#6 – Preserving the Car Dealership Monopoly

What’s so iAWFUL?

Laws and regulations being used to stifle competition by prohibiting new ways to buy a car.

(MI HB 5606)

The Internet has made purchase direct from manufactures more possible and more popular than ever.  We can order customized clothes, couches, and now cars.   But traditional car dealers want to prevent this new competition and they’re using legacy laws and regulations as the barrier.

Laws in Arizona and Michigan have banned Tesla from selling its cars directly to customers.  New Jersey previosly stopped Tesla from selling cars from its showrooms.  And in Texas, Tesla is not just stopped from selling their cars; it has to go through rigorous steps just to advertise them.

But not all states got it wrong. New York, North Carolina, Ohio, and Virginia embraced the free market and enacted regulations allowing direct-to-consumer auto purchasing.  Of course, these cars must still conform to all federal and state safety laws.  But now rather than having to pay a middleman for car delivery, consumers get to keep the cost saving on their customized cars.

NetChoice was founded on the idea of breaking down barriers to e-commerce, and these new laws limiting the online sale of cars is just the latest attempt of legacy players using consumer protection as an weapon for competition prevention.

The iAWFUL reflects the editorial views of the Executive Director of NetChoice and does not necessarily reflect the views of all NetChoice members.

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