According to a recent study of the National Automobile Dealers Association (NADA), regulations compliance cost $3.2 billion for franchised car dealers in 2012.
Consumers paid the biggest part of the amount, in the end. With higher compliance costs, dealerships need to set higher prices, which leads to less sales and less employment in the dealerships.
According to a study done by the Center for Automotive Research, 61 of the big federal regulations mean 10,500 less hires in the industry. $182,754 is the average price paid by a dealership to reach compliance. This means 21% of the business’s pretax net profits.
Altogether, regulations compliance led to $10.5 billion economic losses in output for 2012. For every $1 spent on regulations compliance, there is an economic output loss of $3.28.
Category: Commercial Bonds