Pub. 20 2021-2022 Issue 1

In February 2021, NJ CAR launched an ambitious campaign to promote the franchise system’s many benefits to New Jersey consumers, the local communities they serve, and the 37,000 men and women who rely on the industry for their livelihoods. It began with a video brochure produced by NJ CAR and sent to every New Jersey legislature member, the Governor’s office and key state agency personnel. This effort’s timing couldn’t have been better, with all 120 members of the state legislature and the Governor up for reelection in November.

Mark Twain once said, “A lie can travel around the world and back again while the truth is lacing up its boots.” That statement has never been more true, especially as new-car and truck retailers continue to face increasing pressure from Wall Street and Silicon Valley-backed disrupters peddling false narratives. This well-orchestrated campaign poses an existential threat to the franchise system of independently owned and operated businesses, which benefits the consumers and local communities these retailers serve.

Carvana, Vroom and others
continue to promote false stereotypes about the automotive franchise system. Tesla and others spread lies about our ability to sell electric vehicles. The industry (on both the state and federal levels) is fighting back. NJ CAR has been running a campaign targeting both legislators and the general public to promote the many benefits of the franchise system for consumers.

Both the ongoing Coronavirus pandemic and the fallout from the 2020 election are expected to have the most legal impact on dealers in 2021 and affect many other issues. Dealers must contend with the consequences of the pandemic as well as anticipated changes in governance and policies. Below is a rundown of the top legal trends that are expected to impact the franchised automotive retailing industry in 2021.

One of the most attractive benefits to consumers in any industry is the ability to purchase products and services at a discounted price. Discounting saves customers money, allows companies to earn their business, and disciplines competitors’ prices for the same products. In a normally functioning market, it is a win-win for both consumers and businesses.

Joe Biden’s victory on November 3, 2020, likely will usher in a new era of consumer protection and auto dealers’ compliance challenges. Four out of the five Federal Trade Commission (FTC) Commissioners will have their terms expire during the Biden administration. President Biden will also have the power to replace the head of the Consumer Financial Protection Bureau (CFPB). The Democrats will, for at least two years, control both the House and the Senate.

This past year was like no other in recent history. The worldwide pandemic hit the U.S. in early 2020 and our daily lives were changed in unprecedented ways. COVID-19 resulted in significant illness, hospitalizations, and heartbreaking death tolls. Enjoying activities often taken for granted, such as going out to dinner, visiting retail stores, and having family gatherings, were very difficult — if even possible. Masks, social distancing, nonessential closures, reduced gathering capacity, and quarantines became the new norm to minimize the spread.

NJ CAR tracks dozens of bills pending in the New Jersey Legislature. This article focuses on two pending bills that will allow dealerships to be more responsive to consumers’ needs. Introduced during the 2020-2021 legislative session, they are part of an effort to modernize customers’ transactional experiences with dealerships. On track to move to the Governor’s desk for his final action, their legislative status marks an ongoing trend toward the modernization of dealership operations that benefit consumer transactions.

The New Jersey new vehicle market was in good shape at the start of last year. New retail registrations in the state during 2019 approached 520,000 units based on historical standards and were well above average. And 2020 got off to a good start as well, with registrations declining by less than 5% in January and February versus strong year-earlier results. Auto Outlook’s forecast at the time was for sales to drift lower but remain strong. After seven years of increasing registrations following the recessionary low-point in 2009, the market was due for a mild downturn.