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California DMV warns Tesla its ‘Referral Program’ is unlawful

As if I couldn't hate the dealership association(s) any more than I already do... My guess is they complained to the state and the state was required to take action. While they pitch all of these laws and regulations as something that's benefitting and protecting the consumer, the only thing they do is create a monopoly market.

If were Elon I'd take a picture of me flipping up my middle finger and send it back to the DMV, and send a copy to the CA Dealers Association as well... But... It's probably good I'm not Elon... :)

Jeff
 
Those aren't vehicles. They have a crazy amount of extra regulation, many for very good reasons. It's the 2nd largest purchase people make and gov'ts big and small have added a lot of protections for consumers. They just don't all make sense anymore.
And the biggest purchase is a house, but when I refer someone to the realtor I used and they buy or sell a house, the realtor cuts me a cheque.

This isn't consumer protection, it's dealership protection.
 
That's not actually true. The state doesn't want people acting as brokers without proper training or licensing. They don't want Joe-Bird-Dog selling houses or cars out of the back of his van, without any training or regulation, and just having the licensed dealer (or real estate lawyer) sign the papers at the end. The laws were most definitely not created to protect dealers, they were created to protect unsuspecting consumers from unauthorized brokering. Now, whether the intent of the law matches the consequences is another story, as it always is, but it was written to protect consumers. As I said in my first post new sales models don't often fit into the framework created for the previous schemes. Laws will need to be changed, which is expensive and time-consuming.
What increased risk is there buying from someone who is unlicensed, vs buying from the thousands of extremely sleazy licensed dealers? Their license doesn't make them stand behind the vehicles they sell, it doesn't stop them from pawning off defective vehicles, and it doesn't stop outright fraud and lies.
I don't see the problem with someone without a license doing it. And we're not even talking about that situation, because the unlicensed individual isn't even selling the car! they're only referring one!

I'm sorry, this is blatant protectionism of an industry that is thoroughly corrupt, has massive amounts of power, and definitely does not need any form of protection.
 
Again, not true. Dealers would LOVE to be able to bird dog. They spend hundreds of dollars on every car they sell through advertising. If they could instead offer spiffs (commissions) to people legally, they'd jump at the chance. The law isn't there to stop Tesla - it's there to stop every dealership from taking advantage of people. Again - I'm not stating my opinion on the current state of the statutes and their efficacy in protecting people - but do some research before posting on the topic. Dealers are the ones bridled by these laws. They were in existence decades before Tesla was conceived.

Look at TrueCar.com (and the former ZAG.com) - they are referral services that previously were paid a bird-dog fee by their dealer network. Their dealers loved them - they got customers far cheaper than traditional methods, and with less work involved up front too. But the law went after them and forced them to change to a monthly subscriber scheme whereby dealers paid for the service by the month and not by the sale. Now it's legal.
Absolute and total nonsense. This law was lobbied for HARD by the dealers. They HATE "bird dogging" with all the bile they can muster. They never liked TrueCar because it allowed comparison shopping, they hate that. The dealers pushed for this, and it benefits them immensely while harming everyone else.
 
I'm not going to continue this, the laws have been around a very long time in many states. Predating Tesla and TrueCar and the internet itself. I'll give you another example to illustrate my point that dealers WISH they could bird dog:

Motor vehicle dealers often have strict laws restricting how they can advertise. In many/most states, they can't mention or display Invoice pricing. It's flat out against the law. Well, it's 2015 and for a decade or more every new car buyer knows to ask for the invoice price. Dealers want to place full page ads shouting "$1,000 over invoice!" but they're barred from doing so. But A Bird Dog Can. They can effectively break every law to get the sale. They can place any ad they want, since they're unregulated and not a licensed dealer who must follow the laws and regulations and statutes. Again, bird dogging laws are there to keep all transactions within the regulations. Whether they should apply to Tesla's situation I don't know. Plenty of dealers hate TrueCar, but they didn't create laws to abolish it, they are citing existing laws to make it change it's business practices.
Ok, I'm not sure why I'm responding at this point, but it's obvious you haven't looked in to the laws, there's no law against posting invoice pricing, it's an agreement made with the manufacturer, Dealers hate bird-dogs, they're worried nobody will buy from them if they can buy from someone who is cheaper and willing to compete.

The laws definitely pre-date truecar and Tesla, but they were designed to deal with the same type of thing, anyone who might compete with a dealer. Dealers love these laws, they WROTE these laws.
 
What a bunch of Bologna, there are all kinds of companies that do this. If I recommend a friend who is looking to install solar to the company I used and my friend uses them, I get a check. Directv does the same, etc.
Car companies? Does it involve California Vehicle Code?

The article states:
In his letter to Musk, Frank Alvarez, chief of DMV’s Investigations Division, said the Tesla program “violates California laws.” He described the Tesla offer as “a practice commonly referred to in the vehicle sales industry as offering ‘bird dog fees.’ ”

Alvarez goes on to allege specific violations, citing the California Automobile Sales Finance Act, which says it is “unlawful for any seller to induce or attempt to induce any person to enter into a contract subject to this chapter by offering a rebate, discount, commission, or other consideration, contingent upon the happening of a future event, on the condition that the buyer either sells, or gives information or assistance for the purpose leading to a sale by the seller of, the same or related goods.”

The letter also alleges multiple Vehicle Code violations, including a person acting as a vehicle salesperson without a valid DMV license or temporary permit.
(I'm not a fan of these warnings or whatever, I'm just re-stating what the article says.)

A quick Google search turned up Calif. Auto Dealers Want Brakes Put On Tesla Referral Deal - Law360 from August 28, 2015.

These offer a little more context as to CNCDA's arguments.
Calif. DMV Looking Into Tesla’s Referral Program - Top News - DP's Office - Top News - Auto Dealer Today

CNCDA Says Tesla’s Referral Program Violates Bird-Dogging Ban - Top News - The Showroom - Top News - Auto Dealer Today


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I find his responses amusing.
I would like him to explain to me how it was legal for my Cadillac dealer to give me a card that says they will pay me 500.00 for every customer I refer to them who buys a new Cadillac.
It might've been legal in your state of Missouri but not legal in California, which is what the article's about.

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It was between my two posts (11 and 12), must have been deleted? in fact all his posts in this thread seem to have gone missing...
I wonder if MileHighMotoring himself deleted them or if the moderators did. If the latter happened, all I can do is SMH.
 
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