FTC to Host Public Workshop Examining the U.S. Auto Distribution System Workshop Will Explore Competition, State Regulations, and Emerging Trends in the Industry, Project No. P131202
I would like to voice my thoughts that dealer franchise laws are outdated and becoming increasingly irrelevant in this day and age. The argument that there is no competition if automakers owned the dealerships is false. The free market will force automakers to price their products competitively, and improve them in order to have an edge against their rivals. It works for every other business, so why is that car dealerships have a special exemption to this? If Toyota overpriced the Corolla, a customer could then simply buy a Honda Civic, Chevy Cruze, Mazda 3, or a Ford Focus instead. This would result in Toyota losing sales, and would have to readjust their prices to match their competitors, along with improving their vehicles to sway buyers to their vehicles instead of the competing automakers. Nobody I've talked to, in person or online, has ever enjoyed the haggling process when buying a car either. They are designed to wear down the customer's patience in the hopes that they will settle for a higher price in the hopes of just getting their car and leaving. And then there's the financial loan officer, who's job is to prepare the paperwork and finances, but also to try and upsell mostly useless add-ons such as pinstriping or waxing the car, with the same hope that the customer will agree to anything just so they can get out of there. Such services add very little if any value to the products they sell. Many people would be happy to pay a fair price for a vehicle and leave it at that, just to avoid the haggling process. Dealerships are terrified of this, which I believe is why they're trying to prevent automakers such as Tesla from being able to sell cars directly to customers. If you conduct a survey asking people if they enjoy the car buying experience, the overwhelming majority will say no. If you press further and ask why or why not, they will likely explain similar reasons I stated.