On episode two of The Pushback, our own Paul Daly and Kyle Mountsier respond to a viral TikTok arguing that dealerships are unnecessary middlemen padding prices for no reason. Their answer isn't a simple defense. It's a "this, but that" breakdown of where the criticism holds up and where it falls apart.
This: "Just buy direct from the manufacturer and skip the markup."
It sounds simple. Cut out the dealer, buy straight from the source, save money.
But: The franchise system exists because manufacturers couldn't afford to sell direct in the first place.
When Ford was pouring its capital into figuring out how to manufacture the Model T, it had nothing left to build a national retail network. Independent business owners stepped in, buying the real estate and taking on the financial risk of selling the cars themselves.
That arrangement worked until manufacturers started reassigning dealers on a whim, based on who was in favor and who wasn't. Dealers had sunk real capital into buildings with no protection against losing it overnight, so they organized. That's how the National Automobile Dealers Association came to be, and how franchise protections became standard.
Kyle put the "buy direct is cheaper" argument in terms most people already understand:
In any business, direct to the manufacturer is the cheapest route. Doesn't matter what it is.
That's true. It's also true of Subway and 1-800-Flowers. Franchise protection isn't unique to cars. It exists because an independent owner is the one putting up the capital, and it comes with real tradeoffs for the consumer too, including local competition and someone to walk into when things go wrong.
Did somebody say “franchise law?”
This: "Dealerships are a tax on the working class, and lobbying is just paying people off."
But: Dealerships employ working-class people and fund the communities they operate in.
Franchise dealerships are frequently among the highest taxpayers in their metro areas, and that money flows back into the community both directly through taxes and indirectly through local sponsorships.
As for lobbying, Kyle's reframe is worth sitting with: with 535 representatives covering manufacturing, retail, healthcare, and every other industry in the country, no single lawmaker can hold the technical detail of every vertical in their head. A lobbyist's job is transferring that specific knowledge so lawmakers legislate with actual information instead of guesswork.
This: "Markups are outrageous, and the industry is gouging people."
But: The problem isn't MSRP. It's what gets piled on top of it, and nobody's dodging that part.
Paul's clarification cuts through a lot of the confusion in the original video's comments:
I guarantee you, every dealer would take that deal because no one is selling at the MSRP.
MSRP is a ceiling, not a floor. Most cars sell at or below it, the same way a clothing tag's suggested price rarely matches checkout. Walk in and offer to pay full MSRP with no extras, and Paul's claim is it will be the fastest car deal you've ever done.
Where we stop defending the industry is the markups layered above that number.
The industry didn't do themselves any favors when they mark vehicles up by that much money.
Paul pointed directly at COVID-era pricing behavior as the moment that damaged trust in a way the industry is still paying for, and Kyle agreed without hesitation. Bad actors exist in every industry, but the pandemic gave critics a specific, memorable example, and it still shows up in comment sections years later.
This: "The whole process should take under an hour."
But: That timeline only works for a narrow slice of buyers, and most people aren't that buyer.
If you know the exact car you want, you're walking in with strong credit, and there's no trade involved, that expectation is reasonable. But trade-in equity situations, financing complications, and buyers who walk in wanting one car and leave with something completely different are the norm.
Kyle's point was that those situations require an actual conversation, not a checklist, because someone is helping a customer extend equity into a loan term that isn't cut and dry.
This: "Tesla and Carvana prove dealerships are obsolete."
But: They proved something narrower, and it's on us to actually act on it.
Kyle's framing was direct: Tesla, Carvana, and CarMax are showing the industry a better way on process, and that's a fair hit. But the tradeoff those models carry rarely makes it into the same TikTok comments: when something goes wrong with a direct-purchase vehicle, there's often no local option to walk into and get it resolved in person.
The uncomfortable truth in this episode is that both sides of the argument are partly right.
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Your franchise structure, your local tax contribution, and your ability to sit down with a customer through a messy trade or credit situation are real advantages that direct-to-consumer models can't fully replicate.
But if your pricing strategy still depends on a markup a customer can spot in thirty seconds of research, you're not competing against the dealer down the street anymore. You're competing against every viral video telling that customer they're being overcharged, and right now, some of those videos have a point.
Want the full conversation?
Paul and Kyle work through the full back-and-forth, comment by comment, on The Pushback, Episode 2.
