Employee pricing is a special discount that’s usually reserved for a company’s employees. In this segment, Ford is letting regular customers get similar pricing to make buying a car cheaper.
Sticker price is the price printed on the car’s window sticker. The hosts are saying the deal can reduce that printed price by a lot.
Concept
A plans
“A plans” are special discount pricing programs tied to an automaker’s employee/partner pricing structure. The point here is that it can lower what you pay compared with the usual price.
This is a named marketing campaign by Ford referenced as a prior example of incentive-driven messaging. The segment implies it was designed to stimulate demand and attract buyers during a period when shoppers were more hesitant.
Concept
woo these hesitant shoppers off the fence
This phrase describes a marketing tactic aimed at undecided buyers—pushing them to make a purchase decision. In automotive terms, it often means using incentives to convert “maybe later” shoppers into showroom traffic and sales.
A “comp” is a comparison to the same time period last year. If last year was unusually good or bad, then today’s numbers can look better or worse just because of that baseline.
Tariffs are extra taxes on imported goods. If tariff rules change, car companies can end up paying more (or less) for parts and vehicles, which can affect the prices and deals you see.
MSRP is the price on the window sticker that the manufacturer says the car should cost. In real life, many buyers pay less than that because of discounts or incentives.
Inflation means prices keep going up over time. When inflation is high, people often have less money left over, which can make it harder to buy a car or can push prices higher.
The Ford F-350 is a heavy-duty pickup in Ford’s Super Duty lineup. It’s the kind of truck Ford would highlight when showing off a high-end off-road “Raptor” version.
It means Ford is trying to be careful about how much it discounts cars. Instead of constantly cutting prices, they want incentives to be targeted so they don’t hurt profits.
An employee discount is a special deal for people who work at the car company. Here, they’re asking whether employees might feel like they’re losing out if others can benefit too.
Here, “inventory” just means how many cars or trucks the dealer currently has on the lot. If there aren’t many, the dealer usually doesn’t need to discount as much.
The Ford F-150 is Ford’s popular pickup truck. The hosts are talking about how dealers handle discounts on the F-150 when they don’t have many trucks to sell.
Company
novellas
They’re talking about a supplier plant that makes aluminum parts for Ford. A fire there can slow down production, which means dealers have fewer trucks to sell.
“Truck month” is a time when automakers push extra deals and advertising to sell more trucks. The point here is that if trucks are already hard to get, promotions can make the shortage worse.
A “hot mill” is a factory step where metal is heated and rolled into the shapes manufacturers need. If that part of the plant is damaged, it can slow down the supply of materials to carmakers.
Car
Toyota
They’re talking about Toyota’s sales results worldwide. The point is that Toyota is selling a lot of cars even with extra taxes on imported vehicles.
A hybrid car uses two kinds of power: a gas engine and an electric motor. It can switch between them (or use both) to save fuel, especially in stop-and-go driving.
A “15% tariff” means a 15% tax applied to certain imported goods. The segment contrasts this Japan-related tariff with larger or more damaging tariff impacts from Canada and Mexico.
The Toyota RAV4 is a compact SUV. Here it’s cited as another high-volume Toyota model whose supply chain (coming from Canada) makes it especially vulnerable to tariff costs.
The Toyota Tacoma is a popular pickup truck. The hosts mention it because tariffs on trucks coming from Mexico can make it harder for Toyota to sell profitably.
“Raising prices” refers to increasing the retail price of vehicles to offset higher costs like tariffs. The hosts argue that when cost increases can’t be absorbed elsewhere, automakers often have little choice but to pass some of the expense to buyers.
Tariffs are taxes the government charges on imported products. If car parts are imported, tariffs can make them more expensive, and that can push car prices up. Sometimes governments later refund some of the money, which is what they’re talking about here.
Company
Salantis
“Salantis” is referring to Stellantis, a major car company. They’re talking about how much money Stellantis expects to get back from tariff-related actions. That refund can help offset some of the costs tariffs created.
They mean Ford counted the tariff-related benefit in its quarterly financial report. Instead of waiting for the money to show up, the company treats it like it’s already a benefit.
Guidance is basically a company’s prediction for how it thinks it will do financially going forward. If tariffs are expected to cost less, the prediction can improve.
GM (General Motors) is mentioned in the context of guidance—how much it raised its forecast based on tariff-related money coming back. The comparison is used to connect tariff refunds to earnings expectations.
Commodity costs are the prices of raw materials (like metals) that automakers need to build vehicles. The hosts say uncertainty in these costs can offset tariff-related gains, affecting sales and earnings expectations.
This is about accounting—recording money as if it’s already coming, even if the cash hasn’t arrived yet. The concern is whether that early “savings” estimate could turn out to be delayed or not fully realized.
The Supreme Court is the highest court in the U.S. Its decision can change whether certain taxes or rules stand, which can lead to refunds for companies.
A tariff is a tax on imported goods. If those taxes get refunded, the big question is whether that returned money lowers the price of cars—or just helps the company’s bottom line.
A supplier issue means the companies that make the parts are having problems or charging more. Those changes can then affect what the car company pays and what it charges customers.
Contractually obligated means a contract legally requires someone to act. The hosts are saying companies usually won’t lower prices just out of kindness—only if a contract forces them to.
Liability means legal responsibility. They’re saying the government or companies tried to avoid getting sued or forced to refund people if the tariff approach turned out to be illegal.
A price tracker is a way to watch how prices change over time. They’re saying you can see the impact in the data from that tracker.
Concept
broker economy in auto retail
The “broker economy” in auto retail refers to the role of intermediaries who help arrange vehicle purchases, pricing, or sourcing outside the traditional direct dealer-to-buyer flow. The hosts frame it as a developing system that affects how deals are structured and how pricing information moves through the market.
A franchise dealer is a local car dealership that’s officially allowed to sell a specific brand’s cars. The episode is saying that brokers can bypass that local dealership relationship, which hurts both the dealer and the brand’s local presence.
A lease is a contract where you pay to use a vehicle for a set period, rather than buying it outright. The speaker contrasts broker activity tied to new-vehicle leases (which come from franchise dealers) versus used vehicles, implying different supply chains and incentives.
A “shadow dealership” is basically a business that looks like it’s selling cars, but it doesn’t have the legal license to do the sale directly. Instead, the licensed dealership handles the paperwork and the transaction behind the scenes.
A “rewards program” in this context is the system automakers use to give dealers incentives based on certain sales rules. If the sale is done through a broker, the automaker may not let the dealer claim that sale for the incentive.
Here, “brokerage” means using a middleman to help you buy a car. The big issue is whether those middlemen must have the same kind of license as car dealers, and what rules states set for how they operate.
A “dealer license” is the legal permission a business needs to sell cars in a state. This segment is about whether brokers also need that kind of permission, and how different states handle the rules.
“AI agents” are software systems that can take actions toward a goal—often by using tools, making decisions, and interacting with other services. Here, they’re discussed as doing work similar to humans in the auto retail space, likely affecting tasks like research, outreach, or transactions.
Concept
auto retail business
“Auto retail” just means the normal process of selling cars to regular customers. The hosts are saying that AI tools and outside companies may start playing a bigger role in that selling process.
The “retail process” is the full set of steps involved in buying a car from a dealer or seller. It includes things like negotiating, financing, and completing the paperwork.
LIVE
Welcome to this Weekend Drive edition of Daily Drive for the first week in May, 2026.
I'm Jake Nier in Detroit, in for Kellan Walker.
This week we're talking about Ford bringing back employee pricing for all, Toyota posting
record sales despite tariffs, Detroit automakers expecting more than $2 billion in tariff free
funds and more.
Joining me today as always are Larry Velikwet, who covers Toyota, Mazda, and Subaru for
us at Automotive News.
Larry, welcome back as always.
Kellan, it's great to be here.
Oh, wait, Jake, it's great to be here.
I know.
I know we sound and look so similar.
Michael Martinez, who covers Ford in the UAW.
Mike, how are you today?
I've been worse.
We're starting off strong, guys.
And as you can hear laughing in the background there, we have a bonus panelist with us today.
Molly Boygon covers tech and innovation for us.
And she's the co-host of the Automotive News Shift podcast.
Molly, great to have you with us today.
Great to be here.
I was trying to come up with a pithy something to say, but honestly, I'm in a pretty good mood,
so sue me.
That's all that matters.
Yeah, we'll have plenty of opportunities for pithy remarks here as we go along, I'm sure.
Thank you guys again for joining me today.
Really appreciate it.
And let's start with Ford.
Mike, the automaker that you cover is bringing back employee pricing for all customers through
July 6th.
They're calling it American Value for American Values.
And they're also tying it to the country's 250th birthday.
Talk about what's going on here.
Why is this the strategy and what is the hope?
Yeah, well, this is the first and probably only time I'll be able to use the word semi
quintentennial in a story or podcast, so I've got to take advantage of that.
Check that off the bingo card, yeah.
Yeah, but I think Ford's insisting that this is all about the 250th, that they are looking
for a way to take advantage of the fact that they are the most American automaker in terms
of employment, in terms of sales, and they want to gently remind customers of that while
giving them a pretty good deal.
Let's be honest, you can get up to thousands of dollars off the sticker price using these
A plans that Ford offers its employees.
But I think if you look behind the scenes a little bit, employee pricing historically
has always happened during times of uncertainty.
You go back to 9-11, the deals that were offered then, you go back last year when Ford offered
their From America for America campaign, Stellantis and others followed.
It was really to kind of woo these hesitant shoppers off the fence and into showrooms
to keep buying vehicles.
And Ford's talking a really good game about how they still see strong demand.
Their first quarter sales were down 8. something percent.
It was a really rough year ago comp when everybody was coming in to beat the tariff deals, if
you remember, for Ford and everybody else.
But despite those comps, they still think this year they'll do well in the market.
So they claim it's not because of any uncertainty or any weakness in the market, but you just
got to look around.
The rising prices from the war in Iran, the rising MSRPs that have just continued, the
rising gas prices.
You have inflation still hitting everybody in terms of every transaction they make.
So I'm not sure that this really is as strong a market as Ford's trying to make it out to
be.
And I think a deal like this could really get some hesitant shoppers just as it did last
year.
So they claim it's all about celebrating America.
I think probably there's more to the story.
I am wondering, maybe Larry, you can take this one.
Ford goes to this well a lot.
I haven't been around long enough to know if this is a Ford thing.
Is this something that other automakers have done in the past?
Why does Ford seem to be the one that seems to turn to this strategy more often than not?
Well, they turn to it because, A, it's effective.
And consumers who are shopping for a deal look at that and think, hey, I'm not getting
any better deal than what their friends and relatives are to get on the line.
I mean, you live in Michigan as I do.
You understand that nobody in Michigan pays retail for a vehicle, right?
Except for my very gullible behind.
Right.
Right.
But it's a very effective strategy.
It's something that's ingrained in society.
Society knows that the best deals, you have to be an employee to get the best deal.
Now you're offering it to everybody.
It's an effective strategy that actually saves them, can end up saving them a little money.
They can actually be a little less expensive than just throwing money on the hood.
And they work, they bring people in.
But I will notice that if Mike included in his story the excluded models, right, are
the Raptor of the F-150, the Ranger and Bronco Raptor versions, and higher trims of the Superduty.
So what did they do?
They excluded F-250.
That seems off base if you're going to celebrate the automakers.
Wow, connecting some dots there, Larry, that's good.
Celebrate the country's coming out party and you're going to exclude some trims of the
250.
Well, that's a great point.
And if our eagle-eyed readers will remember earlier in the year, we had a little nugget
in one of the stories around the auto show, President Trump visited and Ford showed off
a Rapt, I believe it was an F-350, so not the 250 comparison there, but they showed a
Rapt Superduty in the American flag and special sort of livery, I guess, and they were planning
that.
They're going to sell that this year at some point.
So I guess that would be excluded too from the promotion.
Don't quote me on that.
I guess I haven't really looked in the details there.
But just to quickly piggyback on to why Ford, why did they go to this well?
I think too, historically Ford's incentives, at least lately, have been a little bit lower
than the competition.
So this is sort of giving them an excuse maybe to put a little more out there in a specialized
way.
It's funny because they just released first quarter earnings this week as well.
And something the CFO called out in the earnings report was their incentive discipline.
And she said that people, they're growing revenue about 6% in the quarter.
She said people are choosing forward because of our products, not because we're paying
them to.
Ironic the very next day they come out with this ad campaign.
But the executives say that that's not going to derail their plans, that they are still
being disciplined.
And this is just a unique way to work in their discounts for the quarter.
It's a guaranteed price.
Again, it provides certainty to customers that probably need that right now.
Is there any pushback from actual employees at Ford?
Are people feeling like they're getting ripped off of their employee discount?
I would hope not, because they still get it too.
So they just get to spread the love a little bit.
It's the whole parable of the workers in the vineyard.
They agreed to these if somebody else gets them because the company gets them, who cares?
It doesn't affect their deal.
True.
True.
It just might affect them feeling special, which is important for all of us, of course.
But Mike, one question I have is, this deal includes the F-150, even though inventory
is still tight from that novellas fire that you've been reporting on, of course, novellas
being the aluminum plant that has supplied Ford for a long time, especially for the F-150.
So how do dealers feel about discounting their most profitable vehicle when they don't have
very many to sell right now?
That's a great question.
I'm going to be honest with you.
I haven't had the chance to get any on the phone in the time between Ford announcing
this and our taping.
But I have to imagine it could get a little dicey for some dealers, because as we reported
a few weeks ago, you have certain pockets of the country all around the country, really,
where these inventory numbers are dwindling fast.
And some dealers have pointed out to me that a similar thing happened with truck month.
Big yearly promotion.
And they said, yeah, we love getting more customers in, but we are already running
scarce on these things anyway.
And then you have truck month, and it further depletes what little we do have.
So Ford's saying they're going to be fine because they're expecting to restart, well,
they're not.
Novellas is expecting to restart the hot mill, the plant that was damaged this month in May.
And Ford says they have contingency plans in place, even if something goes south again,
to still be able to ramp up production starting this month.
So the deals start this month, maybe for a few weeks in some places,
it could get a little tight, but the hope is the inventory numbers are only going to go up from here.
Well, kind of with that sales preview for the next time in mind, let's talk about sales
for this past month.
As of the recording time Friday afternoon here, we have some automakers reporting,
but Larry, we do know that Toyota posted record global sales, nearly 11.3 million vehicles.
That's even with the 15% tariff on Japanese imports.
US sales actually grew nearly 8%.
How are they pulling this off right now?
Well, they're pulling it off because their products are in demand.
They several years ago, when everybody else went full EV, promising we're going to go full EV,
Toyota said, you know what, we're going to take the interim step.
We developed this hybrid powertrain back in the 90s, and it's worked really well.
So we're going to expand it.
And if people want to do EVs, we'll have EVs.
And if people want to do hybrids, want to take the interim step while the infrastructure gets built out,
we'll keep these around.
And they took all kinds of grief for that, if you recall, a few years ago.
And now, on a global basis, they're just killing it.
11.28 million vehicles globally, just crushing.
They traditionally have been in the 10s someplace.
That's where they stand.
And they are maxed out globally on capacity,
and where they can still build more.
So I've said this before in this thing, you will lose money betting against Toyota.
At any point, they are slow and steady and end up winning the race.
But it is worth noting that you mentioned you called out the results in the US.
What we haven't seen yet, what we'll get this week is their financial results.
And that is going to be very telling, because what I'm told is that while they had these record
sales globally and had the fourth best year that they've ever had in North America in terms of just
sales, including a monster year for Lexus, which is a money spitter, they lost money in the United
States. Why? Why do you think? Because of tariffs.
They couldn't do anything more than what they're doing, and they lost money.
Yeah, that's all you have to say about that.
I'm just ruminating on that a little bit. That is pretty crazy.
Yeah. And frankly, what's really telling, and we'll talk about tariffs in a minute,
what's really bad for them is not the 15% tariff from Japan. That one they can live with,
although it's painful. What's killing them is the tariff from Canada and Mexico.
That's just crippling them. You're talking about two of their highest volume vehicles,
Tacoma in Mexico, and RAV4 coming out of Canada. And they just get walloped by the
tariff hits from those two countries, because they don't have any capacity to move them into the
United States. I feel like that is such an interesting use case, too, because we've been
talking about how none of the automakers really want to blink on meaningful price increases
driven by the tariffs. But this is an instance where it's hard to imagine any automaker doing
anything but raising prices. Like you said, they max out the other options. Do you think that's
coming, Larry? Yes. The long and short of it is, yes, they told us in January that they're
budding up against the wall because there's only so much they can do in terms of tariffs
because they have to keep their products competitive in the market. But they don't have
a choice from a financial standpoint. Because the industry moves slowly, they can't turn on a dime,
they are going to have to raise prices. They indicated that in January, they told us there
would probably be three price increases over the course of the year. Now, they'll gradually
phase them in. But if you look at our industry price tracker that's on our homepage,
you'll see that has risen substantially over the last month. We are now up, as of today,
$1183 versus a year ago, up $806 in average market price from just 30 days ago, where
prices are going up fast and we can celebrate birthdays. What the hell did you call it, Mike?
Semi-quincentennial. Thank you. We can celebrate the company's semi-quincenero
anytime we want to, but we're going to pay more despite incentives because of the tariffs.
All right. Well, hold that thought because we are going to come back and talk about
more this tariff situation, including the refunds that automakers are expecting,
especially Detroit automakers. And we're also going to preview a big story that Larry and
Molly have been working on that's coming out on Monday. That's next on this weekend drive edition
of Daily Drive.
Welcome back to this weekend drive edition of Daily Drive. I'm Jake Nier joined by Larry
Bellacuette, Michael Martinez, and Molly Boygon. Mike, I wanted to continue the tariff
conversation a little bit with what the Detroit automakers are expecting from refunds. They're
about to get more than $2 billion back, at least that's what they're expecting from the US government
in tariff refunds. Walk us through those numbers and how they came to this number.
Yeah, it's a pretty nice chunk of change to be getting back. I know they've spent a lot more,
but GM and Salantis are getting about $500 each, give or take, $500 million, excuse me.
Let's say that that would be pretty disappointing if it was only $500.
That's my bet. I forgot the M at the end there. Ford, meanwhile, they're just shows you how
different a world that we live in versus the automakers, right?
Yeah, yeah, I'd take $500. Yeah, for sure. Ford's getting $1.3 billion back. Now, these are from the
IEPA tariffs. There's an acronym for you. It's back to that February ruling the Supreme Court said
Trump overstepped. In these specific tariffs, you have however many other ones that are still in
place that are still costing the companies. But what's interesting is that none of them have the
money yet, but at least in Ford's case, they booked the savings this quarter,
even though they just are assuming they're going to get it, which I'm sure is a great assumption
that nothing's going to go wrong there, right? The check is in the mail. I'm sure it is. It's on its way.
So it's an unexpected savings, an unexpected gain back for these guys, and it's causing
them to sort of raise their forecasts. Now, Ford says their forecast raise was about the
underlying strength of the business, but having this $1.3 billion certainly helps. GM basically
raised their guidance about as much as they're getting back from tariffs, so connect two and two
there. So it's much needed at a time when you're seeing, again, continued uncertainty from the
rising commodity costs and probably lower or at least flat sales year over year.
I've got questions about this certainty about, as Larry said, the check being in the mail. I'll
come back to that, but Mike, as you mentioned, Ford's already counting on that $1.3 billion.
That's nearly triple what GM expects. Any idea why there's such a big difference between those two?
I'd love to give you and our loyal listeners some sort of great insight here. I don't know.
And the thing is, I'm not sure that many people at Ford really know. Now, I'm probably exaggerating
there, but it kind of goes to show how convoluted this whole situation is. Now, we can speculate.
Ford said a majority of these taxes are hitting its Ford Pro and Ford Blue business. That's the
business side, the commercial side of things, and the gas side of things. So probably a lot of F-150,
a lot of Super Duty. What were we talking about earlier in the show? How proud Ford is that it
builds more vehicles here than anybody else. And that's true. But what about the parts that are in
those vehicles? A lot of those still come from Mexico, Canada, overseas, and elsewhere. So I'm
not sure how these specific savings break down. Ford has said that overall, its tariff bill is
basically roughly evenly split between vehicles and parts. So you'd have to imagine a lot of this
does have to come from the parts side because the assembly is mostly here in the States.
Isn't it great, though, how we can celebrate getting our own money back? I just think that's
fabulous. Money we weren't going to spend two years ago, right? Money that we had to spend
turns out illegally. And now we're going to get it back. It's hard to celebrate that.
Well, it's interesting to not to wade too deep into the political side of things, but you see how
all the CEOs are still very careful around how they message this. And they're quick to thank the
president for trying to advocate for a strong American industrial base while he illegally took
billions of dollars from them. So it's a really unique dance that they're going to have to
continue to take as the year goes on. Well, that's why we're reporters, right? Because we enjoy
sticking sticks in people's eyes. There you go. It reminds me of the poor man's savings account,
right, Larry? The tax refund. Yeah, it's that time of year. I wonder if they'll be able to
continue that posture if the checks do not, in fact, arrive in the mail. That'll be the ultimate
test. Well, that's what I was going to ask is about the risk here. They're booking the savings
now without the money in hand. Is that risky? Well, I think Ford said that they have signed on
to a lawsuit just as sort of standard practice as part of this, given the Supreme Court's ruling.
So they at least believe they have some sort of legal fallback that they can bank on. We'll see.
But then again, there you go. So on one hand, can you be suing the government or suing the same
administration that you're trying to praise in certain respects for the same issue here?
So it's going to be a delicate dance moving forward. It could get awkward.
I got a message from a friend today as a little side note about this exact news. He actually
sent me your story, Mike, I believe, about this and said, oh, great, this is great for customers.
And I started trying to explain the complexity of this and who paid these tariffs in the first place.
But I think that there is a perception issue here that when costs for new cars are so high,
tariffs are high, the automakers are getting these refunds back and booking them as savings.
But how does that account for any savings or any costs that were passed along to suppliers?
Have they passed along any of those costs to customers at this point? It sort of gets muddy
here, doesn't it? Absolutely. One, tell your friend, thanks for reading. And two, tell him,
don't expect any automaker to run and lower their prices tomorrow. I mean, you can make the argument
Ford just did with employee pricing at least for three months here. But this goes beyond the auto
industry. I'm not sure any consumer facing company will just turn around and lower prices.
You mentioned the supplier issue. Ford said, in most cases, they're not paying directly for
tariffs on the parts, but they're paying more because their suppliers are charging them more
because they're getting hit really hard. So Molly's discussed this on her shows. We've discussed it
on other versions of daily drive. This is a whole tangled web. And we have one strain here that
looks like it's going to benefit the companies, but we don't know how it's going to flow through
beyond that. I think it's safe to say that the only way that the automakers or any other party
that paid tariffs and is getting a refund is going to pass that on to somebody else
is if they're contractually obligated to do that. I just don't see any kind of goodwill
reimbursement happening from one company to another, from a company to a consumer.
That would shock me. It's also part of the reason that they didn't put the tariffs
right on the Monrones because they didn't want to open themselves up to liability if
they were found to be illegal and had to issue refunds to the folks that paid them on a retail
level, even though the folks paid them on a retail level, every one of them. In terms of
the impact, I'll refer my right honorable friends to the answer I gave some moments before
about the price tracker. If you look at that, there's the effect right there.
All right. Well, I could talk about this for a much longer, but I guess it's my job to keep
the trains running today. Before we end here, I really am fascinated, Larry and Molly, about
a story or a couple of stories that you have coming out early next week in automotive news.
Molly, you've been working with Larry on this story about the broker economy in auto retail.
What can you tell us about what's going on there?
Yes. I got a call from my, among my favorite colleagues, let's say all of them are on this
call, Larry Velikwet a few weeks ago saying, let's look into this. The basic gist is that
there is a cottage industry that has grown in prominence over the years of brokers who basically
work as a middle band between the dealerships and consumers. The incentive for this from the
dealerships side as Larry outlines really clearly in one of the pieces that's running on Monday
is that the stair steps, the incentive programs for dealers are so aggressive and the stakes are
so high. The potential benefits are so meaningful that if they're close to not making the quota,
they will sell vehicles to a broker to basically meet in name only the quota and that allows them
to move inventory along and meet that quota. We covered this in the stories that we wrote
for Monday and another one that I got into was basically how the brokers get their inventory,
what these relationships are like. It was really interesting, I think for both of us,
to take a look at this issue. For me, it's one of these just meaty gray area things where it's like
you see how both parties feel that they're right and justify the different things that
they're doing and it's a really interesting and dynamic relationship.
Molly, tell them about where this came from, where this grew out of because it's fascinating
in terms of the groups. Part of the reason I got this call from among my favorite
favorite colleagues Larry Velikwet is because in a prior life, I worked at The Forward,
which is a newspaper that covers the Jewish community nationwide and one of my beats was
covering the Haredi ultra-orthodox communities of New York City. One of the ways that brokerages came
to be was that different ethnic and religious groups, one of them being ultra-orthodox Jews,
felt more comfortable working with members of their community for these types of transactions.
A lot of communities in New York also don't speak English, they speak Yiddish. This is
almost like a cultural and language translator for this very complicated, long, sometimes arduous
significant financial transaction. That is how some of this came to be and
it's grown in prominence from those groups, also including Russian immigrants, Korean immigrants
to the United States to now be a little bit more of a mainstream industry.
Outside of those smaller groups, I'm curious where they feel like they're filling the biggest need.
The brokers, I did drive down to the beautiful state of New Jersey and I spoke to a couple of
brokers and they work off referrals. It's like you have people, according to these brokers,
don't want to go to the dealership. They'd rather just call somebody on the phone and say,
I'm looking for this make-and-model from this model year and do you have it? The broker can be
fairly upfront about the price, although the dealers would say otherwise.
So now it's basically just a network of friends, family, former customers,
that kind of thing that are often being served by these guys. But Larry, I don't know if you have
anything to add to that. Yeah. So I think it loses to talk about what the problem is. You think, oh,
well, consumers supposedly are saving money. The dealers get to make their monthly goal because
they're offloading these vehicles to brokers. The problems are twofold. Number one, they lose their
relationship with the dealer from a dealer standpoint. The automakers are the ones that
started cracking down on this. And they did so because these franchise dealers are their faces
in their representatives in these communities. So by basically outsourcing that work to brokers,
by not having consumers visit the franchise, they're degrading their own investments. Now,
it's worth noting that dealers are, dealers complain about broker behaviors,
even though every vehicle, and I want to emphasize this, every vehicle, every new vehicle that a
broker sells comes from a franchise dealer. They don't have a pipeline except for from
franchise dealers on new vehicles. Used vehicles are a different matter. But so every new vehicle
lease that these guys do nationwide comes from a franchise dealer. And it's dealers complaining
because these brokers, because they're undercutting them, dealers complain that they're devaluing
their franchise and they are. It's their competitors who are selling their vehicles.
I mean, we talk to dealers around the country. It's not a widespread thing. It's largely regional.
It's in regions basically where there's a lot of leasing. That's where it's most predominant.
So the Northeast, Florida, some parts of California, here in Michigan, there's some of this
and these brokers range from simple concierge folks who will charge you $1,000 and I'll go out
and find the best deal. And then you'll go get that deal from a dealer, a buying service, if you
will, to guys who are running basically shadow dealerships where they're displaying actual inventory
and yet they have no license to do so, no license to transact. All the transaction
still runs through the dealership where the car was. And the dealership then gets to book that
sale and claim it towards their rewards program. So the automakers are clamping down on these guys
and saying, hey, just remind you, you have to identify if you sold this through a broker.
And if you did, you don't get to claim that on your towards your incentives.
Larry, you mentioned the licensing issue and it seems like that is a big part for one thing of
your reporting that both of you did for this, but there is no license for these brokers.
Would that be a possible solution? And if so, why isn't New Jersey and other
areas of the country? Why aren't they just saying, okay, if you want to do this,
you have to get a license and we'll regulate you.
Let's talk about New York, huh, Molly? Yes. So it varies by state. New York has a broker license.
California has a separate license that you can tack on to an existing dealer license.
New Jersey does not have a license and the disagreement is over if there's no license
for brokerage and brokerage is happening. Are brokers supposed to be getting a dealer license?
And what is the kind of limit on their behavior? And New Jersey passed a law, interestingly,
that bans brokerage from the dealership side. So there's an explicit prohibition on dealers
making broker deals. The brokers themselves claim point to the statute, point to the law that
we're violating. And this has just created such an interesting dynamic because it appears,
I mean, there was a letter in addition to the letters from the automakers to the dealers,
the New Jersey Motor Vehicle Commission sent a letter to dealers about not doing broker deals.
And then there are other states that have explicit prohibitions. So states like Texas
have an explicit prohibition on brokerage. And the Jersey brokers that I spoke to said,
yeah, we would like to be, you know, we're open to more regulation, license us, sure. But right
now there's nothing clearly on the books. And honestly, the actions of the Motor Vehicle Commission
sort of support this, that say that we're actually like hardcore, clearly breaking the law.
This is all super fascinating. It's something that I have not really learned anything about
so far in my time at Automotive News. So then our work as reporters is complete, right?
Yes, yes. I am very excited to dig into this in the pages of Automotive News on Monday and at
AutomotiveNews.com. And it's also fascinating to me as we are also reporting on the new era of AI
agents that are doing sort of a similar thing here. So I mean, you kind of have the human
and computer side of, you know, these third parties that are getting involved in the auto
retail business. And so that's a good place to leave it for now. And like I said, everyone can
go check out all the great reporting that you've done on that issue. Larry, Molly, Mike, thank you
guys all for joining me today on Weekend Drive. It's been a pleasure. It was awesome working
with Molly on this, by the way. Oh, the feelings mutual, Larry. I really had fun.
Man, I'm getting out here. I just sat there on the side, you know, let her do all the work.
She was the one who roamed around New Jersey. I got to sit in my comfortable little office here.
No way, no way. Larry was steering the ship for sure.
No, you, no, you. Yeah, yeah. Mike, join us next time. Yeah. Yeah, I have to. It's a party.
Well, speaking of parties, that's all for this Weekend Drive edition of Daily Drive. You can
get all of the latest news on incentives, on the retail process, and everything happening
in the auto industry at AutoNews.com. We'd love to hear from you. Let us know what you think of
the show and the topics we covered today. Send us an email at dailydrive at autonews.com or
leave us a voicemail at 313-444-2774. And if you enjoy the podcast, remember to like,
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About this episode
Ford’s return to employee pricing is framed as both a patriotic marketing push and a way to move demand while tariffs and uncertainty hang over the industry. The conversation also digs into Toyota’s hybrid-led strength, even as tariffs squeeze U.S. profits, and into Detroit’s expected tariff refunds. From there, it turns to whether any of that money will reach consumers, before closing on the broker ecosystem and the dealer incentives that keep it alive.
