Why does Texas have to 100% pay prior to shipment?

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Firewired

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#1
Ok this 100% payment prior to shipment requirement is a new thing, which Tesla did not do before. I have purchased three prior Teslas, most recent in 2016. It is just weird paying for a car without being able to lay eyes on it, make sure there is no damage, or in my case likely make a payment before the car arrives.

Has anyone heard anything concrete and reliable of why there is the 100% pay requirement? Are there any other states with the same requirement?

Thanks.
 

PNWmisty

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#2
Ok this 100% payment prior to shipment requirement is a new thing, which Tesla did not do before. I have purchased three prior Teslas, most recent in 2016. It is just weird paying for a car without being able to lay eyes on it, make sure there is no damage, or in my case likely make a payment before the car arrives.

Has anyone heard anything concrete and reliable of why there is the 100% pay requirement? Are there any other states with the same requirement?

Thanks.
Some states have archaic laws enacted at a time when it was feared the big automakers, after selling franchise rights to independent local dealers, would undercut the family-owned businesses by selling direct. The real problem was that the franchise agreements were written by the automakers and when the dealerships realized this, they went to their state governments and lobbied to have laws enacted that prevented automakers from under-cutting their own dealers.

Tesla does not have independent dealerships so these laws are anti-competitive when applied to a company that has a new way of doing business. America is built upon the idea that those who bring the best products at the best price, wins.

A number of states have repealed or modified their laws so they don't apply to companies without franchise dealerships but other states have left them alone because they are effectively an anti-business, anti-competitive barrier to new competition (namely, new EV start-ups). And because it hinders sales of EV's, it benefits the Texas oil industry while it harms consumers.

People in states with backward, anti-competitive laws that violate core American principles of capitalism and open competition should write their state legislators to repeal those archaic laws. Really, the problem originated with auto dealers who signed franchise contracts that didn't grant them protection from competition from the very company they were signing agreements with.
 

Firewired

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#3
I hear what you are saying, and I personally have gone to Austin for the three prior Tesla lobbying efforts, but all that has been true from when Tesla started selling in Texas. Why is there now the 100% requirement, when as recently as 2016 (my most recent Tesla delivery) it was not. What has changed between then and now? I don’t think Texas passed any new laws regarding this, so is this a Texas issue or a Tesla decision for some reason?
 

PNWmisty

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#4
I hear what you are saying, and I personally have gone to Austin for the three prior Tesla lobbying efforts, but all that has been true from when Tesla started selling in Texas. Why is there now the 100% requirement, when as recently as 2016 (my most recent Tesla delivery) it was not. What has changed between then and now? I don’t think Texas passed any new laws regarding this, so is this a Texas issue or a Tesla decision for some reason?
Maybe someone with more specific knowledge can give you a more concrete answer but I imagine it has to do with a legal opinion from one of Tesla's attorneys or even a letter from state regulators that their previous sales practices may violate the archaic laws and be subject to prosecution.

It could also be that Tesla got stiffed on payment and, due to those laws, found they didn't have legal standing to do anything about it.
 

garsh

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#5

PNWmisty

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#6

Firewired

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#8
Two questions:
1) Can anyone in Michigan confirm they are having to pre-pay also?

2) Not being snarky, but just to point out again that I have taken delivery before of three prior Tesla without this requirement, what changed?
 
Last edited:

PNWmisty

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#9
Actually, they're protecting their local dealerships. The dealerships in Texas especially have a lot of sway in government.
That's pretty common in most states for auto dealers to be well represented. But the truth of the matter is complex. Since it takes a minimum of a majority vote, and sometimes a super-majority, to change a law, the reasons why the Texas legislature has (so far) refused to change their anti-American, anti-competitive laws are as complex as the make-up of the legislature. And while the legislature is definitely pro-dealership, it's even more pro-oil. And the two entrenched interests go together like peas in a pod.
 

garsh

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#10
2) Not being snarky, but just to point out again that I have taken delivery before of three prior Tesla without this requirement, what changed?
Yep, I missed that when I read your post originally. Maybe Texas threatened them at some point with "selling within the state", and the "loophole" is to complete the sale before the car enters the state?
 

Tesla Newbie

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#11
I didn’t let myself think about this too much because I didn’t want anything about this car to annoy me, but I did feel bad for the posters who wrote that they had to make the first loan payments before their cars were delivered. That’s just looney tunes.

In our and similar states, at what point do we actually own our cars? While I wouldn’t want the liability if the car were to fall off the truck onto a Fiat, it does seem a little loco to shell out megabucks for something we won’t own for several days. Of course, we do it all the time in the Internet age. I realize I keep contradicting myself here.
 

GDN

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#12
Our laws are screwed up but Tesla found something to make the sale different in TX. Whatever procedure you went through on your first three cars you still had to get them paid for in another state someway. I guess just getting it paid before shipping is now the easiest way for Tesla to handle thousands of sales here. Even with this it is bumpy, but now they handle taxes and registration all built in and for you by using a third party intermediary. Some of those things you had to do on your own after taking delivery of the car. They are streamlining it but it must be done before the car is shipped.