Auto Dealers have long held a monopoly on new car sales, and it’s time for that to end!
Last month, I wrote extensively on efforts in Texas to reform the law and allow direct sales, from manufacturer to consumer. They’re being championed by Tesla but the proposed legislation would create a much more consumer friendly market for all types of cars.
First you File the Bill
The first step in changing any law is writing and filing the bill…which has now been done. State Representative Jason Isaac and State Senator Bob Hall have filed HB 4263 and SB 2093 to accomplish the exact reforms we promoted last month.
As you can see from reading the text of the bills, the changes to the law are small, but the impact will be significant. The only changes being made are to add automobile manufacturers to the list of entities eligible to sell cars. However, the impact on consumers will be great.
Allowing direct car sales will allow manufacturers to go directly to consumers, allowing huge potential savings for end-users, and force Auto-Dealers to face free-market competition.
As reported in the Texas Tribune,
Instead of looking to create any kind of carve-out that favors the high-end electric car maker, legislation filed Friday would simply allow any vehicle manufacturer to sell directly to Texans — bypassing the middleman dealers — in Tesla’s biggest challenge yet to a longstanding state ban on the practice.
The proposal “will allow manufacturers of vehicles any weight, class, size or shape to sell direct to consumers,” said state Rep. Jason Isaac, the Dripping Springs Republican who filed the legislation in the House. “It’s a simple, free-market bill to allow that to happen.”
Fighting the Lies
As good bills often do, these pieces of legislation face an uphill climb. The Texas Auto Dealers Association (TADA), one of the state’s most powerful lobby groups, hates the idea of this legislation passing. They’re even making the ridiculous claim that passing a law to increase competition would decrease competition…it’s truly bizarre.
According to TADA,
“Tesla’s legislation seeks to unravel the entire franchised dealer system in Texas, in favor of direct sales of motor vehicles by a manufacturer,” Texas Automobile Dealers Association president Bill Wolters said in a statement Friday. “SB 2093 and the reduced competition it will bring about in the new vehicle sales and service market will come at the expense of Texans and Texas.”
The fact is that these claims are false on their face. While allowing direct auto sales may threaten their business model, it poses no threat to Texans.
It’s an Uphill Battle
Passing these bills is going to be difficult. They’ve been filed but have a long road to go in the few months left in the legislative session. Each bill will be referred to a committee and they’ll be heard at the discretion of the committee chairs. Once heard and passed out of the committees, they’ll need to be placed on the floor calendar and debated. Even if passed out of both houses, Governor Abbott has signaled his opposition to the proposed changes.
You Can Help!
Start out by thanking Sen. Hall and Rep. Isaac for filing the bills! They’ve put a big target on their backs with TADA and are doing so because it’s the right thing to do. It’s consistent with the Republican Party of Texas’ platform and free market principles. It should be a no-brainer for the Republican majority but special interest is geared up for a fight.
Next, use Tesla’s Take Action page to look up your legislator and tell them you want them to support HB 4263 and SB 2093 through the entire legislative process!