Tesla, getting around state law, will lease in CT

Tesla, barred from selling to consumers in Connecticut, will be leasing out of its Milford location.

Tesla, prevented from selling cars in Connecticut, has reportedly found a loophole — consumers will be allowed to lease a Tesla.

“We are excited to announce that we are now able to offer leases to Connecticut residents from our Milford location,” the carmaker told Electrek, a news site focused on electric vehicles. “Visitors can now speak with a Milford Gallery Advisor about electric vehicle technology and experience a demonstration drive if they are considering leasing a Tesla. This is an exciting step toward increasing the number of electric vehicles in Connecticut, and Tesla thanks you for all your support along the way.”

Tesla is a manufacturer, and so was barred by state law from selling cars directly to consumers. A proposed bill — opposed by the Connecticut Automotive Retailers Association — was scrapped after the electric car manufacturer said it would be moving to an online-only sales model.

“I believe what Tesla is doing, and I havent seen the details, is a violation of Connecticut law,” said the association’s president, Jim Flemming. “This, I think, is another attempt by Tesla to ignore Connecticut law.”

A sales associate at the Milford Tesla service location confirmed that leased vehicles will still be delivered to Connecticut residents from Mount Kisco, New York.

A complaint filed by Flemming and CARA, and backed by the state Department of Motor Vehicles, contended that a Greenwich Tesla location was flouting state law. A judge agreed, and the location closed.

Fairfield resident Michael Flatto was in Milford getting his Tesla serviced when he saw a notice of the impending leases. He called the law preventing manufacturer-direct sales a “missed opportunity and a disservice to consumers.”

Flatto said he bought his Tesla in New York.

“Connecticut still gets the tax revenue when the vehicle is registered, but it's a pain to jump through the extra hurdles,” he said. “A lot of people say that Teslas are just for rich people, the truth is that there's a growing market for used vehicles and leases that are available to middle-income people.”

Tesla explained that offering leases is a way around that law.

“A Tesla leasing location can offer leases but cannot conduct any activity related to the sale of a motor vehicle,” Tesla told Electrek. “Because it is a manufacturer, Tesla is not eligible to apply for a dealer license under state law, but Tesla is eligible to hold a leasing license, and thus is authorized to offer leases in Connecticut.”

Flemming, though, said the Milford location has a specific license, and that Tesla may be violating statute by leasing out of that location.

“Leasing is, in fact, a form of selling under Connecticut law. Sales tax is applicable to a lease just like its applicable to a sale,” he said. “I think they’re walking the line.”

Tesla maintains 102 stores across 23 states, including Washington, D.C., with the majority clustered in California and Florida, according to the most recent list published on its website.

Connecticut Media Group