Senate moves bill to limit out-of-state new-car brokers to licensed dealers, prompting debate over consumer choice

SALT LAKE CITY — Senators advanced Senate Bill 207 to the third-reading calendar after an extended floor exchange about new-car brokerage practices, Internet sales and consumer protection.

Senator Craig Peterson introduced the bill, saying it would require anyone brokering new-car sales for compensation to meet the state’s dealer licensing and franchise requirements. “If you're going to sell new cars in this state, then you must be a new car dealer,” Peterson said, arguing the law protects buyers from out-of-state or unbonded operators who may take deposits and not deliver vehicles.

Supporters described cases in which consumers were allegedly burned by brokers operating outside Utah’s regulatory framework and said dealer licensing ensures warranty and service linkages. Opponents, including some senators who raised concerns about Sam’s Club–style referral models, said the provision could limit choice, be overbroad when applied to Internet-based services, and sweep up legitimate referral arrangements.

Senators debated whether the bill would prevent in-state brokers who work with local dealers and whether an amendment could narrow the scope to target bad actors rather than broader legitimate services. The floor recorded a procedural tally placing SB207 on the third-reading calendar for later consideration (transcript shows the clerk reporting 18 yea and 7 nay votes for that procedural action). Sponsors said they would work on targeted amendments to clarify exemptions for legitimate, nonremunerated referral services.

The bill remains on the Senate’s third-reading calendar pending amendment work and further floor action.