Island Auto Group is the dealership company being talked about. They’re explaining how their group is growing and why they’re being careful about debt and expansion.
They’re talking about how dealership groups grow. The point here is that buying too many stores (or growing too fast) can be a problem if the deals were overpriced.
“Multiples” is a way of describing how expensive a business deal is. If the multiple is high, it usually means the buyer is paying a lot compared to how much money the dealership makes.
“Service business” means the shop side of a dealership—repairs and maintenance. The idea is that people still need service work even when buying new cars slows down.
Mercedes is a luxury car brand. In this part, they’re comparing how expensive dealerships are for different brands.
Term
surging debt in the US
“Surging debt” means the country is borrowing a lot more. The host is suggesting that this kind of financial pressure can help drive prices up.
Term
money printing
“Money printing” means the government/central bank creates more money. The host is saying that can push prices higher, which is why car prices have risen.
Interest rates are what it costs to borrow money. If rates go up, loans cost more, so dealers feel more pressure to sell cars faster to cover the higher payments.
Floor plan is a loan dealers use to stock cars on their lot. They pay interest while the cars are sitting there, and once a car sells, the loan gets paid off.
An “operator” is basically the person running the dealership—how they manage the business and sales. The host is saying a good operator can make the store succeed even if people criticize the brand.
A franchise store is a dealership that sells cars for a specific brand under an official agreement. It usually means the dealer has to follow that brand’s rules, unlike an independent used-car business.
A used-car store sells pre-owned cars instead of new ones. The host is saying they work with partners who run lots that sell a certain number of used cars each month or year.
Here, “brokers” are middlemen who help you find a car and may charge a fee for doing it. The point being made is that if the broker’s fee is big and the dealer ends up paying a lot too, the buyer might not actually get a better deal.
Concept
revenue source
They’re talking about brokers making money as a main business model, not just charging a small fee for help. The concern is that if brokers earn a lot, the buyer may not benefit as much as people claim.
Term
OEM stair steps
“OEM stair steps” means the automaker’s different levels of pricing or deal terms. The host is saying brokers use those levels to negotiate in a way that can cost dealers money, instead of helping the buyer get a clearly better outcome.
This phrase means people judge things by how they feel or what they think is true. In car buying, if the process seems simple and clear, customers may feel like they’re getting a better deal.
Carvana is a company that sells used cars mostly through an online buying process. The point here is that they may charge more, but they’re easier to buy from than a traditional dealership.
CarMax is a used-car store chain that sells cars in a more streamlined way than many traditional dealerships. The host brings it up to compare how different sellers win customers.
“Vertically integrated” means one company handles more than one part of the deal. In this case, it suggests the company may make money not only on the car price, but also through financing.
“Captives” are finance companies owned by the car brand. They help arrange loans or leases, and they can require dealers to fix or buy back deals if the dealer didn’t follow the rules or misled the customer.
Mazda is another car brand mentioned in the same story. The point is that Mazda, like Toyota, is said to be serious about not letting certain dealer arrangements slide if customers were misled.
“Buy the deal back” means the dealer may have to take the deal back and undo it financially. The idea is that if the dealer did something wrong or misleading, the dealer—not the customer—has to fix the fallout.
“Misrepresentation” here means the dealer may have said something that wasn’t true or didn’t tell the full story about the deal. The episode is saying that if the automaker/captive believes that happened, they can force the dealer to fix the deal.
DMV is the government office that deals with vehicle registration and licensing. The speaker is saying the organization involved is officially licensed through the DMV in New Jersey, which makes their enforcement more credible.
A recall is when a car company says a certain problem needs fixing for safety or compliance. The speaker is saying that because recalls can happen after purchase, the whole ownership process is more complicated than people assume.
This means an AI (or software) could handle parts of buying a car automatically—like talking to the seller and finishing the deal—without you doing all the back-and-forth.
Subaru is a car brand. The point here is that even at a Subaru dealership, the buying process could involve an AI “agent” helping complete the purchase.
They’re talking about whether buying and owning a car will still require real people to help you. The host argues that when cars need repairs, you’ll still want human support.
Tesla is an electric car brand. The host is saying people may be very happy when they buy a Tesla, but satisfaction can fall when they need repairs or service because getting help isn’t as straightforward as with some other brands.
The host is saying Tesla owners may have fewer places to go for repairs and maintenance. If it’s harder to get service, people can end up less happy even if they liked the buying experience.
It’s a way of getting car service without you driving the car to the shop. The shop picks up your car and brings it back, but in busy cities it can be difficult because of things like parking and traffic.
A technician shortage means there aren’t enough skilled mechanics available. Shops then try to make their workplaces more attractive so mechanics will want to work there.
These are websites that aren’t run by the dealership, but show cars for sale and prices. Sometimes the price shown is only available if you meet certain requirements, so what you see online might not be what you get in the showroom.
Concept
pricing goes back to broker pricing
The idea here is that the price you see online can be set up by a middleman in a way that only works if you meet certain conditions. So the real lesson is to check what you must buy or qualify for—not just the advertised number.
“No fees” means the dealer isn’t adding extra charges on top of the advertised price. It’s meant to stop the common trick where the online price looks good, but the final price jumps after you arrive.
“Low Jack” is an anti-theft tracking system. The issue being described is that some dealers may push you to buy it (and other add-ons) just to get the “special” price they advertised.
Here, “warranty” means an extra protection plan you can buy from the dealer. The concern is that the low price you see might only be available if you also pay for that extra plan.
This means the “special” price only applies if you take the dealership’s financing. If you use your own bank or pay cash, the price you qualify for may be different.
VDP means the car’s listing page online. The host is saying some dealers make it look like there are no extra charges right on the listing, even if the final price later includes fees.
The “out the door price” is the full total you’ll pay at the end. It includes the car price plus taxes and paperwork fees, so you can compare offers fairly.
“Use car profit” here refers to the average profit dealers make per used vehicle sale. The host cites Carvana’s published figure to argue that dealers’ pricing narratives (“we don’t charge fees”) should be evaluated against real economics and transparency.
Dealers sometimes add extra charges on top of the car price. The host is talking about those extra fees and how they can end up costing customers a lot more than they expect.
The FTC is a U.S. government agency that helps protect consumers from unfair or deceptive business practices. The host wants them to step in more when car dealers treat customers unfairly.
The Chrysler New Yorker is a large, older-style family car made by Chrysler. It was designed to be comfortable for long drives, with a more upscale feel than basic sedans. People bring it up because it’s a recognizable model with a long history.
Cars.com is a website where car dealers list cars for sale. Here, they’re mentioned because they’re trying to affect how dealers show pricing so buyers aren’t misled.
Brand
cars guru
“Cars guru” sounds like a tool or label that rates prices as “good” or “great.” The point being made is that the best-looking price might depend on things like eligibility, so you should verify the actual deal.
A down payment is money you pay upfront to start the car purchase. Dealers sometimes use it to make the deal look cheaper, so you have to compare the full out-the-door cost, not just the headline number.
“Two prices” means the listing shows one price most people can get, and another lower price that only applies if you meet certain requirements. It helps you avoid being tricked by a number that might not apply to you.
Customer cash is a discount from the car maker that lowers what you pay. It usually only applies if you meet the requirements, so the advertised “great price” might not be available to everyone.
“May also qualify” means the lower price is only available if you meet certain conditions. When you see it, you should ask what you must qualify for so you can tell whether that cheaper number is real for you.
Dock fees are extra charges a car dealer adds for moving the car to the dealership. The point here is that if the ad shows a low price, the real price you pay can be higher once those extra fees are added.
Concept
advertising a used car for 13,000
This is an example of “price presentation” in car advertising—how dealers can advertise a base number while adding fees later. The transcript argues that consumers should be able to estimate the final cost because fee rules can vary by location and dealership practices.
NADA is an organization that represents car dealers. In this episode, they’re mentioned because dealers were talking with regulators about how certain fees should be handled.
LIVE
The thing that's crazy to me is if I walked up to you on the street and said,
give me a copy of your Social Security card and you drive his license,
you'd say, get away from me. You have people.
Yeah. The privacy data is sketchy.
I say it's great. The car dealerships are supervised.
You know, the FTC, we're a bank now.
Like the amount of money we spend to your data is incredible.
You're handing your license and your Social Security to a guy who you met
at a parking lot. You know, it's just crazy to me.
Welcome to the car dealership guy podcast.
Before we get started, a big thank you to our sponsors for making this episode
possible, Podium, Wikimotive and CDG Circles.
And now let's get into the show.
Marcello, Shorino on the CDG podcast.
Marcello, welcome. Good morning.
Thank you for having me. Welcome.
Like excited to have you here.
Yeah, I'm excited to be here.
We have a bunch of things to touch on here.
You're a massive dealer in New York.
Thank you.
And you have a lot of thoughts on FTC pricing, the broker shenanigans,
which has been there's just been a lot of press around it.
Before we get into that, what's on your mind generally right now?
Like, tell me, when you think about the industry in large,
like, what are you thinking about now that are you buying stores?
Are you divesting?
Like, what are you just thinking about day to day right now?
Yeah, I think, listen, we're very blessed.
We have 14 new car stores and six standalone stores.
You know, sell thousands and thousands of cars a year.
We're kind of thinking that there's been a lot of over expansion.
You've seen smaller, you know, local groups try to buy stores.
They did it all during COVID.
We think they overpaid.
I mean, the multiples were just crazy.
People were paying multiples of three years of the best three years in the car business.
So my partner, Josh, and I just kind of sat back.
And we think there's a lot of opportunity coming.
We've seen a lot of guys over expand.
You know, they bought some tough brands.
I mean, we've seen the shift in some of the American brands and some of the lower Japanese brands.
So we've kind of stayed back.
So what's on our mind is expansion, but internal expansion.
We're in the midst right now spending tens of millions of dollars, expanding service.
I think, you know, if the economy does slow down, cars always break.
So what's on our mind is expanding service.
We're going to add between 70 and 100 bays in the next 12 months in our service business.
And we're building a brand new 60,000 square foot Toyota showroom.
For anybody who knows me, you know, Toyota to me is number one.
They do the best job. They deal a friendly.
They've kept the inventory right.
So we're investing in those brands that we feel are going to, you know,
continue to thrive over the next 10 years.
How many Toyota stores you have?
We only have one. We'd love to have 10.
Yeah, the problem becomes that, you know, if you own a Toyota store,
it's there's not a lot of market.
If you look at recent multiples, they're now surpassing Mercedes,
you know, nine and 10 times multiples are like not uncommon in a Toyota store.
And they just don't come on the market.
What do you, when you say over expansion,
how long have you been in the business?
I've been in the business for 30 years.
I've been an owner for 14.
OK, so let's say you've been in the business
roughly twice as long as I have, or I've even been exposed to it.
It's hard for me to see a world like in my lifetime.
I've only seen prices go up.
Like, yes, I was around at 0708, but, you know, not as involved as I am today.
Like I've only seen prices go up
and I've seen it happen primarily due to money printing
and, you know, the surging debt in the US.
Do you, when you say over expansion, do you believe that
there will really become come to a point soon
where there's just going to be, call it multiples,
compressed with dealerships and there's opportunities there to buy again?
Like, do you see a future or is that could be, I mean, 10 years out, 20 years out?
What's your what's your take?
Listen, we're long on the car business.
I think there's always opportunity.
I think you've had a lot of guys take on a lot of debt
and buy what I call not great stores.
You know, if you're going to pay a multiple for a store,
I joke and say, if you got to buy a Toyota store and it's a 12 times multiple,
what are you thinking about?
Because that's a brand you can stay long.
I'm talking about guys that were buying, you know, lower end stores
and paying five and six time multiples of 5000000 dollars in earnings.
And now they're making a million.
You know, there has to be a math equation to end up where you own the store
and you're not always paying debt.
So I've seen a lot of local groups that went from three stores to eight stores
to 12 stores very quickly, and they did it by taking on debt.
And in order to service that debt, you have to sell a lot of cars.
And, you know, interest rates have changed.
They took on those stores when full plan was three percent.
Now full plan, 78 percent.
You know, during COVID, you were printing money on floor plan
because you would get him paid, but you would not paint it out.
That's changed.
But we're long on the car business.
I don't get.
I think the car business is I believe it.
But I believe that, you know, it's about the stores you buy
and the people that you employ.
That's what we believe.
So the store, you're brand agnostic, though.
Like it seems to me like you're open to almost any brand.
You care about the deal.
Yeah, I mean, we own every non luxury brand, but Ford, every single one.
We own multiple Honda stores.
We own a Nissan store, multiple Hyundai stores.
We own a Kia store.
I mean, we love all the brands.
We look at it as math equation, right?
If the deal makes 3000000 can you just mathematically pay 30 million?
How are you going to service that debt?
How can you grow the business?
I mean, our model is to buy stuff that's underperforming
and then look for opportunity and then on the performance.
It's also interesting that inflation has been reigniting
and or say, re-accelerating and it makes you wonder.
Like if you look at poly market now, I last I checked the
there's a higher probability that interest rates will rise
or it's like the highest it's been relative to the last year or so,
as opposed to go down.
It makes you wonder, right?
That servicing will be even more expensive
and there's going to be more pressure on the market.
That's hypothetical, but that is what the market is,
you know, increasingly predicting now.
But shouldn't that affect the multiple?
I mean, it's not.
That's where the market is not really accurate
because interest rates at 7% make your payment.
I'm making it up 200,000 a month on the debt at 2%.
Your payment is 120,000 on the debt.
Dealers, to me, aren't looking at the long game.
You know, you got to pay the debt off.
The whole idea is to own your business,
not just constantly take on debt.
You know, the public's are in a different position.
I call it funny money, right?
The public's come in, they build the $50 million showroom,
pay a 100000000 dollars.
They don't talk about it.
But, you know, when you're small, not small, but a regional group,
you know, we're looking at the right term of it.
You know, we're a private group.
It's very different.
You know, we're very proud.
Our boardroom is three people.
You know, that's how we make decisions.
The board is three people.
It's myself, my partner, Josh Arrington,
and my partner, Ron Barron.
So how did this partnership come to be?
I say life is 5% luck, 95% hard work.
I believe that my whole life.
You know, I got 5% luck.
I was a general manager of a very big store,
of a Hyundai store that was selling
upwards of 700 cars a month.
OK.
I got introduced through a friend of a friend to Josh.
Josh, at that time, they had a Kia store that he owned outright,
and they had just partnered with a gentleman named Michael
Davidson and bought a Hyundai store.
You know, Josh is a young guy like myself, brilliant guy.
And we just sat down and we started to talk.
And he was like, hey, I'm looking to buy a Jeep store in New Jersey,
looking for somebody to be an equity partner.
You know, I've heard great things about you.
Would you be interested?
And, you know, I was like, let me think about it.
You know, of course I was interested.
I was a guy who was a general manager of my whole life,
making amazing money, but had an opportunity to become an owner.
So we bought that store.
It was Route 1 Jeep in Lawrenceville, New Jersey.
When was that?
About 14 years ago, you know, you keep saying like five years ago,
14 years ago at this point, and we crushed that store.
We absolutely crushed it.
We took the store that was doing 30, 40 new cars a month.
I think our second month, we did close to 100.
We built that store into an absolute juggernaut.
And then we bought a couple of Kia stores in New Jersey,
which we since sold.
I mean, we bought 12 stores in four years.
No, we expanded pretty quickly.
When was that? What period of that?
Pre-COVID.
That was pre-COVID, definitely pre-COVID.
And so you benefited from all that multiple compression.
We did, but I think we also learned from our mistakes.
You know, we we made a lot of money and we started buying stores,
but we didn't have a long term strategy yet.
Did you have a team?
We had a team. I think, you know, my father in Iran always says,
you don't buy the store, you buy the person.
You know, if you can have a good operator, you know, we see it in our stores.
It's listen, we could have a Volkswagen store.
Like we have a Volkswagen store now.
Everyone's like, oh, Volkswagen is terrible.
We have a good operator.
You have a good operator.
The store does really well.
So it's about the operator.
So I think we expanded really quickly and then we kind of slowed down
and started to focus our big group with Staten Island.
I mean, we bought nine stores and basically two years there,
which was 85 percent of the market.
And that was a big, you know, a big bite of the apple.
Was that all franchise stores?
All franchise stores.
So where did the you said you have six independent stores?
How did that happen?
We've partnered with people that have opened up use car stores.
So we use car stores that sell anywhere from 30 use cars to 100.
Why? Why did you do that?
That's very uncommon.
I've never heard that.
I mean, it really started with my partner, Josh's philosophy.
He believes that, you know, you partner with good people and you have good results.
And, you know, we had some good operators that came to us and said, hey,
I want to open up a used car store.
We always make sure they have equity and some skin in the game.
And then spreading chips on the table.
Yeah. And it's it's been good for us and good for them.
You know, it allows us to keep that.
I call it the ecosystem together, right?
You know, we send very few cars to auction, very few.
We kind of find everything within our ecosystem.
So you might sell it to we might sell it to our use car store,
one of our other franchise stores.
We try to keep it all within our ecosystem.
Is this like mailbox money?
Like, are you involved in these stores or?
Oh, we have involvement in all the stores.
So we have a central accounting team on basically overseas.
So you're basically buying operators.
We're partnering with good people.
Yeah. That's basically what we're doing.
I mean, you know, if you're out there and you're listening
and you want to partner with someone, we're guys.
We're looking for good people always, you know, honest people,
people that understand that if you work hard in this business,
look, I was a car salesman.
Now I'm blessed to be part of an ownership group that has 20 stores.
This is the greatest business in the world.
You can incredible.
You have the energy and the smarts.
You can be very successful. Yeah.
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That's a that's an interesting model.
And does this move the needle for you when you mentioned the use car stores?
I understand the ecosystem play.
Does it really move the needle when you look at your total revenue mix
at the end of the quarter, right?
Well, it definitely, look, everyone loves revenue.
The publics are all about revenue.
That is maybe my wife, Tommy.
She's going to the delivery. Oh, well, that's more important.
She's we do her.
Her it's not. It's not her due date.
It was yesterday. My photo is right here.
By the time of the podcast releasing, it will be beyond it.
We'll be maybe maybe one by then.
We'll see. We'll see.
They'll already be in the car lot.
Yeah. I mean, listen, when you look at automotive news,
the publics chase revenue, right? Yeah.
You know, total revenue, total revenue. Of course.
We chase net revenue.
You know, I have a friend of mine.
We recently came out in cranes as the 37th largest business in New York state.
So a friend of mine called me up and he's like, man, that's impressive.
You guys did, I don't know, 900000000 dollars.
He's like, you're above the Yankees and the New York Giants.
Show me the bottom line.
I said, for us, it's about net revenue.
You know, you're chasing a percentage of what you do.
So we love the net revenue model, but we also love cars and market model.
So if you have a used car store that's selling 100 cars,
just more people talking about island auto.
You wouldn't dominate the market. 100 percent.
Now, the used stores that you partner on, are they branded as island auto group?
No. So listen, island auto groups, the parent company, we own all of them.
But when we partner with someone, we allow them to do a big supervision overhead.
So like I said, we have central accounting.
Instead, we have a CFO, multiple controllers, accounts payable, accounts receivable.
We've done a good job. Yeah. You know, people joke.
We have 20 stores and I have 22 people in an office.
Like we've really done a good job of, you know,
scaling down the amount of people you need to run a car dealership.
Keeping a flat, lean organization.
Absolutely. And have an oversight.
I mean, my office and my partner Josh's office is in the accounting office.
If you want to know what's happening in your dealership, walk next door in the
accounting office. How's the how's the partnership structure?
Like do you both do the same things at different stores?
I do a little bit more of the operational stuff, the day to day stuff.
My partner Josh is looking at a lot of different opportunities all the time.
We're certainly working together.
Kind of like CEO, COO, one going to business, one's more, you know, facing out.
You know, it's tough when you go into, so my partner Josh and my other
partner Ron are family. And, you know, when you go into a family business,
but at this point, we're all family.
Yeah. You know, we've just become one big business.
And it's not like you don't have disagreements.
That's what, of course, good partners do, but we always find the right answer.
So I think, you know, we have a great mix of how we work together.
You've been pretty vocal about brokers in the New York, New Jersey market.
Is there alignment?
Like are you guys all in unison on the philosophy that brokers should not exist in your market?
Everyone thinks brokers shouldn't exist.
I don't have a problem with someone who's helping the consumer.
If you're an advocate and you're helping the consumer and you're taking a small fee,
why would that not be a good thing?
But when brokers have become this complete revenue source where the dealer is
losing $1,800 and these dealers are writing checks to brokers for 34
and $5,000, how does that benefit the consumer?
You know, they always talk about what's good for the consumer.
If there's a model where the brokers make 300, 400, 500, kind of like an advocate
for the consumer and the consumer wins, we're OK with that.
The problems become the broker has used the OEM stair steps to negotiate with the dealers.
And listen, dealers are where our own worst enemy because we're providing the cars.
I mean, dealers are opting into it, right?
They're not forced to do it.
Some dealers are chasing stair step.
Yeah. And some dealers have a big ego.
And they want to be number one, number one in volume.
You know, I worked for John Rosati years ago, who was a great dealer.
And he used to say, listen, I always want to be in the top five, top 10.
But I want to make the most money, have the best CSI and run the best dealership.
Some of these guys are selling cars to make zero money.
I recently got a broker price list where it said broker fees are capped at
7500 until we have a relationship.
That was an actual thing from a dealer.
That was a that was a price list from a dealer to a broker.
It was a price list selling, in this case, a Japanese brand for triple net,
complete triple net, not 10 on profit.
And in the margin on the bottom, it's a broker fees capped at 75
hundred until we have a relationship.
So how is the consumer being helped?
I mean, we deal with some local brokers in our market that bring the customer there.
You know, I respect the fact the consumer wants to make sure they want an advocate.
That's OK.
So I'm not against broker and I'm against the broker and model with a
consumer at the end of the day is getting hurt.
So how is the consumer getting hurt, in your opinion?
Because the broker is buying the car for triple net and then making selling
the car for sticker or above.
How does that help the consumer?
So you're simply saying that in your perspective, the consumer is not paying
less or they may be paying 100 percent not paying less.
There's not even a discussion amongst it.
It's factual.
The consumer is paying more.
But listen, as car dealers, we've screwed this thing up, right?
Listen to that, right?
Why would the consumer do it?
Because convenience convenience and transparency.
It's not even transparency.
It's, you know, they say perception is reality.
The perception is you say I want to go to the dentist or I want to go to a car
dealer and the argument is which one do you want to go to least?
You know, we haven't done a good job as a dealer body of making it easy to buy cars.
You know, everyone talks about Carvana is making 6000 per
used car. It was published.
So it's not like they beat in the dealer on price.
They beat in the dealer on convenience.
So I did look there was like an analysis done Carvana Carmax.
They are pricing higher than the average dealer.
It's not six or it's not 7000 higher.
It's because that's a vertically integrated.
Like, you know, that includes margin from like financing and all that.
It is higher though, which again is a testament to what consumers really value.
Some are price shoppers.
Some are, you know, one more convenience, someone transparency and convenience.
I mean, it's all different for every single one.
I think the biggest fallacy for any dealer, which this should be obvious by now,
is that not every consumer values price is like number one and let alone
number two, right?
Like in today's day and age with the modern consumer, in many cases, convenience
is the number one thing.
Or if you look at companies out there like Delivered, who was on Daily Dealer Live,
Tommy, he charges flat a thousand dollars, I think, and people pay it all day
because they know that, like you said, he's going to advocate for them.
He's going to be, you know, on their side and do, I guess, the negotiation for them.
Listen, brokers started many years ago, like as a mostly in religious groups,
you know, really started, yeah, like niche, niche, when I was a kid, you know,
there were groups of Hasidics who wanted to buy from Hasidics, which is understandable.
Now you have a guy who's a firefighter who on his part time is outbrokering cars,
you know, and you have guys that are open up in the back of delis.
And, you know, the thing that's crazy to me is, if I walked up to you on the street
and said, give me a copy of your Social Security card and your driver's license,
you'd say, get away from me.
You have people.
Yeah, the privacy and data is sketchy.
I say it's great.
The car dealerships are supervised, you know, the FTC, we're a bank now.
Like the amount of money we spend to secure your data is incredible.
You're handing your license and your Social Security to a guy who you met at a parking lot.
You know, it's just crazy to me.
So let's go upstream, right?
Toyota and, I want to say Mazda, just their captives recently announced by the time
this release recently announced that they are not going to accept these types of deals.
And if they uncover a misrepresentation by a dealer, they will require you to buy the deal back.
Do you think they mean it?
Or do you think this is another like, hey, let's just put it out there.
We'll reserve the ride, but we're not going to really do it.
But why did they have to put it out there then?
The reason is because they're licensed in the state of New Jersey with the DMV as well.
They're a bank.
So I think they're serious.
I really do because some people argue all they care about is selling cars.
Well, Toyota has kind of shown you that they're going to keep it disciplined.
They want to sell the right amount of cars.
They believe in service.
You know, that's another thing with the manufacturers and with the brokers.
When you're buying that car from the broker, these cars today are complicated.
You know, recalls come out.
You have to have a relationship.
So do I think they're going to enforce it?
Maybe I'm a dreamer.
But I think in this case, they are because of the language they put in that letter.
I mean, the language was clear.
You know, some of the other OEMs that came out with letters said,
we don't want you to do it, stay away from it.
You know, they threatened to force you to buy the car back.
So why they do that when they did the letter like, we don't want you to do it?
And like, why?
I think the banks are licensed in the state and they don't want to get involved in.
They want to cover their ass.
You know, yeah, to cover their ass.
The state said it's illegal.
So now you're allowing it to happen.
So I do believe there'll be some change with it.
Do you really have 25 brokers on the same boulevard as your attendio ships?
You want to go over them?
I can.
Let's go one by one.
I mean, they're lined up.
It's become an unregulated market.
Yeah, I say it like this.
You go into Starbucks and right outside is a truck called Starbucks.
And he's selling coffee that's similar quality and he's charging you 50 cents less.
How can Starbucks exist?
I mean, the OEM requires us to spend millions and of
dollars on facilities.
How can we're building a new Toyota showroom right now?
60,000 square feet.
Proud to do it.
It's going to have 40 bays.
An amazing experience.
That's a 20 million dollar project.
How can we spend 20 million and be regulated and everything?
And you have a guy that has zero regulations across the street.
To what extent do you think that type of investment still makes sense in today's
day and age and the world we're going into with agent to agent car sales?
I mean, I don't know if you saw Chris Hudson from Subaru store.
I forget the exact dealership.
He was showing on our show, like literally a customer's agent buying a car
from his dealership agent, like AI, just doing a transaction.
It's pretty remarkable that even exists.
But we talk about cars like a pair of shoes.
This is a machine that you're buying for three years, four years, five years.
You know, cars break.
You need a relationship.
I don't believe that we're going to get to this point where there's no
human interaction with a car.
You don't think so?
I think you're seeing a change, but I don't think it's going to happen.
There was a study about Tesla that Toyota spoke about 80 percent of the
customers are happy when they buy a Tesla, 80 percent.
It drops down to under 50 percent when they need service because there's no network.
Interesting.
Because where do you go for service with Tesla?
They partner with different, you know, shops.
They open up some smaller dealerships.
Yeah, I got a secret for you.
Cars break.
What's going to happen when it breaks?
You need a relationship with a dealership.
So we believe that it's going to be fixed ops is definitely where we're
seeing tremendous growth on because if the economy gets a little tighter,
people keep their cars longer and they need service.
Do you think the economy is going to get tighter?
You know, what's your pulse?
What's your pulse on the unpredictable, unpredictable?
It's unpredictable.
You know, you have an administration that marches to their
own beat and does what they want.
You know, you saw this EV, I guess, the air come out of the balloon.
But what happens in three years in two years?
If the administration changes again, we've become a victim
of administrations, right?
The big CEO said the minute the government decides how you do business,
that's when we have a problem.
And that's what they did with EVs.
So I think the market's unpredictable right now.
I really do.
You know, you have the war going on in Iran and gas prices going up.
I used to be, I'm still long on the economy.
I still think we're going to be OK, but it's just we're going to have
a lot of ups and downs.
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You mentioned you're making big investments into your service facilities
in your service.
You're right.
You just mentioned that.
What's your what's your plan there?
Like staffing, right?
That continues to be a big challenge for many dealers.
I get a message in circles every day.
Hey, anyone have a great way to hire tax?
I mean, there is no like train them from, you know, to start groom them
from the tech schools.
What's your general thought of, you know, the evolution of service?
Are you looking to more pick up and delivery mobile service?
Just planning to, you know, have stationery, just listen, we've
been doing delivery for five years.
It's like the new buzzword.
How's it been for you?
It's been great.
It's a great business because we're in a metro area where are all your stores
like urban, urban markets.
We have 95 percent of our stores.
We have one store that our New Jersey store, you could say is not urban.
It's outside of Princeton, but all of our markets are urban markets.
You know, the mobile service doesn't really work.
And we haven't found it to work in a metro market because, you know,
where are you doing it?
You can't do it on Fifth Avenue, Manhattan, start, you know, changing oil.
So the pick up and delivery models worked for us.
As far as the technician shortage, we all deal with that.
The way we feel is we're going to build these service departments that are
air conditioned, have the best equipment.
To technicians are going to go where it's easiest for them to fix a car.
You know, we're invested in these new tire machines that are 150,000 a
piece that literally change the time.
So I believe technicians are going to go where they can make the most hours.
You know, these skilled technicians are making 60, 70 hours a week.
If you can do an alignment in 20 minutes and it pays an hour and a half,
where are you going to go?
We feel the same way, you know, tires, technicians don't do them
because they take too long and you're not making any money on them.
So we're just trying to figure out ways to be a little bit more innovative.
And we believe the air conditioned service departments, you know,
the new equipment, that's where the technicians are going to go.
Where are you getting your, call it inspiration or education for how to
outfit these facilities and like best practices?
One of my old bosses used to say, there's no new ideas.
You just steal somebody else's, you know, we talked to other dealers.
You know, I think guys like yourself that have put dealers in communities,
you know, I'm in all those chats and it's like anything.
You're active also.
I'm active because I feel like there's good stuff in there and I learned stuff.
You know, I think the smartest guy is the guy who has questions.
So we visit other dealerships.
We talk to a lot of other dealer groups, you know, I'm on the Hyundai
marketing committee, speak to a lot of big dealers there.
My partner is on the Capital One and a community.
We're very involved with allies community.
You talk to different dealers, you find things that are working.
But I think fixed ops cars will always break, unfortunately.
Yeah.
So you're never going to get hurt by it and more fixed ops.
And then we spoke about brokers.
Of course, there's been a lot of buzz around the FTC and cracking down on pricing
and not even introducing any new regulations, but just enforcing what was already there.
You were outspoken on that as well.
You mentioned, you know, hey, it's this is again, goes back to broker pricing,
third party listing sites.
What's your perspective on dealership pricing?
Amen.
Amen.
You know, you can go back and look at us for the last few years.
We were one of the first dealers to put no fees and we heard in our market, you know,
you would have these guys that would advertise a car with a $3,000 down payment.
And then when you got that feed, sent to cars.com, my card showed for 20, their
car showed for 17.
But when you got to the dealership, they said, oh, that was with 3000 down.
You had guys forcing you to buy a low jack where you need to buy a warranty or
finance with us to get that price.
Look, we're in the car business to make money.
We make no lies about it.
You don't have to be dishonest to do it.
And you had big deal of groups, which is really makes me laugh now, because I can
put you on any site right now.
And it's like, no fees.
We treat the consumer right.
Three weeks ago, you had a $3,000 down payment.
I did do a new search and I looked at, I actually saw some automation stores that
had on their actual initial image, the cover image of the VDP is like, you know,
no fees, no fee, not saying that they did charge fees, but I'm just saying, I didn't
notice that it's like very glaring.
Go back three years ago and look at our website.
They've always been like that.
If I would let you listen to our call recordings, customer would call and say,
Hey, I'm Marcello.
I'm looking at this 2023 Nissan you have.
What's the out the door price?
And my folks would be like, well, it's the price of the car plus sales tax,
license and a dog fee of 175.
And they'd be like, no, no, email it to me.
And we started to understand the reason why is because they were showing up at
dealerships on a $20,000 car and the car was 26,000 out the door.
So now dealers are all saying, Oh, we're not charging fees.
Where were you three years ago?
You know, we talked a little bit about Carvana.
I mean, they just published something.
Their average use car profit is $6,500.
But they've been transparent with the consumer.
Consumers can handle the truth, you know, that you can't handle the truth.
Consumers wanted to be treat respectfully.
We're not average in 6,000 a copy.
We're not even close to that.
But we've always been, you know, honest with the consumer.
And I think places like Carvana have thrived because of that.
You know, they've been transparent.
Do you see this actually impact the dealers and just meaningful changes happening now?
Listen, you had a dealer in Maryland, I believe, got a $3 million fine and rumored
to have to pay back $60 million and that's real money.
It's real money.
I don't care what dealer you are, you have to write a check for $60 million.
That's real money.
I would like to see more enforcement personally because why would you want to
compete in a world where they're bad actors?
So we're doing the right thing.
We're not charging any fees, but I'm competing with a guy who says, you know what?
Hell with it, I'm going to play the game.
It's tough and the consumers are fickled, right?
Sometimes the consumer will get to that place.
They'll be so frustrated.
They'll like the car.
They'll spend the extra money.
So and then I look at some of those dealers and they all have 5.0 reviews.
I'm like, you've been charging the customer $3,000 in fees, but you're a 5.0.
Like there's something wrong.
So I look forward to the FTC and their enforcement.
Do you think that's a slippery slope?
The old adage, if you don't lie, you never have to worry about telling a lie.
Listen, we make money on consumers.
We're in the business of making money.
I have friends, I sell them cars.
I make money on them.
That's my business, but you can do it in a transparent way.
You can offer the consumer the products.
If he chooses to buy them, then good for you.
But these days of, you know, when I grew up in the car business,
it was very different.
Yeah, you know, that there was a lot of dishonesty.
Today, you know, podcasts like yours, you know, there are other guys out there.
The consumers are smart.
You can go on in two seconds and chat GPT what the cost of the car is.
Consumers are smart today.
So we can't keep insulting their intelligence.
So I'm not worried about extra enforcement.
Listen, we're in New York City.
We have more people in force than us.
We have the consumer affairs, the attorney general, the FTC, the DMV.
I mean, we can't get any more enforcement in New York City.
You mentioned New York City has has Mamdani effect.
Does that impacted you from your, I would say, desire to scale in New York City?
You know, there was I was watching a podcast.
It's a loaded question.
I know, I know.
I'm sure it is.
But I was watching a podcast with Ken Griffin and he was talking about, I
guess, Mamdani called down his residents and Ken was like, hey, well, now we don't
want to open up or we want to relocate our offices.
I'm curious, like, this is what you see in the media.
But like, what about like truly boots on the ground?
You are a huge stakeholder in New York City.
What is your perspective on where the city's future and your ability to conduct
commerce and to continue investing in the city?
Listen, New York City has always been, I would say, not as business friendly as
other places, right?
We're in Florida right now, very business friendly.
So, you know, New York is a whole and especially New York City.
There's this, I guess, division right now.
Like, if you're successful and you've done well, that you must be evil.
Do you feel that we're responsible for over a thousand people?
Yeah.
And I stay up at night thinking about those thousand people and how I'm going
to make sure they get paychecks and how I'm going to make sure that they're treated well.
So I don't believe that because if we would have leave the state,
let's say we just closed up all our dealerships.
It's a thousand people that are unemployed.
You know, they're paying payroll tax.
They're eating at your restaurants.
You know, they're going into your supermarkets.
I think this division of, you know, rich and poor, I don't truly believe it
because whether I'm successful or not, I'm helping the economy thrive.
A guy like Ken Griffin, all right, maybe you could say, oh, it's obnoxious.
He has a $200 million apartment.
But this guy employs tens of thousands of people.
He's built an industry that's helped New York City substantially.
So, you know, I mean, yesterday there was an article about, you know, Jeff Bezos
came out and talked kind of against the mayor and said, you know, you're talking
about mismanagement, you know, we're spending $44,000 a child to educate
our kids in New York City.
And we have one of the worst education systems in the country.
You know, you can't stand on both sides.
Listen, I think a lot of its perception and listen, the mayor could be here
for another three years and then you may have a different, you know, mayor.
I don't worry about that stuff.
No, I think where we've seen it is the public's lack of interest in places
like New York.
And listen, the public's drive up prices, right?
If they come in and buy a group, they drive up prices.
We haven't seen the public's, you know, they want to go to more friendly states.
Yeah.
You know, places like Texas and Florida go try to buy a tourist.
I mean, they just sold.
I think Nick Saban bought the tourist store from Sutherland.
You know, the rumor is $140 million.
Yeah.
Why?
Because it's a friendly place to do business.
I think New York will be all right.
New York's not going away.
I don't think it's going to go the way it is.
I don't think it's going to go the way of Detroit, but it is kind of scary
what's happening.
I think this division has got to stop.
I'm sure you have peers who run great big businesses in New York.
Like, what's the, you know, the stuff behind closed doors?
We can't pick up and move our business, right?
But I have friends that are, you know, in traders, you know, hedge fund guys,
guys that have done super successful.
West Palm.
They're going to West Palm.
I mean, I just had a very good friend of mine, a super successful guy.
He lives 10 minutes from me.
He picked up his whole family and he had a small office of six.
They managed like a billion dollars.
He moved to West Palm Beach.
So those that can leave in many cases are leaving.
I think the statistics are showing that if you look at, you know, how people
are migrating out of New York, you're seeing it, you know, with the public
school system, they're at their lowest enrollment rate right now.
People are moving outside of the city.
I mean, we're not going anywhere.
I can't pick up the dealerships and move.
But I think people that have the ability, they are moving.
I'm a New Yorker, but I do think you're going to see sections of New York.
The people that can leave have already started to migrate and leave.
How has your market share in your markets been trending?
Listen, we're in a tough market because we have a big broker problem.
You know, we always joke if there were no brokers or if brokers were regulated,
we'd have a much better business.
You know, brokers, I don't think that's a joke.
I mean, I think that's a reality.
It's a fact and it's it all comes back to, you know, I'm not being
like this big advocate for the consumer.
But if the consumer is not winning in this model, then who is, you know, we do
a good job in our market, but we definitely underperform because of the broker issue.
You know, when you're competing against 10, 15, 20 guys, we're not getting
shopped against the New Jersey dealer.
We're getting shopped up against a broker.
You know, that's very foreign to someone.
If you went to Texas and you said, oh, you're going to buy a big Chrysler store
and you're going to get shopped against, you know, the guy in San Antonio to be
like, oh, that makes sense.
No, you're going to get a shop in front of a guy who's in a barber shop up the
block from you.
So it's a tough market, but we're blessed with our market.
We still fully, fully support the New York City market, but we just want
it to be better regulated.
You also mentioned the responsibility of third party listing sites.
What do you think, what do you think they should do in this whole saga?
Listen, I've screamed and yelled about them forever.
They should have responsibility in it.
What kind?
What should they actually do?
They should monitor it and make sure they monitor it right now.
Some would say they're not monitoring it.
It's easy to figure out, you know, if you had a, someone who was a quality
control person who went and looked at the listings and you saw the price and then
you read the fine print, you'd say, if you're going to advertise fine print
on our website, we're not going to allow you to be a part of it.
The problem is the third party sites want the income.
But, you know, you have a lot of these independent used car stores that are
like, you know, one-offs, they're still advertising cars because what's the
FTC, who's the FTC going to find in this?
Are they going to find me, the big guy, or are they going to go after, you know,
Joe, who's got one used car lot?
The, the OEMs are trying.
The third parties, I think now have made a statement on it.
Whether they're following through with it, we haven't seen it completely.
Yeah.
But they have a responsibility.
They're taking.
Has anyone done an exceptional job in your opinion?
Any third party listing site or has anyone leading the charge here?
I mean, right now I've seen a lot of stuff around cars.com trying to stop it.
You know, cars guru has this whole thing where they say, good price, great price.
Yeah.
Well, if you're using a $3,000 down payment to reduce your price, isn't
your price going to be a great price and my price going to be an okay price?
That's not, if you're going to do that, which I think is great, show the
consumer the best price and you have a responsibility to make sure that that's
the actual price.
I think I did see some stuff from cars.com myself as well and does make
you wonder, you know, is this, are we going to move to the, like Bernie
Marina was here a couple of weeks back and yeah, we were talking about it.
And he said, Hey, everyone needs to have the, the, you know, two prices
essentially displayed now.
I saw a really good representation of this.
This was in circles.
They had their, you know, original price with like discounts that everyone gets,
right, customer cash, whatever.
And then they had, you may also qualify for underneath, right?
Where it was like these other things that you could possibly qualify for to
show you the potential price.
I thought it was a pretty neat way to transparently see you put it out, you
know, to the world, if you're including those things, the third parties, you're
saying, correct, well, they need to reflect that.
I think they have, they have to reflect.
You need to be able to be more dynamic.
You can't just shoot out one price because the reality is it's not how it works.
Look at New York and New Jersey.
So New York, the dock fees, 175, it was $75 forever.
They recently raised it to 175 in New Jersey, which we own a store.
It's the Wawa West, the dock fee.
You can be anywhere.
I've seen dock fees as low as 600 and dock fees as high as 1600 in New Jersey,
in New Jersey, yeah, because the Jersey thing is it's kind of a loose law.
Your, your dock fee has to be in line with the dealers surrounding you.
So if I'm advertising a used car for 13,000, what a 175 dock fee, what's
the consumer paying, 13,175.
If you're advertising 13,000, what a $1,400 dock fee.
Shouldn't the consumer know that you're going to pay 1,300 more for that car?
I mean, we're 10 minutes away from each other.
So I'm actually happy with the FTC and whoever wrote that FTC, I don't know.
I think Bernie had something to do with that because they had a car dealer involved.
That was written by a car dealer.
We joke.
That was not by a, why did you think that?
Because they get it, you know, they really speak dealer, they speak dealer.
They really got in depth of how it works.
You know, when the law first came out, they were,
By the way, Bernie, you're, this is, I don't want to implicate or like, we're not
saying he is, but I understand what you're saying.
I, someone that understands the industry was a hundred percent.
I mean, if it was Bernie, good for him, but they spoke to someone.
Yeah.
They didn't get some legislator who, you know, was looking into the car business
because there was a lot of conversation around the dock fee.
That was the last piece of it.
You have to include the dock fee.
And I think there was a call I was on with, you know, NADA, where they had
someone from the FTC said, of course you have to include the dock fee.
Everything except a government charge.
So for us as a New York dealer competing with New Jersey dealers, we're thrilled
about it because the consumer can spend less in New York than New Jersey,
depending on, you know, the start and price.
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See you inside.
Well, we'll see how it plays out kids in the business.
I have three children.
My oldest was in the business for a little bit in the summer with us and
decided he didn't like the business, which, you know, is a little heartbreaking.
But then you realize, you know, I'm really proud that he wants to do
something on his own, so I don't have any children in the business.
I have two in college, neither of my younger children have an
interest in the building of my oldest is now doing real estate development.
Well, my partner, Josh has a younger son who may have some interest in the business
and he also has a daughter and then my partner, Ron Barron, his son is in
the business with us.
But we, you know, we're still pretty young.
You know, I don't think we're thinking past, like, you know, succession planning.
I'm 55, my partner is 50.
Like we love this business.
We want to continue to do it.
We want to continue to grow, but we just want to grow smartly.
Biggest challenge you're facing today.
Employees, you know, employees.
What do you need right now?
What's your biggest, like, bottleneck?
We joke if they had a bus of a hundred technicians show up.
We'd be like, where's the next bus?
Right.
Like we need everything.
You know, people aren't going into the car business like they used to.
You think so?
Or I have an old joke and it's a little embarrassing.
But I say, you know, I could easily be cut in your meat and shop
right rather than being a car dealer.
Like I was a young kid who came from a middle class family, not college educated.
And I had a decision to make.
What do you do?
So I started selling cars.
And what I love about selling cars is you can be a car salesman to an owner.
It's a journey there.
If you're hungry and you want to do it, there's a path forward in the car business.
And unfortunately, I don't see young people getting into this business anymore.
They don't want to work the hours like we've changed our hours.
We're one of the few, you know, we were open on Sundays forever.
During COVID, we closed on Sundays, seven days a week.
You're open.
We were open seven days and now you're nine to nine.
Now we're open six days a week.
I was a Pennsylvania dealer, so we never had Sundays ever.
You find that you sell the same amount of cars.
It just gives your, your quality of life to your people a little bit better.
You want to watch a football game.
You want to go to church.
Whatever you want to do on Sunday, you know, I can't imagine seven days a week retail.
It's brutal. Listen, when I grew up in the car business, you would as an owner.
I mean, you're thinking about every single shift.
You're not like leaving for the nobody's a salesperson.
I grew up in the car business.
You work seven days a week.
Well, that's just as bad.
Then if it was the end of the month, you didn't get your day off.
So you could work 10, 11, 12 days straight.
People want to quit like that.
And you know, one of the first questions we get is, you know, how much time off do I get?
What's my, you see it in the, in every industry, you know, that work from home.
There are people that have quit because they don't want to, you know, go into an office anymore.
It's a different environment.
So I think definitely employees, technicians, especially, I think if you got in
a hundred car dealerships, a hundred would say there's not enough technicians.
If you want to do anything great, there's no such thing as balance.
I was speaking with a relative about just trying to give him some career advice.
And they were telling me, oh, you know, but I need like a work life.
I'm like, just don't even use that word.
Like don't you have a baby do in like a few hours a year?
Well, the point, but that's that's your own point.
What are you really wasting time on?
Right. Like, how are you spending that weekend?
Right. And I think there's priorities in life.
Everyone has different priorities.
Um, for some, I mean, in my case, I really care deeply about business and family.
I mean, there's other things, but I think those are important ones.
The way I like to think about it is when you like thinking about
thinking in life and seasons or, you know, OK, you can have no balance for the first 20 years.
You build yourself up and then you'll have a lot of balance in the latter 20 years.
I think you hit, you know, you hit the right.
You don't need to think about it daily balance.
Think about it, you know, balance by the decades.
That's how you, in my opinion, at least that's how
I grew up in the car business. I worked extremely hard.
You know, I miss some probably important things in my kid's life.
But me and my wife had a deal.
I said, you raise the kids.
I'm going to make sure that, you know, we have enough.
Yeah, you have to.
It's no other way to do it. There's no other way to do it.
You know, 30 years into the car business, you know, I don't work 12 hours a day anymore.
I used to and I can still do it and I'm available to.
But it's that it is work life balance.
But you can't, you know, today, everyone thinks everyone wants to be, you know,
an influencer or, you know, something that's just not you have to work.
People just don't get that anymore.
You know, when I think in any industry you're in,
if you're my dad always had an expression, he would say,
if you're not the smartest guy in the room, you can always be the hardest working.
Yeah, that's something you could always be.
And I always remembered that because I've been in a lot of rooms
with super successful guys and I've always just outworked them.
That's my thing. If you're going to get there, when I started out,
you're going to get there at seven, I'm going to get there at 630
You're going to leave at eight. I'm going to leave it early.
Yeah. Well, you said there was good coffee next door.
So I wanted to get here and I was afraid, you know, you'd have to leave it any minute.
But I think you're the perfect example, right?
You have a baby coming tomorrow.
Now, a lot of people would say, well, you should be home with your wife.
You're going to be there tomorrow when you need to be there.
But you're going to work when you need to work.
And I think, you know, that's how you become successful.
It would be good content if her water broke right now during the conversation.
I'll drive you. I'm ready to go.
I've done it a few times.
Well, I think the point there is that it takes a good in anything in life, you know,
marital or professional, it takes a good partnership, right?
100% someone that is supportive.
And like you said, look at your case.
Great partners. It works out because you work well together.
You complement each other and no different in a relationship is the way I see it.
So listen, I say any successful man does have a successful woman behind him
because I couldn't have worked 60 hours a week without a wife at home
that was supportive of it.
You know, it is tough.
You have to make sure that you pick the right person in life.
So business aside, like what's interesting to you nowadays?
Are you a golfer traveling?
What do you how do you spend some of your non non dealership time?
Yeah, I mean, like I said, my kids are in college now.
My other son lives in the city, so we have a little bit more time.
I still love the car business, but like I love it.
I get excited about fun. Yeah.
I love to think about how can we build new businesses?
How can we make new pathways?
You know, I love places like, you know, the car dealership guy,
where you're educating people like to me, it's about starting that next
generation promo. No, it's it's just the reality of it.
You know, you should have a platform where young guys,
like when I did some of the texts in the group,
had a lot of guys text me privately, hey, can you get on a phone call with me?
Hey, can you tell me about this?
And that's amazing.
I mean, you know, I have an expression.
I've always lived by it. You do good. You get good.
I believe that in my soul.
Like if you can help someone out, I was very blessed.
I got my five percent luck, but you got to do the 95 percent hard work.
And I think that's, you know, what I'm trying to provide to people.
I mean, I enjoy enjoy a little golf, a little tennis.
I'm a family guy.
My my son is my family.
Big Sunday dinners.
You know, not like it used to be because you see like now, you know,
my kids are all across the country.
I have one son at Georgia Tech.
My daughter's in Charleston.
It's not as easy, but you cherish that time when you get together.
Have you been? Have you been in Italy?
Yeah, we were in Italy last year.
So both of my kids back to back studied abroad.
So I had an Italy. No, my daughter studied in Barcelona.
But we mixed Italy with Barcelona.
And then my son studied in France.
So we just did France in Poland, which was spectacular.
All right. Hope you enjoyed that episode.
Please give the podcast a rating.
Consider subscribing to the show and check the show notes for links to what we talked about.
Thanks for tuning in. I'll see you guys next time.
About this episode
Dealership growth and pricing get a reality check, starting with how brokers and dealers can create data and fee risk for buyers—like “You're handing your license and your Social Security to a guy who you met at a parking lot.” Marcello Sciarrino connects the “debt trap” to acquisition multiples and floor-plan leverage: “And in order to service that debt, you have to sell a lot of cars.” He also explains their operator-first, net-revenue model, why service expansion matters, and how “We chase net revenue.”
Today I'm joined by Marcello Sciarrino, Co-Owner at Island Auto Group.
Marcello runs 20 stores across New York and New Jersey — the 37th largest business in New York State, ahead of the Yankees and the Giants — and he watched peers go from 3 stores to 12 overnight while he and his partners sat on their hands.
He breaks down the math trap killing over-leveraged dealers, why brokers in the New York market are secretly extracting thousands per deal at the consumer's expense, and why his next big bet isn't more acquisitions — it's 70 to 100 new service bays in the next 12 months.
Topics:
01:20 Why Overexpansion Crushes Bad Dealers.
02:20 The 60,000-Square-Foot Toyota Bet.
03:50 The 12x Multiple You Cannot Afford.
06:30 The Three-Person Boardroom.
07:20 Why You Buy the Person, Not the Store.
14:00 The $7,500 Broker Fee That Kills Consumers.
19:40 Why Toyota Might Finally Enforce the Rules.
26:30 The $3,000 Down Payment Lie.
27:50 The Carvana Lesson Dealers Ignore.
32:20 Why New York Is Losing the Rich.
This episode is brought to you by:
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2. Wikimotive - Wikimotive delivers organic and paid search solutions to hundreds of dealerships from rural rooftops to multiple top-5 national dealers. Visit @ here for more info.
3. CDG Circles – A digital peer group for top auto dealers. Join dealers representing 3,000+ rooftops @ here.
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