In a court case I was involved in, I pointed out that my employer wanted to calculate my wages one of two ways. I also pointed out that if he does one *OR* the other, it makes negligible difference, and either is reasonable. The problem arises when he wants to pick and choose which calculation method applies to which situation which would result in a steep decrease in amount owed. The judge said that is utter nonsense, the employer needs to pick one, and I got a fat judgement. I'd comfortably assume a judge would do the same here. Tesla can pick one or the other as a policy, but can't pick and choose as it pleases them. I'd imagine a particularly onery judge may even give the consumer the pick to punish Tesla for a clearly unreasonable policy.
Tesla’s “Heads I win, tales you lose” valuation is pretty outrageous. From a financial perspective, buying a car with Bitcoin seems a lot like buying with any other non-cash asset. There is another non-cash asset used to make partial payment for cars, that is a trade-in. A trade-in gets valued at the time of the transaction. If the price of used cars goes up or down later, it doesn’t affect the purchase price. And a US$ value of the purchase has to be established for taxes, fees, insurance, anyway. Maybe too simplistic, but it seems logical to me.
I think your right. The purchase price of the car is the purchase price. What you pay the dealer is the price of the car,minus the price they agree to pay you for things that you trade in, cars, bit coin, beaver pelts, strings of beads or whatever.
During the 1970’s my brother bought a Dodge Caravan in their first model year. The door handles didn’t work well and were being repaired constantly. Once the warranty expired, they replaced all the door handles and locks! It was lime green and we referred to it as an unripened lemon.
I imagine that the government would insist on a USD value on the sales agreement not only for the purposes of the lemon law, but so they can establish how much tax you owe THEM
That, and the US has gone to war over countries thinking about not using the USD to base things in... Wonder what they'll do if the 'country' is the internet? lol
I've only seen a few incidents in the 7 years I've been dealing with bitcoin where someone only used bitcoin. Generally speaking the purchase price may be in bitcoin but that price is determined by some fiat currency exchange rate. Meaning they don't usually just say 1.2btc or 0.8btc, but instead say something like "$50k usd worth of bitcoin". In that case it seems to me like bitcoin is simply a payment method and not a currency, like a check/cashiers check, where the buyer and seller are exchanging the fiat value of the bitcoin. I'm not sure if that really makes sense or not but people are not usually buying an item with bitcoin in the way that we buy things with fiat currency. As a business I would have written in a clause that specifically said bitcoin is being exchanged for fiat and in the event that a refund is needed fiat will be returned. Basically I would say that accepting bitcoin was simply a convenience added to help make purchasing a little easier for nerds who have a big stash of bitcoin.
@@sammiller6631 it depends on how you define fiat currency. If you combine the words fiat and currency independently then sure it is a fiat currency. Fiat is something that only has value because we agree it does and a currency is a fungible medium of exchange. However the combination "fiat currency" is something different and means a currency created by a sovereign nation or some other centralized entity and they are almost always inflationary whereas most cryptocurrencies have a period of inflation and then production stops.
@@notpoliticallycorrect4774 If Bitcoin trades like a commodity, does that mean someone can corner the mining pool and manipulate the market like other commodities?
@@M167A1 There are big difference between fiat currencies and cryptocurrencies. The trust in a fiat currency is approximately equal to the trust in the authority governing the currency whereas the trust in a cryptocurrency is basically based on trust in math and computer code. I don't know about you but I trust math a lot more than I trust selfish people with personal agendas. Also, it is entirely too late to ban bitcoin. If they were going to do it they needed to do it within the first couple years. Now it is just to big for them to ban like that and I'm sure various intelligence agencies are using it to move funds around for clandestine operations. I say it is far more likely that we see a watered down version of a cryptocurrency with centralized minting that replaces the dollar than we see the US gov banning bitcoin. Banning bitcoin would actually hurt the US a great deal since it would lose all of the fintech innovation coming out around it. I'd say the people who should really be concerned about cryptocurrencies are the people who are heavily invested in consumerism. If you have a currency that has virtually infinite supply and one that has a finite supply, then the one with the finite supply should be worth more units of the infinite currency over time. Assuming the finite currency is useful in some way. Deflationary currencies like that could be the death of consumerism. I think it will be good for our species but bad for the way the vast majority of us currently live our lives
Well..of course. The federation is quasi socialist anyway. They need to make up their minds. Go with the latinum. Can they replicate gold in those machines too?
Why can't it be treated as though it were a foreign currency? People in Japan used to buy cars from my grandfather all the time and have them shipped. They would send him checks in ¥ and if the required a refund, he sent them $.
@@pulynanyalikibitz1301 That is what most crypto advocates would like, and it is treated as currency in some countries, but in the U.S., because no legal position has been taken, the IRS has decided to handle it as "property." Imagine trading a plot of land or a painting for a car...
@@M167A1 It depends on the specific crypto involved. Some are tied to the value of a company or a commodity (securities) others are pure currency (e.g. Bitcoin) and are nothing more or less than any other currency.
Steve, you should also do a video/story about Tesla recently double charged customers for their new Tesla and then dragging their feet on issuing refunds for the duplicate charge.
@ARGAMAWOO...find a good reputable person who did the story...not yahoo...but maybe cnn...msnbc..ny times...etc and sent it to him via his email address.....
I buy my cousin's house for 1 gold bar. 20 years later I sell the same house back to my cousin for that exact same gold bar. The IRS will say have a $300,000 capital gain.
@@ronchappel4812 No, it is the value of money that has decreased. The house is worth approximately the same amount of man-hours or goods or practically anything but the continuing devaluation of the currency.
Fortunately for you most or all of that, depending on marital status, is tax exempt. The price inflation on long term property is a reason long-term capital gains were taxed less.
What if I pay for the car with PEZ, and the price of PEZ skyrockets due something completely unexpected happening, like a cargo ship getting stuck in the Suez canal, I know that sounds outlandish, but it could happen...
Depends on the purchase price of the pez on the date of purchase. The pez should never be going through the suez canal. Aren't they Heche in mehico? Hahaha ! Idk. The kids use to sell pez at the border. Now there is no tourism to sell pez to. The kids make much more money as lookouts for the cartels.
Unfortunately, the Automotive Right to Repair act (this is the one that, among other things, put that diagnostic port under your dashboard) has a loophole that removes the protections of this law from ELECTRIC vehicles.
Assuming that's true, wouldn't that only affect the Federal Lemon Law? I'd expect that all, or nearly all states would NOT have that loophole in their state lemon laws.
@@JeanPierreWhite Yes. You might think it's there for things like smog checks, and while it does do that, it does far more than emissions control confirmation would require.
Does Michigan allow purchase of Tesla's in their state now? Only a couple of months ago, my friend in Ann Arbor had to drive down to Ohio to buy his Tesla. Would the Lemon Law then be governed by Ohio law?
Same in Texas, Form 130-U clearly states $ as the currency for title and registration and payment of taxes. There is no bitcoin form available from the state. 💵💵
Steve I live in Michigan love your content. I was wondering if you know the law on bike locks that spray people with a chemical like pepper spray when they try to get it off? My friend got a skunk lock and if u try to cut it off it sprays chemicals at high PSI at the person I just wanted to Know if it's legal
There's a concept of having clean hands when bringing a lawsuit. If something bad happens to you while breaking the law, like ending up smelling like a skunk, a court will likely not be sympathetic. However, it is illegal to set dangerous booby traps and a person can be found liable if they knew or should have known that there was a danger to others.
Sure they are legal. The problem is in the tort, or damage, it may cause. If it sprayed someone in the eye and caused permanent damage, you might be on the hook for paying a lot of money. In the early 1960s a man rigged a shotgun to go off if someone broke into an old house on his property. Sure enough someone broke into the house and was severely wounded. The Supreme Court held that because the injury was deliberate it was a crime. The burglars had posed no threat to the owner. However, if the injury is incidental, it would be a lot harder to prove there is an intent to injure.
This can’t be a new problem, I’m sure people have bartered for cars before. In fact I’m pretty sure a computer reseller I used to work for bartered for a couple of vans one time. They must have had to translate that to a US dollar value for tax purposes. I’m sure the same would hold true for new car registration paperwork.
this has been going on for years the standard of the "coin of the realm" you could buy a car in euro's and it would have to be translated into the "coin of the realm" bit coin would be legally defined as a foreign currency by most judges
Seems like you refund the customer in current bitcoin equivalent in $$ the same as when the car was purchased. Seems like a common sense way to calculate the refund.
Yeah. If the legal currency in the USA is the USD and prices are indicated in USD. It doesn’t matter if the seller accepts another currency of equal value to the price. Tesla could as well say “we accept euros, or yen’s”, still it’s a $$ price.
I agree that would be entirely reasonable if it was USD equivalent in *all* cases, but reserving the sole right to decide to refund in bitcoin if it crashes is where it crosses the line.
Other similar equivalencies would be buying something with rare quarters and getting your refund in paper money. Or buying it with goats at $60 a head and getting a refund in cash.
@@Raxiel497 Reserving the sole right to decide which coin is not an issue! You will get let's say $20k, it could be actual dollars or $20k worth of Bitcoin. This is not rocket science, it is simple math.
I assume that the price in BTC is determined at the time of sale based on the conversion rate to USD. I also have a strange feeling that they advertise the sale price of the cars in USD in normal commerce. Likely the amount returned by the court would be determined in USD since that is the typical unit of monetary transfer for these sort of transactions.
My question is how do you make a purchase of good/s with non-tangible currency? Seems to me placing a goods value on my pooka I could trade it for widget.
@@kamX-rz4uy - So if you got a refund you would get the “current” value of the used car you gave them? What if it was crushed or if it’s suddenly a collectors item? How could you get back the current value of the used car and not its value that you agreed upon at the time of sale?
@@sombojoe The value of the used car is in the contract and does not change. It is considered part of your payment. So let's say the car you are buying new is 50k USD including taxes and fees. The dealer gives you 10k for the trade in and you pay 40k (cash and/or loan). The car gets declared a lemon so you get back 50k USD minus mileage and condition allowances (you don't get to rack up the miles and beat the crap out of it and then expect a full reimbursement) and ignoring the effect of inflation on your money.
Given the lobbying power exerted, I suspect they will propose law changes to update state law in the era of crypto, and subtle changes that let them choose may get slipped in.
They could have turned this into a great publicity stunt by saying it's at the buyers choice. Stating : We don't make lemons ! Maybe a bit risky , but it would definitely give the other manufacturers an acid taste in the mouth (lemon?)
I've mentioned this example before. In Ontario all the auto dealerships, in one form or another, have a clause on new vehicle sales saying the dealership and manufacturer are not responsible for expenses and/or loses the buyer incurs when a warrantied failure takes place. Put simply, if you lose money (lost income, missed cruise ship, forced to stay in motel, etc.), that is the buyers problem. However, even though that is in the sales agreement that the buyer has signed, it has no legal bearing under Ontario law. As in Michigan (and probably every other part of the US and Canada) the law supersedes all contracts and agreements.
If you bought with bitcoin so you are a bitcoin speculator anyway. Tesla say they are not converting any bitcoin (they are half billion up anyway) so they should be able to return the exact amount at no loss to either party in bitcoin. Non story.... Until we get to attempt to claim. I think Tesla are willing to risk it.
What if you buy a Tesla with a foreign currency? Or salt (from which comes salary) or sheep (from which - through the Latin pecus - comes pecuniary). In the USA prices are expressed in the legal US currency which I s the US dollar. Sellers are free to accept any alternative form of payment of equal value if they wish but it’s still the $$ price the reference point.
I'm glad I watched this episode, I thought it was the reverse. I that the buyer could choice cash or the amount of bitcoin. I need to read those stories a little closer.
I guess people don't realize you don't buy with bitcoin .. bitcoin is a product not a monetary value. Bitcoin is converted into a monetary value of the country's origin. It would be the same thing if you purchased something with gold. Gold isn't "spendable" someone who accepted the gold would determine the value in his currency and say you paid that amount with gold doesn't matter if gold goes up or down ... you would just get more or less gold according to the value of gold at the current time if you had to get it refunded.
I have a question about lemon law. If you buy a car for commercial use, is it not covered? Someone told me this. So if say Enterprise buys a car to rent out and it's a lemon, they don't have any lemon law coverage?
I was thinking the same thing. I imagine you would have to court to settle how much 4 cows and 2 goats is worth and argue about it for a while and finally settle on 3 pigs and 6 chickens or something. If you tried the same thing with bitcoin the judge would just google it and say bitcoin is worth x dollars.
It would be more like transacting in euros while in the US or transacting in Indian rupees with a company in the UK. Basically just using a currency other than the main one for that area. It works just like any other currency, the only addition is that you have to translate the value across the 2 currencies.
@@joshnabours9102 kind of except in those situations the transactions are done in dollars and the seller accepts the task of converting the foreign currency. The situation here is a bitcoin being on the receipt which would be more like a chicken.
@@richpaul6806 not really. X bitcoin = y dollars on a given day. It does not matter if you transact in bitcoin, euros, rupees, or dollars because the relative value is fixed at the time of purchase. When you pay for the tesla you are paying x bitcoin which is equal to a dollar amount. 3 years later you still payed the same dollar amount in bitcoin as you did on the day of the transaction. The current value of bitcoin may have risen or fallen, but the amount you payed is fixed to the value in dollars at the time of purchase regardless of what currency you pay with. At least in the US it would be. Other countries would be fixed to the main currency of that area, but the idea is the same. Equivelantly, if you trade 10 goats for a car you are not getting a full refund if they return 4 goats when you send the car back due to it being a lemon. It does not matter if the value of goats has dropped between when you bought the car and when you return it. If you were selling the car back to tesla it would be fine to get the current market rate back, but when you are returning a defective product you get the full value you paid on the day of purchase back. Tesla is using legalese and market currency conversions to try and refund you less than you paid for it. And in the first place if paying in bitcoin is bartering with chickens then paying in us dollars is bartering with chickens too. Both are currencies with no inherent value.
@@joshnabours9102 I'm just saying if you did have a dealer in the US that took rupees or something they would convert it to dollars in the purchase agreement. You wouldn't walk out with a form that said you paid 3 million rupees for a car where the premise of this video is that your purchase agreement would say x bitcoin on it.
I'd be curious in Michigan for example, have you ever heard of car dealerships accepting Canadian Dollars for people doing cross boarder shopping? I'd imagine that would be a similar case (paying in a currency other then USD) and wonder how it would be handled there.
Will any state accept Bit-coin to pay sales tax? I doubt it, so the State must have been given the sales price of the car in Dollars. So it looks like the price that was paid has already been expressed in Dollars as far as the State is concerned.
Here's my opinion. If something is so complicated or legally dubious that we need to get the lawyers involved, then it's best not to do it. I'll stick with cash.
If you're buying a car and signing a contract it wouldn't hurt to get a lawyer involved (and someone else to inspect the car). Compared to the price of the car legal services to look over the contract would be a drop in the bucket.
Won't this be covered by parts of the UCC that cover foreign trade involving currency exchange? If a shipping contract (bill of Lading) specifies settlement in one of several currencies (UK Pound or US Dollar, someone's choice), so that exchange rates move between the start of the sale and the delivery, the UCC or the sales contract should specify what exchange rate has to be used. Don't remember much from BLaw 1 and 2, but that 'What is a chicken' case sticks in my head....
*QUESTION* Wouldn't it make the most sense for companies like Tesla to simply convert the Bitcoin to USD automatically at the time of purchase or shortly thereafter? That solves any price fluctuates and makes this issue moot (even if State law didn't already do that).
Are there any statistics regarding how many of or what percentage of Tesla vehicles are declared lemons? That would be telling as to what the real risk might be, for those who pay with Bitcoin.
I'd be fine with either the USD equivalent of the purchase price (probably what actually gets sent to the state) or the number of bitcoins used, straight up. No equivocation, no "if more we use X, if less we use Y." That way Tesla eats the loss if bitcoin goes up, and takes the gain if bitcoin goes down, just like they do with USD.
@@jeffwells641 I get why you feel that way. By and large, I do too. But there is an argument to be made that the dollar, having the entire US economy plus oil transactions across the world holding it up (and down), is much _less_ volatile than the bitcoin.
Wouldn't they return the value amount of any form of currency you pay with? If I pay 500 bitcoin which equals $1000, and the value of bitcoin goes up, there is still some number of bit coin that equals $1000, it just might be 450 as opposed to 500, but the dollar value would still be the same no?
Bitcoin discussion aside, what happens to the state sales tax if the lemon is a cash buyback rather than a manufacturer replacement vehicle? Would the buyer have to pay sales tax a second time if purchasing a replacement vehicle.
Im not even remotely familiar with lemon laws but I kind of expected something in the law to also be based on the advertised price of the vehicle at time of sale. Where that price is advertised in US funds and effectively creates a particular market value range regardless of a final negotiated price. Maybe you negotiated 5-10% of the price off plus maybe some incidentals like free floor mats and tank of gas but the core of its value was already dictated by the MSRP. The manufacturer would probably be selling the next years model at a nearly identical price further supporting the value of a refund. Additionally there would be other sales of the same model by other buyers in the same market to support a refund value.
So what happens if I trade in a car, and the value of the trade is equal to the purchase price of the vehicle. Is the "purchase price" that is on the buyer's order "One 2 year old Porsche Macan"? If I have a lemon claim, can I demand to be paid back in a used Porsche Macan?
briefly caught the tax point. Sales tax is different than income tax. A business pays sales tax different from income tax on a product sold. However profits made on cryptocurrency is taxed under commodity tax. How would that work?
In the East the economy runs on bitcoid in the following way. You sell an item in bitcoin but the value floats throughout the day/week based on the change in bitcoid value. In a refund condition the same will apply, so that you get a refund value based on what the value is now after the bitcoin revalue is calculated.
I would think that the most economical solution would be if at the time of transaction, the company converts the bitcoin into real/US currency. Or if the lemon law is invoked/triggered. The Tesla store can buy back the Lemmon at a combined value of Bitcoin and US currency or in US currency alone, to the original purchaser's choice/discretion as a default option. Is that clear as mud?
For the sake of simplicity assume that the 1 bitcoin includes the total owed including sales tax and fees. Tesla is then responsible for forwarding along the taxes paid in USD to the government.
Do they have the concept of Purchase Power Parity in US laws? Like, I purchased a Tesla and 2 years later I found our it was a lemon and go to court. In the meantime the price of that Tesla model has skyrocket to the moon. Will they give my back the money I paid or the money I would have to pay today for the exact same model of Tesla?
If they end up offering a 25k refund because of Bitcoin tanking. Instead of sending it for a refund, sell it on the grey market as a parts Tesla. Parts Teslas have almost the same value as brand new Teslas.
Im not sure i fully understand the issue.. You can buy or sell any amount of bitcoin you want, you dont have to purchase 1 full coin so its confusing to me...
The little i have traded in BTC I've been able to buy partial coins. If they were to keep USD equivalence and a coin went down from, say, 50k USD to 25k, then why wouldnt they refund you in 2 BTC? Or if the price doubled per coin to 100k USD, then they'd refund 1/2 BTC. Its not really that hard to figure out...
While I understand your point, it's really not reasonable. Lemon laws are in place to protect the consumer from loss, and allowing Tesla to undercut the protection laws to enrich themselves is NOT reasonable. The more reasonable action would be to pay all refunds in USD, regardless of the Bitcoin value.
What is reasonable is the buyer is returned the exact value that he is due ( in US dollars ). I don’t care if you traded nine chickens for a Tesla. If you are due a refund it should be in US currency of value of the day of purchase.
@@Crimson_Hawk_01 makes you wonder what they did in the bartering days...you pay two chickens for staple foods and a shovel. You return the shovel which is worth half a chicken....do you get half a chicken back?
But fiat currency maintains it's intrinsic value. A dollar is a dollar unless you're trading your dollar for the daily equivalent of another country's currency. If I paid $50,000, I would expect a refund equivalent to my payment, no matter the currency refunded. Bitcoin just creates an onus to match in US dollars an equivalency based on the maket price, which complicates the matter. Most people A. won't have bitcoin, and B. wouldn't notice a market difference in 6 months if paying cash.
This doesn't surprise me at all. Bitcoin value is based on the USD. To me, it wouldn't be any different than buying with stocks that are traded on a stock exchange. At the time of purchase that will be the basis of the stock that was used for the purchase of the merchandise. In a roundabout way that's what the IRS uses to determine earnings made for the dollar value of a stock or real estate even gambling.
So if the bit coin triples in value and a customer sues to be paid back in bit coin and wins but during the lawsuit the bit coin value drops what happens ?
Yeah I bet the state computer system is only setup for US funds and not other currency. Why would they? Also if you buy a car from Tesla that dosen't have a dealership in your state what state laws apply?
So if a person were to buy a tesla and pay 50K and it was paid for in the equivalent in used goats, would the purchaser get a refund in dollars or the equivalent in used goats? Mind blowing thoughts.
That's the whole point, Tesla has worded their purchase agreement so that They decide which to refund...(if you paid Only in used goats) If the current value of used goats is less than 50K, then They would of course choose to pay you back in used goats If the current value of used goats is more than 50K, Then They would of course choose to pay you back with 50K But here is a thought for you, If you had never bought the Tesla, and the value of used goats goes down, What is the difference between that and buying a Tesla with goats and getting refunded with goats ? None. It is only when the value of used goats goes up After you buy the Tesla(and it's a lemon) That you lose. If you paid with 50K, ALL of the above does not apply
@@Bobs-Wrigles5555 I wonder if you can use your bitcoin to buy beanie babies they both are going to have about the same value I think in the future I love your comment keep up the good work thank you sir
Here's a thought I had. Bitcoin is a currency that people buy and hold, speculating that the value will continue to increase, yes? An automobile is an item that begins DEvaluing the moment you drive it away from the dealer/seller. When would that sort of trade make sense? If you absolutely need a car to get around, is a Tesla your first choice for any reason other than status-seeking or excess affluence?
wouldn't it be the same as if you purchesed a car with a forien currency? they change the currency to USD and that is what you get for a refund not the original currency
@@johnmcmickle5685 It's a sticking point that a lot of people don't understand. The IRS for example is very interested in whether or not you are receiving and paying bitcoin as part of ordinary consumer transactions or if it is an investment with gains and losses. Pretty much if the IRS says you owe for gains you will have to pay.
There are no Tesla dealers (there ARE Tesla service centers); but if you buy a NEW Tesla, you can only do this on the Tesla web site. You may perhaps pick up your Tesla at a service center, or it might be delivered to your home address. I guess the "buyer's order" would be the online transaction on the Tesla website.
I think Tesla has an easy way out... List all invoices in US dollars. And allow an invoice amendment to "settle the debt/invoice" using bitcoin with all the terms and conditions Tesla requires in order to accept the settlement. Would that work for Tesla?
People get so hung up on bitcoin and 'the special' new currencies. Instead of bitcoin, imagine you are buying a top of the line Model S for $145k, but you work it out with Tesla that you are going to pay in gold. Current price of gold per ounce is $1,687.70, so you would be paying pretty much 86 ounces of gold for the car. As Steve said it depends on what the 'purchase price' is denoted on the bill of sale (depending on State). A year later you want to return the car and invoke the lemon law, and on the bill of sale it states 'purchase price', let's say somehow you are entitled to the full 86 ounces if the price of gold has gone up then you've mae money, if and only if you go trade it for that money. I would think most sellers would put the dollar amount purchase price. In Oregon, I was looking over ORS 646A.404 and it just says full purchase price, it doesn't appear to denote dollars. Although does mention 'cash price' when calculating the reasonable allowance. In Oregon there is no Sales Tax so might be interesting.
And what if the buyer's order states the price in dollars, and then has an equivalent amount in different currencies based on exchange rates as current at the moment the paperwork was printed? So now they can pay you back in dollars if the bitcoin exchange rate changed to Tesla's benefit, or in bitcoin if bitcoin is crashing at the time of reimbursement, but probably they'd have to give you the actual amount of bitcoin that at that moment constitutes the dollar amount on the original paperwork. So at worst Tesla doesn't have a loss, at best they have a windfall. Same as when the customer paid in Canadian Pesos.
At 5% inflation for 24 months and you have a lemon law claim, would you be given the exact number of dollars you paid or would you expect to receive the adjustment for inflation? I would think the same rule would be fair for Bitcoins too. Although Bitcoins are a much more volatile currency but to give the lesser of dollars or bitcoin‘s it’s only another way for Tesla to make money. If a company resorts to tactics like that then how low would they go? I would never buy product from them.
