Business columns: Why we don’t need car dealers

Charles Lane
The Washington Post

Why, in this day and age, should I have to haggle with “grinning salesmen” when it’s time to buy a car? asked Charles Lane. The short answer is that car dealers are protected by state laws that give them exclusive sales territories and bar online competitors.

Such laws might have made sense once upon a time, when dealers needed an incentive to invest in showrooms and inventory. But this “old business model has been obsolete for decades,” and is completely anachronistic in the age of the Internet. Were it not for those laws, I could browse a manufacturer’s website, choose my model and equip it the way I like it, and then take delivery a few days later.

The bankruptcy filings by Chrysler and General Motors offer a chance to move to this more efficient, lower-cost distribution model and break the stranglehold of the dealers. But powerful congressional Democrats are backing a federal bill that would preserve the dealers’ unfair advantages. If they prevail, the dealers will once again be “exercising political clout at the expense of the car-buying public.”