Friday Q&A With Ray & J | Episode 914

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It's noon here in Ventner City, New Jersey and 9 a.m. in, well, different parts of California, believe it or not.

And this is Car Edge Live for Friday, August 29th.

I don't know, it's just a Friday of Labor Day weekend with your hosts, me, Ray in Ventner, Mario.

He's in the San Diego area and Justice in Sacramento.

How are you gentlemen doing today?

Great. Yeah, good.

Yeah, doing well, doing well.

It's not too hot yet, but it's going to get there today.

When you were telling me it's supposed to be 102 today, I was thinking to myself,

I'm very thankful I'm here at the Jersey Shore where it's supposed to go up to 78.

I think I can live with that.

I would like to be closer to the shore like Mario is.

And complain, yeah.

So what is it that we're talking about today?

Today we are taking some Q&A finally, you know, those are always my favorite shows.

So not just because it's super easy for me to not to do anything ahead of time,

but because I like our Q&A shows and I like to be involved.

So I think we will start it off with one that I actually got in an email today

from in CS where I am.

And I thought they instead of answering email, which I will do after the show,

let's see about answering it on the show.

And maybe they would like Mario and Ray's take on this.

Okay.

So there he goes.

Hi, guys.

You're a great resource of information and entertaining too.

I think that just means you and Zach, right?

I'm hoping you can point me in the right direction on the question.

I'm looking at a 23 month CX-5 premium plus just taken back off a two year lease.

Car was in great shape when returned, but got dinged, which is an interesting word here

when we go through the whole thing.

I got dinged on the dealers lot before it could be service for resale.

The ding is in the front quarter panel just above the wheel well on the driver's side.

It's mostly cosmetic, but will require the panel to be replaced.

It doesn't sound like a ding to me.

No, no, that's not a ding.

That's a dent.

Oh, yes.

Okay, sure.

If the dealer does the repair, which they are still deciding, which is interesting,

how much would this reduce the value that originally listed the car for 28.7?

Right.

They estimate the cost of the repair to be 1,300.

It was listed as CPO and they said, if they fix it, it'll still be CPO.

What are the calculations?

What do we think the cost variation here would be?

I mean, I have some questions in there.

We always go, if it's a ding or maybe it doesn't look like a ding,

something else is great.

If it's branded, if it's in Carfax, if it shows any kind of repair,

then at a facility or it shows that it probably was involved in something,

that's where I started deducting big amounts.

But I don't know.

I mean, I think it's normal reconditioning.

For me, small things, every dealer does that reconditioning pack on used vehicles

as part of their reconditioning cost.

Yeah.

I mean, obviously, it's not a ding.

If it's going to require replacement of the quarter panel, that's more like a dent.

You know, and it's some real damage.

Now, that type of dent, if the dealer repairs it, replaces the quarter panel,

then they can still or will probably still qualify as a factory certified pre-owned vehicle

because it doesn't have frame damage.

It wasn't a severe accident.

Even if that type of thing gets reported to Carfax,

and you have the documentation to show that it was merely a dent, nothing major,

I don't think it's going to have that much impact on the value of the vehicle.

Now, if they're saying that it should cost $1,300 to $1,500 to repair and to replace that panel,

and if the customer says, okay, give me $1,500 off and I'll buy it that way and I'll repair it myself

and they don't certify it, I don't think that would be a good value for the customer.

I think the customer is better off insisting that the dealer do the repair.

He can still try and negotiate a reduction in the selling price,

but he can buy it as a factory certified pre-owned vehicle, which I think has more value than him

taking care of the dent himself or never taking care of the dent.

I think there might be some information in there, because whenever they're replacing a panel,

for me, it could be a lot of things. It could be prior damage that wasn't repaired correctly.

It could have been something larger underneath. I don't know. I mean,

there's more information that I might want to see to be confirmed, because it seems like

replace a whole panel. That's paint, that's matching, that's a whole lot of work.

Which is going to be the big cost in that. It's going to be the paint matching and everything

else on that. I think I agree with Ray. I would just have them do it. Again, on the car facts,

like Ray mentioned, it's not really, it's just going to show up as

something minor. If it shows at all, the dealer would have to report that for it to show in the

first place, since it happened on the dealer's lot. Allegedly.

Yeah, it may or may not even show up, but if it does, it's like already reduced the cost

that much on it, because it's going to say damage reported, no accidents, no anything else.

I would personally have the dealer do it, and then if I get 500 bucks more off.

Here's the other thing, have the dealer do it. If the quality of the repair isn't up to snuff,

you don't have to buy the damn car. Unless you think to yourself that, well,

you know what, I was going to end up putting a big dent in one of my quarter panels anyway.

I might as well just buy the car at a reduced price with that dent, and I'll drive around with it

forever like that. Well, yeah, that was my other question was, are you going to keep it forever?

If you're going to plan on driving it to the ground and you just want a

CPL for the warranty, I tell them to take the 1300 bucks off the price of the car and drive it

around. So it's a great email, and the customer's definition of a ding, and my definition of a ding

could be two different definitions, because I can assure you, having spent 43 years in the business

that, you know, dings don't require replacing panels. Painless dent repair today is pretty amazing.

And if you can't take care of this ding with painless dent repair, it's not a ding.

So, you know, maybe pictures, see if we can get some pictures of it. But

in my mind, it really depends on what his ultimate goal is, how long he's planning on keeping it.

You know, if it's the type of damage where he would say, I would never fix it anyway,

and he can still buy it certified, and he can get a price reduction for the ding or dent,

then, you know, maybe he's better off just taking that price reduction, keeping a CPO

vehicle and driving it into the ground. I agree. Before we move on to the next question,

Rich here has a, this is a, first of all, my name is Rippin S, but thank you.

This is an owner of Zach. I tried to find a sports jersey to wear and realized this is the

only one I own in this. Can I say something stupid about sports jerseys?

There was a comment yesterday about Zach, you have any idea how many fans you're going to lose,

how many viewers you're going to lose because you were wearing a Dodgers jersey?

Well, here's my comment to that commenter. Get a life, okay? Just get a life. I mean,

who really gives a damn what jersey he's wearing? You know, and it was literally a jersey that he

bought a special edition jersey that he bought in Japan when he was there because I don't know,

they're kind of excited about Sohei Itani in Japan. So, you know, I mean, he wears DC United

soccer jerseys, he wears the Dodgers jersey, he wears all kinds of jerseys. Who cares? Is the content

any good? I don't care how he dresses or how justice dresses or anybody else dresses and any

commenter that's going to base whether or not they watch these videos and these shows

based on a shirt or a jersey? Get a life, just get a life. Yeah, yeah, I agree. I like, you know,

there's a, if people don't know, there's a rivalry between, is that my shirt above my head?

Yeah. They sort of showed up there. That's Tom Selle trying to peek in on us right there.

Yeah, there it is. But there's a bit of a rivalry between Boston and New York.

And I wear this hat all the time. And I've only ever had one person, actually,

back in our consulting days, Mario, remember, we used to do the phone calls.

One guy hung up with me because I was wearing the hat. Now is that, and I'm like,

well, I'm not going to give you a refund for that because you don't like my hat.

There's sometimes it goes a little bit too far in some of those, like root for your team,

but we're really going to go that far, that if you're wearing a Dodgers uniform,

a jersey, like, he's not a Dodgers player. Even if he was, that would be fine, right?

We get a little too polarized, you know, my,

I'm sorry, just, you know, based, based on whether you're going to watch this stuff

on the value that you get out of it. And if the only value you get out of these shows

is how Zach and I or Mario or Justice Dress, well, really, there's something wrong with you.

There just is. I'm sorry, I'll be good now. But I just, I had to say that.

Um, yes, I guess it's been shown up because it's picking up the red in my hat. And then

when I sit right, it's picking up the red there. There it is. Yeah. Yeah.

So I'll try that over there. Sorry about that. All right, now on to the next real question here.

We got a few great ones. Okay. So Anthony here says, I'm in the market for a Civic Si,

hey Mario, manual transmission, new or use, what is your advice for shopping for a niche car

with such a high residual value? New is dealer market of two to 3000. Is that still right, Mario?

So two to 3000 on the SI? On the SI, that seems a little bit high, but it would be

super tough to get MSRP on those. It seems ridiculous that, you know, it shouldn't,

but it will take a whole lot of work to get MSRP. There's just a limited supply of those.

But, um, on those first that you get new, you don't get used, right?

That's going to be over overpriced in the used market. It's not worth it. Just, just, you know,

it makes more sense to financially to get that new car financing instead of the used car financing.

See the price is going to be so similar. So that's an easy one. But I definitely think that that's

a bit high markup. That seems like, like a high bar type of market, like two to 3000

in some regions, right? California, especially. I mean, I'm going to say California,

it's California, Southern California, anything that's SI, CTR, it's going to be super tough. You

got to go outside of the market to get anywhere close to MSRP, but it's doable. It's possible.

And even with shipping that tends to be cheaper to go out of state,

even have it shipped in then divide here. Although, isn't it a bit of a pain in the ass

in California to bring a car in from out of state, a new car?

Well, I've done it like a lot of times. I mean, you have to deal with DMB, right?

The smog it and get, maybe go one time to a DMB. Yeah, besides that, it's okay. It's a hassle to

buy it in California and try to drive it outside. Yeah. It's harder to ship out than it is to bring

in. Yeah. Okay. Because if the wheels, the rule is if the wheels touch ground in California,

you got to pay our tax. Wow. So, if you have it shipped out of California,

you got to have it picked up on a flatbed, if you fly in to drive it out,

then the wheels touch ground in California, you got to pay our tax.

Gotcha. So, you can buy it in California and ship it, but you can't buy it in California

and come in and drive it out of state. You can. But you're just going to pay California tax.

Yeah. Okay. Interesting. Interesting.

Okay, Linda. Thanks, Ray. Why did you lease the CX-30 versus a CX-5?

I didn't need something as large as a CX-5. I came out of a mini

Clubman all four S. And the CX-5, which my daughter and son-in-law have, it's a great vehicle,

but it's actually bigger than what I need. So, the choice for me was looking at Mazda was going

to be a CX-30 or a Subaru Crosstrek. Those were the two vehicles that I narrowed it down to.

I didn't think of the CX-50 and I didn't think of the CX-5 because

both of those were bigger vehicles than A, what I needed and B, what I'm used to driving,

honestly. So, that's why I didn't really consider the CX-5. I wanted something that was

close in size to the Clubman. And the reason I ended up with the Mazda was I just felt that

that had a slightly sportier ride and feel to it than the Crosstrek does.

Yeah, I agree with that. I think it's supposed to be that sort of hybrid sporty

and the Crosstrek is supposed to be the camping sort of vehicle.

And you can look at me and you can tell when I go camping it's at a

Sheraton or a Marriott. But it's not because I got stuff packed in my car for it.

So, we have... Bruce says, can you lease from an out-of-state dealer?

Yes. It's pain in the ass, but you can. A lot of dealers don't like to do out-of-state leases

because if they mess up and it's pretty possible, they mess up in taxes, registration fees,

all that's very complicated. They get the contract kicked back and they probably have to

eat any kind of mistake. So, unless it's very difficult to move car or it's someone that's

very used to it, it's tough to find a dealer that will say, yes, I'll lease it out-of-state.

Like, most of our high volume, you know, they're used to doing that type of sale.

I can tell you when I was at the mini dealer and we would do out-of-state leases.

And literally, we would factor in an extra $100 or so for additional FedEx fees

because we knew that somewhere along the line, there was going to be a problem with that contract.

We miscalculated something and especially if we did a New Jersey lease. And so,

there were going to be two or three sets of contracts that had to be FedEx back and forth

until we actually got it right and we could get paid. So, yeah, it can be done. There are dealers

that do it all the time, but it can also be a giant pain in the ass. Wait, I have a question

that I saw earlier and somebody once asked, Mario, why do we call you space? Where did

the name space come from? It just, I guess, started using it when we, at the very beginning,

and I just didn't change it and just got stuck. But it's because I use it across everywhere

and I'm in a lot of places normally answering questions. And that's how I use it. I should

change it maybe, right? I don't know. Everybody knows you as space.

Yeah, I mean, you had that before you started working. Yes, when you set it up in the email.

There's also a space in it. Everything is space. I don't know. It's just that I got stuck with it.

Well, at least we answered that question. Okay. Thanks. Oh, and may I say one other thing?

Your real nickname should be Lease Guru because there is, even, you know,

when I spent 43 years in retail automotive and I think I know Lease is pretty good.

No one knows Leases and the intricacies of Leases better than Mario. I mean, you are an

absolute Lease Guru. And you are. And so if you ever change your handle, change it to

Lease Guru. Okay. I'm just saying. Yeah. I will echo that sentiment. I agree. I know

internal people who all go to Mario and they got a lease coming up and they're all like,

hey, can you look at this, do you want, including myself? I've sent Mario many a lease.

Can you look at this one for me? Can you? So like, some of our concierge will even, you know,

backtrack with Mario. If it gets difficult, then they're like, wait a minute, what's going on?

It's always, hey, space, look at this for me. Take a look. And he's always able to get down.

So if you're ever in the community, courage.com slash community, tag at space.

If you got a lease and you got some questions, there's absolutely nobody better.

So this is not a Illinois or Georgia lease. Those kind of like get

stumped really quickly with those taxes. But yeah, I'm there always. And yeah,

I've been reviewing Leases like they're, that's how I started and we're helping people

with EGORs there and Derek's there and we're happy to help people with their leases try to

figure them out. Okay. And Mario, are those Legos behind you? Oh, yeah. Yeah. Legos? Legos?

I thought they were like Christmas Village. I didn't realize they were Legos. I know.

I should have like the other Christmas tree. All right. So back to some more questions.

We got some more in here. What is your humble opinion of the 2025 Kona? So I think Mario,

this is for you. Ray and I don't have humble opinions. We have Legos, but they're not humble.

I only talk about like the deal, the deal, if it makes sense, you know,

the car, I, it's very subjective. Some people like, I've done a couple of those

with friends because you know, you know, ladies do seem to like them and girlfriends,

you know, for my friends, they like the size of the car and they're like, how it looks. And

it's a good lease deal. Also, Hyundai does have good programs on those. They are willing to discount

those cars. So we do see, you know, 9, 10% off of those pretty easily. And inventory is pretty good

also. So it's like a right combination. So I'm okay with the Kona as a lease. I wouldn't

buy it and keep it though. I mean, that doesn't, I don't like Hyundai's long term,

but yeah, for a lease, it's 100%. Yeah, short term lease also to be possible.

And yeah, I mean, it's just, it's a good lease. I think I agree with that. I think it's there.

Is it my kind of vehicle? No. I drove it. That wasn't, it just wasn't for me. So if you want

my opinion, which is what he asked, I don't particularly care for that. But if you like

the vehicle, there's some great leases and you can get some really good deals. It tends to sit

for a while at the dealer. So I'd be kind of aggressive on it. If you could.

Yeah. If you like it, if you like it, that's fine. You don't have to dislike it because I don't.

And honestly, I don't like it or dislike it. I really don't know that much about it.

I've never really been in one. I think I was in, when we were in Montreal a couple of years

ago and we Ubered to the airport. I think, was it the Kia Nero? It might have been a Kona. I don't

know. It was a car. The Kona's better than the Nero. I really don't like the Nero. I think the

Nero might be my least favorite of all their cars. It was probably the Kona that we were in

because there were four or five of us. So yeah, I don't, yeah, I don't think we would have

fit in the Nero. So yeah, I mean, it seemed fine. Maybe it makes a great Uber or Lyft. I don't know.

Yeah, that would be one I would consider for that. Yeah.

Well, we get it if you can get a good discount on it. Don't buy it close to MSRP or whatever. Only

if you get nine, 10% maybe a little more. And if there's good incentives, if not,

I'll go with the CX30 also, like Ray, better driving, nicer and a true automatic.

Yes. That was the other thing that I like about the Mazda is it is a real automatic transmission

and not a CVT. Although our Clubman, Ray, that we used to have, the CVT, right? It's a

weird transmission, right? I think that was a real automatic, wasn't it?

Oh yeah, it was, I guess. Oh yeah. I didn't like it though.

Well, I mean, in fairness, Ray drove it 150 miles in that effort, but he owned it. So

who knows? I did turn it into the dealer with 8,997 miles on it.

And that was three years?

I traded it in a couple months early because of the tariff situation that I didn't want to

find myself struggling to be able to find a deal because tariffs had raised prices so much.

I mean, literally, I had dinner with friends last night and they're asking me, well,

what's going on with the price of cars? And as we all know, the prices are going up.

And the only hope at this point is that interest rates come down enough so that

the average car payment can stay the same even though the amount you're financing has gone up slightly

because the prices have gone up slightly. It is a tough time or will be a tough time

to be able to find decent deals, I think, moving forward. I could be wrong, but

God knows I've been wrong in the past in my predictions.

I mean, can you predict anything these days?

I for some reason put stock ticker on my desktop and I can't figure out the market

every single day. I'm like, why are you doing this now? I don't get it. I can't predict anything.

So Anthony again asked, is it better to speak with a sales consultant, sales managers,

pro con? I think I have my pin, but I want to hear your guys.

You want me to go first? Yeah.

We'll go left or right. If you want to cut to the chase,

ask to speak to the sales manager. And the reason I say that is because the sales

manager is typically involved in desking many deals at the same time. And so if you go and

sit in the sales manager's office, it keeps him from being able to do what he's there to do,

which is to help structure deals for a bunch of people. So in order to be able to get back to

doing what it is he's supposed to do, he'll, in many cases, he or she will cut to the chase

rather quickly so that they can get to a deal and get you the hell out of their office

and they can get back to their regular work, in my opinion.

Well, what's your opinion, Mariel? I agree, Ray. I'm more, my thinking is

I am okay with talking with the sales guy, the sales person, but I need to be educated on what

I'm doing. I can't go without like, oh, I want the least special. If you go in, I was talking

through it, sending an email yesterday to Ray, if you go in and say that to a sales guy,

then you're putting a mark on your back, right? So it's a, if I, I can talk with the sales person,

but I need to be very clear on what I'm, my expectation and be very clear what my target is

and then it'll move, I'll know that he's going to be back and forth with the sales manager.

Like I know that's the, that's the process. And then if he doesn't do what I want,

you know, I'll, I'll escalate and I'll talk to the sales manager. So sales manager knows

that I've been working with this guy and I couldn't find out a resolution and I'll give

him a chance. But I, I normally don't go straight to the sales sales manager. And Ray,

almost everyone wants to call themselves a manager now. A dealer is like, yeah,

everyone's a manager. And so it's kind of like, is it really, is he really the, the manager?

Is it a title, right? I don't know. Yeah. In, in, in lots of dealerships, they have floor

managers who aren't really desk managers or sales managers. They're just guys that float

around the showroom, trying to assist the salespeople that are having trouble. But they're,

they also have no authority to really be able to do it.

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having a trusted partner makes all the difference. That's why hands down you count on Granger for

auto reordering with on time restocks your team will have the cut resistant gloves they need at

the start of their shift and you can end your day knowing they've got safety well in hand.

Call 1-800-GRANGER click Granger.com or just stop by Granger for the ones who get it done.

So I am you know I kind of more a Morio side of it and I think Jerry said it best before I could

say it. Thanks a lot Jerry stealing my thunder here. If you're aggressive in your negotiations,

you end up talking to the desk manager quicker than if you ask for one.

I know a lot of dealerships that I've dealt with and my old dealership,

if you came and said you wanted to talk to the manager, they would just send you to the

salesperson because there's a process for a lot of these dealerships to go through. So you may not

always get to the sales manager right away. Will you eventually talk to them? Probably

if you're negotiating there but I always start with the salesperson, do the whatever process

that is and then sort of work your way up. Exactly as Jerry said when you're aggressive

enough you'll get there pretty quick. Look and truth of the matter is most stores

have what is known as a TO system. TO stands for turnover. If the salesperson can't close the

deal, there is someone that is going to come in behind that salesperson that closed the deal.

Could be a floor manager, could be a team manager and if that person can't close the

deal then it'll probably be a desk manager or a sales manager because most stores believe in

multiple terms. So multiple TOs but if you're working hard to try and negotiate a deal at some

point yeah a sales manager is going to come out and chat with you but I remember one time

when I was helping a friend get a car and we started with the salesperson and you know he's

going back and forth getting pencils and I said why don't we just shorten the trip we're going to

follow this time and we forced ourselves upon the sales manager and that really sped up the

process. They let's face it dealerships don't ever want you to as a salesperson or as the

customer to take away their controls and so sometimes if you force your way into a sales

manager's office they don't want to look foolish and just throw you out so they're going to work

with you quickly to get to a deal so that he get back to doing what it is they're paid to do.

Yeah I mean look sales managers are human beings and from what my experience is it's easier but it's

easier for them tell me if I'm wrong here it's easier for them to say no to the salesperson

and go tell you no and it is for them to sit and say look you in the face and say no to your eyes

because they are human beings and they don't want to do that.

It's and I think that's a big portion of why it's set up like it is because then the sales

manager can tell salesperson no way go tell that F and yes you know and then they just have the

salesperson go deal with it I know that's what they did to me in the box I had to go back out

but you know that's the I think that's the way that works if you get them in person

and they're going to roll over a little bit easier.

Well and let's face it the reason the sales manager's there is to figure out how to make the deal.

Okay that's his whole that's his or hers whole purpose of being at the dealership

is is when you have somebody that is serious about buying a car it is the sales manager's

duty and job to figure out how to make that so you never want to be able to or you never want

to have to say to your general manager or the dealer principle yes they wanted to buy a car

I screwed it up and they left without one okay because the owner doesn't want to hear that

and the GM doesn't want to hear that so it is incumbent upon the sales manager if they have

someone serious to figure out how to make that deal so that the customer goes home in that car

and and doesn't go home in the car they originally drove there in so it puts more pressure on the

sales manager to to figure out a resolution that well results in the sale of an automobile yeah

yeah all right next one any tips for negotiating a lease deal on a truck that isn't on the lot

I have an otd price on two different trims okay well what you really wanted and the

outdoor price is important but on a lease what's more important okay is you want to negotiate a

discount off of the MSRP and can you do that on a truck that isn't at the dealership yet

absolutely you can the negotiation takes place as if the vehicle is there so that you've

established what the selling price to the lease company will be because remember the bigger the

discount you get the lower your payments going to be because you want to make that vehicle as

inexpensive as possible for the lease company to purchase on your behalf so that sounds about right

mario hundreds I remember uh like when we used to be in the shortage where there were no cars

in the lot and we had to negotiate leases everything was in allocation or was you know

incoming and uh it was different because you need to I mean for me it's like how can I lock in

something that's really important that no one knows and no one negotiates which is the

money factor that changes each month and they're gonna say well you know we can't

commit to a number because it could change in September right at least you can put it in

writing where they're gonna honor real they're gonna honor base rate right so I I remember doing

that back in the days now it's not so common because cars are more more plentiful but they would

they would touch on that subject right so I agree on the price right this is the price but

are you gonna honor base rate based on my credit you know of my credit rating right so no markups

no markups on the because once it's their way and it comes in you've been waiting for it

they're gonna say oh here it is right but a 40 point you know 40 yes markup and that's another

1500 bucks it could be another $1800 right and then you can't do anything about it you know because

you know take it or leave it right so yeah you have to you have to agree to the parameters

yeah as to what it's going to be and and many of the manufacturer I I shouldn't say many

some of the manufacturers uh two that I can speak of that I know of because while I worked

in the dealerships BMW and Mini oftentimes will let a customer lock in the the the buy

where it will lock in the rate and the term and the residual percentage on an incoming vehicle

so if the program expires august 31st but the vehicle isn't going to be in until the third week

of september um BMW and Mini will lock in lock them into the existing program that expires august

31st so there are some manufacturers that will do that not all yeah but some some not all yes

it's important um so is it uh maybe mario you know this one I don't know this one is it better to

release the IQ at the end of the year or stay away since it hasn't been selling I don't think there's

any quality major quality is I think it's a price issue right and why people are staying away from

that I don't see people like staying away from and it's a good it's an alternative that people

are doing right now with the the lyric right because they see that start with the lyric and

it's super high and then they go a little bit but um I'm I normally don't wait I I I look

for the deal that I want and if I get it this month I'll pull the trigger right if dealers are not

budging or the market's completely out of whack then I'll wait but uh it's for me it's not what's what

are your expectations what are what is your number and I'll tell you if you should wait

if you're asking for a huge you know discount and the market's not there I'm gonna say like

you gotta wait right it's too new or it's too it's too in charge supply or demand is too high

but it just depends I I normally don't recommend people to wait like just because in December

magically the price is going to be 20% less like that's not necessarily what happens

and and the other thing that is certainly to consider these days if you're looking at some

type of EV is you know realistically you've got the next 33 days or 34 days whatever it is

to be able to take advantage of of having that federal tax credit

being applied to leases at the moment once those goes away once once once that's taken away

will the discounts be sufficient enough in December to compensate for that loss my my

guess is for most manufacturers it probably will not although lucid has said there they're

going to continue giving that $7,500 tax credit but they're already losing so many thousands

their rationale is well if we're losing $250,000 for every vehicle we we sell our lease

what's $257,500 it you know it's nothing so but I don't think most manufacturers are just

going to suddenly drop the cost of those vehicles $7,500 to make up for the federal tax credit

going away so it depends on the type of vehicle and it depends certainly it depends on the market

condition yeah I agree um here here's one I'll answer uh aren't all EVs better at the lease

right now yes all right pretty much yeah and and the caveat to that is if you're if you are an EV person

and you know that the EV that you're looking at is something that you are going to keep for the

next eight to ten years then the depreciation doesn't matter to you just buy the damn thing

right if you if you are on the fence about an EV and you want to make sure it's the right vehicle

then look at one of these really inexpensive 24 to 36 month leases and and and dip your toes in

the water and this way it gives you an opportunity to see if it's something that really fits your

needs and there's certainly light at the end of the tunnel if it's a 24 month lease you're

you know the commitments not all that long how the commitments probably less than a lot of marriages

last so you know don't worry about it I would I would say this um to piggyback on that and and

slip it a little bit if you are looking to buy why one that just came off a 24 month lease

why take that let that depreciation be taken and you can I mean I bought a used one for a

reason there's a reason why I bought yes a three-year-old uh tesla when I bought mine because

it had taken that depreciate I made it certainly is depreciated more now but um it had taken that

and so I didn't really mind but if you are going to keep it um yeah go for go for one that just

got off of a lease uh they're great buys um and then Ray can you speak to the sales

training process at dealerships well I can tell you a monolith um commission structure

consistent customer service you feel that will be an issue in the future it depends on the

dealership and it depends on the dealership group a lot of dealerships when they hire somebody

will simply say to the salesperson um all the brochures for the cars are over in the rack

over there please take a brochure for every model read it from cover to cover so that you can be

conversant in the in what each one of these vehicles has um and and by the way the stock

numbers on the cars are in the upper left hand corner of the windshield the key machine is over

here here left um so oh and here's your dealer plate uh grab a key go sell a car and and for a

lot of salespeople that's the training and then there's other groups that literally will have

three four weeks of training for salespeople um what I used to do at towards the end of my career

is I literally had the new salesperson sit in the sales manager's office with me

and watch me desk deals and then let them listen to the questions I would ask the salespeople

and then I would ask the the new salesperson why do you think I asked the question the way I did

why do you think I was trying to get that information and so after three or four weeks of

that um the trainee had a real good understanding of what it is that a sales manager needs in order

to be able to put together a deal for the customer um commissions most stores it's a percentage

in some cases today they they pay salaries so that the the salespeople don't have to be quite

as uh money hungry because they know they're getting a salary plus they'll get bonuses

for the number of cars sold things like that uh every dealership talks about customer satisfaction

very few dealerships actually do anything about it uh other than they talk about it so yeah and

yeah Jerry says most dealerships only train with required manufactured training um if that's

true then uh I gotta say Toyota doesn't require very much um because uh I would tell everyone who

doesn't know Ray trained me and he and I had never even met I just watched uh I watched uh YAA

videos that is how I got trained on how to sell cars because my dealership handed me a brochure

told me to read it and then walk around a Camry and sell to my general manager

so I was trained for the two hours it took me to go through the brochures memorize everything

and do the walk around and an hour of that two hours was me waiting for the GM to be available

that was that was my training yeah I you know I I worked for the Penske organization and

before Penske bought it it was it was a somewhat large local dealer group in the Phoenix area and

the principals believed very strongly in training and we literally had a training department and

and what I mean by training department we had that we had trainers for both sales parts service

every aspect of the business and if you were a new sales hire regardless of your experience level

there was a two week sales training that you were required to go through with our sales trainers

before you could come to the dealership and sell cars and and so you know every every group

does it differently but the groups that are serious about selling cars and developing

some type of customer loyalty understand that in order to do that the customer has to be

talking to somebody that knows what the hell they're talking about you know it's it's

it's pretty simple in reality so just two more things before we go because we've already

eaten up 45 or whatever they're not um not a big surprise with the way I run my show

because I've accepted it I hope you all accept it now too um so we have this comment here uh you

walk away with car at the dealership is dumping for joy because they just rob you two three five

thousand for a weaseling money out of you um I see this all the time they there is something

out there in the ethos and I know I used to believe this that thinks that dealers are making

five thousand dollars on a car and I can assure you that is not what's happening there especially

on a new car in particular even you know today the probably new new car gross profits are

higher than they've been um but they're still not approaching the four and five thousand

dollar level um you know unless you're you're buying some type of niche vehicle or specialty car

uh the the in the day uh for mass market brands uh an average gross profit on a new car was

somewhere between two hundred and three hundred dollars you know nobody wants to believe that

but that's what it was um you know much like grocery stores you know grocery stores taking

a poop ton of money but about three cents out of every dollar makes it to the bottom line well

in an automobile dealership it's about two and a half cents to three cents out of every dollar

so the whole idea is you need volume because you're not making much per vehicle sold typically so

yeah there are people that are under the impression that dealers are making five six seven ten

thousand dollars I want 40% off okay I want to be I want to be five seven okay neither one of

those things is happening you're not getting 40% off and I'm never going to be five seven

even if I wear lifts uh okay it's just not happening it's not rooted in reality um but

it is very common like I you know I wasn't trying to call that person down because I brought it up

because it's very very common this thought I got it when I was at the dealership I thought it before

I went to the dealership and then I saw my commission check and went wait what yeah um that

you know that's not it and I learned uh you know it's the surface department that makes the

money at the dealership and it's certainly not the sales department very much there there's a

reason that the dealerships shoot for 70 to 80 percent service absorption and so when you hear

the term service absorption what that means is in a well-run dealership the service department

will will be able to produce enough profit to absorb 70 to 80 percent of all the profit in the

dealership okay of all the costs in the dealership so that there are stores out there that will

operate at 100 percent 100 510 percent service absorption so what that means is that the

service department produces so much income that any profit from new and used cars is on top of what the

service department has already produced and they were already produced more than 100 of what it takes

to cover all the expenses so service it all comes from service service absorption is such an

important concept for a dealership to be profitable and uh part of why not the only reason part of why

dealers don't like EVs get not going to get you just don't get that service department

you know on an EV it just there's less to repair I mean when you do have to make a repair it's

more expensive so they can get some of that but there's just like you're not coming in for

you know regular tune-ups and oil changes and and all that so they just don't like them they're not

getting and as we've seen Mario I know you saw this when we first started doing the EVs that the MSRP

and the invoice on many of these EVs is the same yes it's the same amount so they're making

they're making crap off that on the sales side and then there's nothing coming on the service

side why would you want that and that's part of why I think that whole cycle goes there yes

and then I just wanted to say a personal one here before we go out because I've seen these

comments come through so I want to address it because I know Ray and Zach won't but I so I will

how many times per episode are you required to mention the tariffs ever since your sons were

featured in that magazine so let me say this as someone who gets very tired of the tariff cock

myself as someone who literally says all the time as amazon's putting how much should cost the

tariff is on all their products and I say are you putting the cost of how much corporate taxes

are on each product are you putting the cost of how much regulations are on each product

what a BS political stunt that is tariffs are a tax by the way for anyone who doesn't want to

admit that on on my side over here they are a tax it just is what it is but but the real

they're out there they're happening we talk about news and what's affecting the market I just

talked about the stock market that has something to do with tariffs and the uncertainties so I

think they're going to mention it as long as it's impacting things I get tired of talking about tariffs

or hearing about tariffs I know Ray gets tired of talking about them but they are what is affecting

the market right now just like during the pandemic when we talked about part shortages and sugar

shortages every day is we've got to talk about what's affecting the market and what's moving

things right now is tariffs that's moving things I wish we didn't talk about it I think a lot

of it gets overblown in other areas or yeah I'll just go with overblown but it is a legitimate thing

that has to be talked about these companies are talking about them directly Mercedes BMW

Toyota all talking about them and how they're going to have to adjust the prices so it's a

legitimate story let me share one thing with you from my dinner last night with some of my

dear friends and and one of one of them is actually looking at it was looking at Subaru's

and literally went to a Subaru dealer and the Subaru dealer said to him just just so you know

six months ago these Subaru's were less expensive the prices went up due to tariffs

and and so you're going to see that the cars are more expensive today than they were had you

looked at them six months ago and and he said yeah they seem to be well they are Subaru

announced early on that because of tariffs they were raising prices from X to X and they've

done that and and so some dealers actually I don't know kind of talk about it to the customer when

the customer is there it's not necessarily that you're getting more for the vehicle and that's

why the price went up yeah the price went up because the cost to bring it into the country

went up and you know do I want to talk about tariffs all the time hell no but you you can't ignore the

things that impact the industry when what we talk about is the industry so it just it seems to me

it would be foolish um and doing a disservice to all those that that follow us and listen

and share with us to to not mention it so you know I listen we're not going to please everybody I get

that and and for those who might be on the side of the aisle of defending the tariffs and

and saying this let's not pretend that if the election went the other way and corporate

tax has doubled that we wouldn't all be calling that out and saying everything's more expensive

because you doubled the corporate tax rate and blah blah blah blah like so this is just what we're

going to talk about whatever is affecting the industry so when they stop affecting it then

but okay we'll we'll move on to whatever else is talking about it we talked about the UAW

strike right when that happened and the new contracts when those happened talk about whatever

is affecting the industry so I wish these tariffs would stop

affecting the industry so we could talk about something else yeah because I don't know have

have we ever talked about higher interest rates impacting the industry have we talked about those

impacting the customers have we been talking about an affordability crisis in the United States

for the last four and a half five years um do we still talk about an affordability crisis

yeah because it hasn't gone away yet no um so you know I'm I'm I'm sorry there's there's things

that impact the industry and yes we we find ourselves having to talk about it has nothing to do

with whether or not one of us was quoted in a in a magazine a newspaper on the radio

wherever it we're trying to deal with facts which is why you were quoted on the radio in

newspapers in magazines because what you deal in is yes this is what it is yeah so uh thank you for

letting me jump on to that um again I see these comments all the time I can't always get in there

to to re retort and my uh my bloviation makes it too long to type out so I'm glad

where I get to be on here and just say hey like uh I I agree but it is what it is here

um so thank you all for being here Mario space whatever uh oh I didn't realize your name the

space in the uh thank you for being here I really appreciate that thank you both for filling in

for zack today um and I I want to wish you and our audience out there a phenomenal labor day weekend

enjoy yourselves make it a weekend to to remember and never forget and um car edge life will be off

on monday for labor day so I will be back here Tuesday god willing with my son assuming he

doesn't hurt himself or in here himself why he's climbing this weekend god I wish he'd take up

bowling instead um but that what am I what am I going to do he's 30 years old he can do whatever

the hell he wants uh but then he drops the ball on his foot and he broke his foot and

he could still talk uh anyway thank you both for being here everybody have a great weekend

and zack and I'll see you back here on Tuesday thanks Mario thank you justice right

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Friday Q&A With Ray & J | Episode 914

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