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IOWA DMV pushed by dealerships to block Tesla test drives

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That is crazy. The article mentions September 9th as the date Tesla was setting up for test drives. So that must have been for an event to start and go over the weekend I think, probably beginning Friday the 12th. Did anyone on this forum actually go and find out that the third test drive day was canceled?

We should contact the Iowa legislature and DMV about this.
 
Don't see where the "bribed" part comes in.

Another longstanding state law (prohibits auto manufacturers from selling directly to the public. Anderson said if carmakers owned dealerships, buying a car would be like buying a laptop at the Apple store — there would be one non-negotiable price.

"Independent dealers are aggressive in pricing against each other," he said. "If you wanted to buy directly from Chevy or Ford, the price on the sticker would be the price."

This is nuts. First of all, the dealers all get the same discount from the manufacturer (unless shenanigans). So price competition is merely a race to the bottom. What the dealers should do is provide a better buying experience and complimentary product offerings. What they actually do is obfuscate the real price as much as they can, so you can't tell if you're negotiating a good deal or not. Frankly, I'd rather be able to compare the fixed prices of competing products and make my choice based on value, rather than not knowing what I'm actually going to pay.

Secondly, speaking as an owner of a very tiny company that manufactures some stuff, I compete against companies making competitive products, not my own dealers.
 
More great publicity for Tesla and dealers making themselves look bad. I don't understand why Tesla didn't just continue with the test drive event. Whatever fine may have ultimately been imposed, if the DOT prevailed in its interpretation of the law, would be a cheap price to pay for all the publicity Tesla would have gotten from being fined for allowing people to test drive their cars! And it would have been further exposure of the protectionist dealer model, making it more likely to be overturned one day.
 
Ok, maybe the title is a bit misleading.

I still personally think that the dealership pulled some strings here because Tesla was not selling cars but just offering test drives and for DMV to respond so quickly is definitely suspect.

But I guess the title should be changed because it sounds like I have proof an uncovered some bribing scheme going on which is probably misleading.

I blame media influence. :rolleyes:
 
Uh...what am I missing here? Tesla isn't insured? Tesla doesn't have physical service centers? Tesla routinely fails to deliver vehicle titles to the buyer? :confused:

Licensing is a matter of consumer protection, said Bruce Anderson, president of the Iowa Automobile Dealers Association. To obtain a license, dealers have to be insured and have a physical location where buyers can go if they have a problem with the vehicle. Car dealers also have to be bonded through the state. If a dealer fails to deliver a vehicle's title to the buyer, the buyer can file a claim against the dealers bond.
 
Uh...what am I missing here? Tesla isn't insured? Tesla doesn't have physical service centers? Tesla routinely fails to deliver vehicle titles to the buyer? :confused:

They are saying that part of dealer licensing requires specific insurance/bonds and service locations to affords consumer protection. Tesla may have service locations but would not be required to have one; Tesla will not necessarily have the insurance matching the requirements of dealer licensing.

But the key question here is just what constitutes acting as a dealer. Tesla says the test drives do not mean they are acting as a dealer, IDOT is saying that it does. (Texas clearly considers test drives part of acting as a dealer so Tesla has to get a separate demonstration permit to allow test drives.) You'd have to look at the statutes and rules.
 
I live in Iowa and have a Model X reservation # 6,665. I was scheduled to test drive the Model S on 9/11/14. Early that morning, I received this email:

Thank you for your support of Tesla Motors. At this time, I regret to inform you we need to cancel your test drive appointment scheduled for today.

At the request of the Iowa Department of Transportation late last night, we have been asked to cancel the demonstration event and the display of the Model S within the state of Iowa.

We would be happy to coordinate another drive with you in our nearest store locations: Minneapolis, Chicago, St Louis or any other Tesla Store location of your choice outside of the state of Iowa: http://www.teslamotors.com/findus

Thank you for your patience and understanding.

Our best,

Ashley & Hunter

I contacted the Iowa DOT about the situation and received this response:
Chris,

Thank you for your inquiry to obtain the facts behind the cancellation of the Tesla event being held in West Des Moines. Our office was notified of this event on Tuesday afternoon and we visited the staff involved with the event on Wednesday. From our interaction with these staff and review of the activities taking place we determined this event was in direct violation of the Iowa dealer licensing and consumer protection laws. Iowa law requires anyone engaged in the business of selling, displaying, or offering motor vehicles for the purpose of retail sale to be licensed. This licensing is intended to protect consumers from being harmed by actions caused by a dealer and protects the integrity of the motor vehicle sales business in Iowa. For most people, a motor vehicle is the second most expensive thing they own and can be an important tool to function effectively in society. You should also be aware that the activities being conducted by Tesla this week could not legally be conducted by Iowa licensed new car dealers.

As a Department, we are not opposed to the innovative manufacturing and marketing of Tesla products, it just needs to be in compliance with Iowa law. In order for these type of activities to be legally conducted in Iowa, it would require action by state legislatures to change existing laws. I do appreciate your request to obtain accurate information from the source of your concern and if I didn’t answer all of your questions, please feel free to contact me.

Paul J. Steier, Director
Bureau of Investigation & Identity Protection
6310 Southeast Convenience Blvd.
Ankeny, IA 50021
[email protected]
Office: 515-237-3260
Fax: 515-817-6618
http://www.iowadot.gov/mvd/Investigative_Bureau/default.htm


In addition to writing a letter to the editor in response to the Des Moines Register article, I am planning on drafting a letter to send to state legislators as well.
 
What if they opened a car rental business, and part of the $1 rental agreement was that you had to take a member of their staff along for the duration of your 30 minute rental?

"Anderson said if carmakers owned dealerships, buying a car would be like buying a laptop at the Apple store — there would be one non-negotiable price."

I'd rather make my decision to buy based on the knowledge that I was getting the lowest price available, not that I'd have to run around and negotiate a dozen different deals or wait for their sales or promotions.

Also, does Iowa law require Apple to service their products at their stores? I'm betting that I'd have to send it back to one of their service centers (and they wouldn't even bring me out a loaner).

These dealer associations should be more correctly renamed "Automobile Dealers Racketeering & Lobbying Association"
 
From a local paper:


Iowa lawmakers say there is little appetite to change the rules that prompted state regulators to ban Tesla Motors from offering test drives here.
Current laws require car dealers to be licensed and prohibit auto manufacturers from selling directly to the public. Officials with the Iowa Department of Transportation say that means the electric carmaker can't offer test drives without receiving a license or opening a dealership here.
State Sen. Matt McCoy, chairman of the Senate Commerce Committee, test drove a Tesla last year in another state and said he hopes to buy one when the company comes out with a cheaper model. But the Des Moines Democrat said he thinks Tesla should follow the same rules that require other carmakers to sell through independent dealerships.
"I have mixed feelings about it because I really like the car and I really like what the car stands for," he said. "But in Iowa we tend to respect our system and the way it was set up, and I don't see any appetite to change that."
State Rep. Peter Cownie, chairman of the House Commerce Committee, said he hasn't heard from lobbyists for Tesla or Iowa's auto dealerships, an indication that there isn't much desire to change the rules to allow Tesla to sell directly to the public.
"You can't have two sets of rules," the West Des Moines Republican said. "That would create an unfair playing field for the small business owners and small car dealers."

Iowa curbs Tesla test drives


The senator has fallen into the autodealer lobby corporate message of "two sets of rules" nonsense. Some people will have to provide him an appetite to change it.

I do love that he admits that he needs lobbyists to tell him what to do instead of making decisions which serve the people.
 
Why doesn't Tesla just change the venue to something like "educating consumers about electric vehicles" and invite other EVs to come too. Then they can talk all they want about it and let people test drive the cars to "educate them" on how they are different than ICE cars. That way it's "not for the purpose of resale" and they can circumvent those antiquated laws.