As car shoppers, we are all familiar with the concept of the Manufacturer Suggested Retail Price, which is how the manufacturer suggests to the dealer the price at which to sell a car. Notably, with the exception of Saturn (where the manufacturer owns the dealership), the carmaker cannot set a minimum re-sale price.
All that may be a thing of the past, however. The MSRP phenomenon is a result of a 1911 U. S. Supreme Court case, which prohibited a maker of patent medicine from setting re-sale prices on its products. This so-called “Dr. Miles Rule” did not apply to just patent medicine makers, it applied to anyone manufacturing goods or selling goods through an independent retailer–including car manufacturers.
Last June, after 96 years, the Supreme Court overturned the Dr. Miles decision in the case of Leegin Creative Leather Products v. PSKS, Inc. The upshot is that resale price maintenance (telling your dealer the price a product can be sold for) is no longer per se illegal, it is now only illegal if it is “unreasonable.” As of now, no one knows with certainty what “unreasonable” means, but it is possible (although somewhat unlikely) that car makers may be able to impose a re-sale price on cars sold by dealerships. How this would affect consumers remains to be seen.
— Rod Fluck