Michigan lawmakers are looking out for auto dealers. Sounds nice, right? Well, it does if you’re a new car dealer who doesn’t like the fact that that upstart auto maker Tesla hasn’t followed the herd when it comes to selling their new cars.
The state’s legislature recently passed a bill that bans direct sales of new cars to customers, requiring a dealer to broker the sale. The bill is awaiting signing by governor Rick Snyder.
The National Automobile Dealers Association, which represents almost 16,000 new-car dealers, favors the franchised-dealer network.
“States are fully within their rights to protect consumers by choosing the way cars are sold and serviced,” Charles Cyrill, a spokesman, said in an e-mailed statement. “Fierce competition between local dealers in any given market drives down prices both in and across brands. While if a factory owned all of its stores, it could set prices and buyers would lose virtually all bargaining power.”
Are states “fully within their rights” to block consumers purchasing a legal product directly rather than going through an approved agent? I’m going to say that they’re not. At all. Sure, there may be no laws that expressly forbid them from doing it (though this seems more a case for the Federal government under the Interstate Commerce Clause), but just because you can do something doesn’t mean you should. This is a big old “don’t”. » Read more