I've always wondered this as well. There was even a paper from the DOJ that advocated elimination of these laws: http://www.justice.gov/atr/public/eag/246374.ht

I've always wondered this as well. There was even a paper from the DOJ that advocated elimination of these laws: http://www.justice.gov/atr/public/eag/246374.htm http://www.justice.gov/atr/public/eag/246374.htm I think the reason has to be purely political: it stands to reason that state politicians would benefit more by protecting a local franchise vs. a national car company (even though it is ultimately detrimental to their constituency).