why is it necessary to buy a new car from an auto dealership?
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Most states have laws that prohibit direct to consumer sales—they require licensed dealerships. At one point in time, all states required new cars to be sold by dealers, and many had restrictions that made it difficult to form a new dealership. The laws were reportedly justified to increase competition and improve customer service, but I don’t have any statements by lawmakers saying that or studies that show that—just magazine articles saying that competition and consumer protection is the reason.
Car dealerships may be an example of “rent seeking” (https://www.investopedia.com/terms/r/rentseeking.asp), where a business gets profits and economic protection by political and legal protection without creating new wealth. The do provide services—aftermarket modifications (pinstriping, undercoating, …), tag and title registration, mechanics to handle recalls—but those services could be provided by the manufacturers or local governments or third parties.
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