AJS - Senate Bill 126 will destroy auto dealers

By Stephen DeMaura
Thursday, April 25, 2013

New Hampshire has always been governed by the “Live Free or Die” mentality: protect the state's competitive business climate while keeping the needs and interests of consumers of paramount importance. A Nanny State legislative initiative now moving through state chambers, however, undermines such notions and negatively impacts the Granite State's economy and consumer confidence. While it might not be a household name now, if Senate Bill 126 passes it could soon affect you.

The legislation seeks to assert greater government involvement in the relationship between automobile manufacturers and New Hampshire dealers, and will broaden regulations so that lawn tractors, farm, construction and forestry equipment so they are treated as automobiles. Up until now, the relationship between automobile manufacturers and New Hampshire dealers has been governed by fair, balanced and strict franchise agreements that protect each selling partner and help keep prices low for consumers. While proponents claim S.B. 126 is designed to help New Hampshire auto dealers, the reality is that the legislation simply allows dealers to ignore the contracts they've signed with automakers, which includes things like periodical show room renovations.

Those contracts, however, play a valuable role in the marketplace, as they ensure both parties can be counted on to fulfill corporate commitments. In saying auto dealers no longer are required to hold up their end of the bargain, the government would vastly expand its power, allowing politics to override free-market principles and tilt policies in favor of one segment of an industry over the other. Such policymaking will lead to increased government involvement in the business process, the prioritization of litigation, and ultimately higher prices for products sold by the auto industry — all of which will contribute to rising prices for automobiles that consumers will be forced to absorb. [...]

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