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There are over 21,000 new automobile dealerships throughout the U.S. That’s greater than the variety of open Starbucks espresso retailers, credit score unions, or personal hospitals. The abundance of locations to purchase passenger autos in such a car-centric tradition is probably not terribly stunning. Nonetheless, the place these services are most concentrated could also be much less apparent.
Nationally, there are about 6.4 automobile dealerships per 100,000 residents, however that statistic varies extensively by state. To get a better look, The Common used Bureau of Labor Statistics information to map the focus of latest automobile dealerships by state, as of the top of 2023.
Automotive customers can profit tremendously from having extra dealerships near dwelling. The character of provide and demand signifies that having a number of dealerships in the identical market can result in decrease, extra aggressive costs for these procuring there—notably when there are a number of sellers of the identical automobile model. A bigger variety of dealerships additionally creates higher selection within the autos consumers have to select from.
On the identical time, dealerships usually have big actual property footprints with showrooms and parking heaps teeming with new or used automobiles. Usually clustered collectively, auto rows of a number of dealerships can take up numerous house, which can restrict a group’s entry or proximity to different providers they might need. This impression could reduce in time as automobile manufacturers undertake smaller, extra versatile storefront designs.
Many elements play into automobile dealership availability throughout the nation, such because the evolving panorama of state laws, house availability and restrictions, and automobile tradition and demand. Learn on to see how your state compares.
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Center of the nation boasts excessive concentrations of automobile dealerships
The states with the best concentrations of latest automobile dealerships aren’t those many would possibly count on. Vermont leads the way in which, almost doubling the nationwide statistic at 12.5 sellers per 100,000 residents. Rounding out the highest six are Montana (10.9), South Dakota (10.7), New Hampshire (10.2), and Iowa and North Dakota (tied at 9.6).
Whereas the top-ranked states have been considerably unfold out, states in the course of the nation usually had increased concentrations of latest automobile dealerships than these additional east or west. States on this central area rely extra closely on driving their private autos as a result of they’ve much less entry to and utilization of public transit.
A number of states with extra dealerships than common have legal guidelines prohibiting automobile producers from promoting autos on to customers. Which means all automobiles have to be bought via franchised dealerships, driving a necessity for extra of them. This was as soon as the first means folks bought new automobiles, inflicting little friction.
Nonetheless, when Tesla entered the market with its direct-to-consumer gross sales mannequin, it sparked shifts out there and coverage. States both adopted legal guidelines to formally permit these gross sales or to stop and restrict them within the title of defending customers and present dealerships. Tendencies towards extra on-line car purchases have additionally urged these debates.
Montana, South Dakota, Iowa, and different states with extremely concentrated dealerships outright ban automobile producer direct-to-consumer gross sales. Vermont restricts direct-to-consumer gross sales however does permit nonfranchised, zero-emission car producers (like Tesla) to make these gross sales. Many different states have related limitations.
Nonetheless, it’s not a cut-and-dry situation: For instance, Texas totally prohibits direct gross sales by producers but additionally has one of many lowest concentrations of dealerships at 5.4 per 100,000 residents. That is stunning on each fronts, contemplating Texas is thought for scorning laws and relying closely on automobiles.
A singular issue is at play in Texas. Lately, automobile dealerships within the state have been scandalized by rampant fraud regarding paper license tags. In 2021 and 2022, its DMV suspended dozens of licensed automobile sellers suspected of illegally promoting paper tags. It then required all sellers to get fingerprinted and can quickly require them to situation metallic plates when autos are bought, including new hurdles for automobile sellers.
Trailing Texas and some different states, Nevada had the fewest dealerships, at 3.6 per 100,000 residents. In comparison with the remainder of the nation, states within the Southwest had a really low prevalence of automobile dealerships.
Greater entry to dealerships aids residents in sprawling areas with restricted transit choices in addition to the place electrical autos and EV infrastructure have but to realize a lot traction. In coastal areas, the place e-commerce is flourishing and the EV and hybrid market is already taking off, approaches to automobile gross sales are already evolving. As these market shifts progress, American automobile consumers could grow to be even much less restricted by geography when making their subsequent buy.
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Written by Paxtyn Merten. Story modifying by Carla Pineda. Further modifying by Kelly Glass. Copy modifying by Tim Bruns.
