Automobiles in Pennsylvania could become more expensive and less innovative, and in some cases completely unavailable. New legislation, Senate Bill 1182 (SB1182), proposes to amend the state’s Board of Vehicles Act of 1983 to address modern automotive technology, warranty pay rules, and data privacy. Proponents claim it safeguards consumers, but it protects dealerships instead—at the expense of their customers. Rather than supporting car buyers, SB1182 will only serve to harm them.
Dealerships are already insulated by numerous state laws that regulate the relationship between dealers and manufacturers. Strict guardrails on territorial exclusivity, termination procedures, and warranty reimbursement protect dealerships from coercive practices automakers engaged in at the onset of car manufacturing. While many of these measures were prudent in the early days of vehicle retail, their value today is questionable.
A recent report published by the American Consumer Institute highlights how the legacy dealership apparatus costs consumers significantly more for vehicle purchases and services and is no longer practical for today’s auto market. SB1182 adds to these costs, limits competition, and further alienates the industry from consumer preferences.
One of the bill’s sponsors Lisa Boscola remarked, “the way we buy, service and use vehicles has changed dramatically.” This is indisputable. A shift in the automobile sector has occurred because of technological advances and changes in consumer behavior. But dealers should have less control, not more.
Buyers now do most of the shopping, comparison, and decision‑making online long before ever meeting a salesperson. The most recent Cox Automotive Car Buyer Journey Study found that 7 percent of buyers purchased vehicles entirely online with 28 percent wanting to do so. Consumers are drifting away from the dealer franchise model and moving toward working directly with the manufacturer.
The bill restricts electric vehicle (EV) manufacturers like Tesla—which have never used franchised dealers and prefers to work directly with customers—from competing with traditional car dealerships, further preserving the monopoly over automobile markets. Rather than expanding EV presence in the state, manufacturers are limited to five EV-only dealerships, but only under certain qualifications and strict conditions; emerging companies will struggle to meet the requirements. Meanwhile, Ford maintains approximately 200 dealerships in Pennsylvania and General Motors has over 250.
Since the Senate bill inhibits greater EV penetration in the marketplace, it contradicts a House bill that proposes updating current laws to grant more EV manufacturers the opportunity to sell directly to Pennsylvania consumers. The House bill’s goal “to encourage competition and expand consumer choice in the EV marketplace” is thwarted by SB1182 which does the opposite.
SB1182 restricts over-the-air (OTA) subscription-based software that wirelessly upgrades a vehicle’s systems by forcing manufacturers to route OTA sales through dealers and give them 12 percent commission. Creating a permanent revenue stream for dealers on digital products they did not develop nor install, the generous profit margin disincentivizes manufacturers from offering OTA in Pennsylvania. Or they will simply increase charges. Consumers could miss out on or pay more for innovative and increasingly popular automobile features.
Manufacturers additionally can no longer require access to dealer data systems, blocking legitimate integration and preventing coordination for repairs and warranty claims. These measures potentially undermine safety and efficiency.
The bill tightens and expands existing law on warranty services manufacturers must pay to dealers. Not only are additional categories included but automakers will have much more difficulty disputing rates, further protecting and incentivizing dealers to inflate non-warranty repair rates to boost warranty reimbursement. Manufacturers will simply pass these costs on through higher vehicle prices.
And with new stipulations on dealer ownership transfers and facility upgrades, manufacturers lose their capacity to thoroughly vet new owners and manage dealership improvements. Restricting automaker engagement increases the risk of vetting unqualified dealers and inconsistent product quality.
The legislation prioritizes dealer financial interests over consumer welfare by granting dealers higher reimbursement, guaranteed OTA revenue, more control over data, and protection from manufacturer competition. It increases regulatory complexity and compliance costs and risks making Pennsylvania less competitive in the EV and OTA market. This is a dealer protectionist bill masquerading as consumer welfare and car buyers will pay more for vehicles, repairs, and software features.
SB1182 would harden an outdated dealership‑centric model when consumers and manufacturers are moving beyond it. By entrenching protectionist rules, raising costs, and constraining innovation, the bill would leave Pennsylvanians with fewer choices, higher prices, and a slower transition to the modern automotive marketplace they clearly prefer.
Kristen Walker is Senior Policy Analyst and Manager for Energy and Transportation with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.theamericanconsumer.org. Follow ACI on X @ConsumerPal.