As a homeowner in Delaware and president of a national consumer policy think tank, I am totally shocked that the Delaware House Economic Development Committee reported a bill to the floor without holding a single hearing on it. It’s shameful regulatory malpractice for elected officials to be more concerned about their business donors than consumers.
The bill (SB 278) creates serious environmental problems and will significantly raise consumer prices at a time when consumers are struggling to make ends meet in the face of rising inflation. This is an anti-consumer and anti-environmental bill, and we oppose it, as everyone should. Below is our analysis on the bill and its negative consequences on consumers and the environment in the state of Delaware.
Steve Pociask, President/CEO, American Consumer Institute
Dear Members of the Delaware State Legislature:
The American Consumer Institute (ACI) is a nonprofit 501(c)(3) education and research organization. Its mission is to identify, analyze, and protect the interests of consumers in legislative and rulemaking proceedings in a range of policy matters.
ACI opposes SB 278, which favors automobile dealers at the expense of consumers, automakers, and even the state’s carbon reduction goals.
Our research shows that U.S. consumers pay over $48 billion more each year because of dealership protectionist laws like SB 278, leading to approximately $3,000 more per vehicle. Such laws transfer income from manufacturers to dealers, thereby increasing the price per vehicle. Our findings corroborate previous research by the U.S. Federal Trade Commission showing that these protectionist rules have increased consumer prices.
This legislation gives dealer associations, such as the Delaware Automobile and Truck Dealers, automatic standing to sue in any lawsuit without having to prove damages. This grants substantial power to such organizations in bringing legal action against a host of entities simply because it doesn’t agree, including those that have nothing to do with auto sales.
SB 278 could even bar automakers or certain dealers applying for business licenses in the state to keep them out of the local market, specifically those that only offer electric vehicles (EV).
Disallowing and even preventing various EV manufacturers from selling their products is counterintuitive to the state’s ambitious carbon reduction goals. Delaware has adopted provisions that require 43 percent of new car sales be EV by 2027 and 100 percent by 2035. SB 278 will jeopardize the state’s climate policies.
As such, this legislation eliminates consumer choice by impeding certain cars from competing in the marketplace. And those who have already purchased an EV will be left with fewer repair options if these manufacturers are driven from the state, thereby increasing their costs.
This bill comes at a time when consumers are already struggling to make ends meet in this economy with exceptionally high inflation rates. Most goods and services have seen substantial price increases the last few years; consumers cannot afford nor should be faced with additional costs on various commodities, especially vehicles.
SB 278 is not a pro-consumer bill and is not in the interest nor to the benefit of Delaware citizens. It also threatens the integrity of Delaware’s democratic principles by granting legal powers to special interests. Thank you for your consideration.
Respectfully submitted,
Steve Pociask, President and CEO. American Consumer Institute