LIVE
How many times have you wished you could be in two places at once?
With Wix, you practically can. Wix's website builder is packed with powerful AI tools to make
running your business online easier. Build a full site just by talking with AI. Get an AI agent to
manage your sales and marketing. Or work like a 10-person team, even if it's just you.
So you don't need superpowers to get everything done. You just need Wix.
Try it now for free at Wix.com.
It's noon here in Ventner City, New Jersey and our nation's capital, Washington, D.C., and this is
CarEdgeLive for Monday, August 18th with your hosts, me, Ray here in Ventner City, and well,
Zach in Washington, D.C. How are you today, Mr. Zach?
Happy Monday, August 18th. I'm doing pretty good today. Doing all right. Rep and rep. Oh,
man. Representing Team USA here, sitting in our nation's capital. Dad, we've got a sponsor
for today's show, our friends over at DeleteMe. But before we do, hostcaredge.com, trying on a new
home page. Say goodbye to Car Dealership Games forever. You tell us what car you want. Not just
now, but forever. You tell us what car you want. We've built an AI agent that reaches out to
dealers and negotiates on your behalf. Then you get the best deal. Now, last week,
if you were tuned in, you know that I'd contacted some dealerships. Let's see. Let's
get the little status update here. Yeah, AutoNation Subaru. Let's see here, Dad.
View the chat history. We've been going back and forth with AutoNation Subaru here. I have not
sent any of these messages. This is all the AI. And I'm not mistaken. We got ourselves a little
out the door price. Let's take a quick peek. Let's see what work the AI did for me. Getting
me a $3,499 discount off of that selling price. Again, folks, check it out back at
CarEdge.com. Really impressive stuff. The lead story, however, this morning pops comes from
our friends over at Edmunds. Yes. We're going to do a little bit of a used car market update.
Edmunds ad with the interesting $30,000 for a used car. Here's why that's actually a bargain
in 2025. Let's start here with the data from Edmunds. Is a $30,000 used car now a bargain,
Pops? Is that the case they're trying to make? Well, if your Edmunds, that's the case.
That, yeah, is it? I don't know. Why don't you ask the buying public out there if a $30,000
used car is, well, actually a bargain in 2025 or any other time?
But what is the data? What's the data they're pulling from here?
Well, what they're essentially saying is that the three-year-old $30,000 used car today
has depreciated more from its original MSRP than the $30,000 used car three years ago. Three years ago,
the MSRP, the average MSRP was around 40 grand, and you could buy that car for around 30 as a
three-year-old car. Today, that average MSRP is about 45 grand, and you can still buy it for
the same $30,000. So, in their way of thinking, that represents a bargain. In my way of thinking,
that gets us back closer to what I don't know, normal depreciation supposed to look like
on used cars. So, I'm not sure either one of them represents a bargain. It's just today's
$30,000 or $31,000 car has depreciated more from its original MSRP than those cars three years ago.
I think it's important to first level said here, used car asking prices are still high. They're
still resistant. That has not changed, meaningfully in 2025. The average transaction price for
just those that are three years old is still $31,216, which is very close to the all-time
high we saw back in Q2 of 2022, essentially the same. Now that the overall market obviously still
sees elevated used car prices, we'll look at some Cox Automotive data on that in a moment.
And to your point, the Edmunds conjecture here is that because they had higher original MSRPs
and are still selling for around $31,000, it's a better value. I do appreciate that they
include the day's supply here, Dad, 38 days on average. It's not day supply. How long a
vehicle is sitting? These used cars are turning over. When they do make it to dealers lots,
they're turning over fairly quickly. 38 days is not a long time for a vehicle to sit on the lot.
No, not at all. Most aging policies for pre-owned cars at dealerships is somewhere between 45 and
60 days. What that means is in most dealerships, if you haven't retailed that vehicle in 45 or
60 days, then it automatically goes to the auction to be disposed of. At some dealerships,
the aging policy might be 90 days, but that's about the length of it. So they expect when they
trade a car or they purchase a car at the auction and they recondition it and put it on the lot
for sale that it is going to be gone within 45 days. So a 38-day turn is perfect, is what dealers
are hoping and expecting. So that means the inventory is turning pretty quickly.
Now, Dad, to your point earlier, Edmunds does do this look back. Excuse me. What's going on
between the original MSRP and what the vehicle is transacting for as a used vehicle and what's
the price gap there? And so it's interesting to see here that right now, Q2 2025, the original MSRP
versus the used average transaction price is representing a $13,436 price difference between
the original new vehicle and the used option. That's lower than we've seen historically.
Back in Q2 of 2020, it was about $15,000 was the price difference there. So an additional
$1,500. The higher this number is, in theory, the more value the used vehicle represents. You can
look back at Q2 2022, Dad. And back then, the price gap was more like $7,500 between the new one
and the used one. That's when used vehicles were commanding an insanely high price. So
I do think this data can be helpful, although look at that purple line and look at that
orange line. They are both slowly but surely going up into the right, meaning things are
simply getting more expensive. Unfortunately. And in some cases, these do represent a good value
when you compare them to overpriced new cars. And the other thing that's helping the used car
market to some degree is average used car interest rates have come down a little bit.
So as those interest rates drop, it lowers the payments, which makes the monthly payment more
affordable for a greater number of people. Now, Dad, we did see back in 2022 the spike of used
car pandemania. That was when used vehicles were retaining their values at the highest levels.
They were commanding the highest prices, et cetera. And Edmunds actually does a bit
of a breakdown here of what was going on in Q2 of 2022 versus three years later,
Q2 2025 for residual value. So how much the vehicle is worth when they're doing the analysis here.
And so you can see that the more expensive a vehicle is, the more it is depreciating. So
in the $10,000 to $20,000 used car category, these vehicles were retaining 95% of their value
from MSRP to what they were selling for as three-year-old used cars back in Q2 of 2022.
Now it's down to 77%. So more normal depreciation, 20,000 to 30,000. You can see there's 78%. But
these purple lines represent what was going on in 2022 versus right now. And the market is healing
to a degree. It's just healing from an asinine place. There's no space in the used car market
for any of these vehicles to depreciate only 5% over three years. And that's what this is
saying was going on in Q2 of 2022. Some used cars were only depreciating 5% in three years.
That's not normal. No, that wasn't normal. And the reason it was happening is,
you know, we have to remember that prior to the pandemic, average number of new vehicles
in inventory or on their way to dealerships in any given month was somewhere around 3.4 to 3.5
million vehicles. Yeah. During the height of the craziness for used car values and what people
were paying for used cars, that number of new vehicle available inventory was running around
900,000, okay, a quarter of where it should have been. Today, that number were back up to
about 2.6 million, maybe 2.7 million new vehicles in inventory, which is down a little bit because
we had approached 3 million earlier in the year. So, as new car inventories shrink,
that typically impacts the amount of depreciation on the used cars. If there's no
real new car inventory for people to choose from, then the value of the used cars will go up.
Which again, what we're seeing here is in 2022, that was the high water mark for the industry
having pricing power, aka it was really a seller's market. It's become more of a buyer's market,
but it's still not great. Yeah. It's becoming normalized, okay. So,
it's more of a normal market than it had been. It's still not where it should be or where we
would expect it to be, but we're getting closer to what historic normal numbers would have been.
I like the way you're phrasing that, Dad. Let's take a moment and identify
one of our partners here, Pops. Let's give them the floor for a second. Our friends over
at DeleteMe. Now, Dad, we know data brokers are out there selling our information online,
and they can buy things like our phone number, social security number, and even our home address.
All that information and more is sold online every single day. Now, they are available, excuse me,
to marketers, scammers, and hell, Dad, if you even wanted to do it,
you could figure out how to buy some data online. You and ChatGPT would make a heck
of a data broker. DeleteMe, however, is what you and I both used to take control of our data online.
DeleteMe removes our personal information from hundreds of data brokers on our behalf,
and we have a great offer for the CarEdge community to do that for them as well.
You can get 20% off of your DeleteMe subscription with the coupon code CarEdge,
or you can simply click the link in the top of the description down below.
It's important to note, you yourself will not get deleted. However, your data
will be removed online every single month, Dad, for the past, I don't know, for me,
18 months, and for you, the past year, DeleteMe has been removing our data.
We strongly encourage you to take a look at it, and we appreciate their continued support.
Yeah. Then again, you can just look at my Instagram account and see where I live,
but that's besides the point. DeleteMe is there to help us, and they have been doing a great
job of it. We've got the data from Cox Automotive, Dad, the latest and greatest numbers here
from them. 2.2 million used cars for sale in Asia. Why we'll put that in the context here in
just a moment, but the long story short there is it's about the same as it has been. 43 days
supply will spend a bit more time on that, a.k.a. it's really low. Average listing price,
this is overall vehicles, not just those three-year-old used cars, 25,571 dollars,
and that average mileage, Dad, just keeps ticking up. 72,691 miles on average on that used
car. We continue to see, Dad, the retail used vehicle sales pace actually going up. More used
cars are being transacted, bought and sold, which is what's driving down over here on the day's supply.
2025 is this dark blue line. Look at that steep decline we saw in the month of July, Dad.
Used cars are still selling like hotcakes. Sales are up. Volume inventory is barely up,
1%, but sales are up 9%. That's not a good situation for prospective shoppers.
And used cars are selling really well because new cars are, well, I don't know how to phrase it
other than this, new cars are too expensive. The average transaction price on new cars is
way too high. I don't know how to say it any other way. And so if average transaction
prices are going to keep continuing to creep towards $50,000 on new cars, that's going to make
used cars, even at 25,5 with 72,000 miles on them, seem like a relative bargain
in comparison to those new cars. So it doesn't shock me that used car sales are up
because new car pricing is too damn high. And unfortunately, it doesn't seem as if, or there
isn't any indication that new car prices are going to go down at all. Every indication is that we
should expect new car pricing to continue to go up as it relates to the tariff that are involved today.
Now, Dad, to your point around pricing, it gets even more clear when you look at the
day supply of inventory at different price points for used vehicles. So I'm just going
to read verbatim here from Cox Automotive. Price conscious buyers have limited options
for affordable used vehicles. Used cars price below $15,000 continue to have low
availability with only 31 days supply, which is 12 days below the overall industry average.
Days supply is that measurement of how long it would take to sell all available inventory
based on the current sales rate. And the fact that be this particular cohort, $15,000
in underused cars is 12 days below at 31 days. I mean, we're talking about very limited
negotiability as a customer because there's just another shopper, another buyer who's looking
at that same vehicle, which again, supply and demand just keeps incrementally increasing the price.
So it's a little bit of like a bad cycle that we're in here for the used car market.
Well, we haven't been in a good cycle for the used car market in years. And as I have
mentioned any number of times, there is and continues to be somewhat of a shortage of
quality used vehicles out there because there was a loss of lease turn ins during the COVID era.
Because as we saw earlier, vehicles were depreciating less than what the residual values were for
lease return. So people were actually buying their lease cars out at the end of the lease
as opposed to turning them in because they were buying them for 25, 30, 35 percent below what
market value was. And so those used cars that typically would have made it to the market did
not. And then there was a dearth of leasing during COVID. So we have fewer and fewer lease
returns coming back into the market again today. And I've said it before, it won't be until
the end of this decade that we normalize the used car inventory situation to where it was prior to COVID.
So prices will remain high. Supply will remain short. And it's just it is not
consume friendly, I think is the best way to put it.
Most people don't realize how much of their personal information is being bought and sold
every day. Data brokers are making billions, pulling details about you from public records and the
internet, then packaging and selling it, usually without your consent. That's how your
information lands in the hands of scammers, spammers, even stockers. It's why you get
endless robocalls and why ads seem to follow you everywhere. That's where Aura comes in.
Aura actively removes your data from broker sites and keeps it off. They also instantly
alert you if your information shows up in a breach or on the dark web. But Aura goes
beyond data protection. With one app, you get a VPN, antivirus, password manager, spam call
protection, dark web monitoring, and even up to $5 million in identity theft insurance,
all backed by 24 seven US based fraud support. Other companies might sell just credit
monitoring or just a VPN. Aura gives you all of it together at the same price,
competitors charged for just one service. Start your free trial today at Aura.com
slash secure. Protect yourself now at aura.com slash secure. I've tried all sorts of ways to
make a website with AI. And honestly, it's not as easy as it looks. The results can be
unpredictable. And the moment I tried to tweak something, everything breaks. Then I found Wix
Harmony. It blends vibe coding with classic drag and drop. So you can generate pages,
sections, or even complex components in seconds, then fine tune every pixel
without breaking your site. The best part, everything runs on enterprise grade infrastructure.
Try it for free at wix.com slash harmony.
When the flu is keeping you up at night, don't try to tough it out. Knock out your flu symptoms
with Nyquil intense flu. You got this. It provides powerful relief of your flu symptoms
so you can sleep well through the night. Nyquil intense flu, the nighttime sniffling
aching fever best sleep with a flu medicine. Use as directed. Keep out of reach of children.
I think that's super fair, Dad. And I just set this up on the screen because I wanted to finish
reading it. Top five sellers this month were listed at an average price of $23,838, 7% below the
average listing price for used vehicles. And Ford, Chevy, Toyota, Honda, and Nissan
make up 51% of all used vehicles sold in the market. I mean, that is remarkable that those
five brands account for over half of the used vehicles transacted in the auto industry right
now. A friendly reminder, folks, all of our car buying services and products back at caredge.com
support you if you're buying a used vehicle. So please, folks, check out caredge.com or caredge.com
slash concierge to learn more about our car buying services. They're good for new and used
vehicles financing and leasing or paying cash. So we've got you supported back at caredge.com.
Dad from Josh here, one of the members of our team, fleet buyers are buying used cars.
That's also an interesting conundrum. If you've got fleet buyers going in, then that'll
actually also increase the demand. It's not even retail customers, it's fleet customers.
We saw that with the rental car companies during the shortage of new car availability
that they were buying up and paying top, top, top dollar for younger pre-owned cars
so they could actually put them into their rental car fleets. When the average consumer is
competing not only against other average consumers, but competing against fleet
buyers out there, it makes it more difficult for the average consumer to be able to score
a good deal. It's just harder and harder to do. Yeah, absolutely. Let's switch gears here, Dad.
Really interesting story over from Car Dealership Guy over on their website. How this Texas general
manager nets a million dollars across two Nissan stores in a single month. Really appreciate the
transparency here. I want to scroll down, Dad, and I want to look at this with you here by
the numbers. Both of these stores make a million dollars a month combined in net sales
from about 400 vehicles sold. This is at Clay Cooley and roughly 340 sold at the Don Davis
rooftop. Now look at this, Dad. They're targeting $2,500 in finance and insurance per vehicle
retailed and 80% total absorption across both locations and then this, Dad. Yes. Their strategy
here is to be a volume dealership because the store can actually get $1,200 per vehicle
from Nissan for hitting 110% of their goal from Nissan. Just want to spend a couple minutes on this
data here. It's a dealership coming out in the media, talking about how they're making
in-profit folks net, not gross net, a million bucks between two dealerships in a month.
It looks like the two reasons why, Dad, are because they get most of the people to do finance
insurance through the dealership. That was the FNI penetration, a $2,500 clip. Then Nissan's
paying them $1,200 if they hit their volume goal. I just thought this was super interesting data.
I remember having a conversation with a friend of mine who was a Nissan dealer.
I knew him before he was a Nissan dealer when we were both working at a Nissan dealership.
As Bobby said to me, he said, you can make a lot of money with Nissan as long as you sell the cars
below invoice because Nissan will pay you enough money that that's where your profit's going to come
from. You have to have the mindset that you're going to be a volume dealer. If you're a volume
dealer, for instance, if they're selling 230 new cars and they're getting $1,200 back from Nissan
on top of everything, well, that adds up to a lot of money, damn it.
Even $176,000. Then if your target is to do $2,500
in FNI profit per car retail times 400 cars, okay? Maybe it's not four because they expect
you to finance 80% of your sales transactions are going to be financed. They put a lot of pressure
on their customers to become payment buyers. What do we know? About 85% of all buyers out there
are payment buyers. Between FNI and what Nissan will pay them, if you agree to be a volume dealer,
if you want to be the guy out there that is going, well, I'm not going to sell it for less
than $1,000 over invoice, why your competitors are selling it for $1,000 below invoice,
that's why you're not selling any Nissan. I think the story for our audience, Dad, is look at this
inside baseball and remind yourself that at the end of the month when you go to a Nissan
dealership, many of them are playing this exact game. They're trying to hit that volume
bonus. This is why when people watch our educational videos and we talk about when's
the best time to buy a car, it is the end of the month because if you're a Nissan dealer
and you're trying to get to 110% but you're at 108%, you're not going to take $1,000 below
invoice. It might take $2,000 or $3,000 below invoice because you've got $200,000 riding on it.
There is a show on NPR, there was a show on NPR, I don't know if it's still on,
called This American Life. Okay. Ira Glass, I think it was, was the host.
And so they did a show from a Chrysler dealer, a Dodger Chrysler, a Ram dealer, whatever the hell it
was. And the importance of dealerships hitting sales objectives and how much that mattered
to dealerships and what dealerships were willing to do in order to hit those objectives
at the end of the month so that they could collect the money. It is, it is insane what goes on when
you realize you are a car or two short of your objective that you need to hit. And I remember
telling you a story from one of the BMW dealerships that I was at where the owner said to the
sales manager, he said, you lost $2,500 on that deal yesterday. And the sales manager looked at him,
he said, no, let me correct you. I made you $197,000 by losing $2,500 on that deal yesterday.
Because if I didn't take that deal yesterday, we weren't getting our monthly bonus. So
you tell me, is it worth losing $2,500 to gain $197,000? Okay, or $200,000, whatever.
So that's how you have to look at it. You can't look at every individual deal and go,
well, this one's not a winner. Some of them are winners, some of them are losers.
All that matters is that you have more winners than losers at the end of the month
and you collect that big check from your manufacturer.
Look at this quote from the owner. We just assume we're going to hit it. Failure is not an option.
So we put it in our math steps to think about that as a customer again. If you go in on the
last day of the month and losing for them is not an option, failure is not an option.
They are committed to making sure that they get this back-end money, which we just did the
math, $1,200 times. It was hundreds of thousands of dollars. That's such good leverage. And
anyone out there that tells you you don't have leverage at the end of the month,
there are some exceptions here. If you're going to buy like the Toyota Sequoia,
it doesn't really matter if you go at the end of the month or the beginning of the month.
That's the Toyota Sequoia. It's one of the fastest selling SUVs in the United States right now.
You're going to a Nissan dealership. You're going to a Jeep, a CDJR,
Chrysler Dodge Jeep Ram dealership. You're going to pretty much any other dealership.
You have leverage at the end of the month. There are these incentives at play
that really drive their strategy. And when you've committed as hard as this dealership has,
you could end up totally screwed as the owner unless you get the volume.
I think the owner hit the nail on the head. And what I mean by that is I remember
dealerships that I would run. And I might have been the new car manager or whatever. And I knew
that at the end of every month, it was just crazy the type of deals we would take.
So I came up with the idea that we should treat every day as if it is the last day of the month.
That whatever the poopy deal is you would take on the last day of the month
should be the same poopy deal you would be willing to take on the first day of the month.
And I believe if you look at that quote from that owner, that's basically what he's saying.
Okay, we are basically going to treat every day as if it's the last day of the month
because failure is not an option. We bake that $1,200 into every deal. We have to look at that.
We're going to get that. And so they'll be willing to discount their car further
than they ever would have thought initially at the beginning of the month,
just like they would at the end of the month, because they know by doing that,
that's what's going to allow them to be that volume dealer. It's a mentality.
My thought was you can't divide the month into thirds or halves and say,
I'm going to be more aggressive in the last third or the last half.
The idea, at least in my mind, was to be equally as aggressive at any point in time
in trying to make a deal. Yeah, I hear you loud and clear. And I thought,
again, really interesting insight to be able to share with our community from Josh here.
I recall staying till midnight closing out deals to hit our numbers back in 2002.
So things haven't changed in 23 years. I mean, Dad, do you have a memory
of staying super late at the end of the month to try and get a month closed?
Yeah, I have a memory of calling my general manager at like 11 o'clock on New Year's Eve.
Well, let them know that we just closed our last deal and I was going to be going home now.
You know, it is, yeah, here's the funniest part about it. For those of us
who were in the business or are currently in the business,
it is like a drug when you make a deal. Okay, you could be dead tired until a customer comes in
and threatens to buy a car. And then all of a sudden, it's like, you're on coke. You're ready
to go. There is no stopping you. Okay. And the adrenaline rush and how high you get
from making that car deal, even if it's 10 o'clock at night or 11 o'clock at night,
or I remember going home from the Nissan store during cash for clunkers and getting home at 1.30
in the morning. Okay, only back there again at 8 in the morning. You know, but I wasn't tired.
I was so pumped up because we were making car deals. It is, it is like,
I don't know if you could put a car on a spoon and put a lighter underneath that spoon and
I'm sorry, it's like mainline in this stuff. Be careful. Anyway, folks,
here's car market update. End of month is still the time to be thinking about that new car.
And obviously you heard the New Year's story. End of year is a good time as well. Okay, friendly
reminder folks, today's show, we had a sponsor, our friends over at Delete Me. So please do us
a favor, check out joindeleteme.com slash car edge. Again, we really legitimately use their
products and appreciate them. And then caredge.com say goodbye to dealership games forever.
Check out what we're doing back at caredge.com. We've got the products and services.
We're here to do our best to help you buy a car. And obviously,
track your vehicle value, things like that. It's all available back at caredge.com.
Let's call it a show for today, pop. So we'll be back tomorrow with more Car Edge Live. I'm sure
we'll have something fun to talk about then. And yeah, Dad, you definitely got people in the
chat a little bit fired up today. Thank you everyone for supporting my dad and a little
bit, a little bit wild on the show. Hey, you know, I've got 74 years of life experience.
You know, if I can't share that stuff with folks, what's the point? You know, it is,
it's what makes us who we are or all of our life experiences. And, you know, it's what I mean,
I never really did drugs, but I can only imagine that's what it felt like. I mean, it was,
man, there was, there was nothing like it. There was a great high.
I'm happy for you, Dad. We'll be back tomorrow, folks.
Sorry, it's no what your vehicle needs before it needs it. Visit your Chevrolet certified
service center and ask for a multipoint vehicle inspection. Plus with the winter ready service
event, get up to $210 and stackable rebates on batteries, brake pads and rotors, cabin
and engine air filters and wiper blades. And participating USGM dealers only max rebate derives
from collectible rebates on all eligible parts. Visit chevrolet.com slash service offers or see
dealer for full details. Offer ends 22826. Multi-point vehicle inspections vary by
participating dealer. Whether you're walking barefoot in the snow, escaping for a walk on
your lunch break or trekking halfway across the world for a lush view, it feels good when
we unplug and connect to our simpler side. If only our everyday nutrition were that simple.
It's time to simplify your wellness routine with kachava. Getting the nutrition we need from that
graveyard of supplements in our cupboards is often over complicated. Just two scoops of kachavas all
in one nutrition shake and you've got 25 grams of protein, six grams of fiber, greens, adaptogens
and so much more. Plus it actually tastes delicious. No fillers, no nonsense. Just the
good stuff your body craves. So instead of adding to your back stock of supplements that
over promise and under deliver, keep it simple with just two scoops that have the highest quality
ingredients. Simplify your nutrition at kachava.com and use code fitness. New customers get $20 off
in order of two bags or more now through January 31st. That's kachava kachava.com code fitness.
If you like the show, please take a moment to rate, review and subscribe. It really does
help the show to grow. Thank you for listening.
0:00
30:14