Washington State just did something rare in the car business: it let a customer buy a car from the company that made it. Well, from two companies. Rivian and Lucid, to be exact, and only if they clear a list of conditions that reads like a bouncer’s dress code.
Lawmakers passed SB 6354 in March. Tesla has had a direct-sales exemption there since 2014, and now Rivian and Lucid get one too. Honda, Ford, General Motors and an industry trade group lined up against it, according to GeekWire. Dealers did not lose gracefully, and they did not lose completely. Any manufacturer that isn’t approved and sells a car directly faces a $10,000 penalty per vehicle. Vehicle title fees go from $15 to $40 through 2036, with the extra money pointed at EV rebates and transit. That’s the price of peace.
Why did dealers bend at all? Because Rivian threatened to put the whole question on the November ballot and pledged to raise more than $20 million for it. It had about $4.7 million in the bank when the deal came together. A ballot fight against voters who hate buying cars is a fight dealers could lose. So they bargained.
About that hate. The number everybody quotes is 87%, and I’ll be straight about what it is: a 2016 Harris Poll for Beepi found 87% of adults disliked something about the process of buying at a dealership. Not the whole thing, something. The same poll found 61% felt taken advantage of at some point. Name another business where six in ten customers walk out feeling robbed and the owners ask the legislature for more protection.
That’s what I keep coming back to. The franchise laws were sold as consumer protection. If you’ve read my posts on which states still block Tesla and what North Dakota’s law was really for, you know where I land. A rule that protects a dealer’s revenue from a better offer isn’t protecting you from anything. It’s a press release with a lobbyist attached.
Meanwhile the market keeps trying to fix this without anyone’s permission. Tomi Mikula spent over a decade on the dealership side as a salesman and finance manager. Now he runs Delivrd, where he charges a flat $1,000 to find the car, negotiate the price and read the contract so you never set foot on a lot, per a WBTV feature this summer. He livestreams his calls with dealers and gives away the playbook for free. That feature is friendly, so take the claims as his and the host’s. But the idea is simple and it works on its face: people will pay a grand to avoid the lot.
Think about what that says. A customer will hand over $1,000 just to skip the thing the law insists on protecting.
I don’t need dealers to disappear. Plenty of people like a test drive and a service department down the street, and they can have both. What I want is for a company to be allowed to ask me for money directly, and for me to say yes or no. Washington took one narrow step, with fine print, because someone threatened to ask voters. That’s a sad way to get a basic freedom, but I’ll take the progress.
My two cents: if your business model needs a law to stop customers from buying elsewhere, the customers already told you what they think.