Dealers have a new concern about the used vehicles they buy or take in trade – digital updates that disable vehicle functions. You buy a vehicle with the latest tech, advertise it with those tech features, and then the used vehicle buyer finds the features do not work. The customer is angry and wants to sue. Who do you think will be the defendant?
Tesla vehicles have digital update capability, and dealers should be careful when evaluating them as trade-ins. It has been reported that Tesla is disabling key features of used vehicles remotely when the vehicle is sold or traded by the original purchaser to a dealer or to another owner.
Many Tesla vehicles have autopilot and other driver assistance features enabled when the original purchaser bought it. Tesla has been disabling these features on used Tesla vehicles when the original owners sell them because it claims that the person who wants to use its software must buy and pay for those features from Tesla, similar to a software license from Microsoft to use Microsoft Office.
Tesla requires the used vehicle buyer to pay thousands for those features even though the original buyer paid for those features in the bundled price of the vehicle. There are various problems with this situation but for dealers the most glaring is the potential liability for advertising and selling used Tesla vehicles with features that may be disabled. A claim from a customer who did not get what they paid for will be against the dealer. Dealers must be aware of this problem when appraising vehicles with remotely updated tech features and then selling them. Here are some tips:
- If you take a used Tesla in trade, do not value the vehicles with those driver assistance features since they may be disabled.
- Determine what features the original purchaser has bought and paid for but cannot pass on to you or a subsequent customer who purchases the vehicle.
- If you have taken a used Tesla in trade, do not advertise those features as enabled features on the vehicle unless you will pay for the authorization or you can tell the customer what it will cost to enable the features and that is fully disclosed.
Is it unfair for Tesla to use this practice to control resale of Tesla vehicles? Yes, but for now the priority must be to protect the dealership from lawsuits for misrepresentation. Unfortunately, if Tesla succeeds in exploiting this profit source without crippling negative publicity, other factories that are increasingly implementing digital updating will follow suit.