Dyjak/York on PARTS Act, Nens on Buyer Privacy, Johnson on EOS Gains | Daily Dealer Live

Hey

I'm your host, Sam Darkin. Welcome to the space where all automotive comes together to learn,

to share, and most importantly, we are here to execute. Thanks for choosing to be here on this

Wednesday, January 21st, Frigidae, across much of the country. Coming up today, the problem of

catalytic converter theft and what NADA is doing about it. We'll talk AI search, right to repair,

and why don't we throw in a little right to sell, speaking of which we'll bring up the

scout motors debate for good measure. But first, let's hit today's industry headlines.

First up today, speaking of open AI, they've announced that it's preparing to introduce

paid advertising inside chat GPT. That's going to be fun. Creating a new channel for brands,

including automakers and dealers to reach shoppers. I think there'll be a race to get involved in

that. However, according to open AI, the ads won't change how chat GPT answers questions.

They'll simply appear in clearly labeled boxes below responses matched to the topic of the

conversation rather than embedded into the answer itself. Open AI also says it will not

sell user data or share conversation content with advertisers. Interesting. And users will be able

to opt out of ad personalization without losing other features, similar to some other

social media platforms. The initial rollout will be a test in the US, starting with chat GPT's free

subscription tier. What's the big picture here? Well, the key ingredient with open AI will be

trust. If users suspect that AI is steering them towards paid placements instead of real answers,

the entire format could be devalued. However, for dealers who get in early,

this could be a rare chance to show up at the exact moment shoppers are asking high intent

questions. And that's pretty powerful. We here at the Cardiola Ship Guy will follow this evolution

closely and bring more of this content along with how to's in coming episodes. Because I know

this is going to be a topic I'm super interested in, in my CO role here at the Ziggler Auto Group.

Next up today, auto insurance rate increases are finally cooling off after years of double

digit growth. Average rates are expected to rise just 1% nationwide in 2026. That's the smallest

increase since 22 according to Value Penguin. More than half of all US states are expected to see

insurance costs fall, led by places like Iowa, Minnesota, Arkansas, Missouri and Illinois.

But New Jersey, well, it's a clear outlier with rates projected to jump more than 10%,

followed by Nevada, California, New York and DC all in the 5-6% range. Essentially,

auto insurance is still a real affordability wildcard and even modest premium hikes can

derail deals. Although this deceleration could signal a more favorable market cycle is on the way.

Next up today, let's turn to President Trump who has escalated his Greenland push

by threatening new tariffs on key European allies, tying trade penalties directly to whether

they interfere with US efforts to bring Greenland under American control.

The proposal would slap an additional 10% tariff on countries including Germany, France, Sweden,

Denmark and the Netherlands by February 1st, rising to 25% by June if no deal is reached by then,

and that's on top of tariffs already in place. Markets reacted quickly after the announcement

yesterday, shares of Volkswagen, BMW, Mercedes-Benz and Stellanus all slid, showing how exposed European

automakers remain to US trade policy shifts. But President Trump, well, he's not backing down.

Speaking today at the World Economic Forum in Davos, Switzerland, he said he would not use

military force to persuade and pursue Greenland, but made no such retreat on tariffs, reinforcing

that trade pressure remains his primary level. Lever, lever, lever, lever. Last up today,

used vehicle sales surprised in December, climbing 1.34 million units. That's up 3%

year-over-year and 2% from November, during a month typically known for slowing down according

to Cox Automotive. That late year strength capped off a better than expected 2025 for used cars,

helped by loosening auto loan access and the growing affordability gap between new and used

vehicles. Used inventory levels are higher but still controlled. Dealers started January with

about 2.2 million used vehicles on lots, 5% more than a year ago, while days supply sat at 49,

essentially flat year-over-year and tight by historical standards. Looking ahead,

economic pressure and constrained supply are expected to weigh on used sales as 2026 progresses.

That said, there's a near-term bright spot. Cox expects Q1 to benefit from larger than

expected tax refunds this year. Much of automotive is waiting for tax refund season and the sales

that come from that. And with that, that's a wrap on today's industry headlines.

Yuli, welcome back. We got an action-packed show. All right. Monday, I came to you from the whole

of a boat thanks to Starlink. Today, I've got a little bit of a different background. On Friday,

I'll be back to the normal. But it's proof that no matter where we are, the news doesn't stop. The

conversations in automotive, Yuli, do not stop. And today, we've got one of the coolest conversations,

I think, in all of automotive as we talk about the PART Act, which we're going to learn a little bit

about what that is, what the cost is, ultimately to dealers, to consumers, to everybody else.

What did you think of the ChatGPT Convo there? Like, as soon as you hit the nail on the head,

this is going to be that cool inflection point, right? Like, get in there. This could be super,

super interesting. I've always thought about how does a dealer get in there organically to get

served up? So now, if ChatGPT or OpenAI is able to monetize that, it's going to be very interesting.

Every room I've been in, whether with our leadership group, whether with our GMs,

with other dealers, everybody's like, okay, Google, that's interesting. We've all kind of figured

out how to show up in Google search and how to get digital leads that way. What makes less sense is

OpenAI and people value OpenAI search more than Google search. I would say more than most searches

because it pairs back your own personality to the information you're requesting. And this

ads thing just adds a whole different layer. So maybe we can ask some of our guests about it

today a little bit. But let's start up with the PART Act. So Charlie, Senior Manager,

Legislative Affairs at NADA and Greg York, President, CEO of Van York Auto Group. Welcome to the show.

Thanks for having me. Charlie, I gave it my best shot. Is it Jack?

Jack? You're pretty close. It's Diane Jack. It's a tough one. I know.

All right. And Greg, I got you, man. Greg York. Welcome. Welcome to you both.

So all right. First off, Charlie, would you tell us a little bit about what is the PART Act

and why should dealers, why do we care about catalytic converter theft? What is the PART Act,

Charlie? Yeah. So the PART Act addresses catalytic converter theft at the federal level. So right

now, there's a couple of state laws on the books because, I mean, theft skyrocketed during the

pandemic and has continued since. We believe that there's a need for a federal framework,

because a lot of these thefts, these guys are transporting them across state lines, right?

There was a giant ring in Northern Jersey that was getting shipments from Oklahoma, California,

so not even neighboring states, right? So we need a federal framework to sort of blanket the nation

and protect consumers and protect our guys, too, right? And you said the bill is currently

being considered both at the House and at the Senate. And what does the timeline look like

for passing it before we talk about the specific components of that? Actually, you know what?

Before we go there, though, Greg, what is the cost of catalytic converter theft? Like in our

auto group is the price of vehicles have gone sky high. We're seeing more catalytic converter

theft. We've actually had employees' vehicles have the catalytic converters cut out of it while

they're sitting in an open parking lot, Greg. It's crazy. Yeah. First of all, thanks for having

this on. Thanks for NADA for taking this on. I mean, it's not the sexiest issue, but it's

an important issue. And it's an expensive issue, not just for dealers, but for the consumer. I mean,

it depends on how good the thief is. Are they good? Can they just cut off the catalytic converter

and cost $2,500 or up to $4,000? Or do they completely destroy the exhaust system and get

the manifold and get to that? And then you're up to $5,000. So it is very expensive. I think

any dealer will say they've had in the past year probably had had catalytic converter stolen.

We've had it. We've had it. But here's the people that don't understand. We'll have an instant.

We'll have a group come in and steal eight catalytic converters, four will be from your inventory,

but the other four are customers' cars for service or employees. And those are the toughest ones.

That's when it starts costing the consumer money. That's when insurance starts going up.

It's just a cascade of problems involved in it. Why are thieves targeting catalytic converters?

I've never understood. What is it about a catalytic converter that makes it so appealing

for somebody to sit under a car, cut it out and run off with it? Well, it's easy to get. And then

the minerals and the core value and the resource in there are very, they can turn them into cash.

I think Charlie can tell you talked about that closer from a national standpoint. That's the

easy thing. Easy access and they can turn into cash without any kind of being tracked. Charlie,

is the market more liquid? And is that part of the problem with the current state of legal catalytic

converter theft? Yeah. So scrap facilities right now, record keeping is done on a state by state

basis. So some states have got great laws in the books. Others not so much. So it's easier to sell

these things. And it's the precious metals that are included in catalytic converters that are really

skyrocketing the price of these things. So platinum, palladium, rhodium. At one point,

rhodium was touching $30,000 an ounce. So you're telling me 90 seconds of work. I can get about

$200, $300 worth of precious metals under my arms. Sounds like a pretty great deal.

So those are two main components. And then the third one I'd say is a lack of traceability.

Right. So these local law enforcement guys are pulling these these these over with, you know,

ten of these things and better their truck. They can't prove that one of these converters

came from an affected vehicle down the street. So they don't have a case. So they have to let

them go. So that's a big component to that just makes a step a little bit easier for the guys on

the streets. This is part of the reason we want Greenland, by the way. So rare earth minerals.

Is this one of those rare earth minerals? Or does this have nothing to do with Trump wanting

Greenland? I don't know if Greenland has anything to do with catalytic converter.

So so give us the in plain English, if the part act passed tomorrow, what would change first,

who would feel it most immediately? Because as I understand it, you want a VIN, you want to make

these catalytic converters traceable. So as soon as that employee's catalytic converter is stolen

off a vehicle, the police could immediately identify that it should have been on vehicle A

because of basically a VIN, right? Yeah. And so not necessarily a full VIN, right? So when the

sponsors drafted this bill, they wanted to make it as easy for OEMs to comply with as possible,

right? So a lot of OEMs out there right now, they have unique serial numbers on a catalytic converter.

So as long as they can tie that unique ID back to a VIN, that's as good as the VIN, right? It's

still a tribe that establishes that chain of custody, and they can trace that pretty easily.

So that's the first part of the bill is putting some sort of unique identifier on catalytic

converters of new vehicles. The second part is a grant program. Dealers are specifically listed

as entities that can receive funding to market vehicles that are currently on the road.

That way these these markings start to permeate into the fleet a little bit. That way it's not

just newer vehicles that have these markings. These are smart. We'll hear about that. They'll

just move to start hitting older vehicles, right? So you want to permeate that into the fleet a bit.

Third, it increases scrapkeeping requirements at a federal level. Like I said before, it's done

at the state level, but this would just be a floor of what is necessary across the country.

And then lastly, it increases federal penalties associated with that. So you'd get up to five

years for the trafficking of converters. Again, that's just a deterrent factor. Hopefully you guys

hear that and say, you know what, Feds are getting involved. I'm staying out of this.

Yeah. It's interesting because as you described this, it is additional record keeping. It's

additional oversight. Greg, I don't know if you've had this experience, but in some of the states

we do business in, we have a hard time getting the cops to go after the stolen cars, let alone

parts of the cars. Like giving federal oversight into the catalytic converter theft, how who's

going to enforce this? And what's what are the expectations from a police standpoint of actually

being, you know, recovers? Well, I think right. Like in our state, I'm in North Carolina and they

have had, we have passed state legislature legislation, which was not allow people to

possess catalytic converters unless they're in the auto industry. So that is, but, but still,

they still are concerned because there's no way to trace it back to, to prove that what car that

came off of. So I think that, I think this is more, as Charlie pointed out here, this is more

an attorney. If the Feds are involved and they know that the catalytic converters are getting

marked and there is a way to trace it, I think it'll be deterrent for people taking them off cars.

That's our hope. So Greg, for you, where has this catalytic converter theft hit you the hardest?

Is it, you mentioned customer cars, service owners, inventory. What kind of disruption

to dealer operations does that look like day to day for you? You know, I think we look back this

year, we've had 30, we've had 30 catalytic converters stolen. That's a light year for us this year.

And so I mean, half that's customers, half that's inventory. And I think the, you know, our inventory

or our, our own cars, that's, that's an easy, that's an easy situation. It's when you have a

customer's car who gets, who gets the catalytic converter stolen off that car's down. We're

trying to track down parts. We're trying to make sure we get it repaired. So it complicates a lot

of things. And it complicates our relationship with that customer.

Yeah. So Charlie, NADA has pointed out these thefts can turn violent quickly and pull law

enforcement away from other priorities. I mentioned sometimes it's tough for us to get vehicles

back, let alone the catalytic converters. How does, how does this law specifically help with

let's get these parts back, let's prevent the theft, but, but also keeping law enforcement

focused on the things they need to. Well, it makes prosecuting these cases a lot easier for

the world. Yeah, yeah. It's a federal offense. Just giving them that traceable element. I mean,

this could turn a case that usually would take them, you know, a couple of days into maybe just a

couple hours, right? Because now all they have to do is punch in this serial number into whatever

database they have for this, find out exactly where the car came from. And there you go. Now

they have the case. So this frees them up to address other local issues. And hopefully get

some of these guys that are, you know, turn in violent as well, like you mentioned off the

street, these bad actors, right? Yeah, you're getting a lot of comments online. Igor Kay online

says three big things that are being stolen right now. Catalytic converters headlights,

especially from Porsches. And I'm also seeing thieves steal tow hooks if it's left on the car.

So I mean, anything I think the common element here in a lot of these thefts is anything that

can easily be converted into cash quickly, thieves are willing to take a risk on and

catalytic converters because these minerals in there are easier to turn into cash. And you're

just trying to prevent you're trying to put up some blocks and obstacles that make it less easy,

right? Exactly. You know, it's been around for millennia, right? We're not going to put an end

to theft as a whole. We're just hoping to stomp down a bit on catalytic converter theft because

that's especially prevalent over these past few years. So it's interesting to our daily

deal live audience, dealers, GMs, other people within auto dealers. Have you seen a catalytic

converter theft? Love to see it in the comments. I think most probably have. For those dealers,

Charlie, that want to support the effort, want to get involved, want to help make sure that this

goes from bill to law. What can we what can we do today, January 2026 to help help you in your

efforts? Yeah, so I mean, it's as simple as contacting your members of Congress, right?

So you're your member of the house and then your two senators. And you know, NAD is always happy

to make those connections. If you reach out to us, we're happy to put you in touch with those folks.

But at the end of the day, they want to hear from you guys. I can talk to their offices to

blue in the face. But once they hear from guys like Greg, who are on the ground, who have seen

it firsthand, they actually listen. So we're always happy to put you guys in touch with those folks.

It's gained some good traction on the hill. We had a hearing last week in which three different

members touched on the bill, all supportive Democrats and Republican. So it's got momentum

behind it. And we're hoping to get across the finish line this year. By the way, until today's

political environment, how unusual is it to get bipartisan support for anything? Like,

that's actually pretty cool. How did you achieve that? Were you able to bring both sides of the

aisle together in support and concept of a bill like this, preventing catalytic converter theft?

You know, it's one of those things that it almost sells itself. You walk into the office and you

say, Hey, are you against catalytic converter theft? And 10 times out of 10, they're going to

say yes. So it's an easy sell. And there's a lot of bipartisan bills out there. They just don't

get as much limelight as they should. So Greg, you've spent a lot of time dealing with this type

of theft at all levels, employee, customer, and your own inventory. For those dealers watching

today, even before this bill passes, we obviously want it to pass props to NADA for your efforts to

make this happen and turn this into law. Is there two or three steps you could recommend to help

protect your inventory, your customer vehicle, and your employee's vehicle against catalytic

theft today, January 2026, Greg? Well, you know, right now we have a big fleet order sitting here.

We had to hire someone to watch that fleet order because, you know, big trucks, fleet

or trucks that it's so easy to get the catalytic converters out. So, you know, one of the things

we had to do in one of our stores, because we had it got hit twice was start pulling customer cars

inside. There's not a whole lot you can do to prevent this. You know, cameras are always a

great idea, except many times you just end up getting a video of somebody stealing a catalytic

converter and watching through it. You don't really, I don't think there's a lot of, right now

there's not a lot of teeth and bills to try to, to try to legislate or try to arrest people and get

them and get them prosecuted. So there's not a lot you can do except maybe the cameras. And if

you have to, if it gets severe enough, you have to start pulling things inside for your customer's

cars. Yeah. Yeah. Well, we appreciate the tips, the suggestion for our audience.

Hey, Charlie and Greg, as promised as we wrap up today, one question. So we had the ATAE of

Virginia Auto Dealers Association on, we teased it in the intro. Another big legislative topic

today in automotive, in franchise circles, particularly is Volkswagen's in road into scout.

They got approval in the state of Colorado to sell direct to consumer. And is that a big deal?

No deal. What's your take on it? What should dealers be doing when they think about scout today?

You know, this is one of those things that all the, all my co-workers out in Tysons are working on.

I know we got, I mean, some fantastic folks out there on the IR team and our fearless leader,

Mike Stanton. And I'm sure they'd be happy to apply on this a little more than I would.

You're, you're passing. Greg, any, any thoughts on it?

Yeah. The best, the best, the best system for consumer and for factories and for deeders is the

deeders, is the, is the dealer model. It works the best. It's working for you. It's worked for

decades. It's the best consumers. You know, it's just the best way to market and sell vehicles.

I am a major support of the franchise system. So I will leave you with that.

All right. Very good. Dealers should be involved in that. I'm going to give you both.

Charlie, I know there's a different department that's handling that right now, but

we had Don Hall on. Nobody's more passionate than him about this one topic. And he actually

said on the show, he said, some dealers think that they may not be impacted because they're not a

Volkswagen dealer. What starts in one state eventually spreads in another. And that's why

the legislative efforts of bodies like NADA and others are so important because you're

representing the entire deal abroading nationwide. And you're able to go after this and have

conversations that need to be had. I do believe this franchise auto system that we have in the

US is unique in all the world. And it provides the consumer a competitive advantage unlike

anywhere else. So and we'll leave right to repair to our third guest unless Charlie,

you got anything you want to add on that? You know, it's another one of those issues we're

working on constantly in this office. And I'm excited to hear Josh talk about a little bit

further too. Charlie, what's one thing most people don't know about being involved in legislative

affairs in Washington DC at NADA? I think you got the coolest job. Greg, you and I are in very,

you know, we both work in the car business. Charlie, you're there on Capitol Hill. What a

cool gig you got, right? What's something that would surprise most of our audience about what

you do every day? You know what? I always say it's not too different from what our members are doing

really. It's all it's a people business. And instead of selling cars, we're just selling

our members ideas and making sure everything's going all right with them, right? Which I mean,

with a membership like ours, it's pretty easy to do. So it's not too different from what a lot of

your members or listeners are actually doing on the day to day, just different venue. That's all.

Well, senior manager legislative affairs at NADA, Charlie, Jack, we appreciate you being on.

And Greg York, president, CEO of Van York Auto Group, North Carolina base. Thanks for

joining the show today, sharing your perspectives and creating awareness around this topic. Thank you

both. Thanks. Thank you. Yuli, I don't want my catalytic converter stolen and it's happening. It's

a big deal and we see it all across automotive right now. I love that there are dealers and

that there are associations like NADA that are combining forces to help dealers win in this.

Yeah, my two cents also on that would be don't park your vehicles near any tree lines. That's

something that's huge. Why a tree line? Because I've had in my experience vehicles that have had

their cats stolen and they've been customer cars, they've been inventory, but anything near the tree

line if a bad actor, we'll call them, can walk through the woods and seek out and crawl underneath

and cut out. It doesn't matter what camera system you have. When you go and start up that car the

next day, all of a sudden your Honda Odyssey sounds like a race car and you're like, uh-oh.

Yeah. Yeah. All right. Well, let's talk in Pell for a moment today's episode is brought to you by

Impel. Impel Sales AI is the perfect tag team for your sales staff handling lead qualification

responses and employment scheduling around the clock. So your reps step in only when it's time

to close. We appreciate Impel sponsoring today's comments, supporting today's content, including

this cool conversation on the PART Act. If you want to learn more, you can scan the QR code there

in the Zyglauda group. We actually have several stores that use Impel through CDKs, CRM,

ELEADS, and it's been a very cool and efficient effective tool. So props to Impel for supporting

today's content and for sponsoring the show. So thank you Impel. All right. Next up today,

let's go from part theft. Let's talk data. You know, it's fascinating. We talked with our next

guest in the green room and you know, when you sit and you think about a car, how much data gets

collected in the car. We all know that NPI non-public information data is a burden. It's huge

advantage if you can collect it, you can aggregate it and you can use it effectively. But to anyone

that collects it knowingly or not, it also creates some liability. And our next guest up

is here to talk about that. Cheryl Nins, SVP head of US dealer sales at Privacy for Cars. Cheryl,

welcome to the show. Thank you for having me. I'm excited to be here. Cheryl, welcome. We're

going to start with our signature question, how's biz and privacy for cars? But as you're letting

us know how things are going, tell us a little bit about yourself and what your company is doing

for the automotive industry. Yeah. Well, thank you. Really, I got started in automotive at a

very young age. I think from the garage, my 13th year birthday party, I got a oil wrench from

my dad and had my own creeper since I was seven. Somehow that translated into a career as

on a high school, he had a couple of guys that he knew and I went to work at Jiffy Loop and became

service manager there all through college. And then I had a professor that encouraged me to

interview with Ford Motor Company. And so I spent most of my career there calling on dealers all

over the West Coast. And then I launched two vehicles. My husband likes to call me the small

car killer. The Ford Fiesta and the Ford EcoSport. But I don't think that was just me.

And from there, I joined Comply Auto the last four years where I really became interested in

consumer privacy and then how dealers comply with that. I think dealers have, you know, so much

that they have to worry about, including catalytic converters. But what does it do with consumer

privacy? And I think an area where it's really often overlooked is on your car lot. Dealers are

doing a great job about knowing that they have to do cybersecurity or their phishing tests or,

you know, protecting customer information inside the dealership. But what about consumer information

that's right there and their dealer lots? And is there even an opportunity for revenue to help

protect that information? So that's what privacy for cars is, is really helping dealers streamline

in a very accountable way to delete customer data.

Cheryl, I have a question. When you rent a car at an airport, do you connect to the Bluetooth in

that rental car and connect your phone and do all the contacts and all that stuff based on what you

know in the world? Yeah, I do. I know privacy, but I also had a sister that worked for the

federal government. So I also know, I don't know if there is privacy. But that is something that

you have to think about. We heard a story recently about a woman who went to a rental car and she

did connect her car and didn't delete it. And I know I'm very good about deleting it, but I know

there's also times that I'm late to my flight and I haven't done it. And there was a bad actor

that was able to get in, see her call log, use all those phone numbers to be like a scammer and call

scam, call her parents and contacts and say that she needed money. And fortunately, they figured

out what it was and where it came from. But I mean, it's got easy.

I want to paint a different picture because I have personal experience with your company and

my organizations, but we talk often about protecting consumer privacy laws in the showroom,

like you just said. Paperwork, things like that, nothing can be out. We have triple security checks

on our computers. Everybody has feathers now, right? Exactly. But why is no one thinking about the fact

that someone can buy a pre-owned vehicle, get into it, click home on the nav,

drive to someone else's home and use the garage door opener to get into someone's house? This is a

pretty big deal. So I guess if you could bring the light, how does your company solve for that?

How does that help dealers like us? Yeah, I mean, you make a great point. Like,

think of all that information out there and hopefully we don't all have stories. I'd like

to see what your listeners, if they tune in and mention stories. I had my own friend from

high school when I posted that I came to work for Privacy for Cars. He mentioned that they bought

an EV, a recent EV, and it was a pre-owned and that had the customer's information in there.

So not even from super scary privacy or even security aspect, but what about the consumer

experience that you get into a new pre-owned car? We all want it to feel as new as possible.

And you have other people's data on it. I mean, it's kind of like moving into a new house and

have someone else's trash there. And so that's what Privacy for Cars does is it really helps dealers

by every event. I mean, there's no master control or delete on cars. I mean, do you know how to

clear every car everywhere and do it right every single time? And I think it really starts in the

reconditioning department, but I think there's other opportunities for everyone to get involved.

And is there a little revenue? Like in New Jersey, they have the new state vehicle data clearing law

and you can charge for a little revenue for that. But further than that, I think it's just

look back at electronics and consumer products that we use. I mean, I have an Apple 15 right now.

I need to go in and get the 17, but when I trade this in, I would never expect them not to show me

how to clear data. And so I think that's where the perception is to the consumer and other retailers

are doing a very nice job of that with like reconditioned products. And that's where we have

to get to in the car dealers. So I think consumers are really expecting us to do it. And that builds

that consumer trust for your dealership. For sure. And walk us through from the dealer level,

where does your technology fit in? You know, for someone that doesn't know about Privacy

for Cars, where does your technology fit into the deal flow? You know, taking, selling the car,

starting out trading the car, reconditioning the car, putting enough for sale and then

ultimately selling it to its new owner. Yeah. Well, consumer trust should live in all departments,

but it's very easy. It's just an app. So we can start with at the trade in process. This is

something your sales team can do. It's an app. Everyone can do it with their own phone. And

while the customer is, you know, talking with F and I, hey, I went out and cleared your data and

then I have a certificate to prove it. So then it can live in the deal jacket. So it's traceable,

attractable. But then, you know, reconditioning and prep, you know, this is going to be like a

checklist in your reconditioning department. And now you're not having your team members try to

figure out how to do this. You know, you may know like the manufacturer you have in the most recent,

but, you know, all of them, I mean, there's thousands of events and really differentiates

between then number with the trend type of what infotainment system they have in there.

So in less than a minute, your team can figure out how to go in and do that and clear that car

and then prove that it was done and it's trackable. So it mitigates risk. It, you know,

really helps with consumer trust improves the CSI. And then if there's even a revenue piece for it,

but then don't forget your service and fixed ops for your loaners. Like we mentioned,

if you have your own rental cars. So if a dealer is asking, where's my real risk here,

you know, where does that risk show up first, you know, legal exposure, customer trust,

brand reputation? Yeah, I mean, I don't want to be the big scary, like a lawyer is going to

knock on you. I think everything starts with consumer trust. Most consumers are expecting

this and yet four out of five cars still have customer data on this. And I don't think like

consumers know how to articulate that. So it starts with the consumer and you're doing what's

right for them. So it's really improving consumer trust, your brand reputation. Can you imagine

if something happened? We had a story where a dealer, you know, took in a trade and they didn't

get the title or the spare key. They only got one key. And the customer that bought the new

pre-owned car, they just got frustrated and they went in the navigation went to that customer's

previous owner's home, knocked on the door and asked for the title with me. So just one incident,

you know, can snowball and really, you know, that's a detriment to your brand reputation.

And then it's even to be a differentiator for your trade acquisitions. Come to me, I take care

of your data the right way. So Cheryl, a question online, DNC says, wonder if the dealer has any

liability, financial or otherwise, like are there cases where dealers have been held responsible

in court for not clearing the data, not having it taken care of. So he says, wonder if the dealer

has any liability if they don't clear out the data and a consumer experiences a fraud. What does

that look like in your experience, Cheryl? Yeah, so that's an area that's definitely like growing

and we're trying to see what the precedence is. But under the FTC safeguards rule, there is a lot

about, you know, NPI, non-public information. Now it's specific originally to financial

information. So I would argue, depending on some of these, you know, EVs that you have to connect

your credit card to charge, that has an aspect. But then the FTC has come back in a lot of cases

and said like geolocation data is protected or can count as like part of a data breach.

And I know about you about geolocation, like where have you been? It shows where your kids are,

your doctors, you know, what church you go to. So that's a lot of confidential information in your

vehicle. New Jersey's taken this pretty seriously. I'm not up to snuff with the rest of the states

on how they're doing it. But I know in New Jersey, we're required to have a document and have the

customer sign off on the fact that, you know, either they have to opt out and take it on themselves

or they give the permission to the dealership to wipe that information for them. And we are

able to charge them, you know, a very small nominal but steady consistent fee to do so.

Yes. And, you know, what is a nominal fee? I'm not going to say what it is that, you know, that,

you know, 20 bucks, 50 bucks, 100 bucks for, you know, one minute of work, but then think of

like what it also does for that trust building and like having that customer come back. And other

states are looking at it, but then not to forget about the states, 19 states have consumer privacy

rights. And so a lot of that data could fall under that. I mean, two, three years ago, we had two

states that had data privacy rights laws. So this is really where I think it's a growing aspect and,

you know, consumers are going to be concerned about and come to dealers asking for it.

No, I don't want to reveal here because I know the answer, but this is obviously a very important

thing for the consumer. Does your company do something different to, you know, let the public

know that, hey, I'm treating your cars better than anyone else. Your trade-ins are safe with me.

Your private data is safe with me. Yeah, we do. We have an entire consumer site. And so we let

anyone, even dealers, anyone can have a free vehicle data privacy report. So you plug in your

van and it shows what kinds of information your car is collecting. So first of all, you're knowing

what is being done. And then second, any consumer can go on and we show them how to do it.

Hopefully, you know, a lot of them still, they have the tools in their hand and they don't do it.

Like, I bet I can figure out how to clear my Apple, but it's easier to do it at the store.

And that's what customers are going to do. But yes, we have a lot of consumer tools.

We're also big advocates. You know, I think this is an area where, you know, there's real

repercussions like domestic violence. We've heard like some women have tried to get away and then

their husband was able to track them afterwards. So there's a huge safety aspect to this. And we

help support consumers in that way for free as well. So for dealers that are trying to modernize

their operations, you know, how does treating data deletion as a formal process change the

conversations with the customers? Yeah, I think, you know, just making it part of your process.

I actually challenge you both because Sam, I know you have a few stores like, hey, go out first and

audit, like go grab cars, pre-owned and see if you can find customer data left out there.

And then that's really revealing. And then like, okay, let's start documenting the process and like

putting it into like our reconditioning step. But then going further, how do we document that?

How do we make it really objective where we can, we know every then and then it's done properly

and then prove that to our customer? Why aren't, for franchise dealers, why aren't the OEMs just

doing this? Why isn't there like some sort of a reset process as part of the CPO or

are OEMs engaged in this? Are they thinking about it or is it the franchise dealer that

needs to be forward on this effort? Well, it's the same thing like when we have a data breach and

it's like some other customer or third party, who is your customer? Like who is collecting that

information? And so really, when it leaves the OEM lot and becomes on yours, it's really the dealer's

responsibility. You know, it's interesting, every time I get in a rental car, I have that thought

every time because it'll offer to connect you up on Bluetooth and you can see the option to

download your contacts and you see like eight people on every rental car. I feel like I'm helping

doing my parts. No, I think, yeah, and I think you're right. Like this is an area where people

just aren't quite thinking about it. You know, their comply auto kind of came into its own. I

want to make the argument on the heels of the CDK outage, right? Because everybody and maybe

win casinos and maybe some of the other outages that happened, people really were like, oh,

you know, we need to really tighten up our processes as it relates to data control on that

outage. It was kind of the canary in the coal mine for everybody else. What do you think will

happen in this privacy space with customer vehicles that'll kind of be that same event for

clearing data and used vehicles? Because to your point, there's not a lot of focus on it right now.

Logically, you think about it and you're like, you know what, we probably should think about it,

but getting money spent on the problem won't happen until probably a bigger event or

liability is super clear cut. What do you think is, what do you foresee happening that kind of

shakes the industry up and says, you know, rental cars need to clear data, dealers need to clear

data, people need to be responsible for this data that gets collected, Cheryl? Yeah, and I think that

is going to be through legislation or like a big incident like that. But I really encourage you,

though, because whether it's a big incident or a little incident at your store, we had an episode of,

you know, a dealer told us about a loner that they had. The porter thought, hey, this girl's kind

of cute, went in and found her address knocked on the door. Hey, you want to go out? So the dealer

got a call from an angry dad and a lawyer and like, do you really want that to be the thing or

legislation? So I just really encourage dealers like, hey, reactive can be very troublesome,

headaches and expensive. Proactive can be quiet, maybe generate you revenue. We have a lot of

dealers doing it or even helping with your trade acquisitions. We have Premier Auto Group uses us

and it's right on their homepage to show as a differentiator, hey, come to us, we care about

you and we want you to trust us and this is what we do. So last couple of questions we go here.

What type of revenue and so I do see a huge benefit in being an industry leader in this space to

cleanse a consumer's vehicle, give them that peace of mind, you have your own peace of mind,

not having to worry about one of those scenarios you just talked about happening.

From a revenue standpoint, you have dollars per unit that can be generated on average at some of

these other groups that are doing this that are engaged in it or making it part of their value

proposition to their customer. Yeah, we have a few dealers that do it and they charge reasonable

fee, it's all different. Some dealers don't, they use it more as the trade acquisition,

but let's say it's $100 on trade ends. So we have a small fee where five, six hundred bucks a month

and then so to break even, you only have to sell five or six used cars to clear it. So if I charge

$100 a month or $100 a vehicle, excuse me, and then maybe you spend a service loaner,

hey, when you return the car, one of our fees is $15 to clear the data. And then in reconditioning,

you have like reconditioning prep fees, this can be another fee that's on top of that. And so

that's where the revenue is. And so it's, no, 4500, 5000 bucks if you sell 100 cars.

So does the certificate of cleansing, does it create, does it have some sort of an insurance

product that backs it up? Or it's a certificate based on the process that you put in place,

I would assume, right? Sure. Yes, it is. And it can also be like a car fax report. So on your vehicle

display page, you can use our badge and then it's clickable where the consumer can see that that

has already been done and cleared and see that certificate. So and you, you know, it can live

in your GIL jackets as well. So it's trackable as well. Cheryl Nintz, SVP, head of US dealer sales

at Privacy for Cars. Thanks for joining the show to share really this topic that I think a lot of

dealers aren't thinking about. It's a great opportunity to be a difference maker in the

industry by protecting consumer data. By the way, if you want to see Cheryl NADA, Privacy for Cars

will be at NADA booth 6528N. So you can learn more, you can extend the conversation. I'm sure

you'll get a lot of our audience just curious about more of this. And listen, I will always,

when I see a rental car, I'll never sync it for that exact reason. So maybe if rental cars started

using you and your thought process, maybe it would give everyone a little bit of peace of mind

to go ahead and sync up to it because right now I just don't trust it, right? So thanks for being

on the show. I have an app that can start my car. And when we turned in a new car recently,

I forgot my sunglasses. I had the app. I went in and locked the door. I got my sunglasses. I could

have started the car. So there's a lot of liability there. Cheryl, thanks for being on the show.

Thank you. Come on in. See you soon. Bye-bye. Julie, it's an interesting comment. Eager says,

once you connect your Bluetooth to the car, even when you clear it, it's still there on the hard

drive and can still be recovered if someone really wants to do it. Good food for thought. So if I

accidentally connect to a rental car, I'll never upload my contacts for that reason, right? Like,

there are contacts in my phone that I don't want sitting in a rental car and then other people

to have access to it. This issue of data privacy is fascinating. Eager says data never disappears

completely. The hard drive never forgets about it. That's like an Ocean's 11 type scenario, right?

Like, if we know that you have $30 billion worth of jewels at your house, then we're going to

sit there and hack your hard drive and see what Bluetooth connections you have. But for the average

consumer, I think this is low hanging fruit. If you have some bad actor that gets into a car,

they're going to do path of lease resistance. All right. Last up today, Josh Johnson, CEO of,

by the way, the coolest auto group name in the world, Don Johnson Auto Group, props to Miami Vice.

But you're not in Miami. You're in Wisconsin, Josh. Welcome.

No, the weather's much different here. Welcome, Josh. Thank you.

So I just learned, I think it's cool as heck, 100 plus year old auto group up there in Wisconsin.

You're just north of us, the Ziggler Auto Group in the Chicagoland and Michigan. So

100 plus years, that's quite an accomplishment. What brands do you have, Josh?

We represent GM Ford and Stellantis. Okay.

From five locations in Northwest Wisconsin.

Yeah. Yeah. All right. So we'll ask the traditional question. I don't want to get

into a couple of industry topics before we talk EOS. So how's business this January, 2026, Josh?

You know, business has been great. Mother Nature's gotten in the way a little,

it's 20 degrees below zero. So that keeps the service department stopping, keeps vehicles

breaking and consumers are consistently upgrading because of that. But very optimistic. I think

it's going to be a great 26. So if the three OEMs that you have, we'll put you on the spot and say,

who's winning this January of 2026? Who are you most bullish with?

Well, I think GM's got a great go to market strategy right now. Incredible product.

We're really excited about the new team at Stellantis, the reintroduction of the Cherokee

going forward. I think that's going to be a game changer form and Ford is just a steady

moving ahead. So I think it's going to be a positive year with a solid SARS for all three.

Yeah. So in your marketplace, I would imagine mobile repair is a big deal. Ford put a ton of

money in it. And with their recalls this past year, a lot of groups have capitalized on that. Do

you do mobile repair at your Don Johnson Auto Group? We have been doing mobile repair when it

comes to recalls for Ford. It gets a little bit challenging at 20 degrees below zero. We're not

doing a lot in driveways this time of year, but come the summer months or being able to service

commercial facilities, we've been able to take full advantage of that. It's a great resource.

So you and your group have engaged in the EOS process. We definitely want to talk about that.

But you also heard us speak with NADA about a couple of topics that are big in automotive today.

So Scout just got approval in the state of Colorado to sell direct to consumer. It concerns a

lot of Volkswagen dealers. Big deal, not a big deal. What's your take? It's a huge deal. Absolutely

inexplicable why Colorado would approve this. Yeah, I think we can go back to 2024 Oliver

Wyman study that to look at, take a look at every distribution model, manufacturer direct agency

model franchise and hands down the franchise model provides the most value for the consumer.

It allows us to provide bespoke services that best match consumers needs with what manufacturers

produce on a consistent basis. And we can help balance supply and demand that no other model

does. So why a manufacturer would want to pursue it in the first place just doesn't make sense to me.

And the fact that Colorado has allowed this to go forward is just inexcusable. Thankfully NAD is

on top of it. They're participating in legislation and litigation both in California

and Florida and we're very confident we're going to get this one shut down. Yeah, what to other

dealers listening that maybe are just starting to understand and realize this topic. What advice

would you give to another dealer ahead of another auto group to you know, should we engage in this?

Should we fight it? Should we work with NADA? Should we write a letter? What do you do? Absolutely,

there are two things I think one we need to be in constant communication with our legislators.

That's just step number one. But step number two and I think this is an important one.

If you are a franchise automobile dealer and you're not actively involved in the NADA pack,

it's time to do a self-assessment because either we're going to have a seat at the table or we're

going to be on the menu. NADA pack is what makes sure that we get into the room. We get to have

those conversations to make sure situations like this don't occur. Yeah, yeah. Well, we appreciate

your thoughts on that and with the NADA conference coming up in Vegas, will you be there by the way?

Absolutely, I'll be there an entire week. Good. Well, it'll be fun to potentially meet up with

you and say hi face to face. So let's go into EOS. So you've had an increase in sales this past

month. You guys are winning. I would imagine part of this is the EOS process that you've

engaged in. For our listening audience that's unfamiliar with it, explain what EOS is and

what made you decide to engage with EOS? So EOS stands for the entrepreneurial operating system.

If you look across a dealership or any business, we've got operating systems for literally everything

we do, whether it's managing our inventory, managing repair orders, doing the accounting,

but what most businesses lack is a people operating system. And at the end of the day,

we sell commodity products and services. So what differentiates us, what allows us to provide

those bespoke services, is the strength of our people. And EOS gives us a system for communication

and meetings to make sure that we're clearly identified and aligned in our goals and objectives

and we're giving every member of our team a seat at the table so we can proactively identify

issues, opportunities, barriers, anything that's standing in between where we are today

and where we're going to go together. And because of that, we're always moving forward.

You know, I think what a cool time, you know, there's ebb and flows in our business. COVID was

an odd time. What a great time to commit to a people process, kind of coming out and engaging

into kind of this new norm, whatever you want to call it. How long have you been engaged with EOS and

what did the first 90 days look like for dealers looking outward in trying to implement this

people operating system? So we're about four years into our EOS evolution. The first 90 days

is really education, trust building and cultural and values alignment, making sure that we're

able to articulate across all 165 team members who we are and what we stand for, what's acceptable

and what doesn't work in our organization. Because when that becomes the foundation

that we can all align on and agree to, we can stand shoulder to shoulder and work through

anything together. So what was the trigger for you four years ago that said, so in our auto group

Ziggler, we have a Ziggler Academy, we've committed to doing a lot of internal education through

LMS, we've got different leadership classes courses, we've really leaned into people and we

get some dealer groups outside that are like, look, that doesn't, you're not selling cars when

you're engaged in that, like you can't directly tie the expense of that education back to a car

sold. What was the trigger for you four years ago to engage in this people development process

without a direct tie to a car sold? Yeah, really our journey started far before that as a fifth

generation family business. I finally became a father and I had children and as I looked around

me, I said, I need to make sure that we're creating an organization and a culture that will surround

my children if they choose and have the, earn the opportunity to become part of this family business,

that will make them better versions of themselves. And so for years and a decade, we looked at all

of the different ways that we could help define our culture, enhance our people and grow together.

And then several years ago, we came across the entrepreneurial operating system and it was like

a light bulb went off, we said, that's the way we can systematize and be intentional about who we

want to be and what we see more. That is so, so, so you have kids eventually, it will be gen six.

Gen six, like I said, if they choose to be and if they earn it. What are the, what are the odds of

that in automotive? I know gen one, they build it. Gen two and gen three oftentimes are challenged,

but gen six, what, for those dealers looking at what you've continued into the sixth generation

over a hundred years in business, what advice would you give to dealers looking that we talked

succession planning last episode, it was fascinating, but you've got a great seat over a hundred years.

We've been so fortunate. It really comes down to people and anything you do and staying close to

that values alignment. It's so easy to become short-term focused, particularly when reporting

to manufacturers who talk to the public markets on a monthly basis, but to make sure that we're

always balancing those short-term objectives with our long-term goals and our patients and we just

can't ever step away or sacrifice our values or our integrity in anything that we do.

Both yoga cars online says gen six never heard of it in automotive. Like you've got to be one of

the longest running. I can't, I can't, I can't quickly think of too many gen sixes. So EOS is

big on issues. What are the most common issues as you engaged in the process and you've gone

through it that keep resurfacing in dealerships and then how do you prevent, you know, a game of

whack-a-mole to deal with those issues, but make it part of your culture that it's, it's overcome

before it comes up. That's right whack-a-mole is a great analogy for, you know, really everything

comes back to communication. 90% of issues they have are either internal communication, communication

with our vendor partners or communication with our guests. So that's exactly what EOS helps to

proactively address because we've got a system in place for holding meetings, giving our team venues

to proactively put out, reach out and identify those issues, those opportunities, those barriers

and put them in front of everybody in the department, everybody in a store, everybody in

the organization, then we can work on them together to stay ahead of them. So as you made this

investment four years ago and you continue it today, are you able to somehow, like do you have

some sort of, you know, a quantification metric? Are you able to say, hey CSI is higher, our net

sales, our retention maybe is higher? What, what are the key levers that have gotten better as a

result of this process? Since we've implemented this, our employee turnover, our team member

turnover is a fraction of what the industry stands for. Every single year since we've done this,

we've been a member of Automotive News top 100 best dealerships to work for and this past year

we had four of five locations that, that fell into that, that bucket. Our net promoter scores

have never been higher and I think really what speaks to it is that when our guests visit any

Don Johnson Motors facility, they say that they can feel a difference and that's a hard one to

quantify but when you hear that consistently, you know that there's magic that's happening.

Yeah. So Josh, you're in the North territory to your point, negative 20 degrees below zero,

much of the U.S. this week is going to be hit by colder, chillier temperatures, certainly.

In fact, I think I even heard like it, there's parts Tennessee and others that are about to get

hit by two feet of snow. How do you and your team continue to sell cars and service cars and

deliver your best to your customer every day, every day, regardless of weather and regardless of

temperatures? What's your strategy there? We do whatever we can inside number one but

it's a team effort. It is really what it comes down to. The weather conditions that we experience

in Northwest Wisconsin are atypical. Some of the biggest extremes you'll find anywhere in the U.S.

So vehicles break. They have to be proactively maintained and it's more important than ever

that we collectively do a wonderful job interacting with our guests to understand what

their specific needs are, what their travel patterns are so that we can put them in a vehicle

that's going to be able to handle that variety and travel the best distances that we do. But

it's all for one and one for all. Yeah. Yeah. Very cool. I can't tell you how much respect that

many generations. In fact, we're getting a ton of comments in the comments here. Paul

Salisman says, Don Johnson Motors is proof that franchise dealers have the long expertise

to sell and service cars better than direct sales. An important understanding,

I predict a scout will learn the hard way. We talked about that actually several episodes ago.

There was an experiment way back in the 90s with Ford where they actually tried to go direct with

a bunch of stores in the West. And it just, you know, there's some advantages, I suppose,

in the direct model. And, you know, one of the interesting parts, I think, when you look at

some of the direct to consumer Tesla and others, you know, they don't spend the amount of money that

some of the OEMs require of bigger facilities, right? So they're more modest facilities. And I

wonder if that, you know, scout may learn a thing or two, and that might end up being one of them.

Maybe they'll transition across to Volkswagen. And our own CDG's Hannah Farmer says,

Blizzard's are coming to Nashville. So, Josh, you've given us advice on that, you know,

how to do that. You know, use car acquisition is a huge topic is actually, you know what,

the producers are telling me we're actually right here at time. So they're going to kill me if I,

if I go any, with this EOS process, just the last question, how do you define the right seat

for a general manager? We've been talking a lot on the show lately. Toughest job to hire for an

automotive used to be technicians. Many dealers now are saying sales managers and GMs are the

toughest jobs. How do you find that right person? And how do you determine the right traits? Final

question for today. When we're looking at our team, we really ask three questions. We call it

GWC. Do they get it? Do they want it? Do they have the capacity to do it? Does the individual

understand what's required to be successful in that role and what success looks like and the

scorecard they will be held accountable to? Do they want it? Is it a role that lights a fire in

their belly that water can't quench? So that Monday morning is the best part of your week versus

that alarm going off and you're counting down the minutes or hours until Friday at five or six.

And then do they have the capacity to do it? We all have different strengths.

Are they aligned with what makes them successful or what they do better than anyone else or any

of their peers aligned with the roles that are needed for that specific job? And when we bring

three of those together, it's an equation that can't be beaten. I love that point, Josh, because

there are people that you would say and look at, oh, they would be a great leader. They'd be a great

GM. They don't even see it themselves. But they may simply not want it. Like, it's a complicated,

complex job. And if you don't have that fire to do it, you're probably not going to be great.

It's not something you can go in lukewarm, Josh, right? So. Not at all.

Josh Johnson, CEO of Don Johnson Auto Group, 100 year plus organization. Thanks for being on the

show and sharing your perspectives on all things EOS, organization, people development. And then

a little chat on the side about direct to consumer. Appreciate you being on the show. And we'll see

you at NADA. Thanks for having me. Look forward to seeing you. Thanks, Josh. Thanks. Yeah, you know,

do you want it? Like, not everybody wants it, Julie. So true. Learn that the hard way. Yeah,

yeah. Hannah Farmer, our own says, Blizzard's coming to Nashville. Grocery stores are already

sold out. So if you're in the Nashville area, you're about to be hit by a couple feet of snow.

I mean, you know what? By the way, the great thing about automotive is we're going to find a way to

win in any environment. And a little bit of weather creates some fun. It creates some excitement.

And it creates a shifting environment where there's need. So going back to one of our best

of episodes from last year, Grant Cardone, you can do you can do that. Igor K says,

don't hire GM who sells well, but hire GM's who are great problem solvers. Igor, I agree with

that. And thanks for being a longtime listener, longtime poster in the show. We got a bunch of you

today. Lauren Klein, Dan C, Igor K, yoga cars, the entire daily dealer live listening audience,

plus all of you watching for all of you watching. Thanks for watching daily dealer live today,

where we break down the biggest moves in the car business as they happen. Don't forget,

we are here every Monday, Wednesday, Friday, one PM Eastern. We'll be back this Friday,

one PM Eastern. So if this is your world, hit like, hit subscribe, turn on those notifications

so you never ever miss a beat. And we'll see you next episode, everybody. Thanks for being here.

Thanks, guys.

Dyjak/York on PARTS Act, Nens on Buyer Privacy, Johnson on EOS Gains | Daily Dealer Live

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