Kelly Blue Book is a company that tracks car prices. When they release pricing data, it helps dealers and shoppers understand what new cars are actually selling for.
This study scores dealerships on how they handle people who contact them online. It looks at things like how quickly they respond and whether they try to set up a specific appointment.
Pied Piper is referenced as the organization behind an “Internet Lead Effectiveness Study.” In this context, it’s used to benchmark how dealerships perform when responding to online inquiries.
Stellantis is a big car company. They’re trying to work with another EV maker (Leap Motor) and figure out how to keep selling cars while US rules get stricter.
Buy here, pay here is when the car dealer also acts like the lender. If the customer misses payments, the dealer is involved in repossession and collections.
Tricolor is mentioned as a company tied to a fraud/bankruptcy story. The takeaway is that the case affected how cautious banks became with buy-here-pay-here lending.
Collateral is something of value used to back up a loan. Fraudulent collateral means the “backing” wasn’t legitimate, which can cause major losses when things unravel.
Repossession is when the lender takes the car back because payments weren’t made. The hosts say it happens far more often in buy here, pay here deals than in traditional dealer financing.
Risk metrics are numbers banks use to judge how risky a loan is. Here, the claim is that BHPH loans are being evaluated more like regular dealer loans.
The Toyota Land Cruiser is a tough SUV that’s built for rough roads and long-term durability. Here, it’s mentioned as the first vehicle Purdy Group sold when the company started.
Volkswagen is a car brand. It’s mentioned as one of the brands Purdy Group distributes through its dealerships in Costa Rica.
Concept
distributor vs dealer
Think of it like a supply chain: the distributor is closer to the manufacturer and gets the cars first, then passes them to dealers. The dealer is the store you actually buy from.
Gulf States Toyota is the company that supplies cars to Purdy Group through the distribution network. It’s part of the chain between the manufacturer and the dealerships.
They’re saying it’s harder to get rid of used cars there. If you can’t sell the older cars easily, the dealer has to work harder to move people into newer vehicles.
Import taxes are extra fees the government charges when something is brought in from another country. If the taxes are high, it can be too costly to move cars across borders.
The Hudson Hornet is an older car made in the United States, from around the 1950s. It’s remembered for its name and for being a sporty, well-known model of its time. The podcast mentions it mainly because of the “hornet” connection in the conversation.
Mazda is another car brand the guest says is improving and doing better. They’re talking about how the car company (OEM) is working with the dealer network.
Hyundai is the brand the guest says is trying to catch up to (and beat) Toyota. They’re talking about how well the automaker is executing in the U.S. market.
The Toyota T100 is a pickup truck made by Toyota, designed for everyday driving and work tasks. It’s known for being dependable and built to last. The podcast brings it up as an example of a Toyota model that fits that “reliable winner” idea.
Direct-to-consumer (DTC) is when an automaker sells cars straight to customers, reducing or removing the traditional dealer role. In this segment, the guest argues that cutting dealers out can hurt customers because dealers have long pushed and supported the brand, and relationships matter.
A dealer network is the set of local car dealerships that sell a brand’s cars. The guest says dealerships build familiarity and relationships over time, which helps customers buy and trust the brand.
The FTC is a U.S. consumer-protection agency. A “letter” here is basically a warning or instruction to car dealers to follow pricing and advertising rules more closely.
MAP pricing (Minimum Advertised Price) is a manufacturer policy that limits the lowest price a dealer can advertise publicly. The host contrasts it with earlier periods when pricing varied more, implying MAP helps reduce inconsistent advertised pricing across dealers.
This is about telling customers about all the extra charges up front. Instead of surprising people later, the dealer should clearly show the fees before the deal moves forward.
It’s the dealer’s computer system for managing the cars they have for sale. The discussion here is about making sure the extra fees are entered correctly so they show up the same way everywhere.
Lead providers are companies or services that send customer inquiries to car dealers. The point is that the dealer needs the same correct pricing/fee info to go out with those leads.
An inventory syndicator is a tool that shares a dealer’s car listings with other websites. If the same details get updated in more than one place, the listing can become inconsistent.
Viato is a company that helps dealers share their car listings on other websites. The hosts are saying that when fees change, both the dealer and Viato can update them, which can lead to the same fee showing up twice.
Dock fees are extra charges that can happen when a car is shipped in and handled at a port. If different websites or software systems calculate or display those fees differently, the listing can end up showing them twice.
They’re talking about how hard it is to keep car listing details correct when many different software systems are involved. If updates happen in multiple systems, you can end up with the same information showing up twice or being wrong.
Company
Perti Group
Perti Group is referenced as the CEO’s company (“Harold… her CEO, Perti Group”). The discussion frames it as a group that’s been involved in the dealer’s technology/operations story, likely tied to how they manage leads and inventory distribution.
Uber for Business is Uber for companies. It lets customers request rides from their phone, so a business can provide transportation without running a traditional shuttle schedule.
This means ads should show one clear price that you can actually expect to pay. The idea is to avoid fine print or conditions that make the real cost different.
Advertised payments are the payment numbers dealers put in ads, like “$399/month.” The concern is when the ad doesn’t clearly explain the conditions that determine whether you can get that payment.
Conditional discounts are discounts that only happen if you qualify under certain rules. The compliance concern is that ads may highlight the discount without clearly explaining the requirements.
Here, “compliance” means the dealership has to follow the rules for advertising and paperwork. The price and fees you show online should match what ends up on the final paperwork at the store.
Transactional documents are the paperwork used to finalize a vehicle sale, including the buyer’s order and any finance/contract forms. The hosts are highlighting that fee disclosures and pricing shown online must be consistent with what appears on these documents so customers aren’t charged for fees that weren’t disclosed upfront.
Digital retailing is the online car-buying flow—where you look at prices and deals on a website. The key point is that the online numbers and fees must match what you’re charged in the final paperwork.
Electronic titling means the vehicle title is handled digitally instead of paper. It matters because the dealership has to follow the rules for what fees are treated as government fees versus other reimbursable costs.
Term
CVR
CVR here is a registration-related fee/process the dealership uses to get the car registered. They’re discussing whether that cost should be included in the upfront advertised price so customers see it before they buy.
Government fees are charges tied to the state’s registration and title process. The discussion is about whether the dealership is collecting a real government fee to pass along, or charging something that’s more like a reimbursement.
Integrations are the software links that make different systems talk to each other. If they’re not set up correctly, the price or fees shown online might not match what happens when you buy the car.
Advertised price is the number the dealer puts in their ads. The compliance risk is when that number doesn’t clearly include required fees, so shoppers think they’re getting a different total price.
Disclosures are the fine-print or on-page statements that explain what’s included in the price. The point is to make sure the website clearly says what fees are included or excluded.
An “all in price” is the total price you’ll pay shown upfront, not a low base number with extra mandatory fees added later. The idea is to make sure the ad matches the real cost.
After the government signals it will crack down on certain advertising practices, lawyers may file lawsuits too. Even if the courts haven’t ruled on that exact argument yet, dealers can still get pulled into legal fights.
UDAP is a legal term for “unfair or deceptive” business behavior. For car dealers, it often comes up when ads promise one price or deal, but the customer later finds extra fees or requirements that change the real cost.
An enforcement action is when regulators take legal steps against a business. In this case, it means dealers could face lawsuits or penalties if their ads and pricing practices are found to be misleading.
State attorney generals are the main lawyers for a state. They can join the FTC or bring their own cases against dealerships when ads or pricing are allegedly misleading.
A buy-sell agreement is the contract that sets the rules for a sale. It can include details like how extra items or add-ons are priced, and it can matter a lot at the final closing meeting.
A closing statement is the final accounting document used at the end of a transaction. It summarizes the purchase price, credits/debits, and any adjustments based on the contract terms—so if the agreement includes add-on or price-adjustment language, it can show up here.
A lift kit is an aftermarket setup that raises a vehicle higher off the ground. It can cost a lot, so it can affect how much the buyer and seller end up paying for the vehicles involved.
A purchase price adjustment means the final price gets changed based on what the contract says should be included. In this story, it was used to change the price after they reviewed what was actually part of the deal.
Diligence means doing the homework before the deal is finalized. If someone doesn’t check the details early, they can get surprised at the end when the final paperwork is being agreed to.
Key fobs are the remotes you use to control a car. In a sale, the parties may count them as part of what’s included, and that can affect the final numbers.
M&A means mergers and acquisitions—basically buying or combining companies. Here, it’s about the extra risks dealers think about when they buy or sell a dealership.
All-in pricing means the price you see in the ad is closer to what you’ll actually pay at the end. It tries to stop dealers from advertising a low number and then adding extra fees later.
Concept
wait-and-see methodology
Wait-and-see means holding off on changes until you’re sure what will happen. Here, the speaker argues that delaying compliance can put dealers at a disadvantage versus competitors who update their ads and pricing.
An asset sale is when you buy certain parts of a business (like equipment, contracts, or inventory) rather than the whole company. The point here is that lawsuits can still follow the deal even if the structure changes.
Third-party vendors are outside companies that help the dealership with things like websites and marketing. Even though they do the work, the dealership can still get blamed if the ads or disclosures aren’t compliant.
AI-generated advertising is marketing content created with AI tools, which can introduce compliance risks if claims, pricing, fees, or disclosures aren’t accurate or properly presented. In dealership contexts, that can create exposure if regulators view the ads as misleading or non-disclosed.
Reactive defense means dealing with problems after they’re already happening—like when regulators or lawyers get involved. It usually costs more and takes more time than preventing the issue early.
Term
DPH
DPH is an acronym for a specific dealer-added fee that needs to be shown clearly in ads. The point is that if it’s missing or unclear, it can create compliance problems.
“Massive fines” means big penalties if the dealership is found to be non-compliant. The speaker is warning that ignoring vendor compliance can get expensive quickly.
Customer data is the personal information dealers collect from shoppers, like names and contact info. The way it’s used or shared can create legal problems if it’s not handled correctly.
TCPA is a U.S. law that limits how businesses can text or call people. Dealers can violate it if they contact leads in ways that don’t follow the required consent rules.
Term
Agentec AI
Agentec AI is an AI tool mentioned in the show. The point is that using AI in dealership workflows can raise new privacy and compliance concerns.
Fox Rothschild LLP is a law firm. In this segment, it’s mentioned because the guest is giving legal guidance on dealer compliance.
LIVE
We're doing better as a result of social media presence.
It doesn't do those three things, then it's on the chopping block.
It's in return on investment discussion.
Hey, everybody. Welcome back to another episode of The Daily Dealer Live. I'm your host, Sam
Dark. And thanks for choosing to be here on this Wednesday, May the 13th. We've got a big show
today. We're streaming live from a SoduCon in Maryland. So if you're here in person,
come by and say hi. Where am I right now? I'm in the VIP lounge in the front of the hotel.
And by the way, if we have people streaming through here, it can live stream from anywhere,
anytime, anyhow. We have got a huge show today coming up. Harold Hurst of the Purdy Group USA
is here. We're going to get into what's happening on the ground with him, including a fascinating
story about their group, where they're from, what they're doing. And then we'll pivot over to FTC,
Adam Krollsback, Chief Legal Strategy and Strategy Officer at KPA. KPA just wrapped up a webinar
breaking down the clarifications from the NADA FTC webinar. And Adam's walking us through what
dealers need to know. And by the way, ton of clarity on the NADA FTC webinar props to them for
putting it on the way they did. But the entire industry is still trying to figure out from a
technology standpoint, how do you get this thing to bolt onto that and have it disclose it in the
right way? But props to KPA for taking a lead and helping the industry get there. Seth Dobbs then
joins of Fox Roth's Child LLP is joining to get two legal perspectives in the room on this one.
As a reminder to everybody who are streaming live across all CDG social media platforms,
as we always are, post your comments into the chat and we'll bring them into today's show.
It'll make it awesome. And you may notice because we are live and we are doing this thing as live
production. I may look off screen. I've got a whole different setup today. I've got the laptops on
top of a suitcase and I've got a light in front of me in an odd place. So buckle up. Today's going
to be a heck of a lot of fun. We've got some great comments coming into the chat already, Patrick
Block, Motive Ventures. By the way, props to Patrick. Happy anniversary of the first Formula
One World Championship race, 1950 to be exact. I love that our audience comes into the chat
and shares these facts with us. Gary Miller says kudos to the Asuda team and all participants.
Thanks everybody for being here. You see me go sideways because I got to see the full thing
there. But all right, let's go into today's auto industry headlines. First up today, Kelly Bluebook
is out with April pricing data. The average new vehicle transaction price rose to rose seven tenths
of a percent from March. That's more than double the long term monthly average of three tenths of
one percent. What's the driver? Well, primarily driven by strength and midsize SUVs, compact SUVs,
and full size pickups. Average MSRP hit, get this, 51,607 bucks. That's the average price of a new
vehicle, which is up 2.1 percent year over year while incentives pulled back slightly from March,
dropping from 7.2 percent to 6.9 percent of ATP. Though EVs remain the outlier with average incentives
at 13.8 percent of transaction price. Cox's read is that this is a mixed driven pricing story,
not a demand surge and that supply discipline and product mix are holding prices up more than buyer
enthusiasm. Next up today on the operation side, Napleton Auto Group topped Pied Piper's
Internet Lead Effectiveness Study for the fifth straight year, scoring a 93 out of 100.
Nine out of 10 of their customers receive a response within 30 minutes, 87 percent get a
phone call within 15 minutes, and 80 percent of responses include an offer to schedule a specific
appointment time. The industry average score for context was 74, which notably was Napleton score
back in 22. Napleton's variable operations director said the difference is treating
lead response as an operational discipline with daily accountability built in worth benchmarking
against your own store's process. We'd actually love to have Pied Piper on the show sometime and
explain how the heck they come up with this, so I'd like to understand a little bit of the metric
that goes on behind it. Next up today in news, CEO Antonio Filosa said this week that partnerships
will be central to the company's new business plan set to be unveiled next week. He was speaking at
the Financial Times Future of the Car Summit where he outlined how collaborative agreements,
particularly with Chinese partner Leap Motor, will shape Stellantis' product development,
supply chain, and factory utilization strategy go forward. Last week, Stellantis announced joint
vehicle production with Leap Motor in Europe, and discussions about building EVs together
at the Idle Brampton, Ontario plant are still ongoing. This all comes as bipartisan legislation
in Congress continues pushing to ban Chinese vehicles and components from the US market entirely.
So how Stellantis navigates that regulatory pressure while deepening its Chinese partnerships
will be one to watch closely. And as a personal aside, we've talked about it a lot on this show.
Don Hall, Senator Bernie Moreno, keep China out. My take is I don't want to live in a world where
the best vehicles are outside the United States. I want to compete today and learn and grow and
develop a better product. And I think closing the door to that and closing our eyes to that narrative
is not helpful. So props to Stellantis for finding a way to partner, hopefully to learn. And if we
in the auto industry here in the US can figure out a way to build a less expensive, more technologically
advanced vehicle that the world wants, we will continue to win as we have been leaders in automotive
for all the decades. Closing with a story relevant to the subprime side of the market,
the Federal Reserve released a comprehensive look at the buy here, pay here auto sector last week,
flagging that loan default possibilities for BHPH borrows jumped nearly 150% from Q2 to Q3 of 2025.
That's an astonishing increase as an aside. The backdrop is the tricolor bankruptcy in
fraud case, tricolor, which had over 100,000 accounts across 65 dealerships allegedly double
pledged $800 million in fraudulent collateral to multiple vendors, uh-oh, with Fifth Third Bank
and JP Morgan Chase each reporting roughly 200 million bucks in losses. Banks have since tightened
their stance on the sector with risk metrics for buy here, pay here loans converging toward those
of traditional dealers for the first time. In fact, buy here, pay here dealers are still 16 times
more likely to have a loan in active repossession than traditional dealers, and 10% of buy here,
pay here loans were delinquent in Q3 2025. And that, everybody, is a wrap on today's auto industry
headlines. Well, again, we're live here in Maryland. We're broadcasting live from Asodo. I'm excited
opportunities to speak and address here and talk all topics related to this automotive industry
that we are in. And obviously, I think a major focus of today is AI and automotive. Where does
it make sense to bolt it in? How do we interact with it? And how do we win going back to that
lead response time, that engagement time to set an extraordinary level of customer service to
our customers, one that humans simply couldn't do alone by themselves? Igor Kaye comes into the
chat says, hello, Sam and community. Alex A says, hello, everyone. Gary Miller says, kudos,
Asodo team and all participants. Gary, if you're here, come say hi. So all right, we've got a pack
show today here. Let's go into it. Harold Hurst, CEO of Purdy Group. Welcome to the show.
Hello, how's everybody doing today? It's awesome. It's great to have you here,
Harold. So Harold, for those of us who don't know you, tell us who you are and what do you do out
there? So my name is Harold Hurst, and I am the CEO of the Purdy Group, which we have dealerships
in Texas and Oklahoma. Our company is out of Costa Rica. I like to tell everybody I'm probably the
only Costa Rican non-Costa Rican available to the group that doesn't speak Spanish. So part of the
family, I like to say, but they, our group started just to give you an idea, let me give you a little
history on our company. The Purdy Group started in 1957 in Costa Rica, started out with the Keto's
family that owns the company. They started out selling one Land Cruiser. It was an opportunity to
provide a Land Cruiser to the farmers and things like that back in 1957 in Costa Rica.
They then become distributors for Toyota, and they are the fourth oldest distributor in the world
for Toyota. And we now distribute Toyota, Lexus, Subaru, Ford, Hino, and Volkswagen
in Costa Rica, and we have about 15 dealerships there as well.
So that's interesting. Going back to that distributor model, so they were like Southwest,
or Southwest dealer was, and maybe the Subaru distributor in the Northeast is. Explain to us
the difference between a distributor and a dealer. So a distributor works directly with
the manufacturer, getting, you know, they're the ones that get the cars, and then they sell them to
the dealers. So like we're part, on our side, we're part of Gulf States Toyota. Yeah, Gulf States,
yeah. So we're, so we get our cars from Gulf States Toyota, which is the distributor ship,
it works kind of the same way in Costa Rica. We order the cars in Costa Rica, we order them
straight from Japan, or Germany, or wherever they come from, and we then sell them to the dealers.
Why is that model in place? That's fascinating to me. It adds an additional layer. Does it
have to do with like contract and territory, or is it just? Yeah, it has to do with territory,
yes. And most of your, you know, with the exception in the US, most of it is
is is is distributorship driven over in Costa Rica or in Central America. So,
you know, you're going to be a distributor and dealer there in most of those cases.
So what brought the Purdy Group from Costa Rica? What brought them into the US? What was their
interest? It is the number one automotive sector in the world is the United States. So coming to
the US was a big deal for them. They were super excited about coming to the US, and in 2012,
they got the opportunity to come to the US, and they ended up purchasing our Toyota store in
Bryant College Station. And then we ended up having a store in Madisonville, which has now
been closed down, and we moved that store to Huntsville, Texas. And we purchased a Toyota store
in Dallas in 2015. And now we've just, and then we purchased a Hyundai store up in Oklahoma,
up in Broken Arrow, Oklahoma. And now we've just finished a transaction in
Bryant College Station with the Mazda and Volkswagen dealer there.
Huh. And how did you get to be part of this? So you work for a Costa Rican based company.
Do you speak, what's your background?
They asked me, they said, do you speak Spanish? I said, yeah, fluently, fluently. I speak zero.
Okay. No, I didn't say fluently. You know, I ended up, you know, it was, I've been with Toyota for
a very long time. I've been with Toyota for probably 27 years plus. Okay. And they were big
Toyota and my name got passed around to them and we got to talking and I got to have the opportunity
to visit with the family and they welcomed me in with open arms and you know, the rest is pretty
much history. I was able to come into the group. I came in as a general manager to the group and then
moved into the COO position after that. So as you continue to grow, Harold, you just made those
acquisitions that you mentioned. You just closed those two acquisitions in February. Now you've
got five stores here in the US. How do you decide where to expand? What are you looking for? And do
you have bigger plans? Do you have more plans to continue expanding?
One of the things we looked at is pretty much the culture, right? So we look at what kind of impact
can this, the family is very much driven by culture. So wanting to have an impact in communities and
things like that is a big factor in what we decide we're going to look at and what we're going to buy.
We like having retaining employees. We like keeping, you know, the retention high of our
employees. We like investing in our employees. But the main thing is when we start to go look at
dealerships and opportunities, we really want to look at large or medium to large single point
dealers because we have the big impact in the communities. We were able to develop employees.
We have longer long-term employees. And that plays a big factor. So they're not to say that the,
you know, the metro stores and things like that don't have that, you know, capability. It just
fits our model much better. And, you know, we're not big on the race to the bottom and all that
kind of stuff. And, you know, just whatever it takes to put a deal together, we really like to
provide value. So does that relate to, actually, so here's my question is there's got to be
significant differences between how businesses transacted in Costa Rica and the U.S. And I would
imagine that some of the strength of the Costa Rican operations reflect in how you do business
here in the U.S. What are some of the biggest differences that would surprise most people
about being a dealer or a dealer group in Costa Rica versus here in the U.S. marketplace?
Well, in Costa Rica, so here's the deal. In Costa Rica, like, we own all the Toyota
dealerships in Costa Rica. Okay. A little different. We own all the Volkswagen stores. We own all the
Ford stores. We own all the, so everything that we own, we own them all. So if a customer goes
into one of our locations in Costa Rica to get a price and they decide they want to go to another
location to get a price, there's no race to the bottom there, is it? That's self, there's no reason
to. So it does, it's a little different. So you don't have that competitive side.
So it makes putting a deal together a little bit different. Now, here's another thing.
We don't have inventory set in Costa Rica. So everything is pre-ordered. We have, you know,
samples of inventory at the locations, but everything is pretty much, it's not like you come
out and you're going to pick a car out today and then you drive home in it today. It doesn't work
that way over there. Where it does over here, you know, we're all about the, we want it right now,
you know? Yeah. Americans want it right now, you know, we want the satisfaction of buying a car
now. Over there, you're going to, you're going to place your order. The car will come in and get
everything ready. You know, and it could be, you could have it in three weeks, six months,
you know, depending on. And people wait because there's nowhere else to go, right? So
Eager K comes into the chat and I'm going to go sideways to read this because my monitor is
different. Eager K comes, this is very relaxed laws and you can monopolize the market and that's
the difference, Sam. So there's no, I wouldn't suppose one dealer group could own all Toyota
franchises here in the U.S. A yoga car says it's much like the European model, tight inventory,
you place orders and you sell out of the pipeline. What, so I understand the new car side. How does
the use car business work there? It kind of works the same way, except the only difference is over
and over there is you don't have a lot of place to dispose of use cars. So, you know, okay, disposing
of a used car is very difficult. But you do have the opportunity to market to a used car customer
a little differently. So you can say, Hey, you've got this, you know, let's say you've got an older
RAV4. How about we get you in a new RAV4, we're going to take care of your, here's your monthly
payment, which is going to include your insurance, this, and take a little away
from you. You know, so, but then you got to figure out what to do with the car. So disposing of the
use car inventory is a little challenging over there. That's one of the biggest challenges.
Does the U.S. presence give you the advantage? Are you able to have, you know, there's obviously
you can't export new vehicles that way. But can you trade use car inventory back and forth cross
border? Is there a benefit to that? Because the import taxes and things like that, it would cost
income, it wouldn't even make sense. Yeah. And that's another thing that a lot of people don't
realize, even though our company's out of Costa Rica, the lines, the lines drawn pretty solid,
you don't, don't merge the two together. Okay. The thing that we do merge together
is, is the culture side of the business, you know, what we do a little different
and what we've learned over there. All right. So culture is an easy thing to say. And by the
way, Harold, at some point, I expect we need to invite to Costa Rica to come see the operations.
I think that's, that is a must do. Like as long as one of them are at or near a beach, which by
the way is a little aside, I worked for a Swiss insurance company for a while and I used to go
visit Fletcher Jones stores in Hawaii. And I came to realize you can go to beautiful places
and warm climates. And if you're working inside a car dealership, it's like working inside a
dealership anywhere else, right? So it's the same. Yeah. I mean, yeah. Like when I go over there,
so do you like the fish? Oh, yeah. Who doesn't come on? Believe it or not, the company over there
likes to fish. There's like three or four people like the fish. I love the fish. So when I go
over there, I'm always like, Hey, who's going fishing? Who's taking me fishing while we're here?
Yeah, it's kind of a big deal for me. I love it. But yeah, it's, it's, it's, it's a different,
a little bit different world over there. So culture is an easy, easy thing to say. So
you say, Hey, they've got a great culture there. You focus on culture and a customer experience.
And that relates back here. For the dealers looking to capitalize on that culture message,
give me one or two concrete things that are elements of your culture that help you
deliver a better customer experience here in the, in, in the US.
What we started doing, we started looking at, you know, CSI, CXI, all that kind of stuff that
the manufacturers pushed down on everyone. We started looking at that. And one of the things
that we, we noticed is that CSI is an action, right? That was, that was something that we,
we took action on it. We take action on CS. Did we greet the customer? Yes, we greeted them.
Did we do that? You know, they asked those questions all in the customer surveys.
But we started looking at things more as a hospitality, you know, we started looking at
how do our customers feel. And we started noticing that our customers didn't really feel good.
They'd answer these questions, we'd get good scores and stuff, but the customers didn't feel
good. They didn't remember that. Then we started looking at, well, how does our employees feel?
You know, we do a lot of things, we do a lot of things a little different on our employee side.
A couple of things we do, and I'll give you an idea, you know, to,
one of the things we do is at Christmas time, I shut down the store for, for a week at Christmas
and give everybody a week off for Christmas, five days before Christmas.
Wait, here in the U.S., you do that? Manufacturers hate this. Okay, so I'm,
yes. Are you not aware that the week between Christmas and years is the Super Bowl of Winter
selling an automotive? Like it's Black Friday between Christmas and New Year's World.
I'm talking about the week before Christmas. The five days before Christmas are leading up to
Christmas, which if you will look, it's probably your worst days of the year. Interesting. If you
look at that, the week, the five days before Christmas and then the day after Christmas,
everybody is back to work and we, we just, you know, pound it out to the end of the year.
I would love to get here in the chat, everybody's thoughts on this, and we'll bring some of it
up. Sweet 619 says, love that. Take care of your people. Do you have a tough time getting people
to take those five days off before you head into Christmas and then come back ready to be?
No, believe it or not, they love it. They love it. And, and here's the one thing that, and here's
another thing that I do. I don't impact their PTO time for it. So it's not impacted on a PTO time
and pay them for those days that they're off. So they're not going to be struggling for, oh my god,
I can't, I can't be working. And what we do is we approve for it throughout the year and we put
things together and we save for it and we, we put things in place that, that help us drive that,
that, that thing. Where did that idea come from, Harold? Is that a Costa Rica thing?
No, it was not a Costa Rica thing. It was a meat thing, believe it or not.
They asked me, it says, Hey, what are you going to do different for your people?
Let me tell you, I'm going to tell you a little story real quick, a little story about
when I first joined this family. I was taking over the store as a general manager and I showed up
and I've got my suit on my day one. Day one, I got my suit on and it is during a QBR,
quarterly business review. I've got my suit on and this is my introduction to the staff, everything.
I've got a suit on, everybody else is in golf shirts and they're looking a little more relaxed.
I look like a banker in there or an IRS agent or something. By the way, yeah,
bankers. I'm all dressed up and looking like crazy and most of all these people. And I've got
all the people from Costa Rica there. Well, we were walking around and they put together
like a little ice cream party for the staff and we're walking around and I, I sat through this
QBR and I was just listening. I didn't have any input because I don't know I've been there
and I've got the financial statement and honestly looked horrible.
It was absolutely horrible. So I've got it rolled up and walking around and we're walking around
and he's introduced me to people and, and he goes, Hey, what do you think about the people?
I go, and this is day one. I says, I don't know about the people. He goes, but what do you think
of? What are you going to do with your people? What you're playing with the people? What do you
think about the people? I said, I don't know about the people, but I said, but this financial
statement, I opened it up. I said, this financial statement is horrible. I said, we've got to work
on this right here. He grabbed it out of my hand, wadded it up. He says, now I want you to know
what are you going to do about the people? And it hit me right then and there that said, you know
what, we need to start focusing on the people. And that's what we, from then on we started focusing
on the people. We started to, to, we won't, we won't bring a manager. Typically we won't bring
a manager into our organization. We always promote within. So we try to build a bench in
every department, every manager that's been an F and I sales manager. Any of those things have
all come from within sales or service and we promote within. Is it painful? Yes, sometimes it's
painful. But at the end of the day, that is our culture. Our culture is to say, we promote within
to start. There's been some cases that, you know,
so I was just going to say, let's pressure test it last 12 months. How many GMs or GSMs have you
hired from without? Well, when I bought a new store, you can't count that problem. I kept everybody
at the store. Okay, good. Hyundai store, I kept everybody at the store. I had a few, I had the
GM, which was a partner he deflected, but I took the GSM that was currently there and promoted
him into the GM position. It hasn't been painful, sure, because he knew what he knew and didn't
know what he didn't know. But we take the time to try to spend with those guys and try to create
that. So to our production team, we need like a bell or something. There needs to be like a
hornet because you know what, everybody talks culture and very rarely can somebody actually
point to something where they're changing culture. And I would say there we go. There's the bell.
And I would say that like that extended type of vacation, yoga cars came into the chat says,
that's a real vacation. Like that's a real deal. That's, that is a significant difference in how
you commit to your people and how you allow people to rest during holidays and times where
let's be honest, I agree with you. Like that week, right, leading up to Christmas Day,
heads are elsewhere. My challenge would be how do you get everybody focused and back up hungry
on that week between because they know they know that, hey, they know they got that time off. And
we let them schedule, you know, they schedule trips with a family, whatever they want to do
at that time. That's cool. One of the things we do also is we, yeah, Costa Rica, great time
for a Christmas thought. One thing we also use that week for is if we've got any repairs to do
or any big projects to do, we schedule for the dealership, you know, we'll schedule contractors
come in, paint, restraft the parking lot, whatever we need to do that doesn't interrupt business,
right? So your people are working. Let's make everybody else work. I love that too, by the way.
Gary Miller comes into the quote, and I've got to go sideways to read this vis-a-vis
Ritz Carlton philosophy. Yes, numbers don't lie. I tried to working the week before Christmas,
amen to your progressive leadership herald. We need more like that. I agree. That is a,
that's a cool difference maker. So before we go, because we've got just limited time left,
I want to walk through some of the OEMs you have, you represent Mazda, you represent Toyota,
you represent Hyundai, thinking about, again, U.S. operation side, who on the OEM side here is
winning? And what could the winning OEM, what could, what could a struggling OEM, and name that one
in your book too, learn from the winner right now? Well, I'll tell you, you know, and it's almost
not fair because I've been with Toyota so long in Toyota. You have to say Toyota, 100%. Toyota
doesn't rock. They know how to do it. They've been doing it a long time. They've been successful at it.
The Toyota, you know, OEM has been wonderful. Mazda is coming right along with Toyota. I mean,
it's just amazing that you see with them. I think Volkswagen, Volkswagen could, you know, step up
there and take a few lessons from Mazda and Toyota and start to, you know, maybe look at things a
little differently. And then Hyundai, Hyundai's drive is to be better than Toyota. So, you know,
they're coming along really good. Our biggest thing with us as a group is we want to be pro OEM,
right? We want to be pro manufacturer. We floor our cars with the manufacturer. Can I get something
cheaper? I could. I could find cheaper things, but we like partnerships and we like relationships.
You know, when we talk about dealing in our community, we look at our community, our OEM is
community as well. You know, we want to be good partners with our OEMs. All right, only because
you have Volkswagen. I'm going to ask two questions and then we're out. So Volkswagen is
making an attempt to go direct to consumer scout here in the US and what do you think about like,
what's your take on that? Why is that a bad idea? Because anytime you start to look, who's been
pushing your product for years, right? It's the dealers. When you start to eliminate your dealers
and push your dealers out, your customers are going to feel that pain. It's going to come from
the customer because I'm going to tell you, you go direct as a customer, I buy my car directly from
the manufacturer. Who would I go to? You know, I don't have a relationship built with any of these
dealers and you have to have the relationship is the thing. You know, AI is a big thing right now,
right? A lot of people are scared about AI taking over, but if you utilize AI to just start the
conversation, it enhances it. You don't have a human interaction. Your AI has got to push to the
human interaction. If your AI doesn't push to the human interaction, you're going to lose in that
deal because customers will bounce off of that program faster than you can you can shake your
head at. And that's going to be a big deal. Okay, last up question. And then we got to go. We
appreciate your time on the show with us today, Harold. And then seriously, we do need to schedule
a tour. I've never been, I'd love to see it out there. I'll fish with you. We'll have a great
time there. So, FTC is going to be a topic of the back half of today's show. Month before last,
FTC letter went out to 97 dealer groups. And it was kind of a shot over the boulevard of motive to
get pricing correct. What's the biggest change you've made as a result of that coming out industry
wide? And everybody knows I did not get a letter. Yeah, yeah, yeah. I'm not asking because you did
it. And I'm just saying, listen, everybody's heard that right in the auto industry and everybody's
paying attention and they're thinking about it. And when we come, you know, we were in COVID,
you know, we know what happened in COVID, everybody, you know, all kinds of prices went through the
route. You have map pricing with most manufacturers now. So, you don't have those kind of issues.
It's when you get to the dealership is when you have the issues, right? So, but, you know,
the biggest thing is disclosing dot fees and things like that. Fees that customers don't know.
I think it's a good thing that we're kind of streamlining this and getting some compliance
across the board. You know, and the dealers that are proactively doing it and getting,
you know, in line with their websites and things like that. I'm not going to have any problems.
I mean, they're going to see a little more customer transparency is what you want to have.
The biggest problem with I think in May of 2026, and I'm all in favor of it, everybody working
off the same rule book is just the technology integration of how do you have those fees sitting
in your inventory management tool and then how do you effectively and accurately and consistently
disperse all those to the different lead providers. We have so much technology today in automotive.
In my own world, I'm seeing it's a challenge technologically to make sure all the switches
are pulled correctly. So, things don't get doubled or tripled or halved or whatever.
And I think that's a real new role of GM's today is managing the technology, managing
the test, test, test, test. You got like third party vendors now. They're scrambling, right?
They don't want to mess it up. So, they're doing it. And then you got your OEM websites,
and then you got, so here's what we run into with like Viato, because we use them as our
syndicator, right? So, they push out our inventory to the third party side. Well, we updated,
we updated our dock fees. Well, Viato also updated the dock fees. So, guess what? Then I had double
dock fees. Double. Yeah. No, listen. Listen. It's like you got to get in there every single day,
and you got to make sure that every single week and everything is to the right place.
So, I got a great guy on our team corporate, Ryan Post. He's been calling every lead provider
every single day. And it's like, what's the button we have to press? How's it pushing?
What's the update from Viato on how you're sending it out? And it's not that we can't do it in
automotive. It's just there's so many disparate technological systems that you've got to,
you know, measure twice, cut once, right? And still make adjustments. So, Harold,
her CEO, Perti Group, it's been awesome talking to you. Thanks for sharing with us,
your group and the story behind your group and how you got to be where you were.
And we'll schedule up that live. We need to do a daily dealer,
car dealership live from there at some point. Yeah, let's do it in Costa Rica, you know,
in short. Yeah, December. Let's do it. Let's go. All right. Thanks for being here. Appreciate
you being on the show. Thank you. And a lot of great comments coming in. I'm going to go sideways
just to read some of them. Gary Miller says, tarpon, congrats. And then Gary Miller also says,
oh, VW, VW, VW talking about that direct to consumer conversation. Absolutely appreciate
that fascinating convo with Harold Hurst. Let's talk Uber for Business. Today's episode is brought
to you by Uber for Business. Let's talk about your shuttle program between staffing, fuel,
insurance, and the vehicle itself. You're spending a lot to move a few customers at a time. Uber
for Business replaces your shuttle with rides your service customers can request right from their
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It's transportation that scales with your service lane, not against it. Right now,
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when you get the lunch. Book a demo and they'll send you an Uber Eats gift card.
Head to business.uber.com forward slash CDG to claim yours or click the link in the show notes
below. Props to Uber for supporting today's content including that fascinating conversation
with Harold Hurst. I don't think we haven't talked to anybody that's GM or COO of an operation here
in the US that is a parent of a company overseas, particularly in Costa Rica. What a fascinating
distribution model that is in Toyota. How would you like to have 100% penetration of all Toyota
dealers in Costa Rica? That would be fun. So appreciate his perspectives there.
Let's move on to our next guest, Adam Kroll, Chief Legal and Strategy Officer at KPA. Welcome back
to the show, Adam. Hey, thank you so much for having me, Sam.
Adam, wouldn't it be fun to have all Toyota dealerships in a country?
It sure would be. We're working on that. Yeah, I would love to have that. I'm not sure they'd
allow that here in the US, but that's fun. All right, you've been on this show in the past.
We've talked the FTC letter that went out to 97 dealers a couple months ago. On a recent webinar,
you talked about the importance of single transparent advertised pricing. What are
dealers still getting wrong when it comes to advertised payments and conditional discounts
in May of 2026, despite the letter and the warning shot over the bow?
Yeah, so Sam, I think that there's been a big effort in the auto space with dealers,
and there's a lot of people that are trying to come into compliance, but kind of like the
conversation that you had with the last guest with Harold. There's a lot of buttons to push,
a lot of levers to pull. We do have disparate technologies that are out there, so what might
work for one provider doesn't work for another one, but really the key to compliance here is
making sure that what's on the website, digital retailing, and then what actually
happens at the store and with your transactional documents that you have alignment with those
things. You should not have any consumers that are walking away that are paying for fees that were
not disclosed upfront and rolled into the price. The only exception are those things that can be
variable, which are tax title and registration, which might be different depending upon where
the vehicles get titled, but otherwise. How do you define registration in that case?
Yeah, so that's a great question because a lot of this has come up with things like
electronic titling and things like that. Yeah, CVR in our case. Well, we're talking about government
fees. We're talking about the types of government fees that are basically being collected from the
consumer upfront and being passed along directly to those government agencies, right? So even though
a state might allow for the charging for an electronic fee, if you're not turning around and
just providing that to the state and that's more of a reimbursement, that is not going to constitute
a mandatory government fee. So that's going to be more of a reimbursable sort of expense.
All right, so I'm going to ask it again because I'm not sure I heard. So in our world, CVR is what
we utilize and we utilize that to register a vehicle. Does CVR, does the fee need to be part
of the dock fee? Is that your read? Yeah, so that should be baked into the all enterprise. So the
advertised price should include that fee. Now, if there is that's what we're doing. Yeah, so a
separate fee, though, for the actual registration itself, that could be something
excluded. But yeah, your CVR fees, your V2 fees, those are going to be included in the advertised
price. So you heard the conversation with Harold. We had one of the biggest challenges is I think
all of automotive wants to be 100% in compliance with this. It's awesome that everybody is working
off the same sheet of music now. But technology is creating a unique challenge, right? You can put
the car in, you put the price in, but you've got to have it land on your own website, which means
the integrations have to all be accurate, and then it's got to push out to all the individual
lead provider sites accurately and correctly as well. That's proving to be a challenge, Adam,
in May of 26. It is, it is. And you certainly have your technology providers that are trying to
make updates to the system to make it easier for the dealers. But as they make changes, then that
means that the dealers also have to make changes. So the best advice that I can give out there is to
make sure that you're auditing this on a regular basis with each knowledge provider.
Because it changes constantly, Adam, right? Yeah, it is. Or are there tools that dealers are using
to help audit that on a regular basis? Is there anything you recommend there? If you say, hey,
check it regularly, is regularly once a month, is it once a week, and what are the tools that can
be used to do that? Well, so if I'm on the marketing team at a dealership, I would take
that on as my responsibility to be checking and making sure that the price online is also what's
being reflected in my digital retail tools that are also out there. So any third party providers.
And if you are seeing a different price that's reflected on the website versus those digital
retailing platforms, like that should be a red flag, you should be making phone calls to the
vendors and getting those sorts of things changed. And, you know, the FTC has done three webinars at
this point, two with NADA, one with NIADA. And during the- Only one of those counts with NADA,
by the way, Adam. That is true. The first one was a little bit of a bogey. Didn't really provide
us with much clarity or anything like the second one was much better. And I think that part of that
too is just who did the FTC bring to the table. They had that second webinar, they had the FTC
chair, and then they had the actual director that sent out the letters. It wasn't, you know,
someone that was just working underneath them. So they were able to provide a lot more clarity
with that one. But during the NIADA webinar, you know, they were also talking a lot about,
you know, if it is a situation where your technology provider is not able to make these
changes for you, the FTC will look at them potentially for enforcement, which is I think
why you're seeing a lot of these technology providers like Scramble to make changes within
their own platforms, because they certainly don't want to be in the FTC's crosshairs. So
what I would say for any dealer, if you are running into problems, make sure you document it.
Yeah. Would you say that again? Because I think there are some dealers out there that assume,
hey, I contract with a large website provider. My OEM may be required that I use them, or at
least they're significantly, they're significant in the industry. And a lot of us would assume, hey,
that website provider, they're handling the compliance, they're responsible for it. But
where does the responsibility lie? Can I hold that website provider accountable for mistakes
that may be made that would cause us to go askew with the FTC? Or is it squarely on us to monitor
that? Yeah, Sam, I would say, look, the ultimate responsibility is going to fall on the dealer.
The FTC is going to be looking at the dealer. And from a dealership perspective, you don't want to
be sitting there defending yourself and saying it's the technology provider's fault. There is a lot
of control that the dealers have over their website and what's actually going on to the website.
So from that perspective, where I would say that the ultimate responsibility is going to fall,
it's going to be on the dealer. And if that provider isn't getting it done for you,
then you're probably going to have to look at other providers.
Yeah. So for dealers who are watching right now, I mean, hopefully everybody's taken significant
action quickly, particularly on the advertised price to include the dock fee, because that's a
they're probably already in compliance. Some didn't. So there are adjustments that need to be made.
For dealers listening, what's one realistic action today that they could implement over the next
seven that would meaningfully reduce their exposure here? Yeah. So when it comes to the
website itself, make sure that you are taking a look at the actual disclosures that are being
made on the website. If there are disclosures saying that it's excluding things like dock fees,
that certainly has to change. Another one that I would really recommend is that when you're
really focusing on that price, and kind of my preference is to have a prominent headline price
that is that all in price. So that way you cannot be accused of not disclosing to them
the all in price. So I would suggest that that actually be a headline price. It's not necessarily
the way that you have to do it. But that's the best way to really get the point across for the
consumers and protect yourselves. So you've talked in your own webinar and online about a coming
wave of website compliance demand letters. What kinds of violations are attorneys targeting and
why are so many dealers unprepared for this coming wave as you describe it? Well, a couple
things to keep in mind here is that, you know, when you have a big announcement like this that
happens with the FTC, you also have plaintiffs attorneys that are looking to be very opportunistic
here. And so what they heard with the FTC is they heard, hey, this is an unfair and sub-divac practice
to not include it into the all in price or into the price, especially things like dock fees.
So what's kind of happening right now is you also have the plaintiffs attorneys that are looking to
also take action against dealerships under the same theories that are out there. Now,
this particular theory has not played out in court. No court has actually decided at this point,
but who really wants to be taken off track fighting lawsuits, fighting the FTC, fighting the
states? It's not just the FTC, the states are in on it too. And with that, you want to make sure
that you're doing what you do best, which is selling servicing vehicles and not fighting
lawsuits. And really, at the end of the day, is this really a bad thing for the industry? I think
that, you know, the one thing that the FTC mentioned is why they're taking these actions or
because of complaints that they get. And if this can help drive down complaints in the auto industry,
that's not necessarily a bad thing. Yeah, I mean, listen, I think it's a great thing. And
as Bernie Moreno says, it's a cleanup on aisle nine to kind of weed out the bad 5%
of dealers that just aren't acting correctly. And I think it puts everybody, again, everybody's
working off the same page. I do think it's a bigger problem than just the automotive industry.
I used this example last show. I recently went and got gas at a gas station. It showed 510,
or it showed 470 on the on the board. And you go and start pumping gas. And that 470 is clicking
around at 510. And then you go look back at the board and it says in very fine print with
purchase of a car wash. And I'm like, wait, and they think the auto industry is crazy. Like,
in any time of major pain points, gasoline is one right now, people try to find creative ways
to help make it more tolerable to the public. But it is shocking when you're pumping at one price,
and you realize it's another atom. So there are other industries, I think, that have been targeted
by the FTC for this ticket ticket sales. You know, I don't know what what are some of
of the others, hopefully they go after the fuel thing because with car wash,
I'm not buying a car wash to get a 10 cent a gallon discount on gas, right? Yeah, so so certainly
they mentioned that in the letters, they did talk about things like ticket prices to concerts and,
you know, other events like that. They also mentioned things like food delivery services,
housing, rentals, you know, those sorts of things too. So I mean, I think that we all appreciate
the fact when we go to look for a hotel or we look to go buy, you know, a concert ticket or
whatever it is, like, we appreciate the fact that, hey, it's disclosing the price up front. And now
I can truly compare, you know, one location or one set of tickets to another. And, you know,
it's not just about the auto industry. This this is something that and it's not a red or blue issue.
This is something that the FTC and states they're really pushing for all in fee and fee and price
transparency up front to consumers. So consumers aren't sitting there spending their wheels trying
to figure out, you know, what the price is. Do you think the industry is underestimating how
fast enforcement and litigation around digital retailing and advertised prices evolving and
what the next and maybe that's the question is, you know, what the one shoe dropped with the letter
and, you know, it's a warning shot. How quickly will the next step be taken to a dealer group or
dealership that doesn't take action? Well, the the one thing that I'll say is that your website and
these digital retailing platforms are very, very public. And it's very easy to to crawl these websites
to look for issues. You know, it's something that our company also does from like a compliant
standpoint. And the FTC has the capabilities to do it also. What I would say is some people were
really shocked by the FTC enforcement letters they thought because of the change in administration
that there wasn't going to be the sort of enforcement actions that were happening. We
did see a very big case that dropped shortly after the FTC letters that were out there.
But this shouldn't be a surprise because there are cases that are still pending. And I think
that you're going to see more in 2026 that are going to come down the pike. And by the way,
the FTC said, for those that aren't changing things, right, dealers, those that are coming into
compliance with with our view on what's considered to be UDAP violations, and you're coming into
compliance, we want to hear about it. We want to hear about these other ones. So, you know, that
that kind of island that the, you know, later adopters are on, it's quickly shrinking. And it's
it's really going to put people at risk of, you know, some sort of enforcement action if they're
not coming into compliance. And when you're talking about the the FTC and the enforcement
actions, I have some stats for you, Sam, if you're interested. Let's do it. Yeah. So,
nine of the last 12 FTC enforcement actions in the auto industry have alleged failure to provide
the advertised price, not necessarily not rolling in the dock fee, but you get there and they start
disclosing, Hey, there's these other fees, or you have to buy this other additional product to get
that price or finance together. Yeah, you got to stack all these things. Yeah. So eight of the so
nine out of 12, and then eight of those nine actions, the FTC actually teamed up with state
attorney generals to take these actions. So it's both the FTC and the states. Plus, we've seen
nine. We've seen 11 solo actions against dealerships by states by themselves without the FTC. And in
nine of those cases, and I'm talking about significant cases that were $100,000 or more,
they're alleging failure to provide the advertised price. So it's not just the FTC, it's also the
states, but it's also the plaintiffs attorneys that are out there too. Yeah, well, it's a warning
shot to the entire industry. Adam Kroll, chief legal and strategy officer at KPA. We absolutely
appreciate you coming on Daily Dealer Live today, sharing your perspective on this letter, the
shot over the bow and how dealers can pursue greater compliance in this environment. Thanks
for coming on the show. Thanks for having me, Sam. Well, fun topic. Well, it's not a fun topic,
but it's a necessary topic. And again, I think overall, this is a great thing for the automotive
industry and a great thing for every industry. Nobody wants to walk in somewhere, try to buy a
ticket, try to buy gas, a car and have a process that ends up in something that's
completely different than what you intended. That does not reflect the best of automotive. So
all right, last up today, transitioning along. And by the way, for the comments to the producers,
if you'll just put the comments up, I can't read the comments. My screen is super small. Again,
we're broadcasting live here from a soda con in Maryland. I'm excited to be here. It's seeing
dealers, vendors, partners from all across the country here participating in this event has been
a heck of a lot of fun this week. So Seth Dobbs, equity partner, co-chair of National
Automotive Practice at Fox Rothschild's LLP. Welcome to the show next. Thank you very much.
Pleasure to be here. All right. It's good to have you here. Hey, for everybody who doesn't know
you, tell us a little bit about who you are, what you do and how's biz today? Sure. I'm Seth Dobbs.
I head the National Auto Practice for Fox Rothschild. We are a law firm of about 2,000 people
coast to coast, 30 offices across the country. And we handle probably about 1,000 dealerships
from California to New Jersey. We handle anything from merger and acquisition by sell activity,
manufacturer relations, compliance work, lawsuits, tax structure and setup. If it touches and relates
to a car dealership, we handle it. Well, I mean, how cool to have an attorney that has such vast
and wide experience across the country in automotive. And I guess the first question I'd ask is,
what are the signals you're seeing in automotive today in May of 2026? What surprises you most
about how dealers might get into trouble or run a foul either on M&A or any topic? And then I'll
ask you the reverse as well. What's something that would surprise dealers to learn? Sure. I think
that coming out of COVID where there was an immense amount of buy-sell activity, a lot of
drop-off when it really hasn't, we're still seeing the very similar volumes to what we saw during
COVID. The prices have dropped somewhat just because dealers are making less money than they were
making during the artificially inflated COVID times. But the volume of deals are still there.
So that brings you back to the old adage that dealers need to make sure they have competent
counsel in those transactions and protect themselves. You had asked me earlier for a funny
story about maybe something that might surprise a dealer. We recently had a transaction where we
were representing the buyer. And in that transaction, it was in a market that has lifted SUVs. And we
drafted the buy-sell agreement months before the closing had taken place where the buyer,
we slipped in some language that basically said that the buyer will pay up to $1,000 for any add-on,
for any vehicle. Fast forward, 90, 120 days, we're sitting at the closing table looking at the
closing statement. And there's about 45 lifted SUVs with lift kits that are anywhere from $10,000
a piece. So the buyer said that there needs to be a $650,000 adjustment to the purchase price
that the seller was asking. The seller started flipping out. We pointed to the contract and
the language was in there. So it's the old adage, you really need to be careful.
Once in those agreements, they are important. And you may not realize what language is in there
until it's too late all the way at the closing table. So that was some fireworks that recently
happened at a transaction we were involved in. Competent legal counsel is important because
if you get to that final step, everything's pointing to the close. There's almost too much
momentum going into that last day to stop it unless somebody just wants to unwind it. So
that's one thing to watch for in competent legal counsel is language coming into buy-sell.
What are some proactive tips, things dealers are doing correctly as they approach the buy-sell
environment today? In this market, I think that the buyers are more aware. Buyers are not just
buying revenue. They're buying successful operations. They're buying ability to have
future-proof dealerships. And I think that going into a buy-sell, the successful dealers are taking
a look at their books. They're taking a look at their operations. We were recently involved in a
transaction where a seller was not doing their diligence prior to the closing. And when it came
time at the closing table to talk about parts and talk about miscellaneous parts specifically,
there was about $15,000 of key fobs that the seller was expecting to be purchased because
apparently one of the parts managers was obviously getting a spiff for every key fob that they
purchased. These were two vehicles that were not the OEM that was being sold. So I think that
dealers need to take a look at their operations, make sure that they're on top of things. This is
no longer the era of set it and forget it dealership operations. Dealers need to be proactive.
Dealers need to roll their sleeves up and really on a day-to-day basis get into their stores,
see what's going on, see what's right, see what's wrong, and make adjustments. In this market,
it's very clear that dealers can't just sit around. Month-to-month things change, week-to-week
things change. Dealers need to ride the waves of the up and downs, understand the manufacturers,
rebase incentive programs, make sure they're availing themselves of the changing waves of the
industry, and you can't do that without being proactive. How do you think in the M&A world,
how do you think about all the different risks there are to the business right now? So tariffs
definitely are one. Direct-to-consumer, you know, VW through Scout, Honda, try for a hot minute there.
The FTC stuff, how in the buy-sell market are people thinking about all of those threats to
the industry currently? Just hearing Adam talk, that is definitely the topic of the day, is compliance,
FTC compliance. More so, the all-in pricing is something that dealers really need to start
wrapping their head around. All of our dealerships, we're promoting this all-in pricing and compliance
with the FTC. We also agree with you that this is good for the industry. The problem is that the
late adopters that are not complying and they're taking a wait-and-see methodology, it's really
not fair to the dealers that are. If you're advertising the same car for $1,000 more than
your neighbor because you're incorporating a dog fee into your advertised price, it's not really a
level playing field. And in getting back to your question about how this pertains to the buy-sell
market, those things are being looked at. How compliant is a dealer? What am I inheriting by
buying this dealership? Is it a dealership that has a history of litigation, compliance
issues? Because even if you're conducting an asset sale or you're buying things without liability,
you're still going to be faced with plaintiffs lawyers suing the dealership, thinking that
their success or liability, even if there isn't customers that are going to show up to the dealership
that don't recognize that there's been a change in ownership or management, demanding their vehicle
get fixed, demanding the free services that were promised to them, all of those things are now
being taken into consideration in the buy-sell market. But as a kind of an attachment on that,
you heard the conversation about some of the liability that unintentionally ends up getting
created through some of these third-party technologies and bolt-ons, right? How much
exposure are dealers creating unintentionally through these third-party vendors, through digital
retailing tools, through AI-generated advertising and outsourced marketing? There's so many
partners and disparate sources and places where data is being pushed. The possibility that those
end up in different places at different dollars is higher today than it's ever been. How should
dealers be thinking about that, Seth? With that, I think it comes down to proactive compliance as far
less expensive than reactive defense to enforcement. These dealers need to make sure that they are
focusing on compliance. We have taken painstaking efforts to reach out to third-party vendors,
reach out to the OEMs. After the FTC letter had come out, many of the OEM websites were non-compliant.
And it took some time before Toyota and Lexus started including dealer fees and DPH to their
website advertisements. And same with these third-party vendors. We recommend to our dealers to stay on
top of their compliance, send out letters to all your third-party vendors, make the demands about
how you want them to be compliant. This way, when the FTC or the AG or plaintiff's attorney starts
knocking on your door, you at least have a piece of paper to say. We recognize that this was not
compliant. We threaten to terminate our services if they wouldn't get into compliance and demanding
change from your third-party vendors because it's unknown whether or not the dealer is going to be
at the end of the day held responsible for these third-party vendors as representations of the
dealership themselves. So if you don't have that letter and you're not taking those efforts,
you have substantial risk about it in massive, massive fines.
Yeah, that day of, as you say, set it and forget it is gone, right? Because you can't say, hey,
I do business with XYZ website provider or vendor because liability ultimately rests with you,
the dealer, not with them. They have the reputational risk, but you could be held accountable for it.
So all right, last question up. If you're advising a dealer group with 30 rooftops today, what would
you tell them to prioritize immediately before this next wave hits, speaking of fines, penalties,
investigations, complaints, all the things? And we'll end on that exciting note, right? How about
a positive end to today's show, Seth? Go ahead. Sure. I think you need to make sure your compliance
is in check. Make sure that your FTC compliance is in check. And from conversations we've been
having with local attorneys general and others in the industry, the next wave I think that people
need to focus on is privacy. I think you need to make sure your privacy compliance is also in
check. And a lot of the third party vendors out there are not compliant. They are not focusing
on privacy, what you're doing with customer data, how that data is being handled and managed and
used. There's a ton of TCPA violations that are out there. And the dealers need to make sure that
they're rolling their sleeves up and that they're taking a good hard look and that they're not
resting on their laurels. Every day has to be, what can we do differently and how are we making
sure to bob and weave with the waves of the industry? Yeah, the privacy doesn't even, that
conversation doesn't even start to have conversations about AI, Agentec AI and some of the access on
those tools. Seth Dobbs, Equity Partner, Co-Chair of National Automotive Practice at Fox,
Rothschild LLP. Thank you so much for joining the show today, sharing your perspectives on
all things automotive. Thanks for being here. My pleasure. Thanks for having me.
Thank you. All right, everybody. Appreciate you joining us for this live show today here,
Daily Dealer Live, here broadcasting live from OsoduCon here in Hanover, Maryland,
Baltimore, Maryland. Thanks for watching Daily Dealer Live. We break down the biggest moves in
the car business as they happen. Don't forget, we are here live every Monday, Wednesday, Friday,
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hit subscribe, turn on those notifications so you never, ever miss a beat. Thanks for being
here, everybody. See you next episode.
About this episode
Dealership Guy Podcast runs a live, dealer-focused update spanning marketing performance, pricing trends, and legal/compliance risk. The show cites KBB’s April pricing snapshot, then pivots to internet lead response benchmarks and Stellantis’ partnership-driven EV strategy. A major thread follows FTC advertising and fee-disclosure rules—how to keep “all-in” advertised pricing consistent across websites, digital retail tools, and syndication systems. The guests also cover BHPH lending risk, dealership expansion and culture, and Seth Dobbs’ buy-sell diligence lessons.
Today's show features:
- Harold Hurst, COO of Purdy Group USA
- Adam Crowell, Chief Legal & Strategy Officer at KPA
- Seth Dobbs, Equity Partner - Co-Chair of National Automotive Practice at FOX ROTHSCHILD LLP
This episode is brought to you by:
Uber For Business – Not every service customer needs a loaner. Uber for Business gives your dealership a lower-cost courtesy ride option for customers whose vehicles are in the shop. Same convenience, less overhead. Book a demo and they’ll buy you lunch with an Uber Eats gift card. Visit https://businesses.uber.com/CDG to get started.
KPA – KPA is the leading provider of compliance solutions in the auto industry, with a unique mix of innovative software, a national network of expert consultants, and award winning training and content. Visit https://kpa.io/ to schedule your demo.
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