foxwiz

Since the dealers have very few cars, and I live in Colorado, I called a couple of dealers in Southern California and asked if I could purchase a vehicle. Both dealers said NO. You must be a California resident to purchase a vehicle. That is nuts. Not sure if this is a State thing or a dealer thing. I only called 2 Lexus dealers. I could have a friend purchase the vehicle, but they would have to pay sales tax. Once I brought the car to Colorado, I am guessing I would have to pay sales tax again with a new vehicle. Anyone have insight on this?

swajames

When cars are scarce, dealers want to sell locally. You’re of zero value to the selling dealer if you won’t be getting your servicing done at their dealership. There’s also extra work on their part to support the transaction not being subject to sales tax. It is what it is. In some cases there are geographic restrictions in the dealer agreement requiring dealers to sell only within local markets but this likely isn’t the reason here. They are better off selling to a local customer and they aren’t exactly short of those in Southern California.

mmarshall

I suspect that, if and when California bans new ICE sales, people will be flocking OUT of state to purchase them beyond California's orders.

I'm not sure, however, that we will actually get to that point. CARB has come up with silly rules before, only to have to later back down because of public outrage in the state.

Fizzboy7

I don't think it has to do with what dealers want to do. They'll sell a car to anyone who has the funds. It has to do with the lack of inventory and manufacturers telling dealers not to sell outside of your state. This was to curb people flipping cars for a profit, soon after purchase. Or at least that is what Autoblog said on two separate occasions within this past year. The story was related to popular models in short supply, but likely spreads across the board at this point.

FatherTo1

That is pretty ridiculous to restrict buyers to in-State. As mentioned before, probably driven by fear of flippers. I don’t think it’s a matter of lost revenue from servicing the vehicle since it would be the same situation if someone from Northern California, such as myself, buying a vehicle from a SoCal dealership. Chances are I’ll never return to SoCal for any dealer service needs.

Definitely due to the crazy market and supply conditions we’re in because I recall searching for an LS five years ago and dealers across the nation were responding to me and willing to sell me the car. I could either fly out to close the sale or arrange vehicle transport; where there’s a will, there is a way.

4TehNguyen

iTrader: (1)

dealers want to be able to bilk locals on markups

FatherTo1

But why would it matter whether they’re taking advantage of a local versus someone on the east coast? It is the same money, isn’t it?

If anything, I thought it would be less hassle selling to an out-of-State buyer since you’ll probably never see them again and the buyer is less likely to walk through your door with an issue after the sale unless they’re willing to board a plane.

4TehNguyen

iTrader: (1)

would think locals are more more willing to pay for a markup than out of staters are

swajames

Again, sales tax is a big issue. If the OP buys in person then sales tax is payable. To avoid sales tax the car must be shipped, there are documentation requirements and it’s a pain in the *** for dealer. Pre pandemic, a customer was a customer. Current market, not worth the hassle selling out of state when you’re already in the largest car market in the USA and there are more buyers than cars. And dealers absolutely want service revenue.

JeffKeryk

I bought my sister an RX450h as a gift at Putnam Lexus in Redwood City, CA. Patty lives in Gig Harbor, WA. I had to pay sales tax and registration here. Ouch. She paid WA registration when she drove it home.
The car was never in my name. Dunno if this helps.

bitkahuna

iTrader: (20)

hopefully this is a dealer policy, and not the state's. would seem if state's that's a violation of interstate commerce rules? but i don't know.

swajames as far as being a p.i.t.a. i bought my LC from missouri and had it shipped to florida (that was end of 2020). dealer was happy to do the transaction and i arranged the shipper. i didn't pay them sales tax, and only $150 admin fee i think, that was IT.

came with 30 day temp tag. once it was here i got it registered and paid the sales tax. cake.

tex2670

It's not nuts; it's good business sense. Dealers would rather sell to local buyers who will come back for service. Each car they sell to an out of state owner in this market is one less car available for a local repeat customer.

swajames

It’s not a state restriction. It’s dealer choice, or in some cases part of the dealer’s franchise agreement to limit their permitted sales territory. I could have allocated my Bronco and Lightning to any Ford dealer, but some Land Rover dealers for example will tell you they have certain geographic limitations and can’t sell out of market or to certain markets (confirmed in owner forums).

Your experience with MO and FL does sound reasonably simple, but that isn’t necessarily at all reflective of the California DMV and Franchise Tax Board requirements. But again, even if it were simple, why would a dealer entertain selling to a customer where extra work is required when you’ve got all the business you can support already on your doorstep? It’s not just the sales tax, there’s all the registration and DMV documents and potentially finance to handle plus dealers aren’t going to want to miss the opportunity to have the finance manager to upsell and so on.

you don’t need to look beyond the obvious here. Customers requiring extra work are sent to the back of the line when customers who don’t are taking all the product you can sell.

bitkahuna

iTrader: (20)

i don't think a salesperson looks at it that deeply. they don't get commission on service.

swajames

the point though is that the people who pay the salespeople do look at it that deeply.

In 2021, service and parts contributed 14.3% of Autonation’s revenue, but 33.8% of their gross profit.

In 2020, those percentages were 16% of revenue and 41% of gross profit.

(source: 2021 and 2020 10-K).