Multiple directors at the Federal Trade Commission have put their name on a new blog post on the FTC’s site, calling for states to reexamine both current and upcoming legislation around how cars are sold. Most states make it difficult for manufacturers to sell directly to consumers, forcing would-be car buyers to buy from third-party dealers. The FTC’s post flatly states that "consumers would be better served if the choice of distribution method were left to motor vehicle manufacturers and the consumers to whom they sell their products."
Unlike most other countries in the world, new car sales in the United States are almost exclusively required to be done through independent dealerships as opposed to the manufacturer being able to sell directly to a consumer. The ostensible reason for this is to prevent manufacturers from colluding and controlling the price of automobiles; it also funnels a tremendous amount of revenue into locally owned businesses rather than directly to the manufacturers. Though the original intent of state laws mandating the dealership buying experience might have been valid, the FTC contends that they have long since outlived their usefulness to consumers.
This isn’t the first time the FTC has expressed its displeasure with the current car buying landscape via a blog post—the agency said much the same thing last April. Last time, the FTC called state laws requiring consumers to buy from dealers "protectionist" and the reasoning behind them "unsupported." This time, the FTC is taking somewhat of a broader tack.
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