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Hey everyone, quick heads up. Hyundai dropped a similar statement on broker rules after we finalized this. So while this covers last week’s developments and their implications, it doesn’t detail Hyundai specifically. Broader takeaway still holds, though! Enjoy.
— CDG
The illegal car brokering debate has boiled over in recent months, and last week, multiple manufacturers reminded dealers where they stand.
ICYMI: Kia, Toyota, and Nissan all reinforced their policies. Some folks correctly pointed out that the memos didn’t necessarily deliver fresh news, since most dealer agreements include broker clauses, but many dealers we interacted with were… over the moon.
And, we had plenty of input from the broker world, too.
Here's what the memos could mean for future OEM stances, valuations, and how business gets done going forward.
1. Kia kickstarted an unprecedented trend this week.
For dealers begging manufacturers to do something about illegal brokering, these actions felt like a good show of support.
Kia's letter, dated April 7, reminded dealers of policies already on the books.
Broker sales don't count as eligible retail sales, won't trigger incentive payments, and must be flagged with a broker code.
Dealers cannot conduct Kia sales at unauthorized locations, allow a broker to act on their behalf, or delegate sales obligations to a third party.
On the other hand: Toyota's memo, dated April 8 and addressed to New York region dealer principals and managers, announced a revision clarifying that sales to brokers without an immediate ultimate consumer don't qualify as valid transactions.
Also, broker sales are ineligible for incentives, including Dealer Active Program (DAP) and Marketing Cash Bonuses (MCB), which together represent 2.5% of MSRP, the memo said.
Oh, and just before we planned to wrap up this week’s Breakdown on Friday, Nissan also joined the party.
Nissan’s policy reminder was included in a quarterly sales report and said in part:
Brokered deals don't qualify for incentive payouts under Nissan programs.
Misreporting a deal on an ineligible sale can trigger consequences.
Dealer’s take: For Andrew Habberstad, CEO of Habberstad Auto Group, who acquired his first Kia store just three months ago, the memos felt like validation.
"Kia has invested heavily in building a strong brand with great products, warranties, ownership experiences, etc., and authorized dealers like us invest in proper facilities, train sales and service teams, and create long-term customer relationships," Habberstad said. "But when sales happen through brokers, especially in ways that bypass those standards, it can hurt the overall Kia experience that customers expect."
Andrew Habberstad
Habberstad
Auto Group
He also thinks brokers don’t represent brands well.
"I can speak for most dealers in the sense that the investments that we make in the facilities are eight figures plus," Habberstad said. "To then have somebody with a cell phone act like they're a representation of the Kia brand, who isn't wearing a uniform, who doesn't have a name tag, who doesn't even know the programs or incentives, isn't factory trained, then go drop the car off at your house…that's not the experience that we're looking for."
Bottom line: Broker deals bypassing existing rules come at the expense of licensed dealers putting in the real work.
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2. Firm OEM stances inspire loyalty, though they may not drive value immediately.
Habberstad said Kia’s proactive approach is landing well with dealers.
Welcome timing: "This is a sigh of relief," Habberstad said. "Oftentimes, I think dealers have to continuously nag the manufacturers to do things that are pro-dealer. But in this case, it seems like Kia went out and did it on their own. So for me, it's added confidence. I'm more bullish than I've ever been on the Kia brands, and it makes me want to buy more Kia stores."
George Karolis, president of The Presidio Group, said that, since broker activity is more prevalent in certain regions than nationwide, the impact of OEM clampdowns varies.
For dealers playing by the rules, he said, the announcements are welcome because they level the playing field against those who aren’t.
He also noted that for already-desirable brands like Toyota and Kia, these actions reinforce loyalty and commitment to dealer partners rather than drive new demand.
For Nissan, which has faced more headwinds, he said some renewed dealer interest existed even before these announcements.
Still: The natural progression of the market remains the main driver of brand demand and value, Karolis said.
"It's not harmful to values," he said. "May not have a material impact, any real impact, but it's not going to hurt them. You can only benefit those brands."
George Karolis
The Presidio Group
3. Brokers aren’t going away until the buying experience improves.
Mark Schienberg has been president of the Greater New York Automobile Dealers Association (GNYADA) for nearly 40 years. GNYADA’s actions have helped pass legislation addressing brokering in New York, where the practice is legal.
Sometimes dealers feel like they have to use brokers, Schienberg told CDG News in a February interview.
"While dealers didn't like dealing with brokers, the way that the business climate was set up, they really have no choice," Schienberg said.
"For example, if you're a Staten Island dealer and you're on the border of New Jersey, and you got all these brokers doing a lot of brokering business and pumping in cars into New York, you got to meet fire with fire."
Mark Schienberg
Greater New York Automobile Dealers Association
By the numbers: Over a five-year period, the association asked the state DMV how many vehicles were pumped in from outside New York (mostly New Jersey) through broker transactions. The number was 440,000.
"The thing that could change it right away is the manufacturer should take care of their franchisees and the investment that they're making,” Schienberg said. “And don't make them have to go out and find these ways that nobody likes to do, to do business, to be able to keep the lights on."
Worth noting: OEM stairstep programs are often attributed to making brokering necessary. The topic came up in a podcast this week with Yossi Levi and Rob Cochran, the 2026 NADA chairman and CEO of #1 Cochran.
Levi said hundreds of dealers were surveyed in CDG Circles and that 97% said stairsteps negatively impact their dealership, customer experience, and profitability.
Cochran called the number "encouraging," saying it cuts against the assumption that dealers broadly support such incentive structures.
His view: The fix requires OEMs to reckon with what stairsteps actually do to price transparency and customer trust.
"Certain OEMs are already aligned with that," Cochran said. "Other OEMs… not so much."
Rob Cochran
2026 NADA chairman
#1 Cochran
Why this matters: The manufacturer memos sent this week seem to signal a stricter stance. We’ll see if action follows.
Either way, as long as stairstep programs exist, so do the economics that push dealers toward broker deals.
All that said: Not all brokering is illegal, and in fact, some say it’s a necessary service for the industry.
Tomislav Mikula, founder of Delivrd, facilitates car deals for consumers for a $1,000 flat fee. He doesn’t love the "broker" label and is blunt about why services like his exist.
“I think one of the fundamental questions that we're not asking as a dealership world is: ‘How do we make consumers’ lives easier?’" Mikula told Daily Dealer Live host Sam D’Arc. "I think the way you run business is answering the question of what problems do my consumers have and how do I solve them? And if we do that, profit becomes easy."
He also wasn’t shy about what it would take to put him out of business.
"I go away the second [dealers] make it so easy to buy a car that [it’s] like, 'Why would you pay that?'" Mikula said.
"That's as simple as that."
Tomislav Mikula
Delivrd
Bottom line: Dealers who've been waiting for backup now have some reassurance from at least three OEMs. (And counting?) But enforcement addresses the symptom.
Until manufacturers rethink the incentive structures that make brokering attractive to dealers in the first place, and until the buying experience becomes frictionless enough that a middleman feels unnecessary, this fight isn't over.
