June 2014, Auto Dealer Today - Cover Story
A bill introduced by State Sen. Jim Oberweis would have lifted the ban on Sunday sales in Illinois. The bill failed to make its way through the most recent session of the state assembly.
Sunday car sales have long been debated at the state level, but now that federal regulators are on the scene, that could change. It’s an issue that arises every few years in state assemblies across the country, but one that hasn’t been overturned in any state in several years. As a group, dealers have consistently supported keeping the laws in place.
At least 10 states ban Sunday sales outright, and several more restrict them. In Texas and Utah, for example, dealers can open on Saturday or Sunday, but not both. Other states, including Michigan, allow dealers in designated counties to remain open all week. The bans typically fall under the heading of “blue laws,” which also may ban other retail operations, most notably the sale of alcohol.
Now the Federal Trade Commission (FTC) has voiced its opinion that it finds the laws anti-competitive, and the agency tells Auto Dealer Monthly it could continue to watch the issue in other states.
Illinois legislators are the most recent group to question the ban on Sunday car sales. In January, Republican State Sen. Jim Oberweis introduced Senate Bill 2629, which proposed to repeal the ban on Sunday sales and leases for new and used vehicles in his state. The bill failed to gain much traction among his fellow lawmakers.
Oberweis argues that the ban prevents competition in the marketplace. He claims that about 80 percent of car dealers in Illinois agree with his bill, and that a group of dealers Oberweis refers to as “the frat club” and dealer associations in various states join forces with hard-hitting lobbyists to shut down proposals to lift the bans. “Some legislators are unwilling to stand up and do what is right if they are going to have to take some heat from some lobbyists and special interests.”
As for the dealers who agree with Oberweis, he says, “Of course they are not going to pay expensive lobbyists to work on their behalf. And nobody can win over that aggressive lobbying.”
Lou Renfroe is one car guy who doesn’t want to see the law change. Renfroe is the general manager for Community Mazda in Tinley Park, Ill. He has worked in the auto industry for more than 30 years, all in the state of Illinois, where the existing ban has been on the books since 1983.
Like many dealers, Renfroe says Sunday car sales simply don’t make sense. He argues that banks, financial institutions and insurance agencies are closed on Sundays, so customers could never select, buy and take delivery of a car in the same day.
“We’re open six days a week,” Renfroe says. “Back in the day, when the law was enacted, dealers expanded our hours for all of those other six days. We just didn’t sell that many cars to justify being open.
“I have never once heard a customer complain that we are not open on Sundays,” he adds. Renfroe says that consumers can walk into a car dealership five minutes before closing, and no matter which dealership it is, the staff will stay with that person as long as the transaction takes to close.
“You can come in at 8:55 [p.m.] and test drive a car,” he says. “You can’t go into Macy’s at 8:55 and ask to try on an outfit. The keys are in their door at 8:45 and you hear an announcement over the PA system they are closing.”
Renfroe further explains the trend toward Internet sales only strengthens his case. Rather than asking, “Can I help you?” or “What kind of car are you looking for?” he says, his salespeople are now trained to ask, “Which model would you like to see?” He says most customers respond with the year, make and model, if not the stock number.
With sites like Cars.com and TrueCar working to increase their market share, Renfroe adds, customers already know what they want; they’re only there for a test drive and to fill out the paperwork. The Internet is open seven days a week, so shoppers can browse Community Mazda’s inventory on Sundays if they wish.
“There’s no logic to having someone come in here on a Sunday if they can’t buy the car,” Renfroe says. He adds that the dealers in the states prohibiting car sales on Sundays have to stick together, because if one store opens, others will feel pressured to open as well. “That’s one reason we as a lobbying group fought for this bill years ago,” he recalls. “Otherwise, you’re all going to lose business.”
Bad for Business
General Manager Lou Renfroe says the staff at Community Mazda of Tinley Park (Ill.), works long hours Monday through Saturday. Renfroe can’t recall a single customer complaining that the store was closed on a Sunday.
The FTC has taken a very different stance. The agency issued a letter in late March stating that it agrees with Sen. Oberweis in key issues regarding the ban on Sunday auto sales.
In its letter, the FTC argues that, by banning vehicle sales on Sundays,
“They therefore eliminate the possibility of competition among dealers to determine the hours of operation on Sunday that might be most responsive to consumer preferences and most beneficial to automobile dealers.”
Oberweis says he would not be surprised if the FTC pursued this issue in other states. “I have not heard that from them directly, but it would make logical sense.”
The FTC’s director of the Bureau of Competition, Deborah L. Feinstein, was among the list of officials to sign the letter this spring. She tells ADM that
“We are often requested by state legislators to comment on legislation concerning laws that limit — or end limitations — on hours of operations. We may therefore have other opportunities to comment. The interest of the FTC is that limiting hours of operations can increase search costs for consumers and limit competition.”
But Community Mazda’s Renfroe says being closed on Sundays is a win for both sides. Customers can roam lots without being disturbed and dealers don’t have to pay operating costs on days when little work can be completed. “[Oberweis] is a millionaire who owns all these ice cream stores. I’m sure he doesn’t work on Sundays. Why is he bothering my industry?”
Colorado Automobile Dealers Association president Tim Jackson has watched a similar battle unfold in his state. A law enacting a ban on Sunday car sales in Colorado has been in place since 1952. Jackson says the CADA works tirelessly to keep the law in effect.
“Every few years, it comes up in the legislature in our state,” Jackson says. “It’s usually a new legislator that thinks they need to go fix this, but once they go down that road, they realize they don’t really have any allies or backing. Counting on the federal government as an ally is not really the best endorsement for getting a law passed.
“This is an ongoing conversation,” he adds. “We don’t wait until the issues comes up. As a matter of process, we stay in the loop with legislators on this.”
The Illinois bill did not successfully make its way through the assembly this session, and it is unclear whether or when it might be reintroduced. Responding to a request for comment, NADA spokesman Charles Cyrill reserved comment for state dealer associations, noting that Sunday sales remains a state-by-state issue.
Joe McMahon, general counsel for the Illinois Automobile Dealers Association, calls the FTC’s opinion “nonsense.” He and the CADA’s Jackson don’t believe the FTC will approach other states to pursue repealing the Sunday auto sales bans.
“The dealers like the law the way it is,” McMahon says. “They think there’s plenty of time to shop. The FTC is not the most dealer-friendly association. We take their opinions for what they are.”
“The FTC’s logic is idiotic at best,” Jackson adds. “It is flawed and lacks any insight on the topic at all.”
Stephanie Forshee is the former senior editor of Auto Dealer Monthly. She has expertise in dealership operations, sales and F&I.