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FTC: Sunday Auto Sales Ban Harms Competition

April 1, 2014

By Brittany-Marie Swanson

SPRINGFIELD, Ill. — At the request of Sen. Jim Oberweis (R-Sugar Grove), the Federal Trade Commission issued a letter last week in support of legislation that would overturn the state’s ban on Sunday auto sales. The bill is being opposed by the state’s dealer association.

Senate Bill 2629, which was introduced by Oberweis earlier this year, would repeal certain provisions of the Illinois Vehicle Code that prohibits the sale or lease of new and used vehicles on Sunday. The FTC praised the bill, noting that it believes “that repeal of these mandatory Sunday closing provisions will likely be procompetitive and beneficial to consumers.”

Under current law, which has been in place since 1983, dealers who open their doors on Sundays could face a $1,500 fine.

“The existing code provisions effectively ban the sale or long-term lease of both new and used automobiles (except private sales) on Sunday throughout Illinois,” the FTC’s letter read, in part. “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.”

The anticompetitive effects of the Sunday sales ban, the FTC noted, are impeded and more costly comparison shopping, a market that is unresponsive to consumer preferences for hours of operation, and diminished competition among dealers for both automobile sales and related services, such as vehicle repairs and parts sales. 

“Collectively, these effects may lead to higher prices and reduced output for sales of new and used automobiles and related automobile services than would otherwise be the case,” the letter stated.

However, the Illinois Automobile Dealers Association (IADA) has made clear its opposition to the bill. Joe McMahon, the IADA’s director of government affairs, told F&I and Showroom that the FTC’s arguments don’t hold water.

“We thought [the FTC’s letter] was kind of ludicrous, actually,” McMahon said. “They are saying that the search costs [to shop for a vehicle] are going up. Well, if they're living in the same world that I am, most people go on the Internet to purchase a new car. All franchised dealers have websites that are open 24 hours a day, seven days a week.”

In January, the association released a fact sheet outlining its argument against the legislation. Among the points listed, the association stated that it’s best for dealerships to complete transactions when financial institutions are open. The group also noted that dealership employees benefit from having the day off.

“The guy who sponsored the bill, Sen. Jim Oberweis, he's running for U.S. Senate, so I don't know if he's looking for issues or what,” McMahon said. “But he's saying that the individual dealers should make their own decisions with regards to whether they want to be open or not. And as an industry, we're not pushing for this bill. We like the way the law is currently right now.”

In its letter, the FTC said that while the association’s arguments may explain why individual dealers might choose not to be open on Sunday, “they are not arguments for why a total ban imposed by the state on all Sunday sales benefits consumers.”

McMahon wasn’t surprised by the agency’s response. “They've opposed a lot of stuff related to dealerships over the years. We just don't think their facts are right.”

Comments

  1. 1. Ron Vaughn [ April 01, 2014 @ 10:01AM ]

    As a 40 year veteran of the car business in the state of Illinois, I believe that Mr Oberweis doesn't have a clue about our business. We are open an average of 65 to 70 hours a week, most of the consumers that we have only work 40 to 50 hours per week. I believe that we offer plenty of time for consumers to shop for a car. If we run our salespeople into the ground by working them 7 days per week, we will end up with a bunch of tired, unprofessional, non-productive employees.

  2. 2. Lou Renfroe [ April 01, 2014 @ 11:59AM ]

    I have been in the car business for 33 years and I believed the law was right 1983, and today! To IADA point, people now shop on line and the statistics I have seen of late the consumer visit's on average1.4 dealerships since they have done all there research on line. They request price quote's throught multiple internet platforms to get the best price, so no need to drive from store to store. There are no banks or insurance agency open on Sunday to facilitate the purchase either. This is the only business I know that if a customer walks in at 5 minutes to closing time, we'll stay as long as it takes to accomodate the customer and sell them a vehicle. Many hundreds of time we have left 1-2 hours after closing to help the customer. I have missed many family events do to this, and the 70 hour work week's I have put in. Bet you couldn't get an Oberweiss store to stay after closing.

  3. 3. Lou Renfroe [ April 01, 2014 @ 12:01PM ]

    I have been in the car business for 33 years and I believed the law was right 1983, and today! To IADA point, people now shop on line and the statistics I have seen of late the consumer visit's on average1.4 dealerships since they have done all there research on line. They request price quote's throught multiple internet platforms to get the best price, so no need to drive from store to store. There are no banks or insurance agency open on Sunday to facilitate the purchase either. This is the only business I know that if a customer walks in at 5 minutes to closing time, we'll stay as long as it takes to accomodate the customer and sell them a vehicle. Many hundreds of time we have left 1-2 hours after closing to help the customer. I have missed many family events do to this, and the 70 hour work week's I have put in. Bet you couldn't get an Oberweiss store to stay after closing.

  4. 4. Ted [ April 01, 2014 @ 02:43PM ]

    Is Sen. Jim Oberweis office open 7 days a week and is he in it to serve the people every day? Probably Not.

  5. 5. Ted [ April 01, 2014 @ 03:00PM ]

    What is more important? Buying a car or being able to reach your government official?

    All government offices should be open 7 days a week so the public can get their issues resolved!

    All mail should be delivered 7 days a week too!

    I propose a bill: "Government Offices open 7 days a week"

    Anyone second it?

  6. 6. Ted [ April 01, 2014 @ 03:15PM ]

    The cost of Dealerships to open an extra day a week would only be added to the cost of the car or truck the consumer purchases. Those cost must be passed along. Dealership will not sell more cars or trucks, the only difference with be the added cost. Oberweis must have never attended any business schools. Who wins?

  7. 7. Ben [ April 01, 2014 @ 04:55PM ]

    Will Illinois make chik fil a and hobby lobby open on Sunday as well . I also thing that the secretary of states office is open on Sunday to service the car dealers .

  8. 8. alan gorr [ April 02, 2014 @ 08:45AM ]

    Poor Mr. Oberweis, he couldn't even stay in his state thru the PRIMARY CAMPAIGN, because his wife wouldn't be happy and wanted a Florida Vacation. What does he think, are the wifes of the Car Dealers and their staff happy when their Hubbies can't stay home on Sundays and attend Church Services with them? Mr. Oberweis, GOOD LUCK in your CAMPAIGN for US SENATE, you peed off a lot of your prospective voters.

  9. 9. Frank [ April 02, 2014 @ 08:48AM ]

    Look at a bill of sale and see how much $$ the state sits back and collects per transaction. keep in mind they don't have to pay any of the overhead a dealer does. Just sit back and collect on average more profit per car then the dealer. So when the dealers oppose this perhaps stay out of our business and be grateful that were open 6 of the 7 days a week. Also this affects vendors and banks and ...to be open also. Lastly this will not sell more cars but cost dealers more money, burn out and....Stay out of our lives Republican. Wait I thought that was a democrat stance to over intrude in the lives of the citizens. Dealers employees are Citizens!

  10. 10. alan [ April 02, 2014 @ 08:59AM ]

    Frank, another RINO?

  11. 11. Deb C. [ April 02, 2014 @ 07:09PM ]

    Last time I looked, the FTC regulates segments of our industry, but doesn't trump State's rights to conduct intrastate business. Maybe Oberweis should 'wise' up. Stick your guns Illinois.

  12. 12. STEVEJ [ April 05, 2014 @ 09:26AM ]

    ILLNOIS IS NOT THE ONLY STATE WHERE CAR SALES ARE ILLEGAL. IOWA ALSO DOES NOT ALLOW SUNDAY AUTO SALES. I GUESS WE ARE NEXT.

  13. 13. STEVEJ [ April 05, 2014 @ 09:27AM ]

    ILLNOIS IS NOT THE ONLY STATE WHERE CAR SALES ARE ILLEGAL. IOWA ALSO DOES NOT ALLOW SUNDAY AUTO SALES. I GUESS WE ARE NEXT.

  14. 14. Dennis Pecho [ April 05, 2014 @ 09:59AM ]

    Although harshly put in many posts, they are right in the comments that this will negatively affect consumers. The additional day open with generate greater employee cost, which will challenge the consumer friendly pricing structure that exists today. We will return to a time when hiring quality employees to sell cars was difficult. I suppose theoretically, we can reduce the hours we are now open during the week, because the same volume of business will simply be spread out to another day. If Senator Oberweiss were to review any, and I do mean any facts, he would realize how foolish this would be. Possibly the most counter-productive bill ever passed.

  15. 15. Don Cox [ April 07, 2014 @ 05:57AM ]

    Wow!!! Seven days a week, I think that dealers should put in a sales lounge and an employee hotel for those big sale weekends when you just have to stay there 24/7.! If anyone has ever worked in the automoblie industry selling cars they know exactly what is going to happen if this law is overturned. I thought we outlawed slavery? Shame on those who have never done the job but want to tell us that have, how to do it and when to do it ! Impeach the bums!

 

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