The King of Staten Island: Real Strategies to Win Against Deceptive Pricing, Stairsteps & Amazon | Marcello Sciarrino, Co-Owner of Island Auto Group
Car Dealership Guy Podcast
The King of Staten Island: Real Strategies to Win Against Deceptive Pricing, Stairsteps & Amazon | Marcello Sciarrino, Co-Owner of Island Auto Group
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Car
Jeep Cherokee
The Jeep Cherokee is a type of SUV, which means it's a bigger car that can handle rough roads and off-road adventures. It's popular because it can be used for both everyday driving and outdoor activities.
Term
EVs
EVs stands for electric vehicles, which are cars that run on electricity instead of gas. They are becoming more common because they can be better for the environment.
Term
hybrid
A hybrid car uses both a gasoline engine and an electric motor to drive. This helps save fuel and reduces pollution compared to regular cars that only use gas.
Brand
Stellantis
Stellantis is a big car company that makes many different brands of cars. It was created when two companies, Fiat Chrysler and PSA Group, joined together.
Brand
Nissan
Nissan is a car company from Japan that makes many types of vehicles, including electric cars.
Brand
Subaru
Subaru is a car brand from Japan that is famous for making cars that can drive well in tough weather, like snow and rain.
Brand
Kia
Kia is a car company from South Korea that makes affordable and stylish cars, often with good warranties.
Brand
GM
GM stands for General Motors, a big car company in the U.S. that makes many different types of cars under different brand names.
Concept
stair step
A stair step is a way for car companies to encourage dealerships to sell more cars by giving them bonuses when they reach certain sales goals. It's like a reward system for selling more cars.
Concept
dealer profitability
Dealer profitability means how much money car dealerships make after selling cars. It's important for them to make money so they can keep their business running and continue selling cars.
Brand
Mercedes
Mercedes is a luxury car brand that makes high-end vehicles, often associated with comfort and performance.
Term
electronic MPI
Electronic MPI is a system that checks your car's parts and tells you what needs fixing. It helps you understand if something is wrong without any confusion.
Part
brakes
Brakes are the parts of your car that help it stop. If they are worn out, it can be dangerous to drive, so they need to be checked and replaced when necessary.
Term
lifetime warranty
A lifetime warranty means that if something goes wrong with the engine of your car, the company will fix it for you for as long as you own the car. It's a way to ensure you won't have to pay for engine repairs later on.
Term
MSRP
MSRP is the price that the car maker suggests dealers sell the car for. Knowing this helps you understand if you're getting a good deal.
Term
Dealer fees
Dealer fees are extra charges that car dealerships might add when you buy a car. It's important to ask about these fees so you know the total cost.
Term
extended warranty
An extended warranty is like extra insurance for your car that helps pay for repairs after the regular warranty runs out. It can save you money if something goes wrong, but you need to know what it covers.
Term
LoJack
LoJack is a system that helps find your car if it's stolen. It sends out a signal that police can use to track it down and get it back to you.
Term
out-the-door price
The out-the-door price is the total amount you pay when buying a car. It includes the car price, taxes, and any extra fees, so you know exactly what you'll spend.
Company
Carvana
Carvana is a company that helps people buy and sell cars over the internet. You can sell your car to them without having to go to a dealership, making it easier and more straightforward.
Car
Honda Accord
The Honda Accord is a family car that's known for being dependable and good on gas. It's spacious inside, which makes it comfortable for long drives or carrying passengers.
Brand
Hyundai
Hyundai is a car company from South Korea that makes many different types of vehicles, like cars and SUVs. They are known for being affordable and reliable.
Term
F&I process
The F&I process is what happens at a car dealership when you talk about how to pay for the car and any extra services like insurance or warranties. It's an important step in buying a car.
Term
F&I experience
F&I means Finance and Insurance. It's the part of buying a car where you talk about loans and insurance options, which can change how much you pay for the car.
Concept
TrueCar model
The TrueCar model is a way of buying cars that tries to show clear prices so you know what to expect. It didn't work out as well as planned because not all dealers liked it and some buyers were unsure about it.
Brand
Mitsubishi
Mitsubishi is a car company from Japan that makes different types of vehicles, often seen as budget-friendly options.
Term
F&I
F&I means Finance and Insurance. It's the part of a car dealership that helps customers with loans and insurance when buying a car.
Term
comprehensive warranty
A comprehensive warranty is a type of car warranty that covers many repairs and services. It helps protect you from high repair bills if something goes wrong with your car.
LIVE
You can do a search right now and go online and I'd say 90 plus percent of the dealers, and
they're all advertising with a trade-in, must have a $2,000 trade-in, must have $2,000 down,
or must buy a product, some sort of product to get that price.
That's not the way to treat new customers.
It's dishonest.
And why is it happening?
Because there's no enforcement.
I would say a dealer has to get dinged, the AG or some government regulation has
to go in and ding a dealer, and once they do, then they'll all stop it.
But the big third parties know what's happening and they do nothing about it.
Absolutely zero.
Hey, everybody.
I'm your host, Sam Darkin.
Today, I'm joined by Marcello Charino, co-owner of Island Auto Group.
In one of the most candid conversations we've had on this show, Marcello lays out exactly
how family-owned groups can survive consolidation by doubling down on transparency, service
retention and true community roots.
He gives an unfiltered take on brokers, deceptive pricing tactics in Amazon's
long game and automotive, and even the future of stair step programs.
If you want an honest look at the real pressures facing auto retail today and what's coming
next, this episode is a must listen.
A big thanks to our sponsors today for making this episode possible, Overfuel, CDK Global
and Nomad Content Studios.
And now let's get into the show.
So Marcello, before doing some prep for the show, I didn't
realize you basically own every dealership in Staten Island as part of the Island Auto
Group.
Tell us a little bit about your geography and how many stores you have as part of the
Island Auto Group.
We don't own all of them, but most.
So we own nine stores here on Staten Island.
Altogether, Island Auto Group owns 14 new car dealerships, and we own six standalone
used car stores, mostly concentrated in the metro area.
So yes, I would say that we own Staten Island.
I think that's a fair statement.
You know, as probably the undisputed king of Staten Island, what do most people not know
about having so many stores in one concentrated area and being so loyal and dedicated to that
particular piece of geography?
Yeah, I think for me, it's kind of like a Christmas list.
I live on Staten Island.
I moved out here about 20 years ago with my family.
So I'm pretty blessed that I get to work in my backyard and with my neighbors.
So I think what people don't know is that we're family owned and operated.
Myself, my partner, Josh, Josh Aronson and our partner, Ron Barron, and we really consider
ourselves a family owned business.
And we treat our customers like that here on Staten Island.
And people know me, I'm in the dealerships every single day.
You know, everyone says they know more shallow when they walk in.
So my sales manager will text me and say, Oh, you know, John's here.
He says he's a friend of yours.
So I've become like the guy that everybody knows here on Staten Island,
which is pretty cool.
And you know, that relationship that dealers can and do have so often with clients
and the community, that separates automotive from really any other industry.
What are your thoughts about that?
You know, we hear about Carvana and CarMax and some of these large
national chain players, you separate and differentiate yourself on that relationship piece.
Yeah, I mean, I've always said, you know, car dealers get a bad name.
We do a lot of good in the community.
You know, we employ a lot of people.
And, you know, Josh and I have this motto that, you know, you do good,
you get good. And it's always worked for us here.
You know, our employees are like family.
You know, we run our business, you know, we always say to an employee,
well, today's your daughter's birthday, you know, go be with your daughter.
Like that's kind of how we feel.
So I think car dealerships get a bad name when you look across,
especially the New York area, the amount of time and money and, you know,
just goodwill that we give back to customers.
I think people don't recognize it.
And I have no problems with the Carvanas of the world or the Penskees of the world.
But there is something to buy in your car from a family owned business
and know where it comes from.
Yeah, and especially a family owned business where the motto drives it,
where you do good first and then you get good.
I notice that that is that is pretty cool.
But Marcella, you haven't always been an auto dealer.
You always haven't been the king of Staten Island.
Take us back to where it began.
How did you get your start in automotive?
Well, you know, I grew up in a middle class family in Brooklyn.
You know, my parents were both awesome people.
My dad was an engineer.
My mom was, you know, stay at home mom.
And, you know, it wasn't like my kid, you know,
he had all these selections of colleges. Where am I going to go?
You know, my kids have 11 colleges.
You know, I kind of when I graduated from high school,
I went to community college for a year.
And during that time, I started working in a car dealership.
And I basically thought I was going to be like, you know,
just cleaning up, doing porter work or maintenance work
and a friend of mine's uncle owned a dealership.
And when I went there, he said, you know, you got the job.
And I said, well, it's exciting.
And he goes, come back tomorrow, but just dress a little bit nicer.
And I was like, that's a little odd.
Like, you know, I got to dress a little bit nicer to be a porter
or whatever it is. And I walked in and he goes, no, no,
you're going to sell cars.
Oh, and I was like, I don't know how to sell cars.
You know, back then it was kind of different.
There was no formal training program.
You know, he put me with an older gentleman who was a really nice guy.
And I guess for about six months, you know, I was his gopher.
I got his coffee. I helped him get his deliveries ready.
And then I started selling cars.
And you know, the rest, as they say, is history.
I was blessed that I always felt the car business was that one business.
It didn't matter where you came from, what your educational background was.
If you were willing to work hard and just work harder than the guy next to you,
you could succeed. So I was pretty blessed.
I worked in Brooklyn as a car salesman for, you know, several years.
Then I took a small break to help out with family business for maybe two years.
And then right back in the car business, and I guess where I got my big start
was Manhattan Jeep. I went there at that time of something called an internet
director, which was basically the guy who took the old leads that came from email.
And within a year there, I'd become the desk manager
and then eventually the general sales manager.
And, you know, and then I worked for some other big stores.
I worked for Plaza Automall, which was a really good group,
worked for a great guy, John Rosati, who really gave me my start.
And that was my real first general manager's job.
I took their Hyundai store from, you know, everyone has a story.
Mine's pretty cool, but very true.
I took that store from like 60 cars to 200 cars.
And it became the most profitable dealerships they had in the group.
And from there, you know, my career just kept growing.
And then I was very, very fortunate enough to meet up with Josh Aronson
about 14 years ago, and he had started our group.
They had two stores at the time, well, two stores and two family stores.
So four stores total.
And he said, hey, there's a Jeep store out in Lawrenceville, New Jersey
that I want to buy and I need a good operator.
You interested in?
And I said, yeah, absolutely.
So, you know, I did what every, you know, car salesman or manager would do.
I mortgaged my house and I wanted that as it's with Josh Aronson.
And, you know, it was a blessing.
We took that Jeep store, it was a sleepy store in a little small town.
And we kind of crushed it with that store.
And then from them, from there, we bought three or four other stores.
And then one day Josh and I was sitting in the office and he's like, you
know, we got to buy a big group.
And I was like, yeah.
And I said, well, why don't we try to buy, you know, Manfredi auto group.
And it was owned by a great family of good people.
Um, the owner actually had passed away during the transaction.
His name was Mr.
Manfredi, but they were just an old school group.
Didn't do things like maybe, you know, a little bit more modern.
So Josh and I were fortunate to buy that group.
Um, and from there the rest, you know, it's just history.
So now we're blessed that we have 14 new car stores.
We basically own every non luxury brand that you can think of.
Um, and we have six standalone independent stores that do anywhere
from 30 cars to 200 cars.
And how many employees across the road?
All together, you know, dependent on time of year, we're eight,
nine hundred employees, we've gotten to a thousand before COVID.
We were probably at about a thousand.
Yeah.
So really an American dream because you never intended to become an owner
in a large auto group as a kid.
Um, what did you want to be when you grew up?
Or I don't know.
I think a lawyer, my mother used to say, cause I was a good
arguer, my mother used to say, oh, you'll be a lawyer.
I don't think car dealer was on, you know, my line.
I joke with, you know, some of the guys when I go to these
dealer meetings that, you know, some people are generational.
I could have easily been cut and you meet a shop.
Right.
If I took a right instead of a left at the car dealership.
So, you know, just I'm blessed, very blessed.
And I, I, I kind of feel blessed and I kind of want to give
that back to our employees, which we, which, which is the
roots of do good, get good.
Right.
And it's, it's interesting when you talk to your employees, you're
a benefactor of an American dream you created.
Do you think that's still possible and automotive today?
I think it's gotten more difficult, you know, with the public
money that's come into the, you know, the space and the
carbonas of the world, but it's become difficult.
You know, you can't buy a dealership for a million or two million
dollars, which I know sounds insane.
Yeah.
You know, the numbers now are 10, 20, 30, 40 million dollars.
So I don't think anything's unobtainable, but I will say, I
think it's become more challenging at this time.
What's your message to employees that want that?
Cause I think you're right.
I felt that in my own beginnings in automotive, you
know, you kind of come to the understanding that there
is, the sky's no, there's no limit if you're willing to
work hard, you're willing to serve and give back to
customers and do things the right way.
This guy is the limit.
What's your message to employees about the possibility
and automotive and progression?
John Rosati had a saying, he used to say act as if, act
as if your name's on the door and maybe someday it will be.
And, you know, I tell that to my employees, act as if,
you know, if you see a piece of paper on the floor,
pick it up.
If you see there's a problem with a customer, it's not
your customer, help them out.
You know, act as if you are the owner.
So I still think it's possible.
I think it's a little bit more difficult now, but I definitely
think it's possible.
I mean, I think it was like Bruce Ratten, I had this saying
that life is 5% luck, 95% hard work.
The problem is everyone gets the 5% luck.
It's the 95% hard work.
That's the problem.
So you just got to outwork the guy next to you.
It used to really annoy me when I sold cars and I
wasn't number one.
It would make me infuriated.
But not to the point where I was mad at that guy.
I just wanted to be there.
I think that's the great thing about the car business.
I see some of these young kids come into business that
are just smart, you know, well-rounded young men.
And all of a sudden they're making a hundred grand.
Like it's, it's crazy.
Like what business can you walk into where your first
year you make more than the guy who studied for
medical school for eight years?
Yeah.
You know, it's, it's about hustle and determination.
So I think it's possible.
I just think it's a little more than it's.
And certain times like COVID have sent the wrong
message, but maybe you can do it without the
training, without the hard work.
How have you pivoted with your team post COVID in the,
in the area of kind of doubling down on process and training?
It's, it's been hard, honestly.
And any dealer who says it isn't, I think is fooling
himself, you know, I call them COVID babies.
So we had a lot of guys come in the car business and
thought that, you know, every customer will take a
red grand Cherokee and pay 500 a month.
And I'm like, well, you know, that's not reality.
You know, customers now have choice.
They have selection.
They can go to different dealerships.
There's more online presence than ever.
So I think it's, it's back to process.
That's what we're really focusing on is process and culture.
We believe in culture.
You've got to have people that want to win.
If they don't want to win, I don't care how much process
you have, you've got to have people that are all
rolling in the same direction.
So that's what we work on as our culture.
How do you select for that?
Because you can't necessarily teach the training to
win, or can you?
It's a great question.
I mean, for us, you know, if somebody's on the
team, you know, when you see that side chatter of
guys in a corner saying, you know, I'm not doing
this, I don't like the process, you got to have
guys that want to play together.
You know, I look at professional sports and I
talk to the guys about it all the time.
When you see a guy like, you know, paint man and
go out there and throw, you know, 50 passes
and complete 40.
Well, you don't know that he threw 700 during
the week to make sure that he can complete, you
know, 40.
It's, it's process.
It's training.
It's that mindset that, you know, you want to
win.
Um, and I think we know quickly.
I sometimes you hire and you don't realize
it, but I think people separate themselves
really quickly.
You know, the men and women that want to be on
your team and don't, um, I think in the first
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What are some of the standards you set to
help, uh, encourage that winning mentality
in the store?
There are processes, procedures or ways of
doing business that help you lean into
that culture of winning.
Yeah, listen, I believe in process.
I tell my guys, I'm a pretty boring guy.
You know, when I was a general manager, I
did the same things every single day.
You know, I sat down and did my morning
meeting.
I sat down and checked my website.
I sat down and went through my leads.
I sat down and checked my contracts in
transit, the same things over and over.
But that's one little part of the day.
The next part is, you know, the culture
you provide.
And when a process doesn't go right, do
you yell and scream, you know, we've all
worked for those yellows and the
screamers and those are just bad guys.
You know, I try to teach my guys that
when you tell someone to do a process
and they can't handle it, your job's
to figure out why not to tell them
they suck.
You know, I grew up in the car
business like that when, you know,
you came back to the desk and you
said, oh, they don't want to make a
deal on the sales manager said, oh, you
suck.
I'll get this guy who will go make a
deal with him.
Like that was the.
And I'm sure it was the norm back
then.
Yeah, you're smiling because you knew
it.
That was like, I knew it.
I saw it all.
We all grew up in it.
And for me, you know, people don't
young people don't care as much
about the money anymore.
They care about the atmosphere and
who they're working for and how do
they feel about it.
Um, and that's what we're trying
to create.
We're trying to create a better
culture and it's not easy.
Um, but we're really trying to
work on.
Yeah.
And in fact, talking about
culture, I think one of the things
that showed up in the notes when I
was reading was you're very
committed to family.
You're very committed to work life
balance in a business that is not
easy when it comes to that.
Tell us a little bit about how you
strike that work life balance.
I also think Sam, it's different
now, right?
When I was young, I worked six
days a week.
Yeah.
You know, I left my house at
seven a.m.
Got home at 11 a.m.
And my wife left me dinner on the
table like bell to bell.
Never complained to word about it.
You know, especially during
COVID, our stores were now, we
used to be open Sundays.
We closed Sunday during COVID.
We decided never to reopen
again on because our people got
used to it, you know, got used
to having that day off and
enjoying it, whether it's with
friends or watching football.
Um, we closed at seven o'clock
now.
We used to close at nine o'clock.
So those are big commitments
here to your customers and to
your employees to try to give
them a better work life,
balance, which is not easy.
So for me, I want them to
work hard, but I have a saying,
you know, just get the job done.
If that takes you 11 hours a day,
then it takes you 11.
If you can sell your two cars
in six hours and good for you.
But it is a balance.
But I think the younger people
today, they don't want to work
like they used to.
I just think that's a fact.
You know, you see it with
what we're coming out of the
remote time when people didn't
want to work in person.
So, you know, we try to be
flexible.
Our sales guys and our
managers work five days a week.
We don't require six days a week.
We don't require bell to bells.
But, you know, listen, I always
say to the guys, if it's the end
of the month and you need to be
here, then you need to be here.
So I think it's just changing
that culture. I don't think that
the younger people want it anymore.
That's just what we're saying.
So what would you say to a dealer
that says, look, you giving up
that one day being being
closed on Sunday, cost you X
number of car deals and X number
of profit? What would you do?
How would you respond to that?
Listen, years ago, I ran the
sales desk for Brad Benson,
Hyundai.
And one of the operators
there was Dave Canton.
I'm sure you've talked to Dave
in the past.
Oh, yeah.
Yeah.
We were closed on Sundays
and we sold 700 hundays a month
and the store across the river
from us was open on Sunday
and he sold 300 cars a month.
So to me, that's all nonsense.
You know, today with the online
presence, our BDCs are open on
Sunday. So if you call our
stores, you'll get a live agent
who will pick up the phone
and he'll he'll work with you.
And if you need a manager, he
can get them on the phone.
We make ourself available when
we're not here.
But to have my guys work, you
know, six, I used to work six
and seven, right? That was the
or five and six was the rotation.
Yeah. I think I think you're
burning your employees out and I
can't talk for everybody else.
But for me, I'd rather have a
fresh employee than a guy who's
just coming in because he's
required to come in on a Sunday.
So that's for us, I think it
works. But, you know, I can't
speak for everybody else.
How much of that commitment to
that balance has to do with how
you were early on, or is it
just a reality of current
conditions?
I think it's more the reality
of current conditions. I think,
you know, the marketplace has
changed.
Young people have changed,
whether you think that's good
or bad. I mean, time will tell.
They don't they don't want to
work the way they used to work.
You know, even, you know,
commission models like we still
work on a commission model, but
it's more weight now to CSI
and volume bonuses.
You know, you have to get
good employees without the
employees. You got nothing.
So, you know, you have to
get good employees and we're
trying to think of different
ways to recruit them and to
keep them.
What are your recruiting
methods for these new
employees that want to work a
little different than you and
I did early on in our careers?
Well, I think we try to let them
know that we do believe in a
work-life balance.
Like, you know, you don't have
to because you do go to a lot of
car dealerships and they still do
run it old school where, you
know, you got to work six days
a week and you got to do two
bells to bells, nine to
nines.
So we try to explain to them
that we think differently.
You know, we put family first.
That doesn't mean we don't
expect high standards because we
do. I mean, I work.
I'm here most days.
You'll see me.
But we try to get people that
want to work as a team, but
still respect the fact that they
have a family outside of here.
And, you know, it's a struggle
because there are dealerships that
still do have that mentality.
But we try to think differently.
So I wanted to ask about some
of the key growth milestones
in the evolution of your auto
group. And when we were on
in the green room, you mentioned,
you know, you've bought and
you've sold.
So as an example, you were in
Miami as an example.
You sold that store.
We did. What are some of the key
milestones in the group growth
of your auto group?
And what guides
or drives that decision to sell
a store? That's tough for a dealer
sometimes.
Yeah, you know, I think for us,
we expanded, keep in mind, we went
from two stores
to 12 stores
in like two and a half, three
years. And I think now that we
look back, maybe we didn't have a
good enough strategy.
And, you know, for us, it's all
about the operators.
You've got to have a good operator
in the store.
And I think like, you know, the
Miami store, which is now the
store is killing it. And I look
at it every day and question
myself, but we didn't have an
operator there. We weren't in
that market. The gentleman who
bought it was in that market
like we are in Staten Island.
He had an operator and they
turned the store around.
You know, we had an operator.
Unfortunately, it didn't work out
with that operator. And then we
just went through a series of
people. So I think at some
point, you have to recognize,
maybe I made a mistake.
You know, I think dealers are
very proud guys and myself
and my partners were proud.
But I think sometimes you have
to recognize, maybe focus on
your core and where you're
successful.
And we just haven't been able to
make that expanded model work
yet. I'm not saying it won't
happen again, but right now
we're trying to focus on our core
business.
That's our that's our plan right
now. We're in the midst of a
30 million dollar investment
in our dealerships.
You know, during COVID, a lot
of dealer groups expanded and
we think paid record prices
that a lot of them are kind of
scratching their heads now and
go, wow, I paid that much money
for this store.
Now business is normalized.
So we kind of took the wait and
see approach.
You know, we sat back, we
decided we were going to renovate
all of our current buildings,
try to increase our service
retention, which is huge.
Any dealer right now sleeping on
service retention, I think is a
fool because you are seeing a
dip in the SAR.
I mean, it came out yesterday.
Less cars may be sold over the
next two years, but cars always
break down.
So we've really invested we're
in the midst of a 12 month
renovation where we'll spend
30 million and about 70 service
bays to our Stan Allen location.
We're in the midst of building a
55,000 square foot new Toyota
facility to house Toyota.
Not to shout Toyota out, but if
I could own 100 Toyota stores,
that would be the stores that
we would own.
They just toy stores with
inventory because it's a
challenge to get enough
inventory really still.
I'm calling those guys.
I'm sorry, Toyota dealers, a
bunch of crybabies.
Don't cry from.
OK, we all get going.
You know, you have a decent
amount of discipline.
Yeah, discipline.
Listen, and I say this and I'm
not a paid endorser of Toyota.
They're smarter than everybody
else. They just are.
You know, me and Josh joke, we
went to a meeting a few years
back in Boston, I think it
was where they had this MIT
physicist come up and discuss
the whole EV thing.
And I maybe misquote in the
facts, but he said something
like if you really care about,
you know, reducing greenhouse
gases, you can make 14
hybrids for the amount of
batteries it takes to make
one EV.
And, you know, and basically
Toyota told the government at
that time, we're not doing it.
We're not building EVs.
We're going to build every car
hybrid.
And now all of a sudden they
look like geniuses because now,
you know, governments, you know,
politics change.
EVs are no longer in fashion
and, you know, hybrids are
the way to go.
They're just smarter and they
treat the idealists with
respect, with decency,
just an incredible manufacturer.
Somebody we're proud to be
a partner with.
Hence the reason you're
making the investment and
you're expanding and you're
going all in.
Yeah, we're doing a $15
million renovation just on
that one store because we
believe in the brand and they
have discipline.
You use the word before,
they're not going to over
produce.
You know, you're seeing a lot
of manufacturers and I'm sure
you talk to a lot of dealers.
We're turning down inventory
now.
It's happening on a regular
basis.
You find one Toyota dealer
that's turned down one
singular car and tell them
to call me and I'll take
them. They're on none.
Yeah.
Because they give you the
right amount of cars.
Would we like a little bit
more?
You know, you know, you have
too many cars again.
Yeah.
So you have multiple
franchises.
Toyota included.
Who else gets it right in the
OEM world?
Because I write, you know,
what I think about is in the
pit of COVID, everyone
promised we will exercise
discipline.
We will not overproduce.
And yet, truly, we have
gotten back.
Stairstep is an example of
that.
We can talk about that in a
moment.
But who are some of the
other?
Who are some of the other
brands that you're
talking about?
Who are some of the
brands that you're
talking about?
Who are some of the other
brands that you're talking
about?
Who are having a nice
conversation, Sam?
I know.
We were having such a nice
conversation.
Yeah.
Listen.
I mean, it's the obvious
ones, right?
Stalantis.
We own two Stalantis
stores.
We've always been a big
fan of Stalantis.
I love Jeep as a brand.
I grew up driving a Jeep.
I think they've lost their
way.
You know, they
overproduced.
They overpriced the cars
and none of what I'm
saying, you know, any
other deal would say.
You know, they took a
car to a $50,000 car.
And during COVID, you could do that.
And now all of a sudden, they're reducing all the prices
back again.
And stair step is, stair step's a problem.
Stair step creates unfair advantages.
In our market, we have something called Brokers,
which is a hard word because stair steps
create more broker business.
So it's a challenge.
I mean, Nissan, of course, is very challenging.
We have a Subaru store.
I think Subaru is really smart.
I think they've done a great job.
We have a Kia store.
Kia has done a great job.
And even GM, we're really happy with GM.
I think for the most part, they've
kept some discipline out of the American brands.
I'd say they probably kept the most, what we're seeing,
they kept the most discipline out of all of them.
But they're all good brands as long as you're making money.
You were on the Hyundai dealer council, I think.
I'm on the Hyundai Adboard, which
is on the vice president of that Adboard.
What's really good about the Hyundai Adboard
is they do what the dealer's asked.
They do take that advice and we're
allowed to put it into practice, which is really cool.
And I've been on that Adboard for now.
I think it's my sixth year.
And I enjoy it.
I think it's a good way to get some insight
and get feedback from the dealers.
And Hyundai will listen to it from the advertising side,
for sure.
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So you say stair step is a mistake.
What message would you make to those OEMs
that undertake stair step?
Hyundai does that as an example.
Why is it not needed and what message
would you put out there to those OEMs
about exercising more discipline, perhaps, like Toyota?
Well, the brand that's growing the most this year is Toyota.
They don't have a stair step.
So I think manufacturers lean on it as they...
It's kind of like a trigger, right?
Oh, our dealers will sell more cars.
But you don't need your dealers just to sell more cars.
You need your dealers to make money
because if they make money, they're reinvesting in the brand.
And I think what Toyota dealers, if you ask them,
stair steps wouldn't make us sell more cars.
So listen, I'm not a fan of stair steps.
I think they create way too much inventory.
I think they create a race to the bottom.
And in a metro market like us,
brokers are this gray area group of guys
who sell cars to customers
and they feed on stair step programs
and they go to dealers outside of the metros
who have very low cost factors
and they buy the cars for triple net.
And how does that help the dealer?
What is the dealer accomplishing by that?
Just some of these dealers are, I wanna be number one.
I don't care about being number one.
I wanna be respectable.
I wanna make sure that we sell as many cars as possible
but we're in the business of making money.
It's not a dirty word.
That's how we pay our employees.
It's interesting on our daily dealer live show,
we've talked a couple of times about brokers.
We had a broker on and had a whole debate about it.
What is it about your marketplace,
the New York marketplace
that is a breeding ground for brokers?
You don't really see it elsewhere in the country.
So I'm in the Midwest, we don't have brokers.
Where did they come from?
And I don't totally understand what feeds it
other than the need to push volume, I guess.
I mean, brokers started out really
when I was a kid in the Brooklyn area,
it was a secular thing.
It started with groups of religious people
who wanted to buy from the same type of people, right?
And it was a small thing,
it was a very small little niche market.
And then it was kind of like,
do you remember when you were maybe 15 years ago
they had cell phone stores all over the place?
Remember you could do it?
Yeah, yeah, yeah.
Well, those guys been able to ton of money 20 years ago.
So what happened?
T-Mobile and Sprint said, it's not good for the brand.
Everyone's selling our phones for less money
and they fight and they stopped it.
It was kind of like mortgage brokers, right?
Years ago when I got my first mortgage,
I went to like a storefront.
And like there was a guy there, like in a bad suit
and like he negotiated the mortgage with me.
Like he started it, I don't know, 10% ended up at 8%.
I was like, this is a mortgage.
And the state ended up,
a lot of states, there's no more mortgage brokers.
Now you go directly to your bank.
Brokers find that little space in between.
So what they do is they negotiate with the dealer
and they usually negotiated a triple net number
and then they sell the car to the consumer
and the consumer's perception is I'm getting a better deal.
But the brokers making a profit from that net number
to what they're selling it.
The same thing you can get from a dealer.
So brokers have really done a good job.
And listen, I'm not mad at them.
They've done a good job.
They found a gray area.
There's no legislation.
They have some simple license they have to have.
You know, this morning we were supposed to do a podcast.
I had to stop because I had the DMV here.
You know, inspecting our stores,
which they should do, right?
Like you gotta make sure that we're doing the right thing.
The brokers have no,
you can open up a storefront,
spend 1,100 bucks a month, hire three guys
and you have a business.
And then when the car breaks down,
you know, the customers come to my service department
and we have something called the Island Family Plan
where if you buy the car from us kind of like Disney,
you skip the line, you go to the front of the line.
You know what I'm saying?
It's like a fast pass.
That's cool.
It's a fast pass.
That's basically what it is.
And we'll get some people that buy cars from brokers
and they're mad when I'm like,
well, your next appointment's 10 days.
Well, I gotta take care of the customer
who bought for me first, right?
I mean, you can't, you know, buy a Disney pass
and then go to, you know, a different theme park
and say, I want the same service.
So brokers kind of fit in that little middle area
and until the manufacturers kind of mandate it
and get involved and say, hey, listen,
you know, Toyota has this whole thing where,
or Mercedes, like, you can't buy a Mercedes
really outside of your PMA because you lose the allocation.
That doesn't-
Super similar.
Yeah.
It's really the luxuries do a good job of it,
like Porsche.
If I wanna go buy a Porsche
and I wanna buy it in West Palm Beach
and I live in New York,
they're probably not gonna sell it to me
because then they don't get the replacement for it.
You know, dealers of pumping cars in our market
that are not, you know, from our market.
So, I mean, brokers have this gray area
and something's gotta be done about it.
It's a problem and with all the compliance
that we have to go through,
a car dealer is probably the most over-regulated business
I've ever heard of.
You know, we have seven different agencies
that we answered two years ago
with that whole law they made.
Now we're looked at a bank.
We spent 40,000 a month on internet security
at our dealerships.
You're going to a broker
handing someone your driver's license
that has no security that's putting it on a desk.
It's going in a drawer.
It's problematic.
But they've done a great job convincing the consumer
that you'll get a better deal.
So, that's what's going on.
So what is the solution to the broker situation?
Guys, on our show on Daily Dealer Live,
we've, again, we talked about it a couple of times.
There were a couple of dealers
that initially were like,
hey, I'll talk about this.
And then they pulled back
because the OEM found out they were gonna have a conversation.
It almost seems like it's almost,
you remember the old movie Casablanca at the very end
where they could please come in and shut down the gambling
and the bookie pays the owner of the gambling joint first
before they shut it down.
It's almost like they know what's going on
and they allow it
although they won't admit it publicly, right?
Oh, listen, I'm not afraid to say
that they do know brokerage going on this.
You know, we've had talks with the OEMs about it.
You know, we're investing right now, $30 million.
How can I invest that money if I don't sell in my PMA?
And you drive up and down Highland Boulevard,
which is where our main dealerships are,
which is kind of like a mean thoroughfare
through Staten Island.
You know, there's 10 dealerships on this Boulevard
and probably 25 brokers on the same Boulevard.
You know, it's, the manufacturer knows it's happening,
but listen, dealers, we're our own worst enemy.
You know, the dealers are selling them the cars.
So, you know, and they have to stop,
but these dealers aren't gonna stop
and there's some big dealers doing it.
We just don't-
So the solution would be through the OEMs?
Yeah, if the OEM, yeah, well, state law,
we went through the state, a group of dealers
and we got a state law finally passed,
but it's like a warded down bill that really has no teeth.
And the biggest problem is it has no enforcement.
Like I said, I mean, you can come to our dealerships
any given day, you'll find the consumer affairs, OSHA,
New York DMV, the attorney general,
all these people checking on us.
And I think they should.
I'm a dealer that says we should be checked on.
We have to make sure we're doing the right thing.
You need checks and balances,
but you can't have a business next door
that has no, you know, no governing body
and then expect for them to, you know,
play by the same rules.
Yeah, interesting.
So you've been very public
about embracing modern business strategies,
but you're also old school.
Give some examples of some modern strategies
you've embraced and then their counter in old world.
And I would say connection to community obviously
is one of those, right?
Yeah, I mean, we're on an island, we're on Staten Island,
which is out of borough of New York City.
There's about 500,000 people here.
And we have the highest concentration
of city workers and healthcare workers in New York City,
which is kind of crazy.
And those people are generally very given back people.
You know, they're community people.
So we've embraced that.
Like, you know, we partner with the police department,
the fire department, the local schools.
We just finished a,
we used to do a food drive for many, many years,
but we found like we couldn't be effective
just collecting food because where do you get it to?
How do the people get it?
So years ago, we started something
where we collected money from our employees
and we hooked up with a local chapter
called the Staten Island Given Circle,
which is a group of women volunteers
that basically take care of homeless vets
and vets in need.
That's one of their big things.
Very cool.
Last three years, we've donated $20,000 every year to them.
And 10,000 of that is from our employees.
From our actual employees given $5, $10.
It's getting them to feel like they're part of something.
So I think that's certainly modern,
but we also use a lot of technology here.
You know, we're big on, you know,
pictures and videos for service.
Like, you know, I've watched some of the podcasts
and the guys are like, oh, we're doing pictures
and videos.
I'm like, we've been doing pictures and videos for years.
Like that's a must.
It's something you must,
because it justifies what the customer needs in a car.
So we're very big on electronic MPI
and electronic pictures and videos.
We have no cashiers in any of our stores.
If you go to our stores and you wanna pay a bill,
you pay that bill either on your phone
or with your service advisor.
Cause I knew you grew up in car dealerships
or you'd have the customer at the window
and then going, hey, Joan, what's this bill for?
He doesn't understand it.
You know, we stopped that.
All of our service advisors are in like a lane.
We don't have offices.
We believe in like that bank model.
It should be out and open.
There's nothing we have to hide to talk to you about your car.
So I think we've taken a modern approach to service
and that's why we're about to invest $30 million.
A lot of it has to do with service
and trying to make sure customers have a better experience
because listen, we know we're more expensive
than the independence.
There's no lying about that.
But we gotta give the customers a better experience
and that's what we're kinda focusing on.
Do you think experience can outpunt cost?
I don't think it outpunts cost completely
but I do think if you can show a customer value,
you know, I always say to you,
go to a bad steak restaurant because it's cheap.
Like, am I gonna call you and say,
Sam, you wanna go to dinner?
There's a terrible steak.
It's $29 on seven snow.
Go for $40 for a good steak.
You're gonna be like, why would I eat a terrible steak?
So I think for us, and it's confidence.
You know, when you come to a dealership,
what customers don't realize is
you get an OEM trained technician
and people think like, that's just a thing.
Like, our technicians go through hours of training.
We do an electronic MPI where you can see
what your car needs.
There's no gray area to it anymore.
My wife would call me up and say,
oh, I need brakes.
I'd be like, oh, you don't need brakes, don't do it.
If my wife sends me a video of the brakes being bad
and I'm thinking about my kid in the car,
I'm gonna do the brakes.
So I think we've tried to really get modern with service.
We don't have, our salespeople don't have computers
on their desk anymore.
We're all tablet-based.
They almost don't even have desks.
We have kind of a thing where you sit
where you can sit with a customer.
But we still believe in process.
I think our process is important
because you can't have anything without process.
I know we've talked about it, it's process.
How do you treat your customers?
How do you make sure your customers
see value in doing business with you?
And that's our whole island family plan.
So when you buy a car from us,
we give you free state inspections.
That's a value proposition.
We should have to pay for your inspection.
If you buy your next car from us
and you happen to lease your first car from us,
we give you a $1,000 certificate back
when you come to buy your next car.
That's not like a discount.
It's like you buy a car, you negotiate your best deal
and then you get a thousand bucks in the mail.
On every single new and used car that we retail,
we give a lifetime warranty on the engine.
Every single car.
Wait, really?
How do you do that?
We do it because we believe in the products that we sell.
Yeah, and we're very confident
that when we sell you a used car,
it should last you a lifetime.
And we guarantee the engine if you,
all you have to do is prove that you service the car
and we'll take care of the engine if it should fail.
Actually, that's a pretty spot.
When we talk about retention and the importance of it,
what a great way to get people loyal
to you and your organization,
then stand behind what you sell.
So is that a reinsured product?
Do you pay for it, include it, you reinsure it?
It's put on every single car.
It's reinsured.
I welcome you to go look at our website for used cars.
In the Metro, a lot of dealers
are playing games with used car pricing.
I don't know if you've heard about that,
but a lot of it has to do, we advertise this price,
but you got to put 2000 down.
You have to have on a yellow shirt.
You got to finance with us.
On our website, it's really simple.
The price you see is the price you pay.
There are no fees, zero, nothing.
The only thing you pay is New York State Dock fee,
which is 175 bucks.
You pay inspection and title.
That's the only fees when you buy a car from us.
And in New York, you have a lot of dealers in New Jersey
trying to be at the lowest price.
So they advertise what money down
or you must buy a warranty
or you have to have a low jack in your car.
I own auto group, we don't do it.
There's no fees ever, period end of story.
And it's been tough
because we're playing in an unfair field,
but we believe in it.
Well, talk about that for us a little bit.
New York is one of the most heavily regulated states,
right?
It's not that you don't have regulation.
Do you think it's a problem that dealers
can advertise that way?
Digital lead providers lean into it
and kind of make the problem worse
because they're distributing that.
Google recently came out with some measures,
but I'm not sure we've seen an impact to those measures yet.
What's your take on that?
Well, listen, the big names, and I won't mention them,
the places where we all advertise our cars,
they can stop it.
They can say, if you advertise your car
and you charge any fees,
we're not gonna let you advertise with us.
But they don't.
They don't.
So when you see a price online, consumers,
if I let you listen to our phone calls, Sam,
it's like this, hey, my name is Mark.
I'm looking at this 2014 Grand Cherokee you have.
What's the out-the-door price?
My rep's like, well, it's that plus sales tax.
No, no, what else are you charging me?
It's like every call has the same thing
because you can do a search right now and go online.
I'd say 90 plus percent of the dealers
and they're all advertising with a trade-in,
must have a $2,000 trade-in,
must have $2,000 down,
or must buy a product, some sort of product
to get that price.
That's not the way to treat your customers.
It's dishonest.
And why is it happening?
Because there's no enforcement.
I would say a dealer has to get dinged.
The AG or some government regulation has to go in
and ding a dealer.
And once they do, then they'll all stop it.
But the big third parties know what's happening
and they do nothing about it, absolutely zero.
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Do you think that environment will change?
Is there an appetite to,
for the regulatory agencies to come in
and put a stop to that?
Or do you see it continuing for a time?
And do you win?
And like, how are you able to message,
actually the first question first
and then I'd love, how you message that as a team
so you show your difference?
Cause some dealers would say in that environment,
you have to participate in that in order to be successful.
I don't agree with that,
but you probably do lose some customers.
So Sam, if the guy next to you
smacks someone in the face, do you smack them too?
I mean, that to me is for dealers
and I'll probably get some hate mail after this.
That's ignorant.
We don't have to lie, cheaters steal.
Carvana wins.
Carvana's pricing is more than everyone else's,
just so the dealers know.
I don't know if they've actually checked it,
but they've won on this transparency model.
It's easy.
You go online, you wanna sell them their car,
they don't come to the house like most dealers do
and then say, oh, there's a ding, there's a scratch,
you only have two keys and you're negotiating
on the sidewalk with them.
Dealers have to change.
We have to become more transparent
and we feel like we sleep good every night.
I'm not worried about it,
but to the dealers that are doing this price,
it's price fixing.
How can you advertise a car with $3,000 down?
They have purchase price by four.
So when the customer sees it, what does the customer think?
That's what they're paying for the car.
And it's even illegal to put all the descriptions,
but they do it anyway.
So I'm not embarrassed to say,
the dealers that are listening to this, check yourself.
We should all be on the same playing field.
If you can sell the cars for less than me, good for you.
If you can out-service the cars better than I can, good for you.
But don't win by deceiving the customers
and that's what's happening in the used car market.
It's terrible and it's happening in a lot of markets.
And I think the good dealers are sick of it.
I know they're sick of it.
We're sick of it.
And how do we get it across to the customer?
It's not easy because most customers search by price.
It's just the way that we're equipped.
You go online, you look for a 2020 Honda Accord
and you start with the least expensive one.
We're not always number one or number two,
but we're in the top 10.
And when you come here, the price you see
is the price you're gonna pay, never a game, ever.
We just don't do it.
And if we find out our guys do it, we get rid of them.
It's that simple, but it doesn't happen here.
So Google's put some measures in place recently,
just this past month.
Have you seen any impact from that
to the strategy in the market?
You know, we've spoken to our agency about it.
You know, Google's trying to make it more transparent.
But listen, I sat through a Hyundai ad board yesterday
and it was fascinating where most people
aren't even searching through Google anymore.
They're searching through chat GPT,
which to me was, you know, I felt like an idiot yesterday
and he's like, how do you search?
I'm like, well, I go into Google window
and he looked at me like I was a dinosaur.
Yeah.
So now dealers need to get smart.
And you know, yesterday was an eye-opening experience
for me because it's all about content now.
The better content you put out there,
you know, they gave us an example
like a woman will go online and say,
hey, I'm a mom with three children.
I need a third row.
I gotta be under 600 bucks a month.
What's the best SUV in the Montana market?
And then chat GPT will say, well, you go to, you know,
Montana forward or Montana Hyundai
because this is what they offer you.
So I think for us dealers, there's a reckoning with,
you know, Google, I think it's forced to do it
because they're getting caught in, you know,
putting Google best lease deal
and it'll say 199 with no disclaimer.
So customer thinks it's 199, but there's 39.99 down.
There's taxes, there's fees, there's seven grand
to get to 199.
And I think dealers want to change.
I do.
I think there's more good dealers than bad dealers.
I think dealers want to change and just look at Carvana.
I love how everyone closes their eyes
and says, oh, Carvana is not coming.
They're here.
They bought four Christ, they bought four Stilan stores here.
And the way they're going to do it
is not by fees and trickery.
They're going to do it by using their model.
Like what they do afterwards, that's a separate story,
but the consumers believe in them.
They're a trusted brand and they're trusted
because the price you see is the price you pay
and the car business, that's not the way
it's been for a very long time.
So to your employees and to the other dealers
that do business the way you do it,
competing in that marketplace,
how do you train that or how do you outculture that
so that you remain competitive
in that uneven playing field?
I think it's educating the consumers.
So if you go on our website, right on our homepage,
we have different videos and different excerpts
that'll show you what to ask when you go into a dealership.
Because you really should, when you're buying a used car,
first of all, we give you a lifetime engine warranty.
It's free.
No matter what the price is, you get it, it's included.
To me, that's a value proposition to the customer.
Second, we don't charge any fees, there's just nothing.
And I employ you after this to go online
and look at some dealers in a metro area
and then read the fine print.
It's comical, must buy a $39.95 warranty
to get this price.
That's what it says in the ad.
How is that transparent and fair to the consumer?
And if a dealer is watching this and says,
well, the hell with you, that's the way to do it,
then you do it that way, we're not gonna do it.
My partner Josh and I don't believe in it
and we're not gonna do it.
And it hurts us because we could be selling five times
the used cars if we played the game.
So it's trying to get that balance.
And Carvana spent, I don't know how many hundreds
of billions to get their message across.
It's hard for us as a small group to spend that type
of money to get our message across, but we're trying.
Have you done much with Amazon in that world?
They've got the Hyundai partnership.
They've got that same model, right?
It is very transparent.
And in fact, you don't own the F&I process.
The used car trade-in is a little different.
They've started with Hyundai
and they're expanding to other OEM relationships.
Is that something you're participating in?
We are not.
I don't think they have it right yet.
I think you have to make the dealer a true partner
and by taking away that F&I experience in the trade,
it's the whole true car model, right?
Why did true car fail?
Because true car created this system
where in order to get the customer,
you had to put the lowest price
and then you had to do the three card Monty
when the customer came in.
And dealers started saying slowly but surely,
we don't want this model.
It's not right.
It's not fair.
We're not gonna pay you $400 for a lead
that we're losing $400 on.
And true car kind of became the yesterday.
I think Amazon will figure it out.
They're pretty smart.
I think they'll definitely figure it out.
But I think they're going after Carvana in my opinion.
They have, everyone has an Amazon account.
So they have a lot of data.
Their distribution is outrageous.
I wouldn't be shocked
if they get into the new car business.
It's interesting, you know,
Stalantis is really the only one that's kind of,
you know, there was an article today.
Maybe it was somebody published it on LinkedIn saying,
you know, is Stalantis in bed with Carvana?
Like how all of a sudden did, you know,
Carvana by four Stalantis stores.
I don't know if other OEMs are going to approve them.
I'd be surprised
if some of the more recognizable ones would, but who knows?
But I think that was our end goal.
They would lose faith with the dealers
and there's the concept of the framework agreement, right?
That it challenges.
Yeah. Well, you can only have so many in a market,
but listen, Carvana has so many markets.
They could figure that out and they have so much money.
That's why when we talked about,
can you become a dealer now?
It's hard.
Like even a garbage crisis store is four or five million bucks.
Like stores are expensive today.
Oh, well, it's not easy
and they have all the money to do it.
Yeah. You are seeing quite a few new dealers
come in on the Nissan platform right now
at lower multipliers, right?
But, and it seems like Stalantis is more
than the Nissan stores, but that is-
Well, Stalantis you have to fix the ops, right?
So that's the savior in a Stalantis store.
You know, you have a big fixed ops business.
I was talking to a dealer yesterday
at the Hyundai Mienen
and I said, we were talking about Nissan.
He has a Nissan store.
And I said, you know,
how many Nissan stores for sale on there?
And he goes, every one of them.
You know, that was his joke that, you know,
everyone will sell a Nissan store today.
And that may be a place where, you know,
a new dealer can get involved.
You know, at a low, most of entry.
And Nissan's not going away.
They're going to figure it out.
Stalantis isn't going away.
They're going to figure it out,
but there's been some pain points get in there.
But if I was a new dealer,
that's probably where I'd start.
Buying an inexpensive store, you know,
it used to be every new dealer bought a Mitsubishi store,
you know, just to get a shingle.
I think Nissan's become almost a new Mitsubishi with that.
Like those are where those dealers should be started.
Yeah.
So when you think about coming into,
closing out 2025, going into 2026,
what are the things you think about
as the biggest threats to the industry
and things you're looking to solve for?
I think what we're really looking to solve for right now
is retention, service retention.
I think you're going to see a couple of challenge
in years in the new car business.
I hope I'm wrong.
But the people that I speak to,
we expect the next couple of years
to be a little bit challenged,
but fixed ops is always there.
So I would really important deal
is to work on their fixed ops,
work on their processes,
work on their store capacity,
you know, work with their people to train them
and use cars.
Cause generally as the new cars
have gotten more expensive,
the use cars,
it used to be the last few years,
they were too close,
but that's changing.
You know, the use car values
are going down a little bit.
So I'd expect we're going to try to focus
on use cars and fixed ops.
That's really our plan over the next couple of years.
But you have to build the facilities
to, you know, to have the capability to do it.
Well, it's interesting given my F&I background,
I'm fascinated by that lifetime engine piece
that you have there.
Both as a retention tool,
but then also the economics of it.
You know, is it through an F&I provider
or are you reinsuring it through a particular company?
And then I would imagine you're able to upsell, right?
Yeah, it's a little comprehensive warranty.
So I mean, it generates revenue, right?
But it's a base promise you can make to that customer.
Yeah, I think it's a market in promise for sure.
You know, because I think the consumer,
if you're shopping around like,
how do you separate yourself?
Well, it's the cost of a lifetime engine warranty.
You know, go to try to buy one,
you know, it's a couple of thousand bucks,
but it is a good tool for F&I to upsell for sure.
Because the whole cell is,
listen, we've taken care of the expensive stuff.
Here's why the product is a little bit less expensive
for you to purchase it.
And I'd say we have a pretty good take rate
on our warranties.
And it is reinsured.
And you know, for any dealer that does reinsurance,
reinsurance is a good thing.
So, definitely a reinsurance.
Has it, has the performance on that reinsurance piece
with the lifetime promise?
Has it, you know, is it still positive
or has it become challenged under inflation
and all those things?
No, it's a good product to reinsure.
We've done, we've done well with it.
And you know, lifetime,
you have to understand how long the customer's gonna own.
It's non-transferable.
So it's the lifetime you own the car.
And you know, the cycle is usually seven to eight years
in a car.
So it's a pretty good product.
But I think-
And they need to prove, they need to prove,
obviously they're doing the maintenance and whatnot,
which brings them back in.
What's the uptake or the upgrade penetration look like?
Yeah, I mean, I would say we probably get
somewhere between 25 and 30% more,
I think, off of those cars.
Just because the customer is inclined to do it.
You know, you don't have to do it with us.
So you just have to maintain it.
Oh really?
Why wouldn't it, why wouldn't you require it
through your own auto group?
You don't wanna pay that.
State of New York gets in the way of that.
State of New York now allow you to require a customer
to service it with you, but you can require them.
It's with the OEM too.
It's like if you have an engine problem
with your Hyundai, you just have to prove
you changed the oil.
So for us, it's the same thing.
You just have to prove to us
that you did the service somewhere.
But we're constantly marketing to those people.
So with our Island Family Plan,
we give kind of like CVS.
We give you points for shopping with us.
We send you discounts electronically through an app.
So we have an Island Auto Group app
where we can send you constant discounts.
But our real problem is facilities.
We have four to six weeks out
on a Chrysler appointment right now.
That's why we're built on Lagone from 16 lifts
to 35 lifts just to create more space.
Our Toyota store has 16 lifts.
We'll have 40 lifts in the next 12 months.
So that's our whole promise
is to make sure we can get customers in quickly
because the problem with service
is if you make them wait for three hours,
they're not coming back.
And right now we're making our customers wait way too long
and we gotta get better at it.
Yeah.
Well, an absolutely fascinating conversation.
I appreciate it.
As we wrap up, I would love to hear
and I love your approach to the business.
It is refreshing.
It will be interesting,
particularly the broker conversation
and then on this used car pricing
because I think you've nailed,
you've hit a nerve there, I think.
It'll be interesting to see some of the feedback you get
but when you look at your career
and you look at where you sit today,
looking back reflective,
what's maybe one of the proudest moments you've had
in your profession?
What moment stands out as a proud moment for you?
I think when I was blessed to buy my first store
which was Route 1 Jeep,
just to reflect back and go,
you set a goal in life
and you're able to accomplish it
but I think it's all the people that I've met.
This business is fascinating.
I've met some really great people in this business
and I don't think people understand
the car business, they're always like,
oh, you like the dentist or the lawyer.
I mean, I've met so many good family people
in this business and I probably have a dozen
to 15 people that worked for me in other places
that now have worked for me here for over 10 years
and that's what I'm the most proudest.
These people have followed me.
We've treated them fairly and they've made,
I have a bunch of guys that were salesmen for me
that are now general managers in our store.
That's a great feeling that we were able to help them
grow their business and grow their family
so I guess I'm proud of the people
that have supported me and we've supported.
Well, Marcello on that,
thank you for being on the Cardiola Ship Guide podcast
sharing your views and perspectives
and sharing your story as you've grown
from a humble beginnings and automotive
up to dealer of multi points
working on securing the future of automotive.
Thanks for being on the show.
Thank you for having me, Sam.
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
Marcello Sciarrino, co-owner of Island Auto Group, shares insights on navigating the challenges of the automotive industry, particularly around deceptive pricing and the impact of brokers. He emphasizes the importance of transparency and community engagement in a market often marred by dishonesty. Sciarrino discusses his journey from a car salesman to a dealership owner, highlighting the significance of employee culture and service retention. The conversation also touches on the future of stair-step programs and the evolving landscape of car sales, including the influence of companies like Carvana and Amazon.
Original notes
Today I’m joined by Marcello Sciarrino, Co-Owner Island Auto Group.
We unpack how family-owned dealerships can stand out against national groups, why transparency matters now more than ever, and the biggest fixed ops opportunities in today’s market.
We also get into service retention, culture, and why Toyota’s hybrid strategy is paying off while others chase EVs.
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Topics:
00:31 What is the community connection?
02:30 How did Marcello enter auto industry?
03:41 Building a successful auto career how?
06:22 Biggest industry challenge and change?
12:17 Modern work-life balance expectations?
20:40 Key insight on OEM relationships?
26:03 How do brokers impact business?
29:50 Most innovative service department change?
35:38 How to create sales transparency?
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