how Wal-Mart uses it's huge amount of money to keep low prices until it forces all of the local competition out of business, then raises them once their is nothing you can do about it. Most people want it to go away now though, since it's obviously bad for new automakers that want to enter the market but don't have the mass appeal to get independent dealerships to risk having a bunch of relatively niche cars in stock that never get sold.
- pathseeker 8y ago
  >It's like how Wal-Mart uses it's huge amount of money to keep low prices until it forces all of the local competition out of business, then raises them once their is nothing you can do about it. That's not really how walmart works. They don't jack up prices in local areas after the businesses go away. They just operate on much smaller margins and sell cheaper versions of things which is what gives them so much staying power.
  - hfdgiutdryg 8y ago
    They appear to have been found guilty of predatory pricing in at least one case: https://www.nytimes.com/1993/10/13/business/company-news-wal-mart-loses-suit-on-pricing.html https://www.nytimes.com/1993/10/13/business/company-news-wal... Searching "Walmart predatory pricing" returns quite a lot of results.
    - HeyLaughingBoy 8y ago
      Then perhaps you should point to one that isn't 25 years old!
      - hfdgiutdryg 8y ago
        That's the first, obvious example of Walmart losing in court. A few minutes of skimming yields cases from 1993, 1995 and 2000 in the US, then 2003 in Germany and 2012 in Costa Rica. That's as much effort as I'm willing to put into a comment on HN. Maybe Walmart has completely changed their business practices in the last six years...

We could, but dealers spend a lot of money lobbying to make sure we don't.

https://en.wikipedia.org/wiki/Lobbying_in_the_United_States https://en.wikipedia.org/wiki/Lobbying_in_the_United_States It can be changed but that costs money: To change the law via lobbying or by challenging the law in court.

JetSpiegel 8y ago

In the US? Good luck out-lobbying GM, Ford, etc.

notatoad 8y ago
The point here is that they are out-lobbying Ford and GM. The car companies want to sell direct to consumer, and the dealers have managed to maintain their role as government-mandated middlemen despite that.
- bluGill 8y ago
  Is that true? We know the car companies cannot sell direct, but would they if they could? Dealers are required to have trained mechanics who actually know to deal with the car.

koolba 8y ago

Because elected officials at the State level receives contributions from dealers in exchange for doing their bidding. The “pro” argument for it is that it keeps more money intra State rather than sending it upstream to the parent company’s home country / State. The con is that you’re shafting consumers and eliminating true competition.

smogcutter 8y ago
How do the dealers eliminate competition?

notatoad 8y ago

Probably not. In small towns, the car dealership is one of the most important locally-owned businesses. They sponsor all the community events and contribute to the local politicians. They've got a lot more money to work with than the other typically local-owned businesses like restaurants or retail stores. Pissing off the car dealers is not something any politician - whether red or blue - wants to do if they're going to get rural votes.

yellow_postit 8y ago
All it takes is for a few states to change and have a critical mass of direct sales. NJ for example can’t insulate its market forever if neighboring states which are a short drive away offer consumers more options that they want.

longerthoughts 8y ago

Tesla struggling to sell direct in New Jersey is an interesting case study in exactly that. https://www.washingtonpost.com/news/the-switch/wp/2015/03/18/tesla-just-won-a-huge-victory-in-new-jersey/?noredirect=on&utm_term=.991a5ff6d7fb https://www.washingtonpost.com/news/the-switch/wp/2015/03/18...

dx87 8y ago

Some states are working on it. The reason it's illegal in most states is because it's an old law that was created to prevent Ford, Chevy, etc. from using their huge amount of resources to force smaller dealerships out of business. It's like how Wal-Mart uses it's huge amount of money to keep low prices until it forces all of the local competition out of business, then raises them once their is nothing you can do about it. Most people want it to go away now though, since it's obviously bad for new automakers that want to enter the market but don't have the mass appeal to get independent dealerships to risk having a bunch of relatively niche cars in stock that never get sold.

pathseeker 8y ago
>It's like how Wal-Mart uses it's huge amount of money to keep low prices until it forces all of the local competition out of business, then raises them once their is nothing you can do about it. That's not really how walmart works. They don't jack up prices in local areas after the businesses go away. They just operate on much smaller margins and sell cheaper versions of things which is what gives them so much staying power.
- hfdgiutdryg 8y ago
  They appear to have been found guilty of predatory pricing in at least one case: https://www.nytimes.com/1993/10/13/business/company-news-wal-mart-loses-suit-on-pricing.html https://www.nytimes.com/1993/10/13/business/company-news-wal... Searching "Walmart predatory pricing" returns quite a lot of results.
  - HeyLaughingBoy 8y ago
    Then perhaps you should point to one that isn't 25 years old!
    - hfdgiutdryg 8y ago
      That's the first, obvious example of Walmart losing in court. A few minutes of skimming yields cases from 1993, 1995 and 2000 in the US, then 2003 in Germany and 2012 in Costa Rica. That's as much effort as I'm willing to put into a comment on HN. Maybe Walmart has completely changed their business practices in the last six years...