Used Cars: Power, Profit, and Playbooks | Daily Dealer Live
About this episode
A deep dive into the used car market reveals significant trends and strategies for acquisition as dealers navigate a shifting landscape. The panel discusses the balance between data and gut instinct in making buying decisions, with insights on the impact of EV sales declines and the importance of adapting to market conditions. Notable guests share their experiences on how to leverage data effectively, the challenges of inventory management, and the future of used car acquisitions in a competitive environment. Key takeaways include the need for agility in strategy and the critical role of customer experience.
Bosch
"And because Bosch relies heavily on the flow of the components, it may have to furlough workers if the issue isn't resolved soon. Bosch says it's doing everything possible to keep production at its sol's getter plant in Germany running, but the ripple effects from the chip disruption are getting hard to contain."
Bosch is a big company that makes parts for cars, like sensors and electronics. They help car manufacturers build better vehicles.
Bosch is a multinational engineering and technology company that is a major supplier to the automotive industry, providing components such as sensors, control units, and other electronic systems.
BMW
"German automakers, including VW, BMW, and Benz are already bracing for potential supply"
BMW is a famous car company from Germany that makes luxury cars known for being fun to drive. They are well-respected for their engineering.
BMW, or Bayerische Motoren Werke, is a German luxury vehicle manufacturer known for its performance-oriented cars and motorcycles. The brand is synonymous with quality engineering and driving pleasure.
Volkswagen
"German automakers, including VW, BMW, and Benz are already bracing for potential supply"
Volkswagen, or VW, is a well-known car company from Germany. They make many popular cars like the Golf and the Beetle.
Volkswagen, often abbreviated as VW, is a German automaker known for producing a wide range of vehicles, including the iconic Beetle and the Golf. They are one of the largest car manufacturers in the world.
service contract
"...generate a finance customer where they are both financing the vehicle open to purchasing a vehicle service contract..."
A service contract is like an insurance plan for your car that helps pay for repairs and maintenance. It means you won't have to pay for certain services out of pocket.
A service contract is an agreement between a vehicle owner and a service provider that covers the cost of certain repairs and maintenance for a specified period. This can provide peace of mind for owners, knowing that unexpected repair costs may be covered.
Bentley
"...I'll use Bentley as an example. We may generate leads on a particular type of car all over the country..."
Bentley is a car brand that makes very expensive and luxurious cars. They are known for their high-quality materials and powerful engines.
Bentley is a British luxury automobile manufacturer known for its high-end vehicles that combine performance with opulence. The brand is synonymous with luxury and craftsmanship, often appealing to affluent customers.
CPO
"A CPO Cadillac XT5 that I can replace any day of the week..."
CPO means Certified Pre-Owned, which is a term for used cars that have been checked and approved by the manufacturer. They usually come with extra benefits like warranties.
CPO stands for Certified Pre-Owned, which refers to used vehicles that have been inspected, refurbished, and certified by the manufacturer or dealer. These vehicles often come with extended warranties and other benefits.
Cadillac XT5
"A CPO Cadillac XT5 that I can replace any day of the week and that I compete not only against other Cadillac dealers, but also Bubba's side lot."
The Cadillac XT5 is a fancy SUV made by Cadillac, known for being comfortable and having lots of tech features. It's designed for people who want a luxury vehicle.
The Cadillac XT5 is a luxury crossover SUV that combines comfort with advanced technology features. It's part of Cadillac's lineup aimed at providing a premium driving experience.
manufacturers proficiency objectives
"...which benefits us in our manufacturers proficiency objectives and very likely to sell locally..."
Manufacturers proficiency objectives are goals that car makers set for their dealerships to make sure they are doing a good job in selling and servicing cars. Meeting these goals helps the dealership stay in good standing with the manufacturer.
Manufacturers proficiency objectives are goals set by car manufacturers that dealerships must meet to ensure quality service and sales performance. These objectives often include metrics like sales volume, customer satisfaction, and service quality.
FNI opportunity
"Are you willing to buy at zero or a loss to get the FNI opportunity and to own the customer?"
FNI means Finance and Insurance, which is a part of car dealerships that helps customers with loans and insurance. It's important because it can help the dealership make more money after selling a car.
FNI stands for Finance and Insurance, which refers to the department in a dealership that handles financing options and insurance products for customers. This opportunity is significant for dealerships as it can lead to additional revenue beyond the initial car sale.
service department
"Every opportunity, every car that comes through the doors is more service department gross."
The service department is where cars get repaired and maintained at a dealership. It's important because it helps keep customers coming back after they buy a car.
The service department in a car dealership is responsible for maintaining and repairing vehicles. It generates revenue through service work, parts sales, and customer retention, which is crucial for the dealership's overall profitability.
retail
"We pay retail as a store and I think all sales departments should."
Retail means the price that customers pay when they buy a car from a dealership. It's usually higher than what the dealership pays to get the car.
In the context of car sales, 'retail' refers to the selling price of a vehicle to the end customer, as opposed to wholesale prices that dealerships might pay to acquire vehicles. Paying retail can impact the dealership's profit margins.
profitability
"There's so much more profitability generated with a car that comes through the dealership."
Profitability means how much money a dealership makes after paying all its costs. It's important for keeping the business running well.
Profitability refers to the ability of a dealership to generate profit from its operations, including car sales, service work, and other revenue streams. Understanding profitability is essential for managing a successful dealership.
Ford Mustang
"...I think we made a lot of money on a Mach 1 Mustang the other day. I just go out and buy a bunch of Mach 1 Mustangs."
The Ford Mustang Mach 1 is a special version of the Mustang that is designed to be faster and more powerful. It's popular among car enthusiasts for its sporty features.
The Ford Mustang Mach 1 is a high-performance variant of the Mustang, known for its powerful engines and sporty design. It has a rich history in American muscle car culture, often associated with speed and performance.
BMW M Sport
"So I'll give you an example perhaps on a BMW. Is it an M Sport or not?"
M Sport is a version of BMW cars that looks and drives sportier than the regular models. It has special features that make it more fun to drive and gives it a more aggressive look.
The BMW M Sport is a trim level that adds performance-oriented features and styling enhancements to standard BMW models. It typically includes sportier suspension, upgraded wheels, and unique design elements that differentiate it from the base model.
Ferrari
"...with certain OEMs like Mercedes and Ferrari and BMW..."
Ferrari is a luxury car brand from Italy that makes fast sports cars, often associated with racing.
Ferrari is an iconic Italian sports car manufacturer, celebrated for its high-performance vehicles and rich motorsport heritage.
Chevrolet Equinox
"But just because the reporting is telling you that a Chevy Equinox is a really fast mover in your car and a bunch of them sold, just because you buy that car doesn't mean you're going to have the same success, right?"
The Chevrolet Equinox is a small SUV that many people buy because it's easy to drive and has a lot of space inside. It's a good choice for families or anyone needing extra room.
The Chevrolet Equinox is a compact SUV known for its practicality and comfort. It's popular among families and individuals looking for a reliable vehicle with good fuel efficiency.
EV rebates
"...the EV rebates ended and the EV market changed..."
EV rebates are discounts or money back from the government when you buy an electric car, making it cheaper to own one.
EV rebates are financial incentives provided by governments to encourage the purchase of electric vehicles. These rebates can significantly reduce the overall cost of buying an EV.
Chevy
"...with Chevy, they've really like, they've yanked us around quite a bit..."
Chevy is a popular car brand in the United States that makes many types of vehicles, including electric ones.
Chevy, short for Chevrolet, is an American automotive brand known for producing a wide range of vehicles, including trucks, SUVs, and electric vehicles (EVs).
Honda
"...Honda, the demand is almost non-existent in my area..."
Honda is a well-known car company from Japan that makes many different types of vehicles, including some that run on electricity.
Honda is a Japanese automotive manufacturer known for its reliable cars, motorcycles, and power equipment. They produce a variety of vehicles, including hybrids and electric models.
used EV market
"...it was highly incentivized, even on the used side..."
The used EV market is where people buy and sell electric cars that have been owned by someone else before. It can change based on how many new electric cars are available and how much people want them.
The used EV market refers to the buying and selling of pre-owned electric vehicles. This market can be influenced by factors such as incentives, demand, and the availability of new models.
tax credit
"...the price point of our cars didn't fall into the EV necessarily tax credit. What moved a lot of them..."
A tax credit is money that the government allows you to subtract from the taxes you owe. For electric cars, there are often special tax credits to help lower the cost of buying one.
A tax credit is a benefit that reduces the amount of tax owed to the government. In the context of electric vehicles, many governments offer tax credits to encourage consumers to purchase EVs, making them more affordable.
used car
"...I wouldn't treat it any different than any other used car that's out there. I mean, I think that..."
A used car is a car that someone else has owned before. It's not brand new, so it usually costs less than a new car.
A used car is a vehicle that has had one or more previous owners and is being sold again, as opposed to a new car, which has never been owned. Used cars can vary widely in price and condition.
EV
"...if you're looking at an EV on the used side that qualified for the tax money, I think you have to be cautious..."
An EV, or Electric Vehicle, is a car that runs on electricity instead of gas. They are better for the environment and can sometimes get you tax breaks.
EV stands for Electric Vehicle, which is a type of vehicle that is powered entirely or primarily by electricity instead of gasoline or diesel. EVs are known for being more environmentally friendly and often qualify for various incentives.
tax incentives
"...that qualified for the tax money, I think you have to be cautious..."
Tax incentives are like discounts from the government that help you save money when you buy something, like an electric car. They make it cheaper for you to buy the car.
Tax incentives are financial benefits provided by the government to encourage certain behaviors, such as purchasing an electric vehicle. These can include tax credits, deductions, or rebates that reduce the overall tax burden for the consumer.
Mercedes-Benz Its Mercedesbenz
"The reason that I think it's more important right now than it was a month ago or three months ago is that the manufacturers are scrambling. And whether it's Mercedes-Benz or Kia or General Motors or Ford, yes, they have some long term strategy, but these are super tankers that take"
The Mercedes-Benz SL is a fancy sports car that you can drive with the top down. It’s known for being very stylish and powerful, making it a favorite among people who love luxury cars. It’s often talked about because it represents high-end driving experiences.
The Mercedes-Benz SL is a luxury roadster known for its elegant design and high-performance capabilities. It has a rich history dating back to the 1950s and is often discussed for its blend of style, comfort, and advanced technology. The SL models are considered a symbol of luxury and status in the automotive world.
lease program
"...we're going to come out with a lease program at $3.99 a month to get rid of all this inventory..."
A lease program is like renting a car for a few years. You pay a monthly fee, but you don't own the car when the lease ends.
A lease program allows customers to rent a vehicle for a set period, usually with lower monthly payments compared to buying, but without ownership at the end of the term.
Carvana
"...Igor Kay made an interesting comment online in response to the earlier comment. He says, Carvana and CarMax and AutoNation all learned how to shift inventory around..."
Carvana is a company where you can buy and sell used cars online. They even have special machines that look like vending machines where you can pick up your car.
Carvana is an online used car retailer that allows customers to buy, sell, and trade vehicles through a digital platform. They are known for their innovative car vending machines and home delivery service.
CarMax
"...Igor Kay made an interesting comment online in response to the earlier comment. He says, Carvana and CarMax and AutoNation all learned how to shift inventory around..."
CarMax is a store where you can buy used cars without having to negotiate the price. They have a lot of cars to choose from and make the buying process easy.
CarMax is a leading retailer of used cars in the United States, known for its no-haggle pricing and extensive inventory. They provide a straightforward buying experience with a focus on customer satisfaction.
AutoNation
"...Igor Kay made an interesting comment online in response to the earlier comment. He says, Carvana and CarMax and AutoNation all learned how to shift inventory around..."
AutoNation is a big company that sells new and used cars. They aim to make buying a car easy and clear for customers.
AutoNation is the largest automotive retailer in the United States, offering new and used vehicles along with automotive services. They focus on providing a transparent and efficient car buying experience.
chip shortage
"...Igor also said, another chip shortage might potentially hit again driving values up again..."
A chip shortage means there aren't enough tiny computer chips that cars need to work properly. This can make it harder to build cars and can raise their prices.
A chip shortage refers to a significant decrease in the availability of semiconductor chips, which are essential components in modern vehicles for various electronic systems. This shortage can lead to production delays and increased vehicle prices.
sales history data
"...How often do we get burned by that sales history data though? It's fascinating. We've seen that..."
Sales history data is information about how many times a car has been sold and how long it took to sell. This helps car dealers know if a car is popular and if they should buy it.
Sales history data refers to the record of past transactions involving a vehicle, which can include how long a car was on the market, its selling price, and the number of inquiries or leads it received. This data helps dealers understand demand and make informed purchasing decisions.
AutoCheck
"...the car facts, the auto check, whatever pops up something after the sale and we're ultimately accountable to that. That's an interesting thing..."
AutoCheck is like Carfax; it provides a report about a car's history. This report can help you see if the car has had any accidents or other issues in the past.
AutoCheck is another vehicle history report provider similar to Carfax. It offers insights into a vehicle's past, including accident history, title status, and odometer readings, helping buyers make informed decisions.
Toyota RAV4
"...you want right now in the marketplace? Use Toyota RAV4. Oh, yeah. Very good. All right. 2022 Blazor or ..."
The Toyota RAV4 is a small SUV that’s great for families because it has a lot of space and is known to be very reliable. It’s popular because it’s easy to drive and can handle different types of weather and roads. Many people like it for everyday use.
The Toyota RAV4 is a compact SUV that has gained popularity for its reliability, spacious interior, and fuel efficiency. It is significant in the automotive market as one of the first vehicles to popularize the compact SUV segment. The RAV4 is often discussed for its practicality and versatility for families and outdoor enthusiasts.
Tesla Model
"... going to be a wild one, but I'd probably throw a Tesla Model Y performance or long range upgraded wheels. Rea..."
The Tesla Model Y is a type of electric car that looks like a small SUV. It’s known for being fast, having a long battery life, and lots of high-tech features. People talk about it because it’s a popular choice for those wanting to drive an eco-friendly vehicle.
The Tesla Model Y is an all-electric compact SUV that combines performance, safety, and utility. It is significant for its impressive range, advanced technology, and the growing popularity of electric vehicles. Discussions about the Model Y often focus on its performance variants and how they compete in the EV market.
Audi 4000
"thank you for being on today's show. Thanks, Sam. It was fun. So thank you all to our Daily Deal Live audience for being here today to our over 4,000 live viewers today who tuned in. Thank you as well for being here and continuing to be here every single week."
The Audi 4000 is an older car from the 1980s that was made by the Audi company. It was designed to be a nice, comfortable car that also performed well. People mention it because it’s a classic model that some car fans really appreciate.
The Audi 4000 was a compact executive car produced in the early 1980s, known for its combination of luxury and performance. It holds significance as part of Audi's early efforts to establish itself in the luxury market, and it is often discussed among enthusiasts of classic cars. Its unique design and engineering make it a notable model in Audi's history.
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