Car dealership

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 restrict or limit automakers from selling vehicles directly to consumers. By 2010, all 50 states and the District of Columbia had enacted some form of laws restricting direct manufacturer-to-consumer car sales, which helped support 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. In the United Kingdom, the structure of car retailing differs from that of the United States. Dealerships commonly operate under franchise agreements governed by the Block Exemption Regulation issued by the European Commission, which allows automakers to appoint authorized dealers while preserving competition among repairers and service providers. Following the UK's withdrawal from the European Union, the Competition and Markets Authority introduced a domestic version of the regulation in 2023, maintaining similar protections for consumers and independent repair businesses. Most UK dealerships sell multiple brands through franchise networks operated by large retail groups such as Pendragon, Lookers, and Arnold Clark, which account for a significant share of national vehicle sales. Dealerships are also regulated by the Financial Conduct Authority (FCA) when offering consumer credit or finance products, ensuring transparency in vehicle finance and leasing agreements.