Scout is the new off-road-focused brand Volkswagen is associated with in this discussion. The host frames it as a brand launch that hasn’t put a single car on the ground yet, and argues that the company’s strategy and timing are part of why it’s facing shutdown and legal pressure.
The Volkswagen ID. Buzz is a van that uses electricity instead of gas. It’s made to carry people or cargo, and it’s part of Volkswagen’s electric-vehicle lineup. It comes up in discussions about how companies plan and spend money on different electric models.
“Lobby congress” refers to trying to influence lawmakers through political advocacy. The host uses it to contrast two approaches—spending money on political influence versus spending it on building a new brand—arguing that Volkswagen chose the latter.
NAD is referenced as a party suing Volkswagen “up to Wazoo,” implying a large number of legal actions or aggressive litigation. The segment doesn’t define what NAD stands for, but it’s clearly used as a legal pressure point in the host’s argument.
A “calculated risk” means taking a gamble on a plan because you think it will work out. The host is saying Volkswagen decided to try launching Scout even though there were big risks involved.
The Ford F-150 Lightning is a pickup truck that runs on electricity instead of gasoline. Because it’s a newer, high-demand type of vehicle, some dealers may try to sell it for more than the listed price. That’s why it’s brought up when talking about negotiating the final purchase cost.
Dealer markup is when the dealer charges more than the listed price. The host suggests it happens when cars are scarce and dealers think people will pay anyway.
The phrase means customers send a message with their buying decisions. If people don’t want to pay a certain price, they can choose not to buy, and that pressure can push prices or practices to change.
Here “payments” means what you pay each month for the car, usually through a loan or lease. The host is saying that monthly payment pressure doesn’t automatically make car sales drop.
“Franchise laws” are rules that control how car brands are allowed to sell cars through local dealerships. They often limit the brand from selling directly to customers, which affects how much dealers can negotiate and how prices are set.
“Direct to consumer” means buying a car straight from the manufacturer instead of going through a dealer. The host’s point is that even then, the car still has to be shipped and delivered, which creates real costs.
The Toyota RAV4 is a popular SUV. The host is using it as an example to explain that even if you buy online, the car still has to be delivered through the supply chain—often starting with a dealer.
A destination charge is the cost of getting the car from the factory to the place it’s sold. The host is arguing that if you skip the dealer and ship to one customer directly, it usually doesn’t reduce shipping cost.
A chip shortage means there weren’t enough computer chips for cars. If manufacturers can’t make as many cars, the prices can rise because supply is limited.
The Tesla Model Y is an electric SUV/crossover. The host is using it as an example that car prices can go up when parts are scarce, even for the same model.
Personalized pricing means the price you see could be different from someone else’s based on what the company thinks you’ll pay. The host compares it to how apps give different coupons to different people.
The Tucson is a Hyundai SUV that people often compare when shopping for a crossover. The host is using it to illustrate that shoppers look at multiple models, and pricing could be targeted based on that behavior.
Here, “data” means the information an app or company has about you. The host is saying that different people can get different offers because the system knows different things about them.
A loyalty app is an app that gives you rewards or discounts for using a service. The host is saying companies discount people who are more likely to keep using it.
“Dealership’s profit” means how much money the car dealer makes from the sale. If the dealer’s profit is small, they can’t usually discount the car much more without losing money.
“Below cost” means the dealer would be selling the car for less than it cost them. Dealers usually won’t do that because they’d lose money on the deal.
The Hyundai Elantra is a regular, everyday car meant for commuting and errands. It’s usually sold in different versions, and the price can change based on promotions and dealer pricing. That’s why it can be used as an example when people talk about negotiating the final cost.
The Hyundai Sonata is a common, everyday family sedan. The hosts mention it to show that two people can pay different prices for the same model at a dealership.
A one-price store is a dealership where the car has one set price for everyone. The idea is that you don’t haggle, so the deal feels more straightforward.
LIVE
You said somebody has to fight for your two grand off.
So why wouldn't they pay $1,000 to not have to deal with you?
What a dealership's profit is on a car.
It does not matter to when you consume.
If you want to take money out of my pocket,
out of my kid's mouth, then yeah, we're going to dance.
I'm going to defend my money because that's my money.
The idea that somebody's going to just pay $2,000 more
for you to put food on your table is absurd.
We talk about the free market.
We talk about America.
We talk about freedom and like dealerships
are the type of world that says,
I know what's best for you, Mr. Customer.
You've got to pay my above sticker outdated model
that nobody cares about.
But if you didn't listen to my model,
you'd be paying more.
Trust me, I know better.
Like, doesn't that sound like just some like,
I was at the free market at all.
Just trust me.
I know for a fact you would pay more.
Here's the beautiful thing about it.
I don't agree that we should abolish dealerships.
Carpal, then this should be really simple.
If we agree that cars are more expensive,
if it goes direct to consumer,
why do we need franchise laws?
Get rid of franchise laws.
And as you said, manufacturers will be more expensive.
So dealerships model will be
that they're cheaper than the manufacturer.
Why would you buy a car from Ford
when you go to a dealership and save thousands of dollars?
Oh my gosh.
If OEMs wanted to sell direct to consumer,
they could have it happen, but they don't.
Please tell me why Scout can't sell cars in America today
and why they're being sued up the wazoo.
Can you tell me why Ford has got sued in 2021
when they tried to sell EVs electric?
Can you tell me why Mercedes-Benz
just got shut down for trying to sell cars?
Can you tell me why Sony is not allowed to sell cars
because they have an affiliation with Honda
and it was shut down by NADA?
Don't give me BS that manufacturers could do anything they could.
Why did Tesla have to spend billions of dollars
just to have the right,
and they still can't sell a car in Texas?
The biggest plant in America for an auto manufacturer,
you cannot buy that car in Texas.
They have to ship the car across the state line,
sell you the car and ship it back.
Don't try to give me BS.
They could do it if they want.
Tesla can't even do.
I swear, why are you so disingenuous?
DM me on Instagram, send me, I'll give you the number.
Oh, let's just hear your actual opinion because this is absurd.
But again, Scout has spent $3 billion.
Why would Volkswagen spend $3 billion on a brand
that has not been built yet for money
and they can't sell the car?
I don't know if I trust this random person.
How do I know if I believe you at all?
Isn't this ice?
Yeah, I'm streaming right now, Amy.
Send me your phone number.
All right, here.
How do I know if I trust this person that works at a dealership?
And I like fact check him.
Let me see what you fact check him.
He does sell cars.
He sells cars at Hyundai.
Okay, I'll let him call.
I gave him a number.
He should call.
This is Tommy.
Hey, Tommy, it's s***, aka Kevin.
How's it going?
Okay, doing well, man.
Okay, so please explain to me
how manufacturers could sell cars, direct their consumers,
but they choose not to even though they've been sued up the wasps.
Because it's simple, man.
They're money, you know?
So the automakers, they're rich enough, man.
They're not crying for, they make enough money.
If they wanted a lobby congressman, if they wanted to do it,
if GM, if they wanted to, you know,
put some money into some politicians pocket,
they could totally do that, man.
But even so, even if they wanted to, even if they wanted to,
it's no way in shape or form going to be cheaper for the consumer.
There's no way possible.
Because I need you to answer me this question.
Like, if let the consumer tomorrow, how does it happen?
How does the operation happen?
Yeah, I mean, there's two different ways to do it.
But let's first talk about the,
because I want to debunk this idea that they could.
Why did Volkswagen spend $2 billion on Scout?
If they could just spend that money to lobby congress,
like if they spent $2 billion,
and they haven't put a single car on the ground yet,
and now they're being sued by NAD up to Wazoo,
they might not be able to sell a car.
This idea that they can,
they put $2 billion into this project,
and they're about to get shut down.
So the idea is money,
and they knew they couldn't do it in the first place,
and they knew they could just lobby.
Why didn't they spend some of that money to lobby congress?
Well, it was a calculated risk for them, simple as that.
You know, they figured they could launch a brand,
they can skirt by their dealers.
So the thing is, and I think what needs to be brought up
in this situation, so I don't sell Volkswagen, right?
You know, I sell Hyundai,
but like for the fact of the matter is,
Volkswagen, they don't have those products
that what Scout is actually doing.
And that's what the Volkswagen dealers are upset about.
That isn't a very hot and profitable segment
of the auto industry.
That's all it is, man.
So Volkswagen, they're letting their dealers out to drive.
When as a dealer, I mean, you know this, man,
if you were still in cars, and you know,
first of all, like I think you'd have a really great business.
I'm not mad at it.
You know, so I just want to be clear,
like I think you really do a really good job,
you know, with a hustle and everything like that.
But you know, the dealers,
like the manufacturers do want,
they have high expectations for their dealers,
regardless of what you may say,
regardless of what you may think, man.
You know, they definitely have high expectations for them.
You know, and if a dealer's gonna invest millions of dollars
in a facility and training and staff and all that
and deliver the car and they want product,
but they're gonna give a good product to another brand
that's not in this market.
They want to kind of avoid them.
They're gonna be a little salty about it
because how come they don't,
those cars don't go to their brand?
How come they don't go to the dealership?
Let's go into an example that doesn't,
then they'll just point this,
2021 Ford tries to sell their EVs
because dealerships are charging $10,000
above sticker on a lightning.
So they commit to actually selling cars
direct to consumer to give consumers options.
They can buy from dealerships the Ford Lightning
or they can buy it directly from the dealership.
No different models to the same Ford Lightning.
They got sued of the Wazoo
and had to shut down the program
because N88 didn't allow it.
Same product, same idea.
Okay, so here's the thing, MSRP, right?
What's the F stand for Tommy suggested?
That wording allows the dealer to sell above or below.
I mean, you know this.
I mean, you do this every day.
So if somebody's gonna sell it for $10,000
over because there's no supply or whatever,
because they think that they can get it,
more power to them.
But don't say that consumers
are forced to buy it like that.
There's a thousand Ford dealerships in America.
They can find that truck.
Maybe they hire you to see $4,000 maybe,
but they don't have to buy that truck at $10,000.
Consumers at the end of the day,
they should be voting with their wallet.
And car sales isn't slowing down
regardless of price going up,
payments going up.
It's just not going down, man.
You know, no matter what.
Why not allow consumers to vote with their wallet
when it comes down to the dealership model as a whole?
Again, if you believe that manufacturers,
you could do all of this
and this idea that they're getting sued like crazy
every single time is just for facade.
Why not just get rid of franchise laws?
Why is NADA doing everything they can
to lobby Congress to keep franchise laws?
If this situation was, again,
if consumers were able to vote with their wallet,
dealerships would not exist.
Okay, so here's the thing.
So number one, protectionism, right?
I mean, it's tribal.
I mean, I'm going to call up beta space dealers.
You know, if you're a dealer owner,
if you were selling cars for 10, 20 years
and you had to invest, you know,
$20 million in a new dealership
because the manufacturer said you had to
and then the manufacturer,
they actually want to actually take your lunch.
You know, they want to actually take your product away from you.
You'd be a little upset about it.
That's all.
And I'm not asking everybody to feel bad for dealers.
That's not what I'm saying.
But I'll give an example.
So Amazon, right?
You can buy cars on amazon.com, right?
I had somebody do that.
It was a worst deal.
It was a worst deal for the customer.
They didn't negotiate.
They paid lists.
And now they did it from the comfort of their couch.
So maybe that was the experience.
Maybe that's what they paid for.
But, you know, I think people really take things personal
when it comes to buying cars.
And it shouldn't, man.
What people do when they come and buy a car,
they want to negotiate.
I had a guy negotiate $4 grand off on a Tucson.
And guess what?
We left as friends.
It was a battle, I guess, because, you know,
he was stuck in his ways.
I wanted to sell it for what I wanted to sell it for.
But we got a deal.
We sold the car.
Everybody was happy.
I mean, people, if they don't want to negotiate,
they don't have to negotiate.
They can pay whatever or they can hire you.
But that's just kind of the name of the game, man.
Like, I mean, we don't negotiate anything else
in life, really, other than like a house or a car.
You know, you don't negotiate insurance.
You don't negotiate a movie ticket.
But people, if they want to negotiate,
they can negotiate.
And we can say no.
We can say yes, but whatever.
But I think people just kind of personal.
Nobody's trying to get over on them.
As far as I've learned, two different points, which is,
it's personal because it's a lot of money.
It's the second biggest purchase people make in their life.
People get emotional and people take it personal
when it comes down to homes, too.
So one of the reasons why, when you buy a house, when you do,
you don't normally sit in the same room
as the people that are actually selling or buying the house.
You don't have conversations.
You have realtors because people take things personally
when it comes down to those negotiations.
They purchase as they do.
When it comes down to negotiation,
the reason why people negotiate,
because this is the only business,
one of the only business models in America,
depending on your education level,
you just mentioned the person
that spent $4,000 on a product.
They got $4,000 off.
If that person was not educated and walked in
and paid less, they would have paid $4,000 more.
The same car, same product.
The only difference was his education level.
That is why people take it personally.
It's why people don't like car dealerships.
It's on a level of discrimination.
We're at a point where the only thing
that's differencing of those two people
is their education level to know,
if I ask for four grand off, I can get four grand off.
But if I don't ask, I won't get it.
That's the thing.
You're not entitled for $4,000 off.
Just because somebody got $4,000 off,
you are not entitled to it.
That person, they did the work to get it.
If somebody sees, has their neighbor with a new car,
and they start asking about it,
and the guy, people exaggerate all the time.
Why got five grand off on this car?
Well, okay, that's maybe a half truth or a little bit.
But what it is, people exaggerate all the time.
And they might not know it was an end of the month deal.
It was a demo.
It was a loaner.
So when they go to win, and when they want to buy a car,
and when they don't get the same deal,
or they have to fight for the same deal,
that's why people think dealers are gammy.
But it's a context of the situation.
Now, you and I both know the end of the month.
Great deals happen at the end of the month.
We can admit that.
Why?
Because there's numbers that have to be hit.
You'll take some losses, obviously,
to make up for the whole game, to have a goal for the month, man.
To take it personal, we're talking about money,
we're talking about cars.
But to take it personal because somebody
got a better deal than you,
I just think that's just human nature, man.
Like, everybody wants the best deal, and that's fine.
But if you want a best deal, you're not just entitled
to the lowest price.
Because that deal was like a $2,000 loser on the front end,
which I know your people, they're not going to believe it.
They don't really care.
You're not going to care either,
which I'm not saying you ask me to care.
Do you think a dealer will literally lose $2,000 every single deal?
If they sell 200 cars a month, will they lose $2,000 on a deal to do it?
Do you think they'll do that?
Is that sustainable?
Again, I'm not running a dealership.
Why a dealership model is willing to sell a car for $2,000?
There's no only reason why.
But this is really simple.
I'm just going to break this down for you
the way that you can understand it.
If a car is $25,000 and you're willing to sell the car for $21,000,
the market price of that car is $21,000.
There's a reason why almost every business
you're in and everything in the world says,
don't ever discount anything.
Because the second you discount something,
the discounted price is now what you as you have a business
has said your product is worth.
If you discount a car to $21,000,
it was willing to sell it to anybody for $21,000.
You are agreeing that your product is worth $21,000, not $25,000.
That is the difference.
And that is why dealerships feel that scamminess.
Like right now, I charge $1,000.
I have never once given a discount.
My service is $1,000 no matter what.
The only thing that I've ever done for people
is I've given it out for free.
Because my business model is my service is worth $1,000.
But I've given out to free for people?
Yeah, sure.
We've given it out to free for people for a few times a month
just as like we try to help people out.
But like this idea that with the second you start discounting
your price, you are admitting your product is worth
the discounted price.
It is not worth the inflated price.
So what it sounds like you're saying is like,
and correct me if I'm wrong, the MSRP,
whatever the MSRP is of the car that the manufacturer set,
that should be the price that everybody pays regardless, right?
Incorrect.
Because the MSRP is set by a manufacturer
and an idea that they hope that a car sells at that price
because that pays for the dealership model to exist.
The market price, which should be what a price should be
on a car, whatever that is.
If I go to Best Buy, for example,
if Samsung wants to sell their TV for $4,500
and nobody buys it, guess what?
Samsung lowers that price to $3,500
and now everybody's paying $3,500.
But everybody pays the same price for that same product.
But that is a market price set by demand,
not what an artificially inflated price
that a manufacturer or a dealership has agreed upon.
And if it sells at that price, that's great,
but the market is going to determine the price, not the dealer.
So if they went direct to consumer, right?
So there's an MSRP.
And so will the manufacturer, in your world, right?
Let's say they went direct to consumer.
Let's say both exist.
Because I heard you say that both need to exist.
You're not a favorite of one or the other.
So I heard you say that before.
I actually agree with you, Tommy.
I do think that people,
if they want to go direct to the consumer,
if they want to buy online, they should be able to buy online.
But it's no way impossible.
Can it be or logistically, will it be cheaper for the customer?
Which kind of defeats the purpose if it's just about price.
Why wouldn't dealerships or why wouldn't manufacturers
want to stake that market share?
I'm going to explain to you very, very simply.
Number one, the manufacturers currently do not have anything
in their operations to support direct to consumer.
So that is a cost.
Number two, how will the car get distributed to the customer?
So if you want to go on Toyota's website,
you want to buy a RAV4, okay?
So you can click the buy.
So who gets, and Toyota, they're not struggling
to build RAV4s right now.
So who gets that car first?
Is it the dealer or the customer?
And number three, okay, how are we going to get it to the customer?
So there's a destination charge, right?
Which we can debate about that.
But that destination charge is calculated to shift the car
from the manufacturing plant to the dealership,
because guess what?
The dealership gets a ton of cars all the time.
If you're delivering this one car, one car to one person,
how is it going to be cheaper?
It cannot be cheaper, logistically,
to send that car to one customer.
It absolutely cannot.
And then number four, and I think that people really
don't understand this, is why would you,
like the manufacturer, who's to say that they would charge
everybody the same price?
I mean Tesla didn't.
During the chip shortage, they've raised their prices.
They just raised their prices of the Model Y.
And who's to say that they would charge the same price for you?
If they knew, if they have so much data now,
if they knew you were shopping at RAV4s,
you were shopping for them, how do you know what makes them not,
what makes you believe that they wouldn't suddenly raise
the price for you?
Because guess what the data says?
You are willing to pay for this when somebody else,
who maybe they're more cross shopping with a CRD or CS5 or Tucson,
they might offer them a lower price that they see on the internet.
I mean, it's simple.
The McDonald's app does the same thing right now, Tommy.
People get different coupons no matter what you're doing.
If you're doing something different, you see a different offer.
So that's what I'm saying.
There's no way that you, like if you believe these OEMs would
actually have the consumer's best interest in heart by going direct to
consumer.
That is a lie.
That's false and you're lying to your people and they need to know this
because there's no way in hell that it'll be cheaper.
Would it be more convenient?
Maybe?
Sure.
If they live at your house, but it's not going to be cheaper.
And it might even be a better case because they've never done it before.
And if they drop it off to the dealers as a distribution point,
the dealers aren't going to do it for free.
It's their property.
They don't have to take that car.
So they think that the main value is going to pay them a stipend.
So it's not going to be cheaper for the customer, man.
That's all I'm saying.
It's not going to be cheaper and it might not be better.
So I agree with you.
We need to fix this.
We need to fix the process.
But you know, we got to just, there's more dialogue involved with that, man.
That's all I'm saying.
Yeah.
So a few different things.
First off, I believe you put smart people in a room and you try to fix a problem.
You're going to be able to fix a problem.
One of the things that Delayward is able to do is help fix this problem.
So the idea that you've brought up a lot of problems that you're absolutely
right that a direct to consumer would have to figure out, but that isn't the question
that we're having.
The idea behind it is if we allow a secondary model, and let's just say the manufacturer is
able to solve that, let's just say the manufacturer, how much does the manufacturer have to pay a
service center?
Because realistically, service centers would never go away.
That makes sense for them to have it.
How much would they have to pay a service center for them to be able to drop the car
off and pick it up at a Chevy dealer as a direct to consumer, as they're paying for
all the franchise laws when it comes down to everything on the service?
How much does that cost?
If it doesn't, it makes sense.
If it is more expensive, and why does it matter if the consumer has choice?
My general rule of thumb, which is not my general rule of thumb, it's just economy 101,
is if there is multiple different avenues of competition, price goes down.
That is the tale of time.
And right now, if I put the manufacturer model and I put a lot of smart people in the room and
say, hey, our goal is to sell as many cars as possible and beat the dealership model,
you put, for example, if Toyota was to hire me and we could do direct to consumer,
I could solve some of these problems.
I don't want to get hired by Toyota.
There's smart people like me that can solve these problems.
Options are extremely important when it comes down to the price of the vehicle.
The idea that prices went up and down answering your thing about Tesla,
prices are allowed to fluctuate with the market.
The difference is, is two people did not walk in and this is exactly,
you nailed it right on the head because Tesla did raise their price.
When the market supply went low, they raised their price.
What they did not do is not look at somebody who was buying a RAV4 and realize that person is
an easier target than somebody who was educated and said, I'm going to charge more money to
this person than that person on the same day.
That cannot happen when you're buying a car and 10 clicks on your phone.
It just can't.
Again, this is how, that's how direct to consumer work.
10 clicks on your phone.
You can't go through this entire situation and that's the problem with your ships.
But okay, but listen, I just proved your point though.
I proved what you said wrong.
You had the McDonald's app on your phone and your fiance had the McDonald's app on our phone.
Why maybe why do you see two different offers of coupons for the same service?
Why? Because of data.
They know who's to say that they wouldn't actually do that.
Who's to say that they wouldn't actually do that, Tommy?
Again, we are comparing a $2 burger to a $50,000 car and that's the argument you want to go.
But if you want to use the argument is that, you know, the reason why you get a discount
when you download a loyalty app is you're statistically more likely to keep using the
product.
Now, the reason why this doesn't work in the automotive world is that it's not a reoccurring
model.
Like when I go to McDonald's, I could go to McDonald's seven days a week in order
and really 14 days, 21 days a week.
I cannot buy 21 cars in a week.
So the idea that they would incentivize people to download their app in order to do that.
Sure, there could be a slight incentive, but the idea behind it is not be anything absurd,
crazy, or anything malicious to the point of where dealers worth thousands of dollars apart.
But like that's the reason why people want you to download the app is that it's because
it's a reoccurring business model.
All right, so how come so many factories offer conquest or loyalty incentives then?
Why do they have those then?
If we don't like having McDonald's on the different menu cheeseburger, so why does
Honda Acura, why do they have conquest or loyalty?
It's super easy for me to know on the website.
If I go to the dealership website, if I go to Tesla's website or Ford's website,
I can see what rebates I qualify for in four seconds.
As we saw today, I cannot see the price of a vehicle at the Cadillac dealership without calling
them and going through their process.
Well, that's great, but you don't have to get it from that Cadillac dealership though.
Like the idea is really simple.
I want to know I qualify for conquest.
No, one second, because you're moving the goalpost.
You're saying conquest.
Anybody can go on and figure out exactly what qualifies for conquest if you just go online
and look for online.
I cannot do the same thing with the dealership model.
I cannot just go online and see what price I qualify for because I have a Ford.
That is not it.
I have to call the dealership, go through, and then I have to negotiate the price.
That's not because I qualify for that price.
That's because I was negotiated and willing to fight for that price.
With conquest, I have to have a 2013 BMW or newer to get that vehicle.
The terms are laid out.
It's very simple as black and white as possible.
And dealerships want to do that, they certainly can.
You want to start offering coupons that are on the website that are super easy?
That's a better model than what they're doing today.
All right.
Listen, I definitely appreciate it.
You're reaching out to me because I really wanted to talk to you more about it.
Tommy, like I said, I don't hate you.
I actually really like, I watch yourself all the time, guys, and you're a funny guy.
You know, keep going all day and maybe we'll reach out again.
You know what I mean?
But like, you know, because I think you've got some good points.
All right.
But the model doesn't need to change.
Sure, some parts need to change about it.
You know, 100%.
Like I'm not disagreeing.
I think there's a lot of scummy crappy dealerships out there that make the experience bad.
But you know what?
Honestly, I think I've worked for a good one.
And I got a lot of people that call me and they want to deal with me again.
I've never sold 1500 cars in nine years at this one dealer.
So I don't know if that's a lot or a little.
I don't know.
But you know what?
If you're going to do it for a while, you kind of know what you're doing.
And you don't do it.
You don't stay in there for a long time by scammers people.
You know, and I think that all I'm just trying to get you is like, you know,
there's some scammers out there, not all of them though.
You know what I mean?
I don't use the word scammer.
I don't use that, but I will be clear.
And you've said it at your dealership as well.
Depending on your education level, you get a better or worse deal.
You've admitted that you said you negotiate,
which means that if I'm less educated, I get a worse deal at your dealership.
That doesn't make you a scam artist.
I didn't say that makes you a scam artist,
but that that is why people don't trust dealerships.
I think that people aren't entitled to $2,000 loss on a car on every deal.
I'm not doing that.
Like, so I know you said, you don't care if the dealer makes a profit.
I know you don't care.
And I know customers don't care.
Nor should they care.
But like, I'm not going to say to you, I'm not going to take $2,000.
So why did I take that deal?
Because he's up the dealer up the street 30 minutes before you.
You just, you just know the education because he did work and did research
and realized that if he got the dealer up the street, no, one second,
let me finish.
I want to make sure we're on the same page because it's okay that this is what your
dealership does, but I want to make sure you wonder where we're on the same page.
If I walk in your dealership and say, yes, I'll buy the car, sign the dotted line,
I will pay more money.
And even though I'm an easier client, I'm less work for you than the person
that went down the road and was educated and realized if I brought that car and
saved $2,000, I would save $2,000.
Now what consumer in the right mind would not want to save that $2,000?
If they realized that's the game that's playing.
Listen, everybody would want to say that $2,000 Tommy, but you have to do the work.
If you walk in, if you walk to my dealership, right?
If I present you an offer at MSRP and you agree to it, great.
If you say you want $2,000 off, okay, well, now we're done.
And that's it.
And it's like, I'm not going to like just jump to lose $2,000 on a car.
Like why would I do that?
Why would my first pencil be a $2,000 loser, Tommy?
That doesn't make any sense for any business.
Why would you offer your business if you knew it was going to be a loss?
If you knew you're going to lose money?
And again, it's really not my money, right?
It's the owner's money.
I don't really care.
You know what I'm saying?
I'm just trying to get a unit.
All right.
So sometimes you do it to get a unit, but if somebody is more educated or uneducated,
that's, you know what?
If you don't care for the deal and make the profit, then I do not care if you are educated
or not to get $2,000 off.
If you want to get it, you can ask for it and you can try to fight for it.
And maybe you get it, but you have to withstand the heat.
And if you don't understand the heat to get it, that's not anything to do with me.
All right.
How consumer-friendly is that?
It's totally consumer-friendly because guess what?
He had a better deal at the dealership before he came to me,
but I got him a better deal anyway.
So I don't understand what the issue is.
The issue is that there is education level.
One person's education level got them a better deal.
And the idea behind it is-
So let me ask this question.
Sure.
So let me ask this question.
Is it fair that people that can be lazy and they'll pay you $1,000 to negotiate a car deal,
but if some single mother or four who can't afford $1,000, she has to do it herself?
Is that fair, Tommy?
Yeah, 1,000% is fair.
Money allows people to do plenty of things they don't want to do.
It's not about being lazy.
It's about when you earn, again, just like you don't have to cook your own dinner.
Is it fair in life?
If we talk about the U.S. economy that people don't have enough money to be able to do basic things,
that's not what we're arguing.
We're talking about a luxury service like my service that somebody,
not everybody has $1,000.
It's why I give the education out for free.
Like it'd be different if I gate-kept it all, right?
But I give all the information out for free.
But the idea that my client base is lazy, again, I want to be super clear,
because you just nailed it.
You said somebody has to fight you and earn the right to get $2,000 off.
Those are your words, not mine.
It wasn't.
Hey, somebody, no, wait, no, one second, because I want to finish this point.
I want to finish this point.
Hold on, hold on.
Hold on, hold on.
Hold on, hold on.
I'm going to pray.
If you were like, hey, if somebody asked me for $2,000 off,
I'll give them $2,000 off, no problem.
You said somebody has to fight for your $2,000 off.
So why wouldn't they pay $1,000 to not have to deal with you at all?
Okay, so let me show you.
You have to do the work.
Is it a Tucson, Tommy?
You're a smart guy.
Tell me how much markets in a Tucson.
Again, what a dealership's profit is on a car.
It does not matter to when you consume.
I'll answer the question for you.
It's $1,400 in a Tucson Limited.
So you want me to go $600, but actually it was really more than that.
So you want me to go $2,000 below cost.
But again, I'm agreeing with you.
It's not your problem.
It's not your concern.
Whatever, I'm not disagreeing with you, Tommy, okay?
But if you want to take money out of my pocket, because again,
if I get paid on gross and you want to take money out of my pocket,
out of my kid's mouth, out of my bill, I'm trying to take my bills just like you are,
then yeah, we're going to dance.
Maybe not fight, we're going to dance.
But if you're coming, if you want $4,000 off in a car,
and you do it well, because if you say I got another offer here,
if you want to do it just, if you want $4,000 off just because without doing your research,
well, no, I'm not doing that.
But if you have another offer, if you have all these other things that you actually put in
the work yourself to get it, you will be rewarded.
But if you don't do any work to get it, you're not entitled to get it.
You have to do the work to get it.
And that's simple.
Have no problem losing money on a deal once or twice or whatever just to sell a unit.
That's not, nobody's arguing that.
Nobody's arguing about how much money we need to make or not to make.
You know what I mean?
But like if you want to take money out of my pocket,
I'm going to defend my money because that's my money.
So why don't you give this same energy to your owner?
If you're that upset about consumers, which you've agreed that consumers are going to want
to get the best deal, the idea that somebody's going to just pay $2,000 more for you to put
food on your table is absurd.
And it's honestly narcissistic for you to believe that that single mother or that mom
should be able to spend their money $2,000 more so your owner can pay you more.
Why not just go to your owner and say, hey, I deserve $150,000 to sell a car.
I'll take it as a salary today.
You never pay me a diamond commission in your life.
I'll sell you 30 cars every single month.
Why not do that?
Why not have that same level of energy and attacking rather than attacking the person
that is spending their money because your owner is making money.
The idea from invoice, there is money behind invoice, marketing money, hold back money,
stair step programs that all exist that really only the dealer and the GMC.
This idea that your entire business model has turned you against a consumer that is just
trying to get the best deal.
And if you were in the other side of the shoes, you try to get the best deal on things as well.
You don't overpay for the same item.
You don't pay an extra $500 more for your iPhone just so the Apple employee can feed their family.
No, you're going to try to get wherever the fair deal is on the car or on the phone.
That's what people do.
This idea, it's so narcissistic for you to be like, well, I deserve this.
You're just agreeing that somebody's education level is going to get them a better
deal. You've admitted that 10 times.
No, I didn't say I deserve to make anything.
I have stuff to sell the car and you're not buying a car unless you see the value in the car
and the services that we provide to sell you the car.
It's simple economics, Tommy.
And you know this.
You've been in the car business.
You know people, transactions happen when the value exceeds the price.
You know that that's a basic fact in anything that you sell.
So your service, you try to $1,000.
So clearly people see more value in $1,000, but they see the value is way more than $1,000.
That's why they pay for it.
If they see a car and they really like the car and the salesperson did a good job selling the car
and if it checks every single box that the customer wanted and they liked it so much,
I presented a number and the payment worked for them, the out the door worked for them
and they bought it, they signed for it.
That's not my problem.
I did a good job.
I did what I was supposed to do.
Now as a consumer, if I did do a good job as a salesperson and you think my car is worth $4,000
less than what it actually is, then you want to make that offer?
Great.
I don't have to accept it, but don't be mad when I don't accept it.
Don't call me a scam artist.
Don't call me whatever.
I'm not saying you are, but I'm just saying, don't do that.
If you don't see the value in it, okay, that's fine.
And if you want to give me an offer, I'm not like what these guys are talking about.
I'm the phone with Tommy all day long.
I'll present any offer and I'll go back and forth because you like the back and forth.
That's what gets your views.
And that's what's crazy me, Tommy, is you're kind of a hypocrite because you know it gets you views.
If you only presented content that was just regular, smooth transactions, which I'm actually
sure most of them, maybe not most, but a lot of them probably really are, but you show a lot
of the back stuff, but did you get that engagement?
And that's what grows your brand.
And you monetize that.
You did a good job.
You did a really good job doing that.
But don't act like it doesn't benefit you yourself.
So I'm just saying, don't be a hypocrite.
Like just please don't be a hypocrite, man.
Yeah, two different things here.
So first off, I think you said exactly right value exceeds.
That's when people pay the difference.
And I just want to explain the difference.
You understand it and I'll touch on me and myself is my fee is $1,000.
People know that upfront.
I have to build enough value for somebody to pay $1,000 for my service.
You are selling the same physical item, a Hyundai Elantra, and you are having two people
pay thousands of dollars of difference price because you've sold value that somebody should
pay more.
It would be different if I was charging $5,000 to one person and $1,000 or another,
just depending on how much value they saw.
The difference is, is I am selling one price.
Everybody pays that price.
And if you don't see value in it, you don't do business with me.
Your idea is you're selling the same item and you're selling it for more trying to add value.
And then what I would argue is if somebody is less educated versus more educated,
because I will tell you 95% of the time, if you told that person that saw value in what you did
and you said, hey, just so you know, somebody earlier today bought that same exact car and
they paid $3,000 less because they negotiated with me, they would not be happy.
And the idea that they would be insane.
Now, to touch on my point here, I've been very clear and I'm very clear every employee that's
that works a deliberate understands my business model shouldn't exist.
I fight every single day.
So my business model doesn't have to exist because it's silly and it's absurd that middle
man has to fix middle man problems.
I would love a world that nobody had to negotiate.
Everything was simple and everybody paid a fair price because my business model wouldn't exist
and I can go solve it.
The other damn problem is I have to be here and I have to do this.
To act like I sugarcoat things or the opposite of sugarcoat things.
I do this live, dude.
Like I'm calling dealers live.
You see the real, the good, the bad, the ugly.
The only videos I post are live videos.
It would be different if it was like, okay, well, he does the secret call offline just
to any calls 500 dealers.
Everything is live and the content comes from the live.
So like you're seeing it all.
So I have a question.
You said all that and I really want the answers for me.
Are you know what you're gonna say if I really want to hear from you?
So when you call a dealership and you tell them you've already driven it.
You already know you want it.
It's not really for you, right?
But you said that dealers treat you differently when they know that it's you.
How do they treat you differently?
Would you get a better experience if they knew it was you or are you just trying to do
it the way you do it to get engagement and trying to grow your own personal brand?
No, I'm very clear enough in this from day one.
The reason why I made this content was to teach people how to buy a car and the idea
that this becomes a world where Tommy just gets recognized so he gets a better deal.
It doesn't teach anybody anything.
And it now becomes just an education.
Or not an education thing, a entertainment piece.
My idea, the reason why I do what I do is I want to show people,
not just talk about it, but show people what dealerships do.
The good, the bad, the ugly.
And I do post good content.
About 20% of the videos are good because that's about 20% of the calls are good.
Like my producer is very good about picking the good calls, the bad calls.
And you can audit that too.
Like people, again, all of it's live.
And somebody, and this is the funny thing.
If somebody really had the proof that I was just sugarcoating,
or the opposite of sugarcoating, then somebody would just make an expose.
Hey, right?
It would not be, I'm one of, if I'm on any single conversation piece,
we had some dude that gets three interviews of video.
He made one video of me and he got a 100000 views.
If you could prove that I'm just picking these horrible examples
and 95% of my examples are good, that would make a damn good video to show this.
But I do it live.
And there's a reason why there's thousands of people that watch this
because the majority of dealerships are bad.
That is the world we're in.
Yeah, listen.
I don't necessarily agree with you.
I agree with you.
The majority of dealerships are bad.
There's a lot of them around where I'm at.
And it helps me out because they come here and you know what?
And I treat them good in the bike cars and keep buying cars.
So it's great.
You know, it is what it is.
But the business, it's not really going anywhere, man.
Like dealerships are going, they're too big right now.
There's too much money involved.
There's too many rooftops.
There's too much money invested for them just to go away.
I think the dialogue is still open and needs to stay open on how to improve it.
And I think transparency is the key to it.
And I think the FTC, what they did by putting on big deals with all their fees,
I thought was a great thing, you know, because it's an even playing field,
you know, but there's still some rough edges, man.
But, you know, a lot of people, it sounds like you talked to a lot of people
that just aren't good at their job.
And that's unfortunate because there's a lot of good people in this business
that are really good at their job.
They're really great at their job.
They know what they're doing.
They go above and beyond their customers.
If 20% are good, 80% are bad, that's because 80% are probably new
because, you know, the turn rate is pretty high.
Probably because it's just long hours or whatever.
So whatever, you know, it is what it is.
I want to be clear because I'm not going to try to be disrespectful.
I would put you in that 80%.
Not because you're bad at your job at selling cars.
You probably sell a lot of cars.
I would put you in the 80% because you are in the business model
that charges people more depending on their education level.
So let me ask you a question.
When I'm charging more, so for me, if I'm charging MSRP,
what the manufacturer suggested I sell this car for.
So I'm in the 80% because if I charge MSRP for 80%.
Yeah, you're in the 80% because two people at your dealership
can buy a Hyundai Sonata and pay thousands of dollars
at a different price depending on their education level.
Okay. All right.
So how do you feel about one-price stores then?
One-price stores, at least I've found a decent business model.
Yeah, sure. That's fine. Everybody pays the same price.
It's fair.
Don't you negotiate with one-price stores and what happens?
Again, they don't negotiate.
Are they in the 80% or the 20%?
20%.
One-price store.
Well, let me correct. I'll stay incorrect.
If it is a bad customer experience, they might not be in the 20%,
but their business model puts them at least a leg up.
Now, if they end up being just a horrible salesperson,
then that's a whole different...
If they're just bad at their job, they're not energetic,
they don't answer questions, they don't have the information.
That's different, but that put them more likely.
If a dealership does negotiate, in theory, they're a part of that 80%
because it's just unfair to a consumer
that an education level should determine somebody's deal.
It's kind of an oxymoron that a bad salesperson
is somebody who gets a higher price for the car.
It's kind of an oxymoron, don't you think?
So if you believe you're a good salesperson,
why don't you do this?
Charge the same price for the car and say,
hey, you know what, to work with me, CarPow,
I charge $1,000.
So for you to do business with me, it's $1,000.
And I'm worth $1,000 versus somebody's going to charge $200.
Why not just put your commission on the line,
put it in front of people and say, that's what I'm worth?
If you believe it, don't even add, sell the car at the same price.
But the idea behind it is nobody would pay that.
And you know it because they don't see value in what you're doing.
You're just hoping people are not educated enough to know that,
or you can convince them that you know more than they do.
It's 16 million new cars get sold every single year, Tommy.
And you do... How many do you do a year?
We'll do about 4,000 this year.
All right, congratulations. That's a lot. 4,000 is a lot.
But you know, like I said, it's not...
Every situation is literally different, man.
What point were you trying to say that I'm a small fish?
Is that like... You went through and you were like, okay.
Hey, no, no, no.
Why bring up the 16 million?
Because we can have that argument that I'm a small fish, right?
Like I'm willing to have that conversation.
Tommy, Tommy, Tommy.
Tommy, listen, listen, listen.
I love your content, bro.
And you're growing, right?
You're growing.
But what I'm saying is like, I'm not really good at math.
But 4,000 out of 16 million is a small slip.
That's not a disrespect to your business
because you're put in work.
I'm not saying you're not put in work, man.
You build something from the ground up.
You know what I'm saying? It's not disrespectful.
But what I'm saying is like, not everybody...
It's not a one-size-fits-all.
It should be the same with every single car,
with every single person's business.
There's too many variables in the whole process anyway, man.
But no, no, no.
What I will agree is that it's not a one-size...
You are right. It's not a one-size-fits-all.
So the idea that you can have a dealership model,
be able to fit the size of 16 million Americans
and that that business model can accommodate all of them
is insane.
So why not allow a direct-to-consumer model
to exist to compete and allow options to consumers
to be able to serve that 16 million?
That's the idea behind it.
It's super simple because a dealership model
cannot serve 16 million people.
It makes 16 million happy.
That is not how it works.
People that leave with their cars,
nobody leaves pissed off after they bought a car.
They're the happiest that they've ever been
because people, when they buy a car,
they are emotionally happy
because it's a happy time in their lives.
They're not gonna buy a car if it doesn't make them feel good, man.
70% of people say they do not like the car-buying experience.
70%.
This idea that over 70% of people do.
Again, there's a reason why you have millions of Americans
saying how much they hate it.
There's a reason why car salesmen are trusted as much as Congress.
This idea that every...
Sure, because people are just genuinely normally nice people,
they are to you are going to seem happy.
That does not mean they had a good experience or a good deal.
They understand that there's no...
And they might not know they got a good deal or a bad deal
because they just don't know better.
That doesn't mean that all of a sudden,
they had a great experience
where the consumer had the best possible world.
So, how come my dealership...
How come those...
How come there's more good reviews than bad ones?
I imagine part of it's coaching, right?
Part of it's coaching.
No, I don't tell anybody to leave a Google review.
Some dealerships do.
Some dealerships have, like, a sentence.
Like, so I'll lay it out there.
Some dealerships tell people it's for your paid plan
to get at some of the Google reviews.
We don't do that.
They do it naturally.
And there's more good ones than bad ones.
So, again, to sit here and say that 70% say they hate the experience.
That's not me saying that.
That's that survey.
Consumer Reports did a survey.
I think a 67% of people said they did not enjoy the car buying process.
And then you look at what's the big hiring firm
that said that car salesmen are as trusted as much as Congress
at the right in front of Congress and for people that trust.
These are not my stats.
These are actual stats.
Well, that's fine.
But I'm just saying, like, Google reviews, man.
How come car dealerships...
Why are there not more one-star reviews
on car dealership websites on Google reviews?
There's a million different reasons.
First off, getting one-star reviews out as a business owner
is really not a hard concept,
especially when you spend millions of dollars on advertising from Google.
Google will bend over backwards to take care of you.
So would you do that, Tommy?
Would you pay to erase one-star reviews for your service?
We've never paid to erase one-star reviews,
but I know plenty of dealerships do when we see it.
And again, it's not about paying to do.
I want to be super clear.
What happens is, is that Google,
you spend a lot of money advertising on Google.
And the most dealerships spend hundreds of thousands of dollars.
You don't want to make those people mad.
So what ends up happening is when you end up getting bad reviews,
you report those reviews, Google will remove them for you.
Now, I don't have a big...
Unfortunately, we don't spend any money on advertising.
So because of that, when I try to report a review, this ends up happening.
It's one of the reasons why if you look at our channel,
where we're at a 4.9, but there's somebody that says,
I don't like delivered.
He should go fall off a bridge.
Like that's clearly not a client.
But he left a one...
I can't fight that review.
It just is what it is.
And again, it's one of the reasons
why I don't tell people to leave one-star or five-star reviews.
And I do think generally, for the most part,
dealerships do fight for one-star or five-star reviews.
And most consumers aren't going to go out of their way
to leave a one-star.
It's just human nature.
Most people don't go out.
Well, I think people are more likely to leave bad reviews
than good ones.
Just based on experience.
If you had a bad experience somewhere, you don't leave it.
Even most people don't leave reviews at all.
The majority of people, if you go to their Google review page,
if you go to my Google review page,
and I leave it some decent one,
is in my 18 years that I've been a Google person,
I've left 13 reviews,
and I've only actually left one one-star review.
Normally, I want to tell people my good experience.
So that's my experience here.
But I bet if you go to most people's Google's accounts
and check them,
most people don't have hundreds of reviews
because people just don't go out to pull their phone.
They have a good experience, a bad experience.
They just don't go back.
Like, that is what most consumers do.
They just don't go back to the experience.
They don't actually go.
If it's that horrible of an experience,
they might make a video
or they might go leave that one-star review.
But if it's just not a good experience,
generally the rule of thumb,
and they didn't enjoy it,
but it wasn't horrible,
they're just going to never come back to you.
Yeah, fair enough.
They won't come back.
I'm just saying, you know,
I'm just talking about numbers and stuff.
I mean, a lot of averages, right?
I mean, wouldn't that make sense?
A lot of averages, you know,
there's more good ones than bad ones.
I'm just thinking about your logic, man.
Yeah, I mean, again,
but you would make an argument
that any business would have that same.
So like, I might be that person now.
So you look at, Japan was a really good example.
The majority of businesses in Japan
are rated anywhere between 4.5 to 5.0.
It has gotten so bad in Japan
because so many people have gotten five-star reviews.
They opened another app called TableLog,
which is actually where you have to be a registered person
to use to give a real review
because the Google reviews were so skewed
that the only way to get an actual review on things
was to use another website
because that's how easy it was to manipulate Google reviews.
They had to go through a whole different app in Japan
in order to do that.
That's where we're at.
If you look at most businesses in America,
you won't find, like,
when was the last time you truly saw a mainstream business
that had over under a three-star review?
You just don't see it, right?
Like, that just doesn't,
you don't see, you go down this,
you go to a restaurant.
Oh, it has a 2.1.
That's great.
Doesn't exist.
You're right.
And that's my point.
If it's so bad, which, again,
your source to some reports says
70% of people hate the process,
which I don't disagree.
Just a fact of the matter is, like,
if 70% disagree, how come, you know,
it doesn't, the math of the math.
So if that was the case,
then my dealership wouldn't be growing, right?
I wouldn't sell more cars this year than I did last year,
for example.
I wouldn't make money this year than I did last year.
If it's so bad, it just wouldn't happen like that.
Again, again, the only option I have is other dealerships.
And the idea behind his dealerships
have no incentive to grow
because their competition is so low.
So, like, yeah, the idea-
I know you're not saying getting rid of dealerships, right?
Everybody in your comment sessions,
they want to get rid of dealerships
because they're just, they're not, you know, whatever.
They're very extreme.
But wouldn't getting rid of them limit competition
because you can only buy a Toyota from Toyota?
Wouldn't that, by the laws of supply and demand,
wouldn't that increase the price of the car?
Sure.
That also assumes that dealerships have a purpose, though.
They will exist.
The free market is very, very clear.
You can read any economist in the last 2000 years.
It's very simple.
If the market demands that your business will exist.
So, if dealerships cease to exist,
it's because they didn't add value to consumers.
Now, again, I really do think
if you allow direct-to-consumer to exist,
dealerships would be forced to find a way to add value.
And right now, they don't have to.
Right now, you use my model or call it a day.
Now, if you allow, if you get rid of franchise laws
and dealerships go away,
my argument is if direct-to-consumer is not solving problems,
another model will come into place
and be able to fix the problem that they're not.
That's how the free market works.
That's why we have such an amazing country
that's able to solve so many problems
because the free market is allowed to do its thing.
Right now, in the manufacturer world,
when it comes down to dealerships,
they're not allowed to do their things.
The market cannot fix this problem,
which is how we fixed every single problem in America
over the last 200 years.
Yeah, got you.
Cool.
All right, Tommy.
Well, I gotta go get some dinner now, man.
I appreciate you reaching out
because I've been watching stuff.
I really want to talk to you for the longest time, man.
I actually, like I do wish you luck in your endeavors,
you know, man.
But yeah, baby, hey, man,
if you got somebody looking for a Hyundai
over in New England, man,
you let me know you got my number.
I'm gonna do something for you.
Maybe I'll get $4,000 off.
It sounds good, man.
I appreciate it.
Good luck to you.
No problem.
Bye.
Bye.
Bye.
Okay, Bada Boom, Bada Bing.
I'm jumping off.
See you guys tomorrow.
Peace out.
About this episode
Dealers, franchise laws, and pricing power take center stage as the hosts argue about why “sticker” isn’t the real number and how negotiation (or lack of it) changes outcomes. They question dealership credibility and point to lawsuits and shutdowns tied to direct-to-consumer attempts. From end-of-month “gammy” incentives to why discounting sets market value, they push a “vote with your wallet” approach—while debating whether DTC would actually be cheaper once logistics, service centers, and data-driven pricing are considered.
In this video a Hyundai dealer named Kevin finds me live on stream and calls in to debate me on everything from franchise laws to direct-to-consumer sales to whether dealerships actually add value for consumers.
He came in swinging, held his ground on some points, and genuinely made me think on a few others.
But by the end of the call he offered to send me Hyundai clients in New England! You don't want to miss this episode!