Benefits of the Motor Vehicle Franchise System

New Jersey’s neighborhood new car and truck dealerships create fierce price competition and prevent manufacturer monopolies; protect consumer safety by offering independent safety recall, warranty and repair service; generate good-paying local jobs, tax revenues and economic benefits; and simplify the complex car buying and registration process.

Dealers compete fiercely with each other, which benefits consumers.  Inter and intra-brand competition improves customer service and the ability to negotiate price, as dealerships compete for every vehicle sale. Manufacturer-operated stores create a monopoly and eliminate a consumer’s ability to negotiate.

Franchise dealerships are more aligned with consumer interests when it comes to safety recalls or warranty work.  Dealers see warranty and recall repairs as an opportunity to serve their customers, address safety concerns and generate revenue, since they are paid by the automaker to fix their errors. Manufacturers see warranty and recall work as an expense.

Franchised dealers offer an extra layer of accountability for public safety.  New Jersey motor vehicle laws require that franchised dealers have service facilities to perform warranty and recall work. Having a dealer advocate on their side makes safety, warranty and service solutions easier for consumers.

Dealers generate good-paying, local jobs (that can’t be outsourced), as well as significant tax revenues that benefit both State and local economies.  New Jersey franchised dealers directly employ nearly 39,000 men and women in good-paying, local jobs with benefits and opportunities for personal advancement and professional development. This $36 billion industry in New Jersey also generates nearly $1.8 billion in State and local taxes.