4 ms·

I see zero reason for such laws to be in the interest of the general welfare. Break up market dynamics to introduce mandated middlepeople? So dumb.

fiddlerwoaroof 6y ago
I wonder if the thinking was that dealers have more buying power since they’re purchasing multiple cars from the manufacturer at once, so they are on more equal footing when it comes to negotiating with GM and Ford. Then, since there are multiple dealerships selling the same cars, they can compete with each other on price. Thus, in theory, allowing customers to purchase cars at a price closer to the “wholesale” price. Of course, once the systems exist, the dealers will lobby for their continued existence.
- wongarsu 6y ago
  If dealers really have that negotiation edge they should be able to stay relevant with market dynamics alone, instead of lobbying to prevent direct sales.
  - thirtyseven 6y ago
    Unless the manufacturers undercut the dealers until they're out of business, then raise prices.
    - ngcc_hk 6y ago
      Apple still has dealer network with direct sell. But there are so many can’t imagine just manufactures.
syshum 6y ago
The history of why dealership came to be is an interesting one, and why the laws was originally passed was in some way valid However today dealerships collectively enjoy HUGE state level political power, as in most states the bulk of sales tax revenue is directly tied to the resale of cars, thus the dealers of said cars have out-sized pull in state governments
- kortilla 6y ago
  Being a large source of tax revenue does not imply political power. Campaign contributions do.
  - CamperBob2 6y ago
    Actually, it does. If a large source of tax revenue vanishes, the legislators will need to raise taxes on someone else to make up for it. They would rather not do that, given a choice, because of all the wailing and gnashing of teeth that will result from the people whose taxes go up.
- stephenboyd 6y ago
  Legislators aren't especially influenced by big tax contributors and the same taxes would be paid by the manufacturer-owned stores anyway. It's just that once the dealer network is created they become a large and highly motivated special interest group. The dozens or hundreds of people that work at each dealership and their families have mostly outnumbered the voters who care strongly about the ability to buy direct, but this has been changing lately.

fiddlerwoaroof 6y ago

I wonder if the thinking was that dealers have more buying power since they’re purchasing multiple cars from the manufacturer at once, so they are on more equal footing when it comes to negotiating with GM and Ford. Then, since there are multiple dealerships selling the same cars, they can compete with each other on price. Thus, in theory, allowing customers to purchase cars at a price closer to the “wholesale” price. Of course, once the systems exist, the dealers will lobby for their continued existence.

wongarsu 6y ago
If dealers really have that negotiation edge they should be able to stay relevant with market dynamics alone, instead of lobbying to prevent direct sales.
- thirtyseven 6y ago
  Unless the manufacturers undercut the dealers until they're out of business, then raise prices.
  - ngcc_hk 6y ago
    Apple still has dealer network with direct sell. But there are so many can’t imagine just manufactures.

syshum 6y ago

The history of why dealership came to be is an interesting one, and why the laws was originally passed was in some way valid However today dealerships collectively enjoy HUGE state level political power, as in most states the bulk of sales tax revenue is directly tied to the resale of cars, thus the dealers of said cars have out-sized pull in state governments

kortilla 6y ago
Being a large source of tax revenue does not imply political power. Campaign contributions do.
- CamperBob2 6y ago
  Actually, it does. If a large source of tax revenue vanishes, the legislators will need to raise taxes on someone else to make up for it. They would rather not do that, given a choice, because of all the wailing and gnashing of teeth that will result from the people whose taxes go up.
stephenboyd 6y ago
Legislators aren't especially influenced by big tax contributors and the same taxes would be paid by the manufacturer-owned stores anyway. It's just that once the dealer network is created they become a large and highly motivated special interest group. The dozens or hundreds of people that work at each dealership and their families have mostly outnumbered the voters who care strongly about the ability to buy direct, but this has been changing lately.