Agreed. There's already a lot of legislation around automotive (and it's pretty good) so maybe they wanted to steer clear of that to avoid legal conflicts with other state's laws. The dealer lobby is also particularly litigious, so perhaps they want to avoid going down that path when it's not really necessary at this time.
I recall reading that laws against direct sales were created because car makers in the US were very abusive/anticompetitive. So the laws might have had some sense at that time.
Was there any legitimate basis for this fear though? Was this a tactic that was ever provably executed by a manufacturer? Or was it just a made-up scenario by dealerships to push these laws that massively benefit them?
It's bizarre that this has been allowed, and that lawmakers didn't immediately fix this hole in the regulations as soon as they noticed car manufacturers taking advantage of it.
If you're looking for the justifications, here's an explanation from a Cato article (pp. 3-6):
Why Restrictions on Online Auto Sales?
The franchise laws that inhibit the new business models for car sales from spreading online are defended as being important for protecting dealers and consumers from automobile manufacturers. Defenses of those laws, which became widespread in the 1950s, revolve around two arguments: first, that restrictive franchise laws are needed to protect consumers and, second, that such laws are needed to protect distributors from rapacious manufacturers[...]
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).
I seem to recall that the laws were put in place, at least in part, to protect the dealers who were financing the manufactures, only to have the manufactures come in and sell directly once vehicles were ready.
This is either the result of bored prosecutors or outright corruption. Either way, these prosecutors need to find a new line of work. They are using US taxpayer resources to protect price discrepancies for foreign auto manufacturers in foreign countries. I have seen rather transparent attempts to use our laws to enforce the will of large corporations before (SOPA etc) but this seems to take it to new extremes.
Car manufacturers cannot impose restrictions on what we do with cars once we own them. We purchase them - there is no car license agreement. It is not fraud to buy a car and then choose to sell it a few days later, and we have no legal obligation to tell the dealer what we plan to do with the car. I cannot imagine that the government would actually prevail at trial on any of these cases. They may get a few intimidation-based guilty pleas, but I don't see these cases having a ton of legal merit.
I agree, the people enforcing these laws are just as negligent. Why did the let the manufactures anywhere near the testing process.
I would like to think that now, after the scandal, they are selecting and testing cars that have recently been sold. The cars that are actually being driven around.
I had no idea there was actually a written law that prevented auto manufacturers to sell directly to consumers. What is this law supposed to achieve exactly?
Cynically, my guess is that the laws were passed by classic car owners. There have been similar looking dispensations on road tax for classic cars in the past.
If by "legitimate" you mean "useful" or "good" (as opposed to the law not being passed through the established legislative process, because that criticism wouldn't make sense), then even then it was illegitimate. If the manufacturer can come in and undercut the dealer, they should. Unfortunately, the dealer was local and the manufacturer often wasn't. The same reason any protectionist measures are created.
Because the few people who would have their cars crushed vote. They are not a large group, but small groups voting as a block are enough to change an election. If a politician wants to keep her job she will be careful angering groups like this.
Also, in the US the 8th amendment prohibits excessive fines. It is likely that courts will look on crushing a nearly new car as an excessive fine.
I wouldn’t confuse peoples ideals with corrupt politicians.
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