New Auto Franchise Act

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Utah law currently prohibits a new auto manufacturer from selling directly to the consumer.  As technology has allowed many market sectors to change its methods of sales and distribution, the auto industry remains locked into a 100 year old system propped up by state law. New companies like Tesla Motors and Utah's own Vanderhall Motors are denied the ability to sell cars in Utah unless they give up tremendous control of their business to a third party dealership franchise to do it for them.  

If you want to get wonky with me, click to read how a Yale study found these laws to be state sanctioned anti-trust, the Supreme Court found them unnecessary and the Federal Trade Commission finds them anti-competition and anti-consumer.  This isn't new either.  The FTC has been saying this for at least 30 years and encouraging states to relinquish the restraints they have placed on the auto trade.

Auto dealers, who are dependent on this century old system to continue to survive, will tell they are necessary to keep prices low and provide you that fantastic experience you always look forward to when walking onto a car lot.  Again, the FTC demonstrates that this system keeps prices artificially high and the market skewed.  It is anti-consumer.  Franchise-world will tell you that these laws artesla_at_capitol.pnge needed to keep big Detroit manufacturers from abusing them, but the SCOTUS has ruled that such monopoly-preventing protections are no longer needed. And if these laws are truly in place to protect the dealership from big manufacturer abuse, why should new little manufacturers be subject to them--they have no franchises to protect from them!  And why force new manufacturers to create a new generation of victims?!

Our Utah Constitution has an express prohibition on restraint of trade.  It's time to uphold that when it comes to new car sales.

 

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