The virtual automotive dealership: is it time? Is it legal?

The decade of the 1990s has seen unparalleled innovation in the retailing of new and used motor vehicles. Most recently the Internet has become the facilitator of change in auto retailing. After reviewing the current state of automotive Internet services, this article develops a model whereby a new entrant could introduce a vehicle line and market that line directly to the consumer via the Internet – “the virtual dealership”. Consummation of the transaction, vehicle delivery, warranty work, after‐market parts and service, and used car trade‐ins would be handled by existing players in the automotive infrastructure. Includes a discussion of potential problems, concentrating on legal restrictions imposed by state franchise laws.