South Carolina’s Direct-To-Consumer Auto Sales Law Gets Hung Up In Committee

Plenty of potential car buyers would love to shop for a new vehicle online without needing to stop at a dealership, and automakers have not been shy about their desire to provide that service, but local and federal dealer franchise laws in the U.S. make direct-to-buyer sales very difficult and almost impossible, depending on the state. An effort in South Carolina to allow Scout Motors and other automakers to sell direct appears to have stalled, raising questions about its future.

The law, which applied to OEMs that previously did not have a franchise dealer agreement, stalled in committee. While it had support from several in the South Carolina government and the governor said he would sign it if it passed, one state representative said that it’s “very clear a lot of work needs to be done on this for both sides.” So, not an indication that it’s dead, but there’s no telling how long the negotiations will take.

Proponents of the bill said it would provide consumers with another buying option, but dealers aren’t so certain. Citing Volkswagen’s Scout motors, the vice president of the state’s auto dealers association said the legislation “is a serious attempt by VW to do away with the franchise law.” While dealers would retain service and other consumer-facing activities, they fear being removed from the sales process would mean that their investments in showrooms and other facilities were all for naught.

Scout was a significant focus of the discussions around the bill because of its future manufacturing presence in South Carolina, but other automakers are watching the legislation closely. A Tesla policy advisor spoke in favor of the bill, saying that the company had sold thousands of vehicles to South Carolina residents, despite them having to drive out of state to purchase.

[Images: Scout Motors]

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