In Georgia, a Lemon of a Law

Tuesday, September 09, 2014

A car salesman, who wishes that "more of my peers would accept the tenets of free enterprise", writes of collusion against Tesla Motors via regulatory capture by car dealers and state legislators:

[R]ight before Labor Day weekend, when the Georgia Auto Dealer Association filed a petition with state officials seeking to cancel Tesla's license to sell its cars in the state of Georgia.

Tesla's crime? Selling 173 cars directly from a factory-owned store located 25 miles away from Atlanta, the only Tesla retail location in Georgia. The dealers say Tesla can only sell 150 cars a year from the shop under state rules, and therefore should lose its dealer license entirely.

"It's just very simple -- we want them to comply with the law the way others are," Bill Morie, president of the Georgia dealers association, told Automotive News. [format edits]
What Moore, like a stereotypical shady used car dealer, is hoping nobody will notice, is that the whole idea of someone needing permission from the government to sell cars -- let alone being told how many he can sell -- is wrong. Licensing laws violate the whole purpose of government, which is to protect individual rights, including the right to enter contracts.

The above episode, by the way, is just the tip of the iceberg of government corruption that has been victimizing consumers in Georgia and other states for some time, thanks to the "extremely tight relationships with statehouse legislators" that car dealers and others in heavily-regulated occupations enjoy -- and that Steven Lang's timely article demonstrates.

Read the whole thing.

-- CAV


Dismuke said...

And the reason these dealers have such tight relationships with state legislatures is because, in many parts of the country, car dealers, thanks to all of the legal protection from competition, are among the wealthiest and most influential people in their local communities. And they tend to be the biggest customers of most local media outlets both print and electronic. Let's just say that local car dealers can often be very helpful for ambitious upstart politicians to know. So the power and influence is self-perpetuating - and the result is the rest of us are forced to suffer through and pay for sales tactics and practices that they would not tolerate from any other industry without a similar state enforced cartel in place.

Let's hope Tesla is able to follow the example of Uber in terms of rallying public sentiment to dismantle such archaic regulations and licensing.

Dismuke said...

Another idea I have wondered about with regard to a company such as Tesla is what would happen if they simply awarded dealerships to a company such as Wal-mart which already has outlets in almost all locations in the country. To me, something like is what strikes me as the most modern and efficient way to buy a car. One would go to a big box type retailer to buy a mass market car in the same way people these days buy a lawn mower or a dishwasher - and you would likely have makes from different car companies to choose from. What I wonder is if giving dealerships to Wal-mart might be a way to comply with the state dealership laws but, at the same time, effectively undermine the very state enforced cartel that such laws are designed to protect.

Gus Van Horn said...


The idea you bring up in your second post might at least put the dealers on the defensive, legally. But it could backfire in terms of (a) no longer highlighting how wrong such laws are, or even (b) giving Wal-Mart a stake in keeping Tesla from operating its own stores.