What Do Car Dealers Do?
New Jersey recently barred Tesla from selling cars through its own stores. Car dealers are not fond of Tesla’s distribution model, since Elon Musk does not want to have dealers. And since many states require cars to be sold by dealers, this poses a significant problem for Tesla’s future.
Here’s my question. What is the public purpose behind a statute or regulation that says that you can only buy new cars through a dealer? I’ll grant that the dealership model has been around for a long time, and dealers are a powerful lobby, but is there anything else to this regulation? For example, can you say that car dealers do a better job at protecting consumer safety or welfare than a store owned by the manufacturer? I find that hard to believe. I’m not sure these dealership statutes are constitutionally irrational, but they are ridiculous.