Proponents of direct selling say car dealership model hurts minority customers

On Wednesday, Connecticut activists and two lawmakers raised concerns about the high costs and hidden fees they say minority customers face when buying cars from dealerships, as they try to mobilize support for legislation which will allow competing manufacturers of electric vehicles to sell directly to consumers.

Deborah Caviness, the founder of the Southern Connecticut Black Chamber of Commerce, recalled her own experience visiting a car dealership in Fairfield County to buy a car on a two-year loan — only to be pushed repeatedly by the seller to take out a long-term loan with lower monthly payments but a higher interest rate.

When she rebuffed the offer, Caviness said, the salesman became ‘condescending’ as her colleagues joined in promoting the high-interest offer, until she eventually quit. the dealer.

“Being a woman and being a woman of color I’m sure is attributed to the salesman’s aggressive negotiation style and tactics,” Caviness said. “When he didn’t get the reaction he wanted, that’s when the shenanigans started.”

Caviness and others who spoke at a roundtable on Tuesday said such experiences are common for black and Hispanic car buyers, who studies show regularly are. have to pay more to finance vehicles of white customers in the same situation.

The discussion was hosted by City and State of Rocky Hill Public Affairs — which counts Tesla among its customers — and often turned to a proposal allowing EV makers to bypass dealerships and sell off. directly to customers, a model that proponents say could lead to more transparent pricing and financing options.

The bill, sponsored by state Sen. Will Haskell, D-Westport, is similar to previous efforts to adopt the direct-selling model in Connecticut, all of which failed in the face of opposition from auto dealers in the US. State.

Connecticut car dealerships have bristled at accusations of customer discrimination and in turn accused lawmakers of seeking to write special exemptions into the state’s decades-old franchise laws to companies such as Tesla – which has fought against its own. accusations of racial discrimination.

“That seems to be a line that Tesla and Rivian reps have,” said Chip Gengras, co-owner of Gengras Motor Cars and seven dealerships in Connecticut. “Yet when asked for documents from lawmakers, they did not have them.”

Gengras was referring to a hearing last month in which a Tesla lobbyist made similar arguments, telling lawmakers during a committee meeting that “there is no endless bargaining, no intense pressure to leave the store with a new car” at the company’s brick. and mortar exits.

Gengras said he was not aware of any dealerships in Connecticut who had been penalized for discriminating against customers, and said the franchise law continued to provide the “fairest” model. allowing customers to purchase and service their cars through local dealerships.

Proponents of direct selling, however, argue that Connecticut’s existing protections for car buyers – including a “truth in lendingand caps on interest rates for auto loans – do not go far enough in protecting minority buyers from discrimination.

“It’s really about the lack of transparency,” said state Rep. Quentin “Q” Williams, D-Middletown. “It’s that if I buy this car, I don’t know why my price is different from yours, if you were to buy this car, I don’t know why the price is different, I don’t know why if we are at the above or below suggested retail price.

Williams and others have argued that the direct selling models offered by companies such as Tesla, in addition to online retailers without haggling, provide a better experience for customers who want to avoid negotiating prices and financing options with dealership salespeople.

“It takes away the anxiety and the stigma of going to a dealership and dealing with finances and going to a showroom and maybe feeling discriminated against,” said Rep. Christopher Rosario, D- Bridgeport.

Proponents of the bill also noted that despite the popularity of Tesla, customers in Connecticut currently have to travel to New York or other states that have already legalized direct sales. At least 20 states currently allow certain automakers to sell directly to customers.

The proposed bill now before the Connecticut legislature would only allow direct sales for electric car and truck makers with no existing presence in the state, such as Tesla and rivals Rivian and Lucid.

The bill was introduced in the Senate by the Transportation Committee last month and had yet to see further action as of Wednesday.

EDITOR’S NOTE: Wednesday’s panel discussion was moderated by James Walker, former editor and columnist for the Hearst Connecticut Media Group.

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