NADA Releases New Video on Why America Needs Dealer Franchise Laws



McLEAN, Va. (July 30, 2014) - New-car dealer franchise laws protect consumers during safety recall and warranty claims, create price competition and benefit automakers, says the National Automobile Dealers Association in a new animated video released today as part of its "Get The Facts" initiative.

"Buying a car is a ... complicated purchase with financing, titling, registration, insurance and trade-ins. Because cars are expensive and car buying is complex, governments set up dealer franchise laws to protect consumers, and dealers make this complex process simple," NADA says in the video. "But recently, some have suggested weakening these laws or eliminating them to bypass dealers completely-a bad idea and nowhere simple as it sounds."

The new video explains the central reason why states adopt dealer franchise laws - to protect consumers and provide a competitive business environment.

The dealer franchise network is also supported by automakers as the best and most efficient way to buy, sell and service cars in the marketplace, and "dealer franchise laws just make good business sense," says NADA.

"Factories get to focus on design and building great cars, while dealers invest billions in showrooms and websites to compete for local business and sell cars at a great price," NADA says. "And locally owned dealers have a huge positive impact on local communities-local businesses that create more than 1 million jobs nationwide, and provide more than 15 percent of local tax revenue."

NADA's "Get The Facts" initiative is designed to inform the media, opinion leaders and policymakers about the numerous benefits of America's franchised new-car dealers through a new webpage and variety of multimedia resources available at

Other online resources include a two and a half minute and 30-second animated video detailing the benefits of the franchised dealer system, a fact sheet on the consumer benefits of dealers, a longer informative FAQ, a document explaining the reasons for state franchise laws, a new report by auto industry consultant Maryann Keller on the consumer benefits of the dealer franchise system and an infographic.

The "Get The Facts" initiative highlights four central benefits of franchised auto dealers, which include:

  1. Price Competition - New-car dealers compete fiercely for business and drive consumer prices down;
  2. Consumer Safety - New-car dealers take the side of consumers in warranty and safety recall situations;
  3. Local Economic Benefits - New-car dealers create well-paying local jobs and generate significant tax revenue that have a huge impact on local economies; and
  4. Added Value - New-car dealers simplify an otherwise complex car-buying experience.

There are 17,700 new-car dealerships with nearly 32,000 domestic and international franchises that employ more than 1 million people in the U.S.

For more information, visit

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