Thursday, April 09, 2020

1889 Institute: End Used Car Dealer Licensing

Licensing limits competition and creates conflicts of interest.

OKLAHOMA CITY, OK (April 8, 2020) – The 1889 Institute has published “Used Car Dealer Licensing in Oklahoma,” another installment in its Licensing Directory. As with other licensing laws that have been reviewed and evaluated by 1889 Institute, the licensing of used car dealers should be repealed.

“As usual, licensed used car dealers police themselves, although licensing is always ostensibly for the purpose of protecting the general public,” said 1889 Institute’s Research Associate and author of the report, Spencer Cadavero. “The fact is, the general public has essentially no say in how used car dealers are regulated, which means used car dealers regulate themselves for market advantage over consumers, just like other licensing regimes,” he said.

As with previous studies of licensed occupations, two questions were asked to determine if an occupation should be licensed. These are: 1) whether the occupation presents a real and probable risk of harm, and 2) whether, if there is such risk, there is no way for markets to mitigate that risk.

“The answer to both of these questions is obviously, ‘No.’” said Cadavero, “Thus, used car dealers should not be licensed.”

The study points out that Used Motor Vehicle and Parts Commission has refused to license a dealer partly based on a lack of experience. This begs the question of how experience is to be gained if one cannot be a dealer for lack of it. Such action confirms the notion, asserted by many, the licensing is generally for the sake of industry insiders and not for protection of the general public.


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