Auto Brokers and Dealers: David and Goliath

Click for audio Auto Brokers and Dealers: David and Goliath

A David-versus-Goliath showdown is shaping up in Lansing. Car dealers and their lobbyists want lawmakers to squash a tiny service industry: auto brokers.

Auto brokers rescue car buyers who don’t have the time or desire to haggle with dealers. Customers tell a broker what car they want and how much they want to pay. The broker finds the car, haggles for them, and collects a fee from the car buyer. One hundred fifty Michigan auto brokers linked buyers with about 5,000 new cars last year.

Eight hundred auto dealers, who last year sold over 750,000 new cars, would rather force buyers to haggle directly with them. They’re using political muscle to try to outlaw brokers. Why? Brokers know how to get the best deals for new car buyers.

No one forces dealers to sell cars to brokers. But if they don’t, they risk sending the brokers’ business to another dealer. Those who lack the courage to decline sales to brokers are trying to shape the law to protect themselves.

The state House voted to squash the brokers. The Senate should reject crass politics and recognize the right of car buyers to secure their best deals.

For the Mackinac Center, this is Catherine Martin.