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NADA Releases New Video on Dealer Franchise Laws

July 30, 2014

McLEAN, Va. — 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 Wednesday 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,” the video explains. “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,” according to the 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,” the NADA said in a statement. “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 here.


  1. 1. David Ruggles [ July 31, 2014 @ 06:58PM ]

    Consumers don't care. In their mind, the market would take care of all of this stuff without the "protectionist legislation" they believe dealers bribed out of legislators. NADA isn't doing themselves any favors by talking about this all the time. Consumers think dealers are a needless tier of distribution. After all, didn't JD Power say that? Scott Painter too? Michael Dell? And now we have some FTC employees writing a piece on the issue.

    This all came up again with opposition to Tesla's factory owned dealership initiative. Let 'em succeed or fail on their own. Consumers will never understand this issue. Why bring it up?


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