A car dealership, or car dealer, is a business that sells new or used cars at the retail level, typically under a franchise agreement with an automaker or its authorized distributor. In addition to vehicle sales, dealerships often provide after-sales services such as maintenance, repairs, financing, insurance, and the sale of spare parts.
In the United States, car dealerships have historically been a significant source of revenue for local and state sales taxes. They possess significant political influence and have successfully lobbied for franchise laws that prevent automakers from selling vehicles directly to consumers. By 2010, all 50 states and the District of Columbia had enacted laws prohibiting direct manufacturer-to-consumer car sales, ensuring the survival of independent dealerships. Most states also restrict the establishment of new dealerships that compete with existing ones. Economists have described these regulations as a form of rent-seeking that increases consumer prices and limits competition, while raising profits for incumbent dealers.
