NEW JERSEY’s FRANCHISED AUTO RETAILERS FUEL OUR COMMUNITY AND OUR ECONOMY

The franchised new car and truck dealerships in New Jersey promote initiatives that foster economic growth and support communities across the Garden State. Dealerships provide aggressive price competition and ready access to warranty and recall service, offering tremendous value and reliability to every New Jersey driver.

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LOCAL ECONOMIC BENEFITS

Dealers fuel local economic activity, creating jobs and economic opportunity for local residents.
  • New Jersey dealers currently employ more than 38,000 people across the Garden state in locally-owned and operated small businesses and support an additional 35,000 jobs.
  • Dealerships provide good-paying jobs with benefits, and opportunities for personal advancement and professional development.
Franchised new car dealers generate $1.76 billion in state and local taxes for New Jersey.
  • New car dealerships in New Jersey are a $35.8 billion per year business.
  • New car dealerships generated $1.48 billion in sales taxes alone last year, and more than $1.76 billion in combined state and local taxes.
  • Dealer profits stay in local communities, whereas profits generated by factory-owned stores flow up a vertical ladder to out-of-state shareholders.
Local dealers hire local people
  • When the going gets tough, an out-of-state corporation will close a local retail outlet and move on. Local dealers have deep roots in the community and are a stable resource for consumers in good times and bad.
  • Dealership jobs cannot be moved to the Sunbelt or outsourced overseas.

 

CONSUMER SAFETY

Dealers are more economically aligned with consumers than manufacturers when it comes to safety recalls or warranty work.
  • Automakers pay dealers to fix mistakes made during the assembly process by performing warranty and recall work at no cost to the consumer.
  • In contrast, automakers view recall and warranty repairs as an expense and will do what all they can to limit the impact to their bottom line.
  • Automakers also have an economic disincentive to follow through, even after a recall or warranty action is announced, which is why consumers are fortunate to have their local dealership going to bat for them when it comes to ensuring the manufacturer lives up to their obligations.
Franchised dealers create an extra layer of accountability for public safety.
  • Former Saab, Pontiac and Oldsmobile dealers still service these brands, even though these manufacturers no longer sell in the United States.
  • New Jersey motor vehicle laws require that franchised dealers have service facilities to perform warranty and recall work.

PRICE COMPETITION

Dealers compete fiercely with each other, which benefits consumers.
  • Having multiple retailers of the same brand in the same market creates price competition and superior customer service as they compete for business.
  • If an auto manufacturer operated all its retail stores in the region, they would have a monopoly on the brand and would be able to set non‐negotiable pricing.
Today’s new car prices are transparent, allowing customers to benchmark pricing and negotiate.
  • The manufacturer’s suggested retail price (MSRP) is readily available, and consumers can easily obtain invoice and independent pricing information for a vehicle.
  • Armed with this information, consumers can go to different dealers to negotiate price.
  • In a factory‐direct model, the factory fixes the price of its vehicles without any opportunity for consumers to either benchmark or negotiate prices.
“Middleman Costs” are a myth.
  • Retailing expenses exist regardless of the distribution model used.
  • In a factory‐direct model, the costs of showrooms, car lots, sales, staff and holding inventory would simply shift from the dealer to the factory.
  • There are no consumer benefits or cost savings associated with the factory‐direct sales model.

Added Value

A new car dealer serves a consumer for the entire ownership experience.
  • Dealers provide test drives of multiple vehicle models and competing brands, sales, financing, trade-ins, registration and tags, as well as repair, warranty and recall service work.
Dealers provide consumers with options to match their lifestyles and preferences.
  • New Jersey’s neighborhood franchised automobile dealers will offer more than 100 models of electric vehicles on their showroom floors by 2021.
Consumers want a convenient purchasing process.
  • Dealers offer a wide variety of financing options, which are frequently more affordable than bank loans.
  • In addition to conducting online research, most consumers want to see and test drive a car before they buy it.
  • More than 60% of all new car purchases include a trade-in to cover a portion of the down payment, and dealers provide a hassle-free market for trade-ins.
  • Dealers take on the complex system of titling, registration and reams of regulatory paperwork, so consumers can simply sign and drive away.
Consumers value personal service and local relationships.
  • While making a purchase that’s the second largest to a house, consumers want to interact in person, not with a website, a faceless 1-800 number, or a manufacturer or distributor located hundreds or thousands of miles away.