An example of a traditional single proprietorship car dealership was Collier Motors in North Carolina. Many dealerships are located out of town or on the edge of town centers. They are often located on properties offering enough room to have buildings housing a showroom, mechanical service, and body repair facilities, as well as to provide storage for used and new vehicles. Ĭar dealerships are usually franchised to sell and service vehicles by specific companies. The number of car dealerships in the US peaked in 1927 at 53,125 and steadily decreased over the next decades. The first woman car dealer in the United States was Rachel "Mommy" Krouse who in 1903 opened her business, Krouse Motor Car Company, in Philadelphia, Pennsylvania. through franchise laws that require new cars to be sold only by licensed and bonded, independently owned dealerships. Today, direct sales by an automaker to consumers are limited by most states in the U.S.
The first dealership in the United States was established in 1898 by William E. For example, Sears made its first attempt at selling a gasoline-engined chain-drive high-wheeler in 1908 through its mail-order catalog and starting in 1951 the Allstate through select its stores and the catalog. The early cars were sold by automakers to customers directly or through a variety of channels, including mail order, department stores, and traveling representatives. Main article: Car dealerships in the United States Research shows that as a result of these laws, retail prices for cars are higher than they otherwise would be. By 2009, most states imposed restrictions on the creation of new dealerships to compete with incumbent dealerships.Įconomists have characterized these regulations as a form of rent-seeking that extracts rents from manufacturers of cars, increases costs for consumers, and limits entry of new car dealerships while raising profits for incumbent car dealers. By 2010, all US states had laws that prohibited manufacturers from side-stepping independent car dealerships and selling cars directly to consumers. They have considerable political influence and have lobbied for regulations that guarantee their survival and profitability. In the United States, car dealerships have historically been an important source of state and local sales taxes. Car dealerships also often sell spare parts and automotive maintenance services. A car dealership, or car dealer, is a business that sells new or used cars, at the retail level, based on a dealership contract with an automaker or its sales subsidiary.
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