Capital One Just Put the Entire Auto Industry On ALERT | Episode 979
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Car
Nissan Rogue
The Nissan Rogue is a smaller SUV that's easy to drive and has plenty of room for people and their belongings. It's a good choice for families or anyone who needs a practical car for daily use.
Car
Ford Explorer
The Ford Explorer is a large family-friendly vehicle that can carry many passengers and their stuff. It's great for road trips or just getting around town, and many people like it because it's comfortable and has a lot of space.
Car
Saturn Outlook
The Saturn Outlook is a larger SUV that was made to fit families and their needs. It's not made anymore, but it has a lot of room and is good for carrying people and things.
Car
Fisker Ocean
The Fisker Ocean is a new electric SUV that runs on battery power instead of gas. It's designed to be good for the environment and has a modern look.
Term
Out-the-door price
Out-the-door price is how much you will actually pay for a car after adding everything together, like taxes and fees. It's the total amount you need to hand over to drive the car home.
Car
Lincoln Navigator
The Lincoln Navigator is a big, fancy SUV that feels very luxurious inside. It's designed for people who want a comfortable ride with lots of space and high-end features.
Term
warranty products
Warranty products are like insurance for your car that cover repairs if something breaks down. They help you avoid paying a lot of money for repairs later on.
Term
gap products
Gap products help you pay off your car loan if your car gets totaled and is worth less than what you owe. It's like a safety net for your car loan.
Term
Permaplate
Permaplate is a product that dealers sometimes offer to protect your car's paint and interior from damage. It's like a special shield for your car.
Term
GAP insurance
GAP insurance helps you pay off your car loan if your car is stolen or totaled. It covers the amount you still owe on the loan that isn't covered by your insurance payout.
Company
Crystal Fusion
Crystal Fusion makes products that help protect your car's windshield from damage and improve visibility when driving.
Part
tires
Tires are the round rubber parts on your car that touch the ground. They help your car grip the road and are important for safe driving.
Company
TireRack
TireRack is a website where you can buy tires for your car. They help you find the right tires and offer services like shipping and installation.
Term
vehicle service contract
A vehicle service contract is like an insurance policy for your car that helps pay for repairs after the original warranty ends. It can save you money if something goes wrong with your vehicle.
Term
powertrain
The powertrain is the part of your car that makes it move. It includes the engine and transmission, which work together to get your car going.
Term
comprehensive coverage
Comprehensive coverage is a type of insurance that helps pay for repairs if your car is damaged in ways other than accidents, like theft or bad weather. It ensures you're protected from many different problems.
Term
box-closed method
The box-closed method is a way that car dealerships handle sales paperwork. It means that when you buy a car, you sign everything at once, including any extra warranties you might want.
Term
additional warranties
Additional warranties are extra protection plans you can buy when you get a car. They help pay for repairs after the regular warranty ends.
Term
extended warranty
An extended warranty is like extra insurance for your car that helps pay for repairs after the regular warranty ends. It can cover important parts like the engine and transmission.
Car
Ford Ranger
The Ford Ranger is a type of pickup truck that can carry heavy loads and is good for both work and fun. The 2021 version has updated features and a strong build.
Term
mechanical breakdown insurance
Mechanical breakdown insurance is a special kind of insurance that helps pay for repairs if your car breaks down. It's different from regular car insurance, which covers accidents.
Car
Ford F150
The Ford F-150 is a big truck that's really popular for carrying heavy loads and doing tough jobs. People love it because it can handle a lot of different tasks, from work to weekend adventures.
Term
dealer fees
Dealer fees are extra charges that car dealerships might add to the price of a car. They can include costs for paperwork and getting the car ready for you.
Term
add-ons
Add-ons are extra features or services you can choose to include when buying a car, like special warranties or additional equipment. They can make the car more expensive.
Term
MSRP
MSRP is the price that car manufacturers suggest dealers charge for a car. It's like a starting point for how much a car should cost, but dealers can sell it for more or less.
Concept
finance manager
A finance manager at a car dealership helps customers figure out how to pay for their car. They talk about loans and other payment options after you've decided to buy the car.
Concept
Toyotathon
Toyotathon is a sales event by Toyota where they offer discounts and special deals on their cars. It's a good time to buy a Toyota if you're looking for a new vehicle.
Car
Toyota Rav4
Car
Toyota Camry
Car
Toyota Tacoma
The Toyota Tacoma is a small truck that is tough and can handle rough terrain. Many people use it for work or outdoor activities like camping.
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It's noon here in Venter City,
New Jersey at our nation's capital, Washington, D.C.
And this is Carage Live for Wednesday, December 10th
with your host, me, Ray here in Venter City.
Where it is windier than, well, God only knows.
And my son, Zach, in Washington,
how are you today, handsome?
Do a fantastic happy Wednesday, December 10th.
Happy birthday to my buddy, Daniel.
Excited to have to join you here today
to talk about the interesting information
that Capital One recently shared
that has the entire auto industry on alert
before we turn our attention there.
We need to remind everyone that today's show
is brought to you by CarEdge.com.
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We have for a limited time another four days here,
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Please learn more about our car buying service
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Please shop your auto insurance,
go to CarEdge.com, click on insurance,
and just see if you can save some money.
All right, dad, you ready?
Yes.
New data shows growing trust in car dealers.
Now what?
This comes, dad, from a Capital One annual survey
that they do.
Capital One car buying outlook finds nearly 70%
of car buyers view dealers as trustworthy.
So today for the show,
wait, wait, wait, no, no, no, give me a sec, give me a second.
So for today on the show,
what we're gonna do is we're gonna review the report
that Capital One has.
And we're also going to go line by line
through a new civil court case
against Morgan Automotive Group filed in Florida.
We're gonna go through a complaint
that a former finance manager said recently
against Morgan Auto Group.
So we're gonna go side by side today.
70% of car buyers view dealers as trustworthy.
And yes, y'all, I did go to the clerk website
for the state of Florida to find this court case
so that we can literally go through 13 pages,
which include, I should mention,
screenshots of text messages talking about
how we can't take advantage of the elderly,
but we can get it over on the other 98% of customers.
We'll be looking at that side by side here on today's show.
Let's start, dad, with the company.
One question about the Capital One survey.
Did they only survey dealership employees?
And that's like 200% trustworthy thing?
Let's start with the Capital One data.
Let's start there.
And then, yes, again, I think I did very good QA
up to this show.
We've got the perfect antidote
to what Capital One is putting out there.
So this was on December 4th, okay?
So a week ago.
Yes.
I'm literally, we're just gonna read it together.
The 2025 Capital One car buying outlook
reveals nearly 70% of car buyers now view dealers as trustworthy
up from 44% just two years ago.
This growth in trust is supported by an in-person
and digital shopping approach
where car buyers research online for convenience
while seeking in-person experiences
for control and excitement.
Dad, you sold cars for 40 plus years.
Do you think seven out of 10
of your customers trusted you
when they walked in the door?
Not initially.
No, no, not initially.
You know, and let's face it,
you know, the bulk of my career,
I shouldn't say the bulk,
the beginning of my career 12 years were spent
in the Atlantic City area at an Nissan dealership.
And, you know, the one thing I understood
working just outside of Atlantic City
was that there wasn't gonna be any growth
population-wise to the east of us, okay?
That was the Atlantic Ocean.
So there's only so much growth
that could be had in our area.
And so it was a relatively small population.
Yep.
I kind of sort of figured you'd better be nice
to those people because if you're not,
they're never coming back to sea again.
It's not like we were in Philadelphia.
Yep.
So initially, no, you know,
everybody walks into a dealership
with their defenses up, you know?
And I am not buying for an instant, okay?
That if you were to survey a hundred people
that 70 of them would say,
absolutely, I find dealerships trustworthy,
above and beyond reproach,
I would trust them more to my doctor.
Well, Dad, we survey the car edge community.
We do this every single month
and we're at 82% of customers
do not trust car dealers.
So we've got very different data sets here.
Capital one, again,
putting the entire auto industry on alert.
The days of being, I don't know,
disbarred and dismayed by consumers are gone.
70% of consumers trust you.
That's a huge moment for the auto industry.
In the same breath, you can find other research.
Ours, for example, 82% don't trust dealers.
And again, we're gonna look at this ongoing litigation
out of the state of Florida to talk about,
okay, what is a former finance manager complaining about
with regards to his role
when he was working within a dealership?
Let's keep going here, though,
though through some of the data that Capital One shared, Dad.
Car buyers, excuse me, familiar with digital tools
are more likely to trust dealers.
And when trust is established,
they're twice as likely to return for their next purchase.
Dealers also increasingly recognize digital tools
as a competitive advantage.
I get so nervous here.
Yeah, because everything you read on the internet
is not true.
A lot of these digital tools, quote unquote,
digital tools, they don't serve consumers.
They don't provide transparency.
A lot of these digital tools
facilitate bait and switch pricing,
which is the same crap to be clear
that dealers bemoan online as well.
Dealers hate the fact that many of these websites,
you can advertise it, a BS price, get customers in
and then flip them onto a different price
or payment pack and then all that stuff.
So digital tools, Dad,
help customers trust dealers even more.
Well, help me with something here.
Do we not provide consumers with digital tools
to engage with automobile dealerships?
Of course, yeah.
That's been going on ever since, what, the early 2000s.
So we, but we hear specifically.
Oh, like carage?
Yeah, of course.
We've spent six years building digital tools
that help people keep more confident buying car.
And let me say that one of our tactics
is to use email templates and things of that nature.
It's evolved from email templates,
you can copy paste to an AI agent
that'll use our email templates to negotiate for you.
Yeah.
And then utilizing those digital tools that we provide,
how difficult is it to get dealerships
to actually provide us with the information
that we ask for, virtually impossible?
I mean, Dad, if I may,
we've got a video obviously gonna come out soon
with regards to reaching out to 104 dealers,
but just to share, just to share a little preview folks,
we only got out the door price quotes
from 39% of dealers.
We've got 87 total across the 100
because they sent multiple
and we negotiated down the price,
but only four out of 10 actually sent out the door prices.
And we reached out to 104 dealerships for that video
that'll be coming out soon.
So like, yes, digital tools build trust, evidently.
I don't quite see it.
I really don't see it
because it's taken I think some pretty innovative things
like what we're doing to actually make a difference.
Like, again, shocked is a word I will use
to describe this Capital One research.
I would be curious as to how much automobile dealerships
paid Capital One to do this survey.
In my opinion,
This is the fifth year they've done this, Dad.
And Capital One, to be clear,
has built a massive auto business.
So I think it is worth naming
that Capital One's auto navigator
is a huge part of the Capital One business.
And yes, they do work with thousands of dealerships
nationwide to provide and serve that solution.
Obviously this fits their narrative.
They want to say that their tools are supporting better
and more transparent transactions at car dealerships.
It's just hard for me to really get excited about it,
to be honest.
I wish I was excited.
It's hard to believe.
Hard to believe it.
The results, you know, we see the comments every day.
Now, maybe it's because, you know,
only people that have had negative experiences
will comment, you know,
but that could be part of it.
But that certainly isn't all of it.
And I just, I find it hard to imagine
that if you walked up to 100 people on the street
and said, oh, by the way, just out of curiosity,
do you trust automobile dealers?
Would you find dealing with them to be a trustworthy endeavor?
You are not going to find 70 people out of that 100
that say, oh, absolutely.
It's just not going to happen.
So, you know, at a certain point, you look at information
and you think to yourself, does it pass a smell test?
This does not.
It absolutely does not.
Let me show you a little bit more about the methodology.
I also want to read one a quote from Mr. Yannick here.
I think it's either the vice president
or president of what they do in automotive.
Quote, dealers who bring together technology
with in-person experiences are creating the kind of trust
that keeps customers coming back.
So there you go.
It is, obviously it's a good narrative
if we can talk about how digital tools
help support this, which to be clear,
heck guys in our business,
we want to be able to put out the same thing,
but to be clear here, you know,
we survey 500 to 1,000 of you every month
and this is what you tell us,
82% of you do not trust car dealers.
Maybe it's a little bit audience bias as well,
that this came to be clear.
Over 2,000 survey responses from US car buyers,
either recent or future.
So they did do a really large group here.
Over 2,000 feels like a significant number.
And again, what they found is that 70%,
nearly 70%, 69% of car buyers,
view dealers as trustworthy.
So the other piece of today's show
that I wanted to cue into and really tap into here
is we've got some local publications
now covering a story out of Florida.
Former dealership execs Suze Tampa Auto Giant
alleging use of deceptive sales practices.
So this was an interesting story,
especially to juxtapose again,
the really positive news, which is again,
that 69%, nearly 70% of car shoppers
and it's getting headlines to be clear,
like over in Axios.
New data shows growing trust in car dealers.
Now what?
It feels very appropriate then that we went to the docket
and we actually pulled this case information
from this filing here from Jason Meribito,
who was a finance manager at Morgan Auto Group.
He's filing a complaint.
He's trying to get back a significant amount of money
and damages from this dealer group,
alleging that, I'll give you a bit of a summary here,
alleging that they essentially mistreated customers,
that they took advantage of customers
on products that had no value,
whether that be warranty products,
gap products that they sold as gap
or an actually gap,
as well as selling products like permaplate
and things like that,
that never actually got installed on vehicles.
And then they were packing payments as well.
So he goes in and we'll look at a lot of this as well
in the actual document,
but he goes in and he kind of hits on a lot of things
that you and I have been teaching people about
to watch out for for years.
So it's an interesting juxtaposition, right?
70% of customers trust car dealers,
yet in the same show,
we can have this very recently filed court document
talking about the pain points
that you and I have described for years.
And let me ask you one question.
I'm all ears.
Survey of trustworthiness of the...
Professions.
Professions.
Exactly where do car sales people rank on that?
Give me a second.
Drum roll, please.
Oh, we don't need a drum roll.
We know how bad it is.
The drum is rolling and here it is.
Give me a second.
Americans rating of US professions
stays historically low.
That's exciting.
Let's see.
Dad, we're actually up.
Car sales people, 7% of Americans
trust car sales people.
That is the worst except for lobbyists at 4%.
So if 7% think sales people are trustworthy...
Yeah, how can Capital One publish that in Greenville?
You'd feel good about it.
Are they only surveying the 7% who think car sales people
are trustworthy so that it appears as if 70%
of survey respondents believe dealerships are trustworthy?
And the numbers just don't add up.
What's that all saying?
The math just ain't math in here.
Okay, there is no way that people can feel
as strongly as they do about automobile sales people
being, I don't know, bottom dwellers,
being the scum of the earth.
And then those people who are their points of contact
at dealerships suddenly say,
oh yeah, when we find the dealership situation
very trustworthy.
I think we gotta take a moment though, Deb,
because I wanna be able to stay on both sides
of this conversation.
And the reason I'm saying that is because
we have had really great dealer principles
join us on this show.
Where is it?
The car market has finally flipped.
Ford, Mazda, Lincoln, Joe Lewis has been
on this program a half dozen times.
The day before that was Dan LeGrange
over from Key Automotive Group.
There are dealers out there.
I'm thinking Andy Wright who posts his LinkedIn,
once a quarter this man Andy Wright
who's a dealer operator posts on LinkedIn
just absolutely beating the crap
out of third party marketplaces
who let dealers advertise BS prices
and how they never regulate it.
There are a lot of good people in this industry.
I don't think the public perception of it reflects that
because it's not the majority.
I think that's the reality is it's not the majority
and this lawsuit we're gonna look at,
this civil case that we're gonna look at
demonstrates exactly literally everything
we've been teaching people for six years
and how real it is.
This is coming from someone on the inside
now suing his former employer.
Like, there are a lot of bad apples
in this industry, unfortunately.
Yeah, Igor as well.
Igor used to operate dealerships as well.
There's a lot of good people.
You used to operate dealerships,
that you're a good man.
But the point is that there are many,
many, many, many, many more bad apples
in retail automotive than there are good apples.
You know, the ability to list dealers
who we know operate in a manner
that we would find appropriate,
you know, it doesn't take all that many fingers
and all that many hands in comparison to the fact
that there's 18,000 new car franchise dealerships out there.
Okay, not even talking about independent
used car dealership.
There is just no way that any of that makes sense.
You know, having spent 43 years on the inside
and you know, I had to confront every day
what it was that customers feared the most
of coming into a dealership.
Now, did that mean that I tried to take advantage
of people and everything?
You know, it meant that I actually listened to people
on a daily basis and tried to figure out ways
to improve the process.
For sure.
It was a very, very difficult road to hoe
because it wasn't me that needed the convincing,
it was dealership owners who needed the convincing.
So Deb, let's actually get into that.
And the thing I want to get into is
it is profitable to run your dealership in a way
that I think for many of us here
in the car edge community,
we would say is against our personal values
or the values of car edge, our company,
it's profitable to do some kind of shady things.
And we're gonna review this court filing
as a way to demonstrate some of those shady things
that happened.
And it's not just us talking about it, right?
Or saying, hey, here are the red flags.
We're gonna read through and look at text messages
that actually demonstrate potentially alleged,
I should say, you know, bad practices
because this is in court, this is not, you know,
this is America, you're innocent until proven guilty.
Before we do, however, again,
a friendly reminder, caredge.com, six years
of trying to turn the auto industry
into a more safe, transparent, and honest space, excuse me.
If we can help you with anything,
please check out the website, my dad and I started
six years ago, now we have an incredible team
and we work every day to support our community.
So Deb, again, this was filed back in July,
but there was an update recently
and that's why it's getting a little bit of press attention.
It's a case between Jason Mirabito,
who is the plaintiff, and Morgan Auto Group,
that is the defendant.
Morgan Auto Group has over 70 dealerships,
if I'm not mistaken, and this has been filed
in Hillsborough County Circuit Court in Florida.
Now I'm gonna jump around a little bit here,
but I'm gonna scroll down to the facts of the case, okay?
We're gonna read through a lot of this.
The defendant, excuse me, the plaintiff
has been in the car business since January 2000, all right?
So this guy's been in the industry for a while.
He became employed as a finance director
over at Morgan Auto Group earlier in his tenure, excuse me.
And then I wanna share here some of the things
that were going on at the dealership.
On January 1st, 2023, the dealership fired
both Safeguard and JMNA as their warranty providers.
So they had a provider for vehicle warranties
and they replaced those warranty products
under a new name called Sidecars.
The new warranties appeared to be exact
because of the warranties previously used
just with the Sidecar logo at the top.
The new warranties were identical to the prior products
and were introduced with no instruction from corporate.
No explanation as to the details of the warranties
and no explanation as to how the new products were added,
notwithstanding the similarities.
So the original warranty products initially offered
Sidecars were useless warranties
that offered little to no protection
to the consumers who purchased them.
So that's the first thing that I felt
was kind of interesting on the warranty product.
Useless to consumers who purchased them, GAP.
It was originally offered by the dealership,
now being offered alongside another product
called Equity Shield.
Equity Shield looks like GAP.
The description was very similar to GAP
and it was being sold to customers as GAP
or GAP plus if they were being sold both products.
Yet it does not replace GAP as protection
and the maximum payout according to the contract
is 5,000 for new vehicles and 3,000 for used vehicles.
Customers are being sold the product
in lieu of actual GAP
when the customers are financing considerably more
than the vehicle's worth.
When the internal cost of the product was raised so high
that finance managers could no longer
make any money selling GAP.
The dealership began selling customers Equity Shield
instead of GAP,
leaving customers uncovered, unbeknownst to them.
So there you go.
We've got another interesting one there.
We've got here, dad, where was it?
Where was it?
Yeah, objective to finance managers
trying to convince customers that this Equity Shield product
operated the same as GAP, get it continued.
Here we go.
The dealership offered Permaplate,
an appearance protection package
and Crystal Fusion, a windshield protection product.
Permaplate and Crystal Fusion pulled their products
when the warranty providers,
the dealership previously used for fire.
Sidecars had two exact copies of Permaplate
and Crystal Fusion,
but they didn't have the materials
to actually put the products on the vehicle.
Interesting.
I mean, so what are we getting at here, dad?
We're barely through this thing to be clear.
But so far, what red flags are we hitting on
that should make a consumer
maybe have their alarm bells going off
or maybe be a little bit wary of trusting a dealership?
All right, people, serious question time.
Did you know that driving high is considered
driving under the influence?
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Driving under the influence of marijuana
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That means even in states where marijuana is legal,
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Paid for by NHTSA.
This episode is brought to you by Progressive Insurance.
You chose to hit play on this podcast today.
Smart choice.
Progressive loves to help people make smart choices.
That's why they offer a tool called Auto Quote Explorer
that allows you to compare your progressive car insurance
quote with rates from other companies.
So you save time on the research
and can enjoy savings when you choose
the best rate for you.
Give it a try after this episode at Progressive.com.
Progressive Casualty Insurance Company and Affiliates,
not available in all states or situations.
Prices vary based on how you buy.
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Well, everything so far has been deceptive.
And here's the issue in my mind.
The entire industry, the majority of the industry
is based on deception,
starts on the internet with internet pricing
where dealers price vehicles utilizing
every incentive known to man,
that there isn't one person on the face of the planet
that could qualify for all of them,
but the advertised price includes all of them.
So it is significantly lower than what it really will be
when the customer shows up.
So if there's an industry that has based everything
they do on deceiving the customer
in order to get them in the door,
why would you ever think for a moment
that anything they tell you would be accurate?
Let me jump back into this.
Let me jump back into this.
Jump to that conclusion.
Yeah, dad, let me.
It's fine to me to get me here about.
Let me go, dad.
Let me go, let me go, let me go.
It's accurate.
Dad, let me go.
Equally egregious, the dealership packs
two or three year powertrain-only vehicle service contracts
into customer payments on new automobiles.
However, there are very few, if any,
brand new automobiles that do not come
with at least three-year comprehensive coverage.
The maximum length of coverage offered
on those powertrain VSCs was usually packed
with a two-year variant.
Essentially, the dealership is selling customers
something that already comes with their new car.
Listen to this stat to build off your point.
Honor around October 2023,
Ernie Sims was transferred from Honda of Fort Myers
to Jaguar Land Rover Sarasota.
Mr. Sims was brought in to revive the dealership
because the other one was one of the most successful dealerships
within the group.
Very quickly, it was understood that the success
of the other dealership was largely due to, quote,
Ernie Play.
In accordance with the Ernie Play,
a, quote, box-closed method is automatically
implemented with the sale of each vehicle.
In the auto industry, the box is what the finance department
refers to, the situation where a customer signs all
the bank paperwork and buys additional warranties,
essentially, quote, checking all the boxes.
However, the box-closed requires the customer
to sign all the paperwork with the salesperson
and floor manager, but detailed payment information
is specifically excluded.
Here, the customer is only agreeing on the price
of the vehicle after any trades.
This means only numbers the customer sees
and the only number the customer is agreeing to
and signing for is the out-the-door price
of the vehicle.
For example, if a customer agreed to a final price
of $15,000 for the vehicle,
as the total the customer should be financing
if they chose to not add any warranties.
Instead, employees were told to engage in a practice
known as payment packing whereby customers
are charged for products that the customer did not want
or did not know they were pushing.
That this is, sorry, I got so antsy there,
but I was like, everything you were just serving
is in this freaking lawsuit.
It's how the industry operates.
That's why disclosure is so important.
If a customer doesn't know what they should look for,
they're going to be taken advantage of.
If a customer is told one thing by the salesperson
and they just assume that everything
that the salesperson told them is what they're signing
for when they're in the finance office without checking,
oftentimes they're gonna be shocked
at how much difference there is
between what they had been told
and what they ultimately signed for.
Now, is it the customer's responsibility
to slow down the process and make sure
that what they're signing is accurate?
Yes, it's your responsibility
because trust me when I tell you this,
there ain't nobody out there that's looking
to protect your ass, not your state,
not your federal government.
Nobody's out there looking to protect your ass.
So if you want to protect your ass,
you got to protect your own ass.
So slow down the process.
Make it annoyingly slow for the finance people.
Go over every line, make sure it matches up.
But most people unfortunately won't do that
because either they're worn down, time,
or they're just accepting of whatever it is
somebody says to them at that point.
And so, yeah, these type of practices happen all the time.
I want to keep going here, Dad.
And I also want to remind everyone,
this is why I courage is a passion project
for both me and my dad.
My dad tried to be a good guy,
which quite frankly, the way that this lawsuit
is set up, this case, this person who's suing,
like he's the good guy as you're about to see here
in a second, he got fired ultimately.
I think a lot of ways, Dad,
you were held back in your career
because you did not take advantage of as many customers
as you could have made more money for the dealership.
What we do at Carage is a reflection of my dad's values
and my values.
I want to continue to read here, however,
upon information and belief,
defendants instructed managers to artificially inflate
the payment amount to leave room for warranties
and a higher interest rate,
both of which could then be negotiated by the customers.
Oftentimes the interest rate first provided
was well above the interest rate,
actually available to the customer,
thereby constituting a potential truth
and lending act violation.
At that point, the finance managers agreed
to negotiate the potential customers
to close the deal by offering reduced interest rate.
Now, here you go, Dad.
Notwithstanding the pressure to perform,
the defendant, or the plaintiff, excuse me,
refused to engage in the early play
and refused to payment pack.
He repeatedly complained to the defendant
regarding those practices.
And those practices, by the way, are ill legal.
Yeah.
Just so you know.
Yeah, man, this thing just goes on and on
and on and my favorite part about it is, however,
at the very end here, I'm going to go all the way down to it.
You've got actual screenshots of text messages between staff.
Yes, she got to Ernie yesterday
and said she didn't want the warranty, et cetera,
so he had Joey print a buyer's order to mail out.
It's okay.
She was threatening taking advantage of the elderly
and calling the state's attorney.
We don't need that heat.
We can't fight the elderly.
Take what we can get.
It's okay.
No one is upset with you.
We know buyers are liars.
Just can't have major heat.
Hey, the next one.
We get over on the other 98%.
It is what it is exactly.
Like, again, if you're just joining our show,
this is the coming off the heels of Capital One,
saying 70% of car buyers view dealers as trustworthy.
And it's not like our mantra here
is to paint dealers as villains.
We actually want to just paint the picture
that buying a car can be transparent and easy and efficient.
And if you go in, eyes wide open and naive,
there's a likelihood you could be in a situation
like this and end up getting taken advantage of
and no one deserves that.
One of the favorite things to do at dealerships
when they're working deals
is to ask for how much money the customer
is going to be putting down.
And oftentimes they won't even ask that.
They'll print out a proposal that'll show zero cash down,
$2,500 cash down, $5,000 cash down,
and how that equates into payments.
Yep.
And one of the things I've caught a lot of heat for,
if you know the person's credit score, okay,
and you've agreed to a selling price
and you've agreed to a certain cash down,
cash amount down or trade,
you don't have a payment range,
because oftentimes you'll see the payment will be 750 to 759.
Well, no.
If you know the exact amount that you're financing
and you know the exact rate,
you would have an exact payment, okay?
So the idea, the concept of having a 10,
15, $20 spread in payments,
that is something that's done strictly
for the finance office,
because they don't wanna actually
have to sell their products
and sell the value of their products.
They wanna know that there's,
I don't know, $20 built into the payment or more
built into the payment
that they can then just automatically squeeze product into
to say they sold something.
One of the reasons why finance managers,
business managers go ballistic
when you tell them, oh, by the way, it's a cash deal,
oh, what's in it for me?
What's in it for you is the opportunity
to talk to a customer
and show them value in the products that you have
and see exactly what kind of salesperson you are.
That's what's in it for you.
You know, you have an opportunity.
You don't have a guaranteed income,
you have an opportunity.
All you can ask for in sales is an opportunity.
Let's turn our attention here to the chat from Sweet Regret.
Thank you for this kind contribution earlier in the show.
What extended warranty for engine and transmission
do you recommend for a 2021 Ford Ranger?
We have, I don't know if y'all know this,
but back at CarEdge.com, we have a warranty partner.
So go to CarEdge.com, click on warranty.
We partnered with a company called Fair
about a little over a year ago now.
We were doing things in-house,
we decided we would get a partner.
Good people over there.
I would encourage you to get a quote over here,
see what it's gonna cost through Fair.
They've done a great job as well,
making it very clear what's covered, what isn't covered.
The idea that a warranty is a scam,
an extended warranty, a vehicle service contract,
mechanical breakdown insurance as a scam,
I think is a misnomer.
They're just typically tons of,
there's typically packed with tons of profit.
And in many cases, like we've described here today,
can be sold in ways that add absolutely no value
to a customer.
So we have a partner, we vetted them,
encourage you to go check that out,
Sweet Regret, appreciate you.
With the kind of contribution from Matthew as well.
Thank you for this Matthew.
Ray Rodehoe, not Rode, there you go.
Also sounds like this guy just wants whistleblower money,
scammers here, scammers there,
scammers, scammers everywhere, potentially.
But I mean, I think it's good that we see these things,
these whistleblower allegations come out.
And to be clear, they're allegations.
Like this'll go to court,
it'll likely get settled in a way
where there's no wrong doing.
I bet you Morgan Automotive Group's
got a great lawyer dad, like they're gonna do their best.
It's a simple case, so it's different.
But let me say this,
the one thing that this gentleman has done
by bringing this lawsuit
is he has ended his career in automotive,
in retail automotive.
There is not another automotive group out there
that is going to hire him
because he is disclosing inside secrets
about how dealerships operate.
And so he better have another line of work in mind
because it's not gonna be working
in the automobile industry.
I'm not gonna suggest to you
that he would be blackballed,
but I'm pretty sure he would be blackballed, okay?
And that he no longer has a future
in something that he had been doing for 25 years.
So will he get some money
from Morgan Automotive Group?
Who knows, but I would bet dollars
to donuts, in my opinion,
that the charges he's brought
are things that they're actually doing
and they know better
and they know they shouldn't be doing.
It's worth mentioning at this point,
my dad actually is doing expert witness work
for the state's attorney general
out of Massachusetts right now.
So he's joked to me a couple of times,
not that you have any interest going back
and working at a car dealership,
but you've joked to me a handful of times now.
You've said, okay, I think I've said goodbye
to ever working in the auto industry again.
Because I think the moment you become an expert witness
for a state AG in a case against a car dealership,
you've kind of signed your letter saying,
all right, I'm never gonna work inside the industry again.
Which I think as a community,
we should commend you for doing this work.
I mean, this is outside of what you do at Car Edge.
You're working with a state attorney general
on a case against a car dealership.
That's really incredible.
Trying to help them right or wrong.
That's all.
I mean, I have found it not difficult for me,
but difficult for people around me to do the right things.
When you screw up, put up your hand and say,
hey, it was on me, I screwed up.
When there's a problem, I used to always look at it and go,
is this the right way to address it?
Is it?
Were we taking advantage of somebody?
Were we hiding something from somebody?
Did we not disclose everything
that we should have disclosed?
And if I discovered that we did not,
then we just corrected the damn situation.
It is so difficult for so many people to do the right thing.
And perhaps maybe today,
what makes it so difficult is people don't understand
what is the right thing.
But my suggestion for automobile dealerships
and dealer principals and owners of these facilities,
do wonder others how you would like it done to you.
And if you don't wanna be,
you don't wanna shop somewhere where they had the lining
to get you in and don't operate your business that way.
This is why I'm so proud of what we've built here at Carriage.
For those of you that are unfamiliar,
scroll down on the homepage,
go to the about us section
and learn more about why we do what we do.
There's all sorts of information here.
We even have the manifesto back on the community forum too.
So please learn more about why we do what we do here at Carriage
because it is exactly what you just described that.
It's like we have values that we wanna bring out into the world
and we're on a crusade to absolutely do that.
I mean, listen, I can't sit here and tell you
that there were times that dealerships that I worked at
that there were times where people were taking advantage of.
I'm sure there were.
There were also times when I wasn't a general manager
at a dealership where I might've been a new car manager
and I could bring it to the general manager's attention
and if he didn't wanna do anything about it,
my hands were pretty much tied
or I needed to go find a different place to work.
It wasn't uncommon that I would go find a different place
to work because philosophically,
how that general manager wanted to treat customers
or that dealer principal wanted to treat customers
didn't align with the way I thought we should treat customers.
So it's incumbent upon everyone in the industry
to find a better way of doing it
and to clearly understand what's right and what's wrong
and know the difference between right and wrong
and not cross that line.
Yeah, let's end the show on this.
I used Carriage Pro, our AI agent, all of our data
to reach out to 104 dealers for the same value,
same like advertised F-150 and dad,
we've got a video that'll be coming out
on the main Carriage channel soon,
but I just wanna share with everyone,
like we've got all the data.
Yes.
If you're curious, it took 15 minutes and 30 seconds
to get our first out-the-door price quote.
That's pretty incredible.
The slowest was four days, 20 hours and 40 minutes.
On average, it took a day and 41 minutes
to get an out-the-door price quote.
We've broken everything down here.
What are the most common fees we were seeing?
What are the most common add-ons?
What were the prices for those add-ons?
You're gonna see the lowest out-the-door price
we got was $53,402, the highest was $70,000.
Again, folks, we've reached out to 104 dealers
on the same MSRP F-150.
Yet we have a $17,000 variation in price.
So stay tuned, y'all.
This is gonna be an incredible video that comes out.
And again, we used our AI agent
to contact these 100 dealers and negotiate with them.
We got responses actually this year, dad,
from over 79%, almost 80% of dealers responded to us.
Yeah, we only got out-the-door prices from 39%.
So cannot wait to make that video.
Stay tuned for it.
The data is looking pretty insane, to say the least.
How crazy it is to buy a car.
$17,000 price difference is nuts.
So anyway, I wanted to just kind of plant that seed.
That'll be out on the main CarEdge channel
in another week or two here.
Yeah, but the good news is that 70% of the respondents
to the Capital One survey find-
Trust car dealers.
Yeah, dad, you got here, yep.
Yeah, go ahead, yeah.
Is that an Arizona Cardinals or Louisville Cardinals?
It is Arizona Cardinals, unfortunately.
We lived in Phoenix for 20 years.
My children were born in Phoenix.
I was a Cardinals season ticket holder for 10 years.
Zach used to go to games with me.
I've also been a filled-off Eagle season ticket holder,
but that was back in 1962, 63, and 64.
And yeah, I am lost in my allegiance to the Cardinals,
to the Arizona Cardinals.
This is for them.
Thank you, man.
Yes, and when people say, well, what's the best way
to watch an Arizona Cardinals game?
My answer used to be, well, with your eyes closed.
And today, I would amend that for someone my age
with your eyes closed and your hearing aids out.
Okay, so you can't see it and you can't hear it,
so you can't be disappointed
because you know what's gonna happen.
We've got here, dad, from Gark.
Good to see you again.
Incredibly kind over the past week here.
We helped this individual purchase of the vehicle,
and he has been coming back day-to-day
out on the show and making contributions.
Thank you, it means the world to us.
I was annoyed with the finance guy at our dealership.
We signed a deal before sitting with finance,
and they changed the price before we signed
to take the car officially.
Super shady, let alone dishonest.
Yep, this is a practice, unfortunately,
that we see the handoff from the salesperson
to the finance manager.
We had, it was so disappointing, man.
We offer a car buying service, y'all,
and there are some dealerships that we work with.
To be clear, they don't pay us anything,
but we work with them.
We send them a lot of customers,
and so they treat them really, really well.
We had a concierge customer recently,
dad, who we ended up having to refund,
and it was really disappointing refund.
But the reason we ended up having to refund them
is when they got to the dealership,
the dealer blew up the deal,
like absolutely blew up the deal,
to the point where this customer of ours
was threatening to call the attorney general
and like, yo, go berserk.
Which I don't blame them.
The whole deal blew up
and they spent $1,000 with Carriage
to have a great experience.
This is the frustrating part.
Doesn't happen often,
but man, oh man,
there are some dealers out there
that just even with a layup, man,
a layup, the done deal,
they still shoot themselves in the foot
and they totally act shady
and it's just, it's mind boggling to me.
Again, folks, if we can help you with anything,
caredge.com, that car buying service,
I mentioned a moment ago,
man, it stinks when it doesn't work,
but fortunately, 99% of the time it does.
We're offering a promotion here, $150 off.
Meet our team and learn more about how this works.
Even get a free consultation call
to see if it's a good fit.
Back at caredge.com,
then click on Car Buying Service.
And as I said at the beginning of the show,
please shop that dog on auto insurance.
We're seeing people save money weekend and week out.
You just need to shop it.
You need to be able to compare
and we've obviously built a solution there for you.
Final thoughts here, Dan, from MJC63.
Thank you for the kind words.
Also, Dan and F and I, and love you guys.
Cheers, Michael.
Thank you, Michael, we appreciate it.
Dad, we're back tomorrow with more Car Edge Live,
aren't we?
I do believe.
I don't think we have a day off for quite some time.
So, yes.
I'm super anxious for tomorrow.
Tomorrow I hear if I got into the Chicago Marathon,
I really hope I got in.
I'd love to run that race next year.
When do they run that?
What is it, like October or November of next year?
Oh, I have no idea.
October of next year, I think.
They should wait till December
when it's really cold and snowy.
I hope.
I hope I get it, man.
Also have a 5K race this Sunday.
I'm trying to break 19 minutes.
We'll see if that happens.
So anyway, very anxious for tomorrow, Dad.
Let's see if I get Chicago, okay?
Well, we're all pulling for you.
And yes, we'll be back here tomorrow
and we look forward to having you here tomorrow.
And remember, bring a friend.
Yeah, bring a friend.
Love you, Dad.
Love you too, handsome.
When you fill up a 76, you're ready to go.
To that music festival you see posted about each year,
but have never been to.
And you're ready to go?
Do a sunrise yoga class before work.
Ah, and go dog sitting
and try to get the zoomies under control.
Now who wants to go?
Go here, go there, go anywhere with 76.
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About this episode
Capital One's recent survey reveals a surprising increase in consumer trust towards car dealerships, with nearly 70% of buyers now viewing them as trustworthy, a significant jump from 44% two years ago. However, the hosts challenge this data by contrasting it with their own findings, where 82% of their community expresses distrust. They delve into a civil court case against Morgan Automotive Group, highlighting allegations of deceptive sales practices. The episode explores the complexities of trust in the auto industry, raising questions about the validity of surveys and the reality of consumer experiences.
Original notes
Today on CarEdge Live, Ray and Zach discuss the latest news from Capital One. Tune in to learn more! Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com
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