FTC to Host Public Workshop Examining the U.S. Auto Distribution System Workshop Will Explore Competition, State Regulations, and Emerging Trends in the Industry, Project No. P131202
Restricting direct manufacturer sales of automobiles in Texas is anti-competitive, and unfair to automobile purchasers in Texas. I purchased a Tesla Model S in Amarillo Texas in 2013. The restrictions on manufacturer sales in Texas made it extremely difficult to shop for this vehicle, or to even take a test drive. The Texas Legislature enacted a rebate to encourage the purchase of electric vehicles. However, the legislation specifically excluded rebates for otherwise qualified electric vehicles that were purchased out of state. Since the State of Texas forced me to purchase my Tesla Model S in California, this excluded me from obtaining the electric vehicle incentives. These incentives were available to every other purchaser of an electric automobile in Texas, except for Tesla. The restriction on direct manufacturer sales no longer makes any economic sense. It is analogous to forcing computer buyers to purchase a Dell computer from a retail store, rather than directly from Dell. Obviously consumers quickly identified that it made more sense to purchase computers directly from the manufacturer, which made Dell the company that is today. It also made computers more customizable, much more inexpensive, and higher-quality. Most people in Texas don't think that the dealership experience is very worthwhile. Haggling back and forth on the purchase price of the car is a throwback to days when horses were traded that way. The price of the car is partially determined on the negotiating skill of the purchaser versus the negotiating skill of the car salesman. Most car purchasers are not very good at negotiating, allowing car dealers to take advantage of their customers. A more open marketplace, such as those that exist online, would make this a much more competitive and consumer focused way to purchase an automobile. Automobiles are the second most expensive item that most people purchase, yet states such as Texas are forcing us to purchase them from an antiquated, consumer unfriendly, high cost dealership system that almost none of us want. I would strongly urge the FTC to work to overturn state laws such as those in Texas that force us to purchase only from dealerships, and allow manufacturers to sell directly to anyone who wants to purchase from them.