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Virginia Automobile Dealers Association president Don Hall’s last appearance on CDG's Daily Dealer Live show sparked a firestorm after he called out direct-to-consumer (DTC) sales models as a threat to consumer choice.
The clip racked up over a million views, Tesla commented, and suddenly, the whole industry had something to say.
That's when we knew this conversation had to get bigger. So, we brought Don back—this time with DTC advocate Alex Lawrence (owner of EV Auto) and Michael Oz, a new car broker—to settle the debate live and unfiltered.
And what emerged were three polarizing claims...
Industry groups are arguing for open markets while backing bans on direct-to-consumer sales.
Don opened with the franchise system's leading talking point: dealer competition creates genuine consumer choice.
"If one is truly about competition, if one is truly about 'I want the best deal when it comes to service, my trade-in, selling and buying a new and used vehicle,' we offer competition in the franchise system," he said.
Don Hall
His point is that consumers can shop multiple dealers for the same brand, compare pricing and service, and choose who gets their business.
"The consumers are in the driver's seat. They get to go out and decide to whom they want to buy from," he added.
And I get why Don led with this argument. It's been the franchise system's go-to defense for decades, and in many contexts, it's absolutely valid. Franchise dealers do create competition within brand ecosystems. And they do offer different experiences and pricing on identical products.
But there is another side. As Alex pointed out, dealers and the representative bodies lobby aggressively for stronger franchise protections and bans on direct-to-consumer (DTC) sales.
"It kind of feels ironic at best, disingenuous at worst that the auto dealers are saying 'choice' but don't let the customer buy direct," Alex said.
Alex Lawrence
And Don's response revealed a disconnect in the eyes of many: "We are a system that forever, through blood, sweat, and toil, have worked our asses off to protect and provide for manufacturers."
The problem is that every time a dealer association argues for "free markets" while lobbying to restrict consumer choices, they're sending mixed signals to the people that actually matter: consumers.
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Some dealership processes prioritize business metrics over customer experience.
The most surprising moment of the entire debate (imo) was when Alex casually dropped this bomb: "In the first quarter of this year, I sold more used EVs in Utah than Tesla did here."
Think about that. A non-franchise dealer competing directly against Tesla's direct-to-consumer model and winning. Meanwhile, Tesla has billions in brand recognition, technology infrastructure, and operational advantages.
How is that possible?
Well, Alex has taken the approach of many modern auto retailers. There's no pressure, no closing tactics, better F&I transparency—just authentic customer service focused on long-term relationships rather than immediate transactions.
But there's more. As Michael, the broker, explains exactly what gap his model fills.
"We have clients that come to us that want to visit the dealership. They want to touch the car. They want to do the test drive. But they don't want to deal with the people at the dealership," he explained.
Michael
The elephant in the room? The broker model is essentially compensating for flaws in the traditional model. If consumers were getting the experience they wanted at dealerships, the broker model wouldn't need to exist.
Automakers are breaking franchise commitments by launching new brands outside the dealer network.
Tensions rose when Don discussed Scout and VW's plan to bypass franchise dealers.
"I have for 75 years carried their product. Through good times, bad times... And now I'm told, well, but you don't get the scout because we're going to sell that direct. Bullshit."
And you know what? His anger is completely justified.
VW dealers didn't just sell cars—they invested millions in facilities, training, parts inventory, and service infrastructure at VW's direction. Many built new EV-specific facilities in the last few years, spending millions on charging infrastructure and specialized equipment that VW required.
And if VW successfully launches Scout Motors as a direct-sales brand while keeping traditional VW products in the franchise system, you can bet some more major OEMs will at least consider testing the waters.
Automakers will either honor franchise agreements and potentially lose competitive advantage, or break faith with dealer partners and face massive legal battles. Whatever path they choose will be expensive and disruptive.
At the end of the day, the truth is somewhere in the messy middle.
And the winners in today's car market and beyond likely won't be determined by whether they're franchise, direct sales, or broker. They'll be determined by who eliminates customer friction, and delivers transparent pricing.
Remember, customer experience is everything. The distribution model is just the plumbing.
I want to know, which sales model do you think is best?
Missed yesterday’s episode of Daily Dealer Live?
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Reymer on New Class of Auto Leaders, Garcia on Investing in Car Biz Tech
Featured guests:
Luke Reymer, student at Automotive Business School of Canada
Quin Garcia, Managing Director at Autotech Ventures
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Shout out to Widewail, Cars Commerce, and Nomad Content Studio for making this episode possible!
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