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Tesla will sue you for $50,000 if you try to resell your Cybertruck in the first year
(www.businessinsider.com)
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this post was submitted on 12 Nov 2023
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This is, surprisingly, not that unusual for vehicles in high demand. It's to prevent flipping.
GM does it on certain vehicles as well:
https://gmauthority.com/blog/2023/08/gm-restrains-customers-from-flipping-cars-but-not-dealers-from-charging-ridiculous-markups/
(the C8 Corvette Z06, GMC Hummer EV, and Cadillac Escalade-V if you want to know without clicking the link.)
GM wasn't harsh enough IMHO. They should have black listed people who immediately flipped base C8s for significantly more than MSRP. Base C8s (not Z51) going for over 100k, with miles on them, was fucking ridiculous.
I'll say it now: car dealers are useless dinosaurs and there is no point to having them anymore. I don't need a dealer to tell me what options I want on my car. I can select those on a webpage after I've reviewed the available options. I need a place to take my car for service if it's a factory failure / warranty work. I can do the rest myself or pay another focused professional to do the work.
Yeah, pretty much every Hummer EV I saw was at a dealership lot, used, and marked up $100k
I really like your second paragraph!
Agreed, but I absolutely need somewhere to test drive the car as well before purchasing. There’s no way I would buy a car without it.
I would agree with that. I had a car shipped by an online sales company and when I showed up to test drive & but it, I didn't actually fit in the car properly, so I didn't end up buying it. Such is the life of being tall.
I'm just shy of 6 feet so not excessively tall by any means, but I test drove the Fiat 500 some years ago, and found there is no way for me to be comfortable in it. Interestingly the Mini Cooper was very comfortable, and could have easily accommodated someone taller - as long as anybody sitting behind you didn't have legs.
Yeah the Fiat is VERY small and I concur on the Mini. I'm a bit over 6' and I found regular Minis to be very comfortable with headroom with the countryman's being a bit better on the backseat situation 😂
I'm no fan of flipping/scalping but the choice of the degradation of ownership is much worse. If they really own the car then they aught to be able to resell it.
Prediction; this will extend beyond just high end cars.
Like with other manufacturers with similar limitations, the limitation for resale is only for the first year. It literally is just to try and prevent people buying and flipping the car for a profit. If you don't like the vehicle you can sell it back to Tesla outside the normal return window. Or wait a year and sell it to someone else.
The reduction in ownership rights is worse than scalpers. Not sure why you assume this is pure benevolence instead of companies making more money via their control of property you paid for.
I suppose it depends: would you like to at least have the item or be able to buy it only at a 3x price, if ever ?
Other high brand cars have even more stringent clauses (like, you cannot repaint the car in a certain color to not ridicule the brand). People are even perpetually banned from buying from the brand in some cases.
It is not benevolence, it is a try to solve a real problem that they think it could arise.
I think it is not in anyone's best interests to lessen their ownerships rights to maybe save money. Their choice is also bad for me in that it shows companies they can to it too and could become the norm.
If a manufacture has a good reason to not sell to someone that would be fine but it is none of their business what colour I paint my car, or who I can resell it too.
If they wanted to solve the problem they could make more cars to meet demand (without the needless use of microchips, if that is still the bottleneck).
While yours are valid concerns, that type of restriction works only on specific items. I don't see a car manufacturer pull the same stunt on a mass production car (or any other mass production item for the matter) because the problem this try to solve does not exist in the first place, maybe Tesla just think (true or false that it can be or based on the data they have) that the Cybertruck will be some sort of "status symbol" which would attract scalpers or the like of them.
In the end this is a battle Musk cannot win: he will be damned if he do (to ban resell in the first year) and he will be damned if he don't (and thus allowing scalpers). He can only choose why he will be damned so he choose a way that maybe is more friendly (or less enemy from your point of view) to the consumer.
I can agree with you, but the fact that the manufacturer put these restrictions and people still buy their cars means that maybe it does not really matter to the buyers since having the car is much more important that being able to repaint it pink, in their view.
People often choose what isn't in their best interests but that doesn't invalidate the criticism. I am unsure if this should/could simple be illegal but I will argue social stigma should be applied to people who don't care about themselves or others.
My concern is companies will do it anyway for their own gain, regardless of if it was actually a cure to the issue of scalping, because users will let them.
Musk's has enough variety of questionable choices but I'll damn him here for needlessly making low supply, the cause of scalping in the first place.
Agree on people. But to decide if this is illegal, we should know the term of the contract. What I can think is that this is not blatantly illegal, I am sure Tesla has lawyers that draft the contract, maybe we all are making a case where there is not since the contract state that for the first year the car is just rented. Questionable but not illegal.
The point of discussion is if Musk want to have a low supply or he just cannot avoid it.
In my opinion he cannot avoid it, at least as the production start and until it goes to capacity, which is true for every new car that make to the market and not only for Tesla, so he takes some (questionable) steps to try to solve what he deem a problem.
Only for the first year is bs. I bought an object, I own it and I decide when to put it on sale for whatever reason I want, because you know, I own it.
If Tesla doesn't like that they can stop selling vehicles to the public. Or they can come up with something creative like renting them, or only selling one of this trucks to someone who has proven to be a fan boy and have already brought 1 or 2 Tesla's before
Or... Get this... You can just not buy the fucking car if you don't like the terms. You're not forced to buy a Cybertruck at launch.
Once production increases I'm sure this restriction will be removed just like most other vehicle resale restrictions from other manufacturers. Not all though, Ferrari has limitations even on things like paint color and wraps, Deadmau5 completely got rid of his wrapped Purrari because of that bullshit once Ferrari started trying to enforce it.
But none of you people will be in comments talking about the resale restrictions being removed once production is ramped, just complaining now about hypotheticals for a vehicle you never intend on purchasing to begin with because you either don't like Tesla or Musk specifically.
Problem is, the more manufacturers pull this kind of shit the more it becomes normal. At some point your entry level yaris has some kind of stupid rules like this and maybe it spills over other industries too. Again, how about we stick to my property is my property and I decide what to do with it, the way it should be.
I hate the "slippery slope" argument, but in this case...
What if the limitation was 2 or 5 years? What if the fine was $100,000 or a million? If they get away with lesser restrictions, why wouldn't they? The point is, companies already have way too much power over what a private person does with things they legally bought (Right To Repair, anyone?) and this seems like an escalation of that...
How about the manufacturer builds enough stock so scalping makes no sense? I believe that if I buy a product I am entitled to do whatever I want with it as long as it doesn't brake the law. I hate scalping too, no1 did anything when it happened to GPUs or consoles or toilet paper during covid, so why are cars special?
Stock does not just appear out of thin air. Manufacturing takes time to ramp up. So it's often not possible to produce enough for a high demand product.
So maybe don't release a model until you have at least a decent amount of units? Still doesn't explain why cars are any different than other products that are scalped. Why are they not lobbying to create laws against such practices?
I feel like if they want to prevent flipping for profit, make the agreement that you can’t sell it for more than you bought it for, but still allow the sale. Otherwise you’re not policing the right thing.
It's not possible to track how much it was sold for in a private transaction
Real estate and Ticketmaster: "Fuck yeah, flip that shit and inflate our markets to insanity!"
Auto industry: "Fuck you, we do the inflating around here. Pay me!"
Ticketmaster owns the resale sites too. And the venue.
Ford notoriously sued John Cena for exactly that reason with his Ford GT
It really is to protect consumers from scalpers.
Dealerships are the biggest scalpers.
Not really. I don’t particularly like them, but they don’t contribute much to the cost of cars. They barely make anything selling the car. That’s why they are always pushing extended warranties, accessories and trying to get you back in for service. Most of these guys are just hustling and getting as bad a deal as the rest of us.
The dealers are under huge pressure from the manufacturers to move cars. They are given sales targets they have to hit or they don’t get paid. That’s why they end up selling a car for like $500 profit or even break even. There’s a good episode of This American Life called “Cars”.
Of course, none of this applies to high-demand cars that sell themselves. They will mark those up like crazy to survive because the manufacturer doesn’t pay a bonus for those and barely gives them any inventory.
...forreal? You do realize dealership markups in the past few years have jumped as high as 40%?
https://markups.org
If you're as much of a snake as they are, maybe. For the rest of us, not so much.
There's nothing to stop anyone from buying a single unit and scalping it
It's not "bizarre" in the slightest unless you've never heard of the concept of scalping.
Except, you know, the economic principles of supply and demand
Except, you know, supply and demand are flipped on their fucking heads. That's why this clause exists in the first place?
How
Presumably there's going to be very few Cybertrucks. Supercar manufactures, with their very low production rates, generally have some kind of wait list, Ferrari goes to extremes and won't even consider selling you most stuff if you're not already driving a more entry-level Ferrari.
It's not really about the money, though: If a Sheikh comes along and wants your car, he's just going to add double the penalty amount to his offer. It's more about getting shitbinned by the manufacturer.
Ah, yeah that's my bad. I didn't think about the manufacturer-limited supply and sort of misunderstood the point. That's for being patient with me and setting me straight.
Shame though. Would absolutely love to see a guy with a garage full of these things because he couldn't find enough crypto bros to gouge.
I imagined them stacked on top of each other haphazardly, piled up in a garage with a sad white 30ish year old guy standing in the driveway looking sad.
Kinda curious why the company doesn't raise their prices to fit demand then, since clearly, demand exists that allows those products to be sold for more (else the scalpers couldn't profit). Not saying they should charge more, I'm just curious why an entirely profit-driven entity like a company wouldn't charge as much for something as demand would allow for, it seems out of character?
Part of it is allowing the dealers to profit. If they price too high, there's no wiggle room and incentive for the dealers to order the car.
Tesla has no dealers. They sell directly, which is why they cannot sell vehicles in some states. Some states require vehicles to be sold through dealers.
Oh, yeah, I know, I was talking about the GM cars.
Same with Ford F150 Lighting when it came out. Not sure if it still stands.
It’s to prevent ~flipping~ scalping
Somehow I get this weird feeling that the cybertruck will flip all on its own. ;)