Jonathan Collegio:

Roughly 16.4 million new cars and light trucks will be sold this year, virtually all through America’s franchised new-car dealerships.
 Local independent dealers provide the most competitive, efficient and consumer-friendly model for the buying, selling and servicing of cars — and policymakers should work to strengthen the franchise model.
 New-car dealers compete fiercely for their customers’ business — and that competition in sales and financing drives prices down. In many major metro areas, multiple stores across and within brands compete for the business of every customer, and that competition provides the incentive for the lowest-cost distribution model for virtually any consumer good anywhere.
 So-called middleman costs are a myth in the car business. Margins in auto retailing are 1 percent to 2 percent, compared with more typical retail margins of 12 percent to 15 percent.
 Fierce retail competition between auto dealers drives down costs and profits. If factories owned all their own stores, competition would be eliminated. Not only would all of the retail costs still exist — the land, buildings, workers and advertising — but the incentive to limit those costs would no longer exist. Meanwhile, consumers would have far less bargaining power because different stores would not be competing for their business.