Tesla Sales Banned in New Jersey... hopefully not for long!

[Bradleybang]

The piece on Fast Money just now was spot on. Phil Lebeau clearly stated that the franchise laws are to protect the franchises from a manufacturer from selling directly but since Tesla doesnt have any franchises, they arent hurting anyone which makes the law not pertain to them.

Its like preventing me from having my own burger joint because its not fair to McDonalds franchises owners.

I dont understand what they think isnt "fair" about it. What advantages do Tesla stores have?

In N Out Burger immediately came to my mind when I read your analogy. Way back in the 80s after I graduated from college in L.A. and moved to SF, I enquired with In N Out about franchising a location in SF. I knew it would be a winner. Problem was In N Out never has franchised and has steadfast to this day not franchised. In-N-Out Burger has slowly expanded outside Southern California into the rest of the state as well as into Arizona, Nevada, Utah, and Texas.

Their reason for not franchising is that they believe it could compromise quality and the brand.


This quote yesterday really got me.
"Jim Appleton, president of NJ CAR, says Tesla never should have been granted the right to sell cars in New Jersey in the first place because the state believes there’s a public benefit to promoting a separation between automakers and auto sellers. If there’s a warranty issue or recall notice, said Appleton, dealers see a chance to help customers; the manufacturer sees an expense."

Warranties are the dealers biggest source of profit from both the sales and service centers. If there’s a warranty issue or recall notice, dealers see $$$$$$$$$$.

 

[Doug_G]

This quote yesterday really got me.
"Jim Appleton, president of NJ CAR, says Tesla never should have been granted the right to sell cars in New Jersey in the first place because the state believes there’s a public benefit to promoting a separation between automakers and auto sellers. If there’s a warranty issue or recall notice, said Appleton, dealers see a chance to help customers; the manufacturer sees an expense."

Warranties are the dealers biggest source of profit from both the sales and service centers. If there’s a warranty issue or recall notice, dealers see $$$$$$$$$$.

I've had the dealer repair my transmission incorrectly, and say the resulting problem was "normal". The manufacturer representative backed up my claim that a repair was done incorrectly, and basically ordered the dealer to fix the problem. It took two weeks but it got fixed.

I've had unethical service behavior at a local dealer - delayed my appointment until after the warranty expired, then tried to charge me for the work. Probably were going to double dip. When I responded angrily he said, "Well you can't blame me for trying". My answer was, "I sure as hell can!". The manufacturer got so many complaints about that dealer that they threatened to pull their dealer franchise if they didn't clean up their act.

I've had a dealer try to sell me rustproofing treatment, which it turns out would have invalidated the manufacturer's warranty.

I've had a dealer finance guy blatantly lie to me. Fortunately I didn't believe a word of it. The guy was furious with me because he didn't get away with his shenanigans.

So in my experience the reverse is true. I've had many bad experiences with dealers, and in some cases I've been protected from my dealer by the manufacturer.

 

[NigelM]

Someone should call Chris Paine and ask him to do a 3rd movie. So far we got: 1. "Who killed the electric car?" 2. "Revenge of the electric car" 3. How about: "The fight against electric cars".

'Car Wars: The Empire Strikes Back!'

 

[Lloyd]

in theory yes, but Tesla seems not to be open to having franchisees

NOT letting the GEEK SQUAD touch my car! :crying:

 

[pbleic]

In N Out Burger immediately came to my mind when I read your analogy. Way back in the 80s after I graduated from college in L.A. and moved to SF, I enquired with In N Out about franchising a location in SF. I knew it would be a winner. Problem was In N Out never has franchised and has steadfast to this day not franchised. In-N-Out Burger has slowly expanded outside Southern California into the rest of the state as well as into Arizona, Nevada, Utah, and Texas.

Their reason for not franchising is that they believe it could compromise quality and the brand.

It would be a perfect analogy if you ordered an in and out burger over the internet, it was cooked and delivered at your local store.

 

[palmer_md]

Seamless | Order Food Delivery Online from Local Restaurants

 

[Chris Naps]

Or maybe a future Tesla buyer. Sue the state for preventing them from buying the car they want. Impinging on their freedoms and such...

Unfortunately this will not even be admitted into the courts - most likely - The state of NJ has decided that Tesla VIOLATES consumer protection when only allowing direct sales. It is more about the rights of the people than it is about selling a vehicle. They are saying that because Tesla is a "direct sales" company that the person you are purchasing the car from, Tesla in CA and NOT from the Tesla in NJ. This means that if any problems occur with the car and you decide to hire an attorney to sue, you are suing the Tesla as a company and not the dealership itself which in itself is against NJ law because it is out of states hands at that point in time.

Here is a quote for the reasoning behind why it was banned (in good faith of the consumers of NJ):
Bill Wolters, president of the Texas Auto Dealers Association, makes this argument in a recent interview:

‘Now to me fewer dealers drives the price up. Fewer dealers drives the service down. Fewer dealers make people less safe on the highways because I don’t have a dealer in West [Texas] to take recalls,’ said Wolters. ‘The price doesn’t go down when they have fewer outlets. And when they talk about the manufacturer being able to save more selling direct, there’s nothing that says they pass that along to the customer.’
(link to the whole website: http://www.project-disco.org/compet...-jersey-playing-the-consumer-protection-card/)

Tesla also never donated any money, so this is also another reason why NJ hates Tesla (Corruption at its finest.) Here is a funny quote from the article that proves that dealerships are as corrupt:

Also, bear in mind, that the Consumer Federation of America argued against these very laws, along with a host of other laws lobbied for by car dealers, as being anti-consumer, which — as of 2001 — they calculated as costing consumers $20 billion a year; and the $140+ million dollars that auto dealers have spent on political contributions since 2003 is, in the end, coming out of the consumer’s pocket.
​

 

[Joel]

Unfortunately this will not even be admitted into the courts - most likely - The state of NJ has decided that Tesla VIOLATES consumer protection when only allowing direct sales. It is more about the rights of the people than it is about selling a vehicle. They are saying that because Tesla is a "direct sales" company that the person you are purchasing the car from, Tesla in CA and NOT from the Tesla in NJ. This means that if any problems occur with the car and you decide to hire an attorney to sue, you are suing the Tesla as a company and not the dealership itself which in itself is against NJ law because it is out of states hands at that point in time.

Here is a quote for the reasoning behind why it was banned (in good faith of the consumers of NJ):
Bill Wolters, president of the Texas Auto Dealers Association, makes this argument in a recent interview:

‘Now to me fewer dealers drives the price up. Fewer dealers drives the service down. Fewer dealers make people less safe on the highways because I don’t have a dealer in West [Texas] to take recalls,’ said Wolters. ‘The price doesn’t go down when they have fewer outlets. And when they talk about the manufacturer being able to save more selling direct, there’s nothing that says they pass that along to the customer.’
(link to the whole website: http://www.project-disco.org/compet...-jersey-playing-the-consumer-protection-card/)

Tesla also never donated any money, so this is also another reason why NJ hates Tesla (Corruption at its finest.) Here is a funny quote from the article that proves that dealerships are as corrupt:

Also, bear in mind, that the Consumer Federation of America argued against these very laws, along with a host of other laws lobbied for by car dealers, as being anti-consumer, which — as of 2001 — they calculated as costing consumers $20 billion a year; and the $140+ million dollars that auto dealers have spent on political contributions since 2003 is, in the end, coming out of the consumer’s pocket.
​

Question: If New Jersey residents have to purchase their Model S' outside of the Garden State, will they pay New Jersey state taxes on the purchase or the state in which the transaction occurs?

 

[Chris Naps]

Question: If New Jersey residents have to purchase their Model S' outside of the Garden State, will they pay New Jersey state taxes on the purchase or the state in which the transaction occurs?

In New Jersey ironically there is NOT sales tax for purchasing EV vehicles. The thing is... You CANNOT buy them in NJ anymore!!! So you would have to pay the sales tax in another state equal to 7%. If it is less than 7% then you must pay NJ the difference and THEN pay taxes for bringing back in to NJ and all of that junk (titles, fees, and so on.) You may refer to this: http://www.state.nj.us/mvc/pdf/About/GU30_Revised.pdf

So in the end it would be way to annoying for any NJ resident to purchase a Tesla vehicle at the moment.

 

[ggies07]

Someone should call Chris Paine and ask him to do a 3rd movie. So far we got: 1. "Who killed the electric car?" 2. "Revenge of the electric car" 3. How about: "The fight against electric cars". Seriously guys we can't let them crush our Tesla-dreams. Let the mainstream people know about this ugly truth.

I like it!

 

[Joel]

In New Jersey ironically there is NOT sales tax for purchasing EV vehicles. The thing is... You CANNOT buy them in NJ anymore!!! So you would have to pay the sales tax in another state and THEN pay taxes for bringing back in to NJ and all of that junk..

So in the end it would be way to annoying for any NJ resident to purchase a Tesla vehicle at the moment.

If you buy a Nissan Leaf, New Jersey does not require the owner to pay sales tax?

 

[Airton]

No sales tax in NJ even on a used EV, I purchased my Rav4 EV used had shipped here registered it and paid 0 sales tax.

 

[ckessel]

In New Jersey ironically there is NOT sales tax for purchasing EV vehicles. The thing is... You CANNOT buy them in NJ anymore!!! So you would have to pay the sales tax in another state and THEN pay taxes for bringing back in to NJ and all of that junk.. You may refer to this: http://www.state.nj.us/mvc/pdf/About/GU30_Revised.pdf

So in the end it would be way to annoying for any NJ resident to purchase a Tesla vehicle at the moment.

Sales tax is almost always applied in the state where the item is shipped, so while you buy it from California, you'd take ownership where it's shipped, which is New Jersey.

That's why for online purchases you pay your local sales tax, not that of the company that's shipping it.

 

[Chris Naps]

If you buy a Nissan Leaf, New Jersey does not require the owner to pay sales tax?

Yep - If you purchase any EV vehicle in NJ you are not permitted to pay sales tax. and you get a few more discounts.. such as... 10% off toll roads on off-peak hours, junk like that.

- - - Updated - - -

Even thought, lets say you buy the car in PA... You are not allowed to drive it to NJ - you have to have it shipped to your home because there must be a process that the new owner must go through to make the car "titled", regardless if it is new or used.

In the end of everything, it becomes too much of a burden. I think it would be better if Tesla pre-manufactured the cars and brought them to NJ just to sell, or have an "extended" test drive from the closest gallery to another state in order to make the purchase then a drive back in the vehicle by a representative at Tesla.

http://www.nj.gov/mvc/Inspections/VehiclesLeased.htm

 

[Norbert]

Also, in 56:10-4, which relates to the whole of 56:10 (the "Franchise Practices Act"), it says:

56:10-4. Application of act

4. This act applies only:

a. to a franchise (1) the performance of which contemplates or requires the franchisee to establish or maintain a place of business within the State of New Jersey, (2) where gross sales of products or services between the franchisor and franchisee covered by such franchise shall have exceeded $35,000.00 for the 12 months next preceding the institution of suit pursuant to this act, and (3) where more than 20% of the franchisee's gross sales are intended to be or are derived from such franchise; or

b. to a franchise for the sale of new motor vehicles as defined in R.S.39:10-2, the performance of which contemplates or requires the franchisee to establish or maintain a place of business within the State of New Jersey.

L.1971,c.356,s.4; amended 1993,c.189,s.1.

(bold emphasis is mine)

Here it says explicitly that 56:10 overall applies only to franchises, in the first place. (The definition referred to, in 39:10-2, is completely unrelated to this question.)

I'm getting the impression that law was changed based on a misnomer in the definition in 56:10-27: the accidental use of the word "person" instead of "franchisor".

The definition I was referring to, in this previous post, is actually 56:10-26 (not 27). I edited that post to fix this.

 

[apvbguy]

Yep - If you purchase any EV vehicle in NJ you are not permitted to pay sales tax. and you get a few more discounts.. such as... 10% off toll roads on off-peak hours, junk like that.

- - - Updated - - -

Even thought, lets say you buy the car in PA... You are not allowed to drive it to NJ - you have to have it shipped to your home because there must be a process that the new owner must go through to make the car "titled", regardless if it is new or used.

In the end of everything, it becomes too much of a burden. I think it would be better if Tesla pre-manufactured the cars and brought them to NJ just to sell, or have an "extended" test drive from the closest gallery to another state in order to make the purchase then a drive back in the vehicle by a representative at Tesla.

http://www.nj.gov/mvc/Inspections/VehiclesLeased.htm

I don't think you are correct about any of this, you can buy a car in PA and have it registered, inspected and titled in NJ and AFAIK you are only liable to NJ for any sales taxes owed

 

[SFOTurtle]

Someone should call Chris Paine and ask him to do a 3rd movie. So far we got: 1. "Who killed the electric car?" 2. "Revenge of the electric car" 3. How about: "The fight against electric cars". Seriously guys we can't let them crush our Tesla-dreams. Let the mainstream people know about this ugly truth.

I also like the idea. Would be fun to watch pursue Gov. Christie on this topic, although I assume he will repeatedly decline comment and instead issue some non-responsive written statement to avoid having to answer any tough questions on this. Heck, you could even have some fun by asking the WH why it has refused to even respond to the petititon asking for its position, despite well over 100K signatures.

 

[youlikeadajuice]

Even thought, lets say you buy the car in PA... You are not allowed to drive it to NJ - you have to have it shipped to your home because there must be a process that the new owner must go through to make the car "titled", regardless if it is new or used.

In the end of everything, it becomes too much of a burden. I think it would be better if Tesla pre-manufactured the cars and brought them to NJ just to sell, or have an "extended" test drive from the closest gallery to another state in order to make the purchase then a drive back in the vehicle by a representative at Tesla.

http://www.nj.gov/mvc/Inspections/VehiclesLeased.htm

I bought a car before I moved from Chicago several years ago. I got a temporary registration/license from Illinois to transport the vehicle to New Jersey where I then went to the DMV and had it licensed/registered/payed tax for NJ. So, yes, you can transport it from another state and pay tax once your back.

 

[Norbert]

Unfortunately this will not even be admitted into the courts - most likely - The state of NJ has decided that Tesla VIOLATES consumer protection when only allowing direct sales. It is more about the rights of the people than it is about selling a vehicle..

Where has the state said this? Are you not confusing this with something the dealer association has said? The committee texts quoted in this thread talk only about making the amendment in order to be more consistent regarding existing law.

And even if that's what the state said (the executive), why would this mean that the courts would not admit a case from someone who disagrees with such a point of view (probably coming from the dealer's association) ?

They are saying that because Tesla is a "direct sales" company that the person you are purchasing the car from, Tesla in CA and NOT from the Tesla in NJ. This means that if any problems occur with the car and you decide to hire an attorney to sue, you are suing the Tesla as a company and not the dealership itself which in itself is against NJ law because it is out of states hands at that point in time.

I suppose this argument would apply to anything bought over the internet, so how can there be a NJ law against it?

 

[ggr]

just a few days ago i ordered s85 to be delivered in july. now, nj is completely banned tesla from direct-to-consumer sales. i have a few questions and dont know where to ask. please help!


1. what will happen to my order? will i still be able to take delivery in nj?
2. what will happen to service center(s) in nj? where can i service my car in the future?
3. do i now have to pay sales tax? (it was 0% sales tax on tesla)


thanks!

Fret not. Tesla will take care of you, somehow.