“Direct sales to consumers, especially with the Internet now becoming the go-to vehicle for purchasing, are very important,” Jack Gillis of the Washington-based Consumer Federation of America and author of “The Car Book,” a consumer guide to buying, said in a telephone interview.
Gillis of the Consumer Federation questions who is the fox and who the prey.
“We walk into a dealership, and we have to match wits with a seasoned professional who is trained and spends all of their days trying to get the highest possible price,” he said. The market would keep manufacturers from overpricing and force them to provide service, he said
Restrictions on direct sales took hold in the 1930s as the industry matured, with a combination of company-owned stores and franchise dealers, said David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor, Michigan.
Laws were enacted to protect dealers because carmakers could strip franchises from established dealers and give them to new ones without grounds, Cole said by phone.
FTC: We use income earning auto affiliate links. More.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.