#423 - AI vs. Traditional Marketing: Where Car Dealers Should Be Investing Right Now
The Independent Dealer Podcast
#423 - AI vs. Traditional Marketing: Where Car Dealers Should Be Investing Right Now
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27:13
Term
reinsurance
Reinsurance is like insurance for insurance companies. It helps car dealers protect themselves from paying big costs if something goes wrong with a warranty or service contract.
Term
gap
Gap insurance helps pay off your car loan if your car gets totaled or stolen and you owe more money than the car is worth.
Term
warranties and service contracts
Warranties and service contracts are promises that help pay for fixing your car if something breaks after you buy it. Dealers sell these to help protect you from surprise repair costs.
Concept
dealership financial challenges
Car dealers sometimes have money problems because more people are losing their cars, cars cost more, loans cost more, and fewer people are buying. All these problems together make it hard for dealers to stay open.
Part
brake pads
Brake pads help your car stop when you press the brake pedal. They work by rubbing against a metal disc to slow the wheels down.
Term
paper thin rotors
Paper thin rotors mean the brake discs on a car have worn down a lot and are very thin. This can make stopping the car unsafe because the brakes might not work well or could break.
Concept
AI to diagnose cars
AI in car shops means using smart computers to help find out what's wrong with a car faster and better. It helps mechanics fix cars more quickly by giving them good clues.
Term
Blitz Pay
Blitz Pay is a company that helps car dealers accept credit card payments easily and at good prices.
Term
PTI
PTI means how much money someone pays each month compared to how much money they earn. It helps lenders decide if a person can afford to pay back a loan.
Concept
annual inventory audit
It's like checking all the cars a dealer has once a year to see how much they cost and how much it takes to fix them up, so they can make better decisions.
Term
recon
Recon means fixing up and cleaning used cars so they look and work well before selling them.
Company
Mannheim
Mannheim is a big company that helps car dealers buy used cars by auctioning them off.
Concept
private party
Private party means buying a car directly from another person, not from a dealer.
Concept
Buy Here Pay Here
Buy Here Pay Here means you buy a car from a dealer who also helps you pay for it, especially if you don’t have good credit. The dealer acts like the bank and lets you pay them directly.
LIVE
Your brand is timeless, but where do I put that time investment?
Do I chase a TikTok channel?
Do I chase an Instagram channel?
Do I chase a YouTube channel?
So as a dealer, you have to decide where am I going to invest my money, time, marketing
dollars, energy in, right?
Yeah, because you can't do it all.
You can't, maybe you shouldn't.
Some people might argue you should.
I know dealers who have doubled down on their TikTok channels and are supposedly selling
cars off of that.
And yeah, we've talked a few people.
Yeah, it's hard to know if that's going to turn into the internet of the future.
A lot of people probably looked at Facebook and Facebook marketing and Facebook ads as
a trendy bandwagon that they didn't want to jump on, so they never jumped on it.
Now were they successful regardless or did they miss the boat?
It is a timeless thing that we needed to do.
Hello and welcome to the independent dealer podcast brought to you by Luke and Jeff, Luke
and Jeff.
Luke and Jeff.
Yeah, we're pretty much the only ones that bring you this content weekly consistently,
Luke.
How many episodes are we on now?
423, I think this one will be.
Wow, that's insane.
Hopefully, you guys are still getting things out of this episode.
We look at our viewership both on iTunes and YouTube, but it continues to grow, so we
continue to do stuff.
So I guess if you don't want to listen, stop listening and we'll stop making it.
Please get me away from Jeff.
I'll stop through the way too much.
Yeah, eventually this has got ahead.
But while we still have an audience and we're enjoying this ride, Luke, what I want to talk
about this week is just some of the hot topics that I see because we do go through so many
of these in-depth conversations with vendors and we have topics and honestly, guys, everything
under the sun we've discussed and we've given you a very deep dive into Buy Here, Pay Here,
into retail, into hybrid models, into CAC, into cash deals, all this stuff we've gone
over in depth.
So go back into the history, look at our catalog of information and you're going to find some
timeless information.
Now, timeless stuff.
There is timeless principles in Buy Here, Pay Here and retail and used cars in general,
but there's also, I would say, maybe more timely information based on the world we live
in today and how things are being run.
I look back, I saw a post the other day from one of my dealer friends that was on Facebook
and I think it was some sort of a giveaway that he was running and it basically said,
like, like, share and comment on my post to enter this drawing and I was like, wow.
Yeah, go down.
There's me back.
We had no, not a long time now.
That throws me back to 2015 when it was all about like, sharing and commenting on your
Facebook page in order to get followers.
There's a silver.
I mean, how many times have you asked for a Facebook review?
Oh, no.
Not anymore.
I mean, we used to.
Yeah.
Is that still a thing?
No, it's been, it's been at least a decade since you cared about a Facebook review.
Now, Google reviews timeless.
Timeless.
To this point.
Right?
Yeah.
As long as that's been around, that is still something you need.
So hopefully those people that were putting money and time and effort into getting reviews,
you were getting Facebook reviews.
So this philosophy cuts, it cuts both ways, right, Luke?
Yes.
How many, did you put effort and time into, let's say, Vine?
Did you ever use Vine back in the day?
I don't even know what Vine is, buddy.
Okay.
Let's take us to some other ones.
What I'm digging at is there are timeless investments.
Yeah.
Featureship.
And there are trendy investments, just like in life, right?
And your brand, your brand is timeless, right?
Your brand is timeless, but where do I put that time investment?
Do I chase a TikTok channel?
Do I chase an Instagram channel?
Do I chase a YouTube channel?
Clubhouse.
Oh, there's a good one.
That's a great term.
Remember that?
Oh, my God.
That was awesome.
You told me.
Yeah, you told me and I was like, this is not going to last.
This is terrible.
I think they're so active.
I don't know.
Are you kidding me?
So, as a dealer, you have to decide where am I going to invest my money, time, marketing
dollars, energy in, right?
Yeah, because you can't do it all, because you can't do it all.
You can't, maybe you shouldn't.
Some people might argue you should.
I know dealers who have doubled down on their TikTok channels and are supposedly selling
cars off of that.
Yeah, we've talked a few people.
Yeah, it's hard to know if that's going to turn into the inner net of the future.
A lot of people probably looked at Facebook and Facebook marketing and Facebook ads as
a trendy bandwagon that they didn't want to jump on, so they never jumped on it.
Now were they successful regardless or did they miss the boat?
Is AI a timeless thing that we needed to do?
Yeah.
You know, I actually, I asked Chat the other day, the best place to buy a pre-owned car
in Columbia, South Carolina, and it said Goblin Motors.
Wow.
I don't know how that happened.
Wow.
No, I have no idea.
So, that was through Chat, John Gemini, so it wasn't a Google review situation.
It was probably a general web search.
Yeah.
You get the same results when you just type that into an incognito web browser?
I don't do that.
That would be interesting to see where you rank, how your Chat GPT ranking compares to
just a regular web browser, you know, Google search or Bing search or, you know, you think
that your Google search would match up with the Gemini AI search, that those would be
very similar.
Yeah, you would expect that.
I'm not.
But is that the search of the future?
And we talked about it a little bit in a previous episode that places like Chat are
now allowing advertising.
So do you want to learn the rules and jump through the hoops to get your dealership set
up on Chat GPT as an advertiser?
So when someone does ask Chat, hey, where do I go buy?
You're not just reliant on the organic, but you're actually going to be showing up as
a paid ad in Chat.
What's funny is I just did what you said with the incognito.
And it doesn't give you an answer.
It just gives you just gives you a bunch of ads.
It just it doesn't give you an organic results.
It does not.
It lists a bunch of people.
But it doesn't it doesn't say, hey, and maybe maybe it's that we're getting used to this
this Chat, this AI type of of thought process that Google might be leaving
our mind, you know what I mean?
Yeah.
So actually, at that point, I went to AI mode and at AI mode, it actually gives us top rated
dealers and GABA motors, definitely.
And of the one, two, three, four, five people listed, GABA motors is in there.
Oh, boy, yeah.
And that's an AI mode, AI mode, but not on a regular Google search mode, Google search
incognito.
And you know, it has the AI mode or the all.
OK.
I clicked the AI mode and that came off.
There you go.
I'm I'm a regular mode.
I'm ranked down in a lower I'm in the maps because I show up very good for my Google
listings, my Google reviews, my business listing shows up really good.
I have an ad campaign running, but apparently not strong enough for these other people.
And I show up third in AI mode, which is about the same as the map.
It looks like I don't know how these guys beat me out.
That's nonsense.
Um, so what it tells me is I need to go in and look at their websites and I need to
see what they're doing that is causing chat to have their dealerships rank above
mine when I type in some of these generic terms.
Um, what I'm trying to drive at, Luke, is where and how are you finding time and
energy to chase these things?
And how do you vet them to say, yes, my instincts tell me this is a place I should
put my energy into because of the long term payoff?
Yeah, I don't know.
It's OK.
You know, it's going, it's talking to other dealers, talking to other businesses,
you know, as Cardinals, we kind of sell ourselves into we're all Cardinals.
They're saying, we talk about cars, right?
I was talking to somebody the other day that is looking to invest in roofing
companies and then I have a cousin that owns a roofing company and I was talking
to him about it and he's like, essentially, we're just a marketing company.
There's three crews in Columbia, South Carolina, that in Richland and
Lexington County, South Carolina, that do all the routes.
And so no matter if you hire A, B, C roofing or X, Y, Z roofing, the same
set of guys are going to be putting the shingles on your house.
That's funny.
That's my boy, right?
It's so.
So it's just a marketing company.
And so the more you think about other businesses and how they relate, I think
the better you are to incorporate those type things into what we do as Cardinals,
not limit yourself to talking to other Cardinals, but to think outside the box
and outside of the echo chamber that we're in, like, oh, cars are too high,
so we shouldn't buy cars or, you know, oh, that's the slow ones.
We're not going to sell cars.
I think you just have to think differently.
And when you think differently, you get new ideas to market better or to
build your business differently or whatever it is.
There's businesses that have been around a long time that are car businesses.
So let's emulate kind of what they're doing.
Maybe they're on the front.
Maybe we aren't anymore.
I don't know.
But there's a way to do it that we aren't thinking about maybe.
Hey, sorry to break in real quick, but make sure you guys know about Buckeye.
Long time, awesome sponsor of the podcast and who I use for all my reinsurance products.
I can't thank them enough for teaching me so much about reinsurance over the years
and coming up with new products and new ways to get my portfolio secured.
My customers have options of warranties and service contracts, gap.
I think it's just been great, Jeff.
It's absolutely been a great way for me to build wealth, put away some money.
So if you are a buyer, pay here, lease here, pay here or retail dealer,
it works for all dealers.
You can set up a reinsurance company.
You can ensure your own stop giving money to those third party providers
that aren't going to cover your stuff.
Anyways, keep it in-house.
Call the guys and girls over at Buckeye risk services and get set up ASAP.
Yeah.
And that leads me to think of the ones that don't survive because we do see dealerships
that have kind of hit the skids over the last, you know, six to 12 months.
And we've documented this quite a bit with the perfect storm.
We feel like of raising, rising repos, rising cost of cars,
rising cost of the race, fences, rates going up, sales slowing down all at the same time,
you know, for whatever reason.
Are there things those guys and gals could have done to stay out of that situation?
It's yes.
The longer the shorter that answer is yes.
And it's how you run your business and how you engage in your business.
So many businesses are under capitalized and people don't know or over-expensed, right?
You could be under capitalized and over-expensed and you're going to die really quickly,
or you could be under capitalized with the right expenses and you don't want to involve
yourself enough and you just slowly bleed to death.
I think that the biggest reason people go out of business
is because they don't treat your business as a business.
Oh, really?
In that it's a hobby or in that it's a...
It's a second thought.
People get bored.
Hey, I'm living proof that these things happen, but I recognize quickly that
maybe it was time just to move out.
I mean, we were still very profitable, but it's like
sometimes you get bored and you take your off the ball.
And so you need somebody to bring you back to reality sometimes.
And it's easy to do, especially when you've been doing the same business for 20 years.
If you don't have good management, you don't have good processes and procedures in place,
it can go off the rails really quickly.
And if you haven't saved a lot of money and reinvested in your business,
you could be out of business real quicker.
Yeah. And I think what you said there is really crucial in that as dealers that are
listening that have been at it a really long time, there's a handful of you that
still have a deep passion for the business and enjoy getting up to work every day to
take one penny and turn it into two pennies by shining it up and putting a new set of
brake pads on it.
But some of us get a little bored with that hustle.
And so what I want to draw the connection to is to wrap it all the way around to our
first part of the conversation of those new, those new things in the industry that you
can chase that might pay off long term, might not, but what it does do in the near term is
it gives you a new passion for the business.
Yeah, it gives you a reason to be behind the desk every day and say, hey, I'm going to
learn AI this week and how to make my dealership better through AI integration,
whether it's automation, whether it's silly graphics or videos that I'm going to use
through social media, whether it's I'm going to build my own CRM, I'm going to just
vibe code a CRM and kick this expense out completely because I want to have my own
system that I own, I control, and it's going to cost me a fraction once I have it built.
It might take me six weeks to do it.
So those types of things I think are areas that some dealers that are maybe in that
you know, kind of like burnt out phase, let's say, I don't know, burnt out, maybe
just burned down, worn down, worn down on paper thin rotors, you know, you can see
both your both sides of them.
We've seen those just to put a little more tread on the life, you know, because
that's for me, what does it?
And I say all this because the variety in my side of my dealership and the other
things I have going on.
Now, the other things I have going on can be a distraction.
I get it.
I could chase the podcast.
I can chase, you know, whatever else and get myself distracted to take my
off the prize of the dealership.
But if I can find things to keep me interested inside the dealership, you
know, there is probably, you know, there's probably a way to be made there.
Yeah.
Now I'm keeping my eye on the ball, but maybe I'm just really, really focusing on,
you know, how I'm going to help my shop use AI to diagnose cars better.
Yeah.
What you don't want to do there when you were talking about timeless and
family type things is you don't want to go down a path where you, you're just,
you're spending all your time chasing things that, that aren't going to work.
Right.
You still have to run your business and you still have to be engaged.
These little, these little side, John, we'll call them, they're okay.
Don't get, don't get too far down a rabbit hole.
Yeah.
I would argue that it could be an 80, 20.
And I say 80 side quest, 20 core, because of this, because I think you
need to delegate the middle 50 to somebody else.
Okay.
I think you've got the middle 50 of the jobs that you're doing, the 50% of tasks
that you have on your daily play can be delegated to someone else at a cheaper
per dollar rate or just to free up your brain space.
And you spend more time on the innovative cutting edge.
What new product am I going to bring into the dealership?
What new system am I going to fix?
What new this am I going to do?
Am I going to get a set up on an Instagram, TikTok account and come up
with a marketing schedule for that?
And then 20% is core, core, core tasks that I will never give up.
Right.
Maybe for you, that's buying the parts.
Maybe for you, that's the accounting.
Maybe for you, that's, you know, picking up cigarette butts because it's therapeutic.
I don't know what it is, but I would say that'd be the mix.
Maybe that's wrong or too strong.
You need to find it, but it goes back to previous episodes we talked about where
list out everything you do in a week, in a month, put everything on a spreadsheet
and then look at the core items that are only yours, that give you excitement
and passion and find a way to delegate all the rest, either your existing employees
or if you need to hire someone, it's probably worth the money.
Yeah.
And just remember, AI agents, you could build them to take a lot of the
aggravation off, you know, off yourself.
Yeah, some of your stuff, you know, we talked about my Google review of AI
agent that automatically responds to the Google reviews.
Now I've got one I set up that takes all my happy customer photos.
So when we take the picture at the end, my salesman now just upload
that photo to a Google drive, it grabs the photo, writes a little caption
and then posts it to my Facebook page, a little caption with a happy customer
photo.
So I've automated that Facebook posting process.
I've done that also with the Google reviews.
It won't let me post to Google business.
So that is a hurdle I'm trying to figure out a workaround for because.
I wonder why that is.
Yeah, it's really weird.
You can take it from Google business and you can post a review, but you
can't actually post a photo through AI agents or through zappy or integration.
Google business doesn't allow you to automatically integrate a photo.
Anyways, so, so we're doing those things to simplify, but there's a million
other areas, there's so many other areas.
If I could get the data from my vendor, or if I could find a way to get the
data out in an easy fashion and load it into AI and then kick out some data
that's now actionable, not just data for data sake, you know, sometimes it's
like junk in, junk out, or you get stuff out and you're like, okay, cool,
what am I supposed to do with this?
Or, wow, I got all this data.
Now that just created a shit ton more work for me.
You know, like, I don't want to do that, but I want it to be actionable data.
Yeah.
It's who are we?
I was talking to somebody talking about having a chief data officer, right?
Yeah.
And, and I think AI is your chief data officer for, for people like us.
And you should build a GPT that does that for you and points out the data
that some blind spot to you.
I was reviewing some repo files of the day and, and I had a blind spot,
total blind spot of it.
And I said, Hey, I see this.
What else am I missing?
And all of a sudden it goes, these payments are really hot.
And I go, Oh, okay.
Well, that makes sense.
But it's, it took somebody else looking at the data.
You know, anyway.
All right, Jeff, sorry to break in, but we got to talk about putting
money in the bank and how do we do that?
I do it through Blitz pay.
The guys and girls at Blitz pay are great, amazing, attentive on top of it.
I have had little to no issues since I switched over from that other company.
For sure.
They, to me, they're probably the best services when it comes to answering
phone calls and taking care of things that I've ever seen a vendor.
And the back in automation, I've actually been working with that for
a couple of dealers here lately and going in and changing up these automated
texts that go out super simple, they work, uh, the customers click and pay.
It's fantastic.
And also they got this AI thing, Jeff, pretty cool.
Yeah, I'm stoked.
They got the audio AI, the phone caller, and hopefully very soon the texting
version of that.
So it'll help my collector be way more efficient in the future.
Um, I'm super stoked to see the AI get integrated into the collections
process and Blitz pay is on the cutting edge of it.
So if you're taking credit cards at all, whether you're by here, pay
here, lease here, pay here, even retail dealers can take advantage of this
and use Blitz pay for their credit card processing, incredibly competitive
rates, super easy interface, call the team over at Blitz pay and move
your credit card processing today.
Your PTI was too high for those, those repos that came back.
It picked out that common thread like, Hey, these, these payment incomes
were maybe too high and that could have been the cause of repo.
And it really wasn't the PTI was it?
I'm going to go down a rabbit hole real quick.
PTI can line up.
Okay.
Because your customer makes, let's just say, let's just say your customer
makes a net of $4,000 a month, Jeff, and a 20% PTI is 800 bucks, right?
Yeah.
Who in the buyer pay your space needs $800 a month.
Yeah.
Your body, right?
And so it's just those little things that for some reason, if you look at
the PTI, it says it's fine.
But then when you start looking at the actual payments, you go, Oh,
the PTO, Oh, the PTO payments to other options.
And then the customer says, wait a minute, I'm paying $800 for this.
100% I just saw them advertise a hum day.
There are 600 a month.
Or, or they actually advertise it for two, nine, nine a month, which
they'll never get that.
But let's just say they get four, nine, nine a month.
Yeah.
And again, the nights are in your car.
So anyway, AI is your friend.
AI is your, your chief data officer.
Um, and that is really where people need to be spending time in the data.
It's my opinion.
Yeah.
I like doing my annual inventory audit where I upload all my vehicles and all
the data of like what I paid for them and where I bought them from and what I
paid for recon.
And then I asked AI to sort that out.
And it tells me, you know, on average, cars you bought from
Mannheim cost you X amount of recon.
And on average, cars you bought from private party cost you this.
And here are the highest making model for your recon costs, you know.
And, and so you kind of look at that and you think, Oh man, I really thought
that these cars were great, but they're really not the best source for me.
So I'm paying over, plus I'm paying more.
And then I'm paying more for recon.
Like I got to avoid that auction all together.
They're, they're just the cleaners.
Yeah.
Well, just thinking you had multiple buyers.
And yeah, I paired against.
Yeah.
Oh, I thought this power is doing a really good job.
He's actually costing me a lot of money.
Yeah.
And what's so great is you get that in the matter of five seconds
instead of 50 minutes doing it yourself.
Yeah.
Very, very interesting.
Yeah.
Um, cool.
Luke, anything else in closing this week that you're excited about?
Um, I'm excited that you and I are going to be going to Buy Your Pay Here United soon.
Yeah, we absolutely need to make sure everyone, guys, if you are not signed up
for Buy Your Pay Here United, you need to be right now.
It's going to be in Las Vegas again.
It's at the Caesars.
Am I right?
At the Caesars.
And what's cool?
It's our friend, Steve Levine at Compliance Aliche.
And it's our friend, Tim Lawrence from LHPH Capital.
And it's Buy Your Pay Here United.
Like they mix it all together.
I like that.
It's easier to get everything done and there'll be so much to learn.
So many good people there.
I can't wait, bro.
Yeah.
And I've been on the, I'm on the board or whatever they call it, the
dealer advisory board for the education sessions.
And this is going to be top notch Buy Your Pay Here education.
So every single session has been meticulously crafted.
The presenters have been handpicked.
The garage sessions are going to be great because they're going to be hands
on workshops where you're going to get AI and accounting and selling the car,
walk around and GPS install advice.
And I'm physically taking a car down there so that they can install a GPS
and they can do a walk around on it and poke holes in it.
So we're not going to cut this one in half.
Yeah.
Not like last year.
So it's going to be, it's going to be great, man.
So, so definitely sign up.
When is this going down?
It's like a 19th, April 19th through the 21st.
Yep.
In Las Vegas.
So, and then there's a myriad of other conventions going on through the summertime.
So start getting those on your calendar.
Obviously, if you're near Utah or in Utah, there's Utah's statewide convention,
April 13th, it looks like Florida is doing a great combined one as well.
That, that should be really exciting.
Yeah.
That's it.
It's Florida.
Alabama, without the one in April was like Florida and, and automotive
remarking is doing one and then Alabama, Florida, Mississippi, Tennessee,
I think you're doing one in the other time.
Yeah.
Miramar, Florida, like on the case, it's going to be good.
Yeah.
And then we've got, of course, buy here, pay here, dealer forum going on at in Denver.
That's NIADA.
NIADA.
So a lot of great education coming up.
Yeah.
I think it's going to be a good spring and summer.
There's a collections boot camp happening.
I mean, in Atlanta, May 12th, May 14th, May 14th, May 14th, that I'm putting on.
Let's pay and it Iran are going to be there.
And yeah, it's going to be, it's going to be fun.
It'll be tolerable.
It'll be tolerable.
All right.
Lou, good talking to you.
Catch up with you next week.
All right, buddy.
About this episode
Luke and Jeff dive into the evolving marketing landscape for car dealers, debating where to invest time and money amidst trends like TikTok, AI, and traditional platforms. They explore how AI tools can optimize dealership operations, from data analysis to automating customer engagement, while emphasizing the importance of balancing innovation with core business tasks. The hosts also discuss dealer burnout, the value of delegation, and upcoming industry events focused on education and networking. Practical insights on leveraging AI as a 'chief data officer' and integrating new tech to stay competitive round out the conversation.
Original notes
In this episode of the Independent Dealer Podcast, Jeff Watson and Luke Godwin tackle one of the biggest questions in dealership marketing right now — are you betting on the right platforms? From TikTok to ChatGPT ads to AI automation, they break down how to tell the difference between a timeless investment and a trendy trap.What You'll Learn:Timeless vs. trendy marketing — how to know the differenceWhether AI search is replacing Google for car buyersHow to automate social media posting and Google reviews with AI agentsWhy your data is useless if it's not actionableIf you're a dealer trying to figure out where to put your marketing dollars in 2026, this one's for you.Support the businesses that support the podcast:Buckeye Risk Services - Reinsurance and wealth strategies for independent dealers.https://theindependentdealer.com/buckeyeBlytzPay - BHPH payment processing with fast funding and text-to-pay.https://theindependentdealer.com/blytzpayIturan GPS - Asset protection and customer management for BHPH and retail dealers.https://theindependentdealer.com/ituranFollow & Connect:Website: www.theindependentdealer.comFacebook Group: @independentautogroupLuke Godwin: @lukegodwinJeff Watson: /sendtojeffwLike, subscribe, and share this with a dealer who needs to hear it.
The Independent Dealer Podcast
Jeff Watson & Luke Godwin
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27:13