Protecting Competition, Consumers and Communities

The franchised dealership system gives consumers something a direct-sales model cannot: independent retailers competing for their business. Multiple dealers selling the same brand compete on price, trade-in value, financing, service and the overall customer experience. Dealers also provide a convenient, nationwide network for test drives, vehicle delivery, warranty and recall work, and ongoing service—all backed by significant private investment in local communities.

Dealers also serve as important advocates for consumers by facilitating warranty repairs and increasing vehicle recall completion rates. Unlike manufacturers, which face financial costs associated with warranty and recall work, dealers have a direct incentive to ensure these services are performed promptly and effectively.

State franchise laws protect this competitive system. These laws ensure local small business dealers are protected from automakers' disproportionate economic power, while providing consumers with an independent local business that is accountable to them when problems arise.

Direct-to-consumer (DTC) sales eliminate that same-brand retail competition. When the manufacturer is also the retailer, consumers cannot shop competing sellers of the same vehicle for a better price or deal. And a DTC model does not eliminate the considerable costs of vehicle retailing and servicing — it simply shifts those costs. Independent studies confirm it’s not cheaper for manufacturers to sell direct and would not save consumers money.

America’s franchised new-car dealerships directly employ more than 1.1 million people and support nearly 2.4 million jobs nationwide, while contributing roughly $500 million each year to charitable organizations and community causes.