Does requiring that new cars be bought through car dealers protect consumers (or just car dealers)?

by Brian Wolfman

Tesla wants to sell its electric cars from its own stores directly to consumers.

Some states require consumers to buy new cars from car dealers supposedly on the ground that requiring consumers to go through a dealer promotes competition. Really? Sounds like protectionism for car dealers, doesn't it? Tesla isn't saying that it wants to ban dealers. It's saying that it wants to compete with them and the cars that they sell. Should Apple have to sell its computers through computer dealers?

Tesla's CEO Elon Musk says that New Jersey governor Chris Christie “has gone back on his word” to allow Tesla to sell directly to consumers. According to Musk, the Christie administration acted "under pressure from auto dealers .. [to] shut down Tesla in NJ … ." Musk was referring to the recent refusal by the New Jersey Motor Vehicle Commission, which includes members of Christie’s cabinet, to allow direct-to-consumer sales. The Christie administration says its hands are tied because of a state law that bans direct new-car sales, but I haven't heard the governor call for the law's repeal.

Read about it here, here, here, and here.