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Virginia Legislation to Prohibit Direct Sales and Delivery Agents
The Virginia state house recently passed legislation that aims to protect franchised dealers from automakers attempting to negotiate directly with consumers or declare dealers as delivery agents. The bill, which passed unanimously in both the House and Senate, prohibits automakers from negotiating binding sale or lease terms with customers, including online; retaining ownership of new vehicles until they’re sold rather than selling them to dealers to hold in inventory; and declaring that dealers are delivery agents. It also bars automakers from unilaterally changing franchise agreements without also getting an agreement from the dealer. The legislation was created in response to growing concerns among franchised dealers that legacy automakers may try to take steps towards an agency model or sell directly to consumers. Don Hall, CEO of the Virginia Automobile Dealers Association, said the bill language was amended to clarify some provisions at the request of GM and the Alliance for Automotive Innovation, the trade association that represents most major automakers in the U.S. He noted that the trade association does not oppose the legislation.
