In certain states, the number of permits to perform state inspections is capped. New entrants who want to perform inspections (which a used car dealer will typically need to do) have to either wait in line indefinitely or buy up an existing permit-holder.

State inspections may improve vehicle safety at the margin. However, when state inspection permits are treated like taxi cab medallions, the cost-benefit comparison becomes a bit skewed.

The usual argument is that it's just a waste with no safety benefit. Some states that previously required annual inspections have eliminated them, and traffic deaths per mile driven haven't increased.