The battle to curb Scout Motors' direct-to-consumer sales model continues to rage across the country, including in the state of New Jersey. Laura Perrotta, president of the New Jersey Coalition of Automotive Retailers, called the model “unacceptable” and a complete violation of franchise law.
Driving the news: Perrotta, who has a background rooted in advocacy, including as a lobbyist for the NADA, said that her Jersey group is fighting Scout’s moves in-house while watching how other efforts unfold across the country.
That includes lawsuits in California, Florida and Colorado.
“We are vigilantly watching this and seeing what the right path forward is for the New Jersey dealers,” Perrotta told Daily Dealer Live hosts Sam D’ Arc and Uli De’ Martino. “But we aren't going to take it standing down, and we're going to educate every single stakeholder in the state of New Jersey about why this is untenable.”
Between the lines: Perrotta pointed out that many consumers don’t realize the protections that the franchise model actually provides to buyers.
By promoting competition (and therefore fair pricing) for example. Or requirements to disclose damages and such.
Managing warranty work and recalls safely.
In New Jersey, for example, they just strengthened franchise law to make sure consumer recalls get priority, Perrotta said. (And that allows techs to get paid the same for working on a recall or warranty job as they do for customer pay).
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On top of that: Perotta highlighted the importance of the franchise model for local economies, sharing that the dealer business in New Jersey is a $43 billion industry that provides 70,000 local jobs.
That’s the kind of economic footprint that a factory headquartered in some faraway state can’t provide, Perrotta shared.
“They're not providing the local jobs, they're not providing the local tax revenue, all the things that these dealerships provide to the economy,” Perrotta said.
Looking ahead: No matter who a dealer interacts with, be it consumers, legislatures, vehicle commissions, Perrotta urges everyone to keep showcasing the value of the dealer model.
“Think of all the charitable contributions the dealerships make into their local communities,” Perrotta said. “We have to tell these positive stories so that folks are realizing this is so much more than just about direct sales versus dealerships. There's a whole ripple effect.”
The mission: Perrotta says to stay public-facing and make the story simple and compelling. Using videos, social media, even PR firms. “You can make it fun,” Perrotta said. “There are so many ways to do it.”
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