Latest / Nonsense with cj little and Jeff Parker / The Four-Square Shell Game: How Not to Get Robbed at the Stealership

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The Four-Square Shell Game: How Not to Get Robbed at the Stealership · Nonsense with cj little and Jeff Parker

• 0:00
  Welcome to Nonsense Season 4, Episode 26, Our big story, but
• 0:02
  not our second show of the week because of the quantity of time
• 0:05
  the Dodgers and Lakers require. Well, they're both still
• 0:08
  playing. I'm so, so sorry.
• 0:10
  I'm Jeff Parker. Real first world problems over
• 0:12
  there, huh Jeff? So hard.
• 0:14
  I guess so, yeah. I have too many sporting events
• 0:16
  to go to. I'm sorry I can't record our
• 0:18
  little show. We'll be back with tech news.
• 0:20
  There's still things happening in the world.
• 0:22
  Probably in May, maybe early May, I don't know, but we will
• 0:25
  be back with news at some point. The later the better for the
• 0:28
  Lakers. Are you CJ Little?
• 0:29
  I am. Oh, I forgot that part.
• 0:31
  Yes, I'm CJ Little. Yes.
• 0:33
  This time we're looking at Anatomy of a RIP Off.
• 0:35
  How your New $40,000 Car Just Became 55,000 bucks Up next.
• 0:40
  You can't even buy a car for 40 grand these days, is that a
• 0:43
  thing? I haven't been shopping for cars
• 0:44
  in a long, long time so I have no idea.
• 0:46
  Isn't that nice? Presumably with E VS going
• 0:48
  forward that's going to get stretched out even more.
• 0:50
  I'm. Looking forward to owning the
• 0:51
  EV. I'm just not looking forward to
• 0:52
  the process of buying the EV. Well, I'm.
• 0:55
  Going to walk you through that we got a plan we're.
• 0:56
  Going to talk about some of the dealership scams and ways they
• 0:58
  gouge you for more money on the way.
• 1:00
  Well, some of them, I'm sure there are some that have been
• 1:02
  yet still uncovered. Yeah, the great part is now for
• 1:04
  a very small premium, no joke, you can buy a car and have it
• 1:07
  delivered to your home. I've been doing that with leased
• 1:09
  cars for decades. Yeah, Fleet desks.
• 1:11
  Lovely. And I'm sure they've got their
• 1:13
  own ways that they hide markups that I don't know about, that
• 1:16
  I've not found out about for sure they still do.
• 1:19
  I remember the first time I, I bought a fleet vehicle through
• 1:21
  your fleet guy. Yeah.
• 1:22
  And I rolled up to pick it up and they were like the vultures
• 1:25
  were coming out to, you know, to try to get me to buy a car.
• 1:27
  And then I was like, no, no, my car's already here.
• 1:29
  And he bought it from, you know, whatever his name was, Tom or
• 1:31
  whatever the look of sadness on their face, knowing that I'd
• 1:33
  already. One that got away.
• 1:36
  There was a little bit of joy on my face seeing them be unhappy
• 1:38
  knowing I'd already purchased the thing.
• 1:40
  OK, stealing the deal. The secret math of modern new
• 1:43
  car dealerships. Let's go.
• 1:44
  That's not very secret. They just add a zero and a comma
• 1:47
  in their math. That is less secret than you
• 1:48
  think. It's what they do.
• 2:01
  New car dealerships are masters of the shell game where profit
• 2:04
  is buried under layers of jargon.
• 2:06
  The most blatant RIP off is the interest rate markup.
• 2:09
  Dealers take a bank's buy rate and quietly add 1 to 3% on top,
• 2:12
  skimming thousands from your pocket over the loan's life.
• 2:14
  Then come the non negotiable add-ons.
• 2:17
  The second sticker on the window $500.00 for nitrogen in your
• 2:20
  tires. Air is 78% nitrogen and unless
• 2:23
  you're racing a car for some reason on a track, unless you're
• 2:26
  an F1 driver, you don't need nitrogen.
• 2:28
  Your nitrogen is still going to leak out of your tires at about
• 2:31
  2.2 PSI per year. You still need to check your
• 2:34
  tire pressure and top them off regularly.
• 2:36
  I'm frustrated because apparently we can predict that
• 2:39
  there's extraterrestrial life at like 96.7% and that you're not
• 2:43
  OK with but 2.2 lbs of loss per year that you're fine because.
• 2:47
  That's easy to calculate. That's super.
• 2:49
  We have a bunch of tires. We can actually figure that out
• 2:52
  that we don't have an infinite number of planets and planets we
• 2:55
  don't can't even see or don't even know.
• 2:56
  All right, good $90.00 ceramic coatings are simply spray on
• 3:00
  sealant. The actual retail value is less
• 3:02
  than $20 a bottle. This price is right.
• 3:04
  Will cover multiple cars or worse, spray on wax.
• 3:07
  Is why we call them Steelerships. $1500 for window
• 3:10
  vin etchings you can do yourself for 20 bucks.
• 3:13
  Oh yeah, you can't do that yourself.
• 3:15
  Not for any any more than $20 you can't.
• 3:17
  They also thrive on monthly payment focus, stretching terms
• 3:20
  to 84 months to help hide high prices in affordable chunks.
• 3:23
  Finally, beware the Finance and Insurance Office, the so-called
• 3:26
  box where the high margin and GAP Insurance and warranties are
• 3:29
  marked up to 100% above cost. Shop the car, but negotiate.
• 3:33
  The math. I mean, know the math.
• 3:35
  Yeah, surely. And I get it.
• 3:36
  They're running a business. We can and probably maybe debate
• 3:40
  the longevity of that business, but I understand.
• 3:41
  That I personally have a sentiment that a business should
• 3:44
  help you save money wherever they can, and that's a business
• 3:47
  you'll come back to. Well, OK, car dealership model
• 3:49
  isn't that way because you come to them so infrequently.
• 3:52
  That's like, let's gouge you for as absolutely as much as we
• 3:54
  possibly can. Yeah, I was going to say I, I
• 3:57
  believe that a business should and gouge you or take advantage
• 4:00
  of you, right, which is what they do.
• 4:02
  And it's under this auspices of like, well, they're fully
• 4:05
  informed. I'm like, are they really are?
• 4:07
  They have you on the premises, they know you don't want to
• 4:10
  leave while they have you there. Let's take all the money we
• 4:13
  possibly can. And like, I'm good at math, so I
• 4:15
  can do it in my head, so I'm fine.
• 4:17
  But there are other people that that aren't good at math and
• 4:19
  they get really tied up in it. And then they're just like,
• 4:21
  well, we showed them all the numbers.
• 4:22
  And I'm like, but did you really?
• 4:23
  Yeah. Did you, you know it took us how
• 4:25
  many years did it take us to get the the nutrition label style
• 4:29
  implementation on broadband? Sure.
• 4:30
  How is that not on cars? The IS PS tried to get that
• 4:33
  taken. Off yes, exactly.
• 4:35
  Like some some sort of normalization.
• 4:37
  How is that bad? I understand that it's bad for
• 4:39
  the the dealers. I understand that that's where
• 4:41
  all their margin is. But we shouldn't be in business
• 4:44
  to keep the dealers in business. We should be in business to make
• 4:45
  the consumers not get screwed. Sure.
• 4:48
  Do you know that they have this concept?
• 4:49
  This is true. The dealers have this concept
• 4:51
  called the Foursquare philosophy.
• 4:53
  Do you know this? What is that?
• 4:54
  What is the Foursquare? Philosophy.
• 4:55
  I mean, it sounds like some nice form of a children's game.
• 4:58
  Yeah, it sounds kind of fun. No, the four square philosophy,
• 5:01
  which I did not know about until we were we were researching this
• 5:03
  this particular episode, it's that they can hide profit in one
• 5:07
  of four places, the car price, the trade in price, the
• 5:11
  financing or the add-ons. And typically if you're getting
• 5:15
  a deal in one, they're making it up in one or three of the other
• 5:18
  ones. Sure.
• 5:19
  That's their their basic model. They would love to, I'm sure,
• 5:22
  make it in all four areas. Of course, fortunately for them,
• 5:25
  you can look up car prices on the Internet and so one of those
• 5:28
  three areas you can you can battle just by doing a little.
• 5:31
  Bit of research, no, you can battle on all of them, right?
• 5:33
  You can get financing rates online.
• 5:35
  You can get trade. In But the easy one is car
• 5:37
  price. That's the obvious.
• 5:38
  One, yeah, OK, sure. I think, I think that does get
• 5:40
  hidden though and there's like the MSRP, but nobody pays the
• 5:42
  MSRP, right? Only on very rare new vehicles
• 5:45
  or limited run stuff. You're not paying MSRP, you're
• 5:48
  paying less than MSRP. There's actually an EV where the
• 5:50
  dealership is admittedly charging $5000 over MSRP because
• 5:54
  they are so. New yeah.
• 5:55
  Anything they absolutely, yeah. I mean, it's applied to man
• 5:57
  curve and I guess that I kind of get, I don't like it, but I get
• 6:00
  that if you're gonna charge a premium for something you can't
• 6:02
  get elsewhere, OK, maybe, yeah. But that's, that cannot be the
• 6:05
  majority of where they're making their profit.
• 6:07
  They're making on the everyday stuff that people are buying.
• 6:09
  They're coming in to buy a, you know, whatever, a Toyota
• 6:11
  Corolla, they're getting screwed.
• 6:13
  Right. Let's go through the the list
• 6:15
  here. There's a whole bunch of areas
• 6:16
  where they can make money and I think this is kind of
• 6:18
  interesting. Yeah.
• 6:18
  How much time do we have? Well.
• 6:20
  I know this is a pet subject for you.
• 6:22
  Oh yeah. So I I know you're going to get.
• 6:23
  I'm coming out of this with an an aneurysm, that's for sure.
• 6:26
  Let's just start at the top. I think it's great.
• 6:27
  They at very least don't try to sell you a bunch of stuff that
• 6:31
  you don't actually. Need.
• 6:32
  Oh no, they're great about that. Yeah, that's a nice thing.
• 6:34
  Yeah, there's no upselling going on at all.
• 6:36
  Are you kidding? And, and here's the other thing.
• 6:38
  I don't know what people know and what they don't know.
• 6:40
  Apparently a decent number of people don't appreciate that
• 6:43
  there's what the manufacturer puts on the car.
• 6:45
  So that's at the factory. Yeah.
• 6:46
  The things that are put in, like maybe black leather seats or the
• 6:49
  engine size, those usually happen at time of manufacture.
• 6:52
  There's this whole other list of stuff that happens from the
• 6:55
  dealer. Things the dealer adds on?
• 6:57
  Yeah, usually are quite inexpensive to them that they
• 7:00
  mark up quite a. Typically high margin, right and
• 7:03
  little value. Also, I don't know about you,
• 7:05
  I'd rather have the assembly worker who is trained in doing
• 7:08
  that one thing right and well do that one thing right and well.
• 7:12
  Because he does it all day, every day.
• 7:13
  Then some Yahoo at the dealership, yeah, because he or
• 7:15
  she does it all day as opposed to dealership where you get like
• 7:18
  best effort and that's not a very high bar.
• 7:20
  I don't want a dealer doing yes paint protection on my car.
• 7:23
  I want a professional. Professional dealer preferably
• 7:26
  does. Yes, ceramic coatings all day
• 7:28
  along every day. So you'll see all sorts of stuff
• 7:30
  like tracking devices. That's a popular one, right?
• 7:32
  Maybe a LoJack or one of these ELO GPSS?
• 7:34
  They'll put that in the car beforehand.
• 7:36
  Explain that to me, should I get my LoJack aftermarket?
• 7:39
  Is that where I'm going to save money?
• 7:40
  I mean, these days I'm not sure. Well, first of all, you're not
• 7:43
  getting anything from the dealer at a price that is better than
• 7:46
  what you could get elsewhere. Sure, period.
• 7:47
  Full stop. But that's what I'm wondering.
• 7:49
  I think a LoJack is an interesting idea.
• 7:50
  I think being able to track my car is an interesting idea.
• 7:53
  Why are you saying this is not a valuable A valuable service?
• 7:55
  You're just saying because the dealer markup's crazy, generally
• 7:57
  speaking. If they mark it up, yeah, I
• 7:59
  could probably do a whole episode on tracking devices in
• 8:02
  vehicles and whether or not that's preferred or not.
• 8:04
  I don't even know if I'd want one.
• 8:06
  Yeah. Do you want to get your car back
• 8:07
  that's half damaged and then have it repaired, or would you
• 8:10
  rather have it be gone, gone and get the new one?
• 8:12
  I don't know what the better answer there is.
• 8:13
  I could argue either way. I don't know the answer to that
• 8:15
  here, but at least I could if before they damage it I could
• 8:17
  know where they're driving it to maybe.
• 8:18
  Yes, so you could go buy some other stolen car for cheaper
• 8:22
  with your insurance money. Sure, that's what you could do.
• 8:24
  You'll see things like a pulsating third brake light.
• 8:26
  Tell me what that is. Third brake light is the the
• 8:29
  mandated light we've had for what 30 plus years that goes
• 8:32
  typically in the middle somewhere in the back of the
• 8:34
  vehicle. So the concept here being if one
• 8:36
  of your brake lights is out, at least you have two other ones
• 8:37
  that work. And these pulsating lights are
• 8:39
  they attract more attention so it the light will blink when you
• 8:42
  first hit the brakes. It's standard on some vehicles.
• 8:45
  And this is not something the manufacturer puts in.
• 8:47
  Sometimes they're they're they're kind of a lot like it's
• 8:50
  kind of a lot when you see it. Typically this is an add on that
• 8:53
  you'll see that's either in the light itself or just in the
• 8:55
  electronics in the car. And I've seen these things be
• 8:57
  sold for hundreds of dollars. So it's not something that's.
• 8:59
  Required for? No, not at all.
• 9:01
  Not at all. OK, OK, not at all.
• 9:03
  The other popular one apparently of late is VIN etching.
• 9:05
  Yeah. So they'll take your VIN number
• 9:07
  and etch it on all the glass panels on the vehicle.
• 9:10
  So the thieves, when they come and see your car, they see the
• 9:12
  VIN etching and they say, oh, this car is going to be too hard
• 9:15
  to steal because I'd have to buff out all the windows.
• 9:17
  Or replace them or something. That is the theory.
• 9:19
  It is a deterrent, much like a club that you put on the
• 9:22
  steering wheel. Yeah, right.
• 9:23
  It's not. It's not that they can't defeat
• 9:25
  it. Just move on to the next car
• 9:26
  that doesn't have VIN. Etching you move on to the next.
• 9:28
  So that's the theory, but you'll see things priced anywhere from
• 9:30
  like 500 to apparently $2000. Wow.
• 9:33
  Meanwhile you can get a kid online to do it for like 10s of
• 9:36
  dollars. 20 bucks like I see them at 20 literally. 20 to 30
• 9:38
  bucks you can do this, so you're paying a pretty decent amount of
• 9:41
  markup. There and not hard to use.
• 9:43
  It's a little thing you apply to your window and then you put a
• 9:45
  little paste on top of it and 5 minutes later you have vint
• 9:48
  etching. It's debatable if it even works.
• 9:50
  Like it's really debatable if this is actually a deterrent or
• 9:53
  not. It's only a deterrent if thieves
• 9:55
  know what that thing is in the window when they.
• 9:57
  See and don't have a polisher. Right.
• 9:59
  But if they know it's there, then they go, oh, let's move on
• 10:01
  to the next one. Yeah, now you're only going to
• 10:02
  track the thieves that have a polisher, right?
• 10:04
  Those are the only ones you're going to get.
• 10:05
  Who have no other options of other cars to steal.
• 10:07
  You mentioned it at the top here, nitrogen and the tires.
• 10:09
  I've seen people charge as much as 200 bucks for that.
• 10:12
  This is a racing thing. If you're an F1 car driver, you
• 10:15
  probably want nitrogen because it is a steady curve as it heats
• 10:18
  up. Yeah, as the pressure gets
• 10:20
  greater from the from it heating up, you can see the curve.
• 10:22
  And if you have what you have in just regular air, you have a lot
• 10:24
  of of moisture you have, you have.
• 10:26
  So the curve is not a steady, a perfect curve like it's also a.
• 10:29
  Bigger molecule. So in theory it leaks less, but
• 10:33
  we're not talking about a lot of leakage here, right?
• 10:35
  We're talking about, like I think you mentioned, 2 lbs.
• 10:37
  On average 2.2 lbs per year, and a tire with air in it is 3 1/2
• 10:41
  lbs. Right.
• 10:42
  Yeah. So I'm not saying you shouldn't
• 10:43
  get nitrogen, I'm saying you shouldn't pay 200 bucks for
• 10:45
  nitrogen. No, I'm going to say you
• 10:46
  shouldn't get nitrogen. Yeah, you still need to check
• 10:48
  your tire pressure if you're going on a long road trip or
• 10:50
  even just periodically. If you're not going on a long
• 10:53
  road trips, always pressure in your tire.
• 10:54
  Nobody ever does. Nobody ever checks is.
• 10:56
  So unsafeed when you don't Well. That's why you have TP TPMS now.
• 10:58
  TPMS is really designed to tell people when their tire pressures
• 11:01
  are low. TPMS tire pressure management
• 11:03
  system. It's the thing that lights up
• 11:05
  when your car tire one of them is low.
• 11:06
  Yes, or many of them are low. Costco gives you nitrogen for
• 11:09
  free and you're already paying below market for the tires so
• 11:13
  why not get it there? That's what I do.
• 11:14
  Sure. I'm just saying you don't need
• 11:15
  nitrogen. It's not.
• 11:16
  It's not really helping you. You don't need it.
• 11:18
  Yes, I agree. Unless you're an F1 driver, in
• 11:20
  which case go ahead and get yourself some nitrogen.
• 11:22
  Well, even. Then it doesn't really help the
• 11:23
  driver, it's really helping the the crew, because the crew's the
• 11:26
  one whose job it is to set the pressure.
• 11:27
  Sure, not worth 200 bucks for sure.
• 11:30
  You'll see all sorts of like fabric protection or paint
• 11:32
  protection. Most of the stuff is spray on
• 11:34
  that either is easy to do or should be done by an expert.
• 11:36
  Sort of either or the one I see all the time because I, I'm a
• 11:39
  paint nerd, so I know a little bit about ceramic coatings and
• 11:42
  the so-called ceramic coating that they're putting on.
• 11:44
  It is actually a ceramic sealant.
• 11:46
  It's a $20 bottle and it'll do multiple cars.
• 11:49
  By the way, don't get your paint protection.
• 11:50
  It's your dealership. They don't do this all day every
• 11:52
  day. Yeah, they will seal a car that
• 11:54
  they have not polished and so you will get your scratches will
• 11:57
  just be nice. Nicely sealed in, yeah.
• 11:59
  You want to get what they're good at.
• 12:00
  So if you need help grifting, you want to get that from the
• 12:02
  dealership, that's where you want to go 'cause that's what
• 12:04
  they do every day. Again, you want to get what
• 12:06
  you're good at. No, they're good at that.
• 12:07
  So my favorite, and this is 100% saw with my own eyes, I had a
• 12:11
  loner, an EV loner from from our dealer a little while ago and it
• 12:15
  had a like one of the dealer add on stickers on it.
• 12:17
  And I kid you not, they had a $19199 add on option that said
• 12:22
  lifetime oil service. Oh wow.
• 12:25
  For Wow. It's an EV that's.
• 12:27
  Expensive for an electric after a car that doesn't have oil
• 12:29
  doesn't have oil, that's a lot of money you're paying for oil
• 12:33
  that it doesn't use. Does it also include the
• 12:35
  lifetime rocket booster service? Are there other things that are
• 12:38
  included in this mythical service?
• 12:40
  All of this stuff. That's crazy if.
• 12:42
  You've found the car that you want and you go into the dealer
• 12:45
  and you're like, I wanna I wanna buy this blue Chevy Bolt right
• 12:48
  here. They're gonna tell you they
• 12:49
  can't take it off. Oh, sorry.
• 12:50
  It's in the price the. Stuff that the dealer has added
• 12:53
  on has already been added on, yeah.
• 12:54
  Yeah, yes, the stuff that they've added, your answer
• 12:55
  should be I don't. Want it?
• 12:56
  We can't unatch the window. I will wait.
• 12:58
  Yeah, that's OK. They can just replace the glass.
• 13:01
  And if they don't want to, they can just not charge you for it.
• 13:03
  I'd actually think you should charge them for etching the
• 13:05
  glass. If you're perfectly new car,
• 13:07
  sure. But the point is you don't have
• 13:08
  to pay for it. This is a tactic.
• 13:09
  And you should just say, you know what?
• 13:10
  We'd I'd rather not have all of these things.
• 13:12
  And if it kills the deal, it kills the deal.
• 13:14
  You gotta walk away. Oh, sure, Absolutely.
• 13:15
  That a kid kill the deal. You don't need that stuff.
• 13:16
  Yeah. You and I buy cars in
• 13:18
  California. In Texas.
• 13:19
  Yeah, the dealerships actually drill more holes in the car so
• 13:22
  they can mount their dealership badging onto the car.
• 13:25
  Oh, that would give me full awful.
• 13:27
  When you go in, Yeah, And they tell you whether it's the
• 13:29
  lifetime oil service or my favorites, and they're like, oh,
• 13:31
  oh, we've got this, this protection package, right?
• 13:33
  It's gonna protect your whole car.
• 13:35
  What is the protection package? It's a $1500 protection package.
• 13:37
  It's it's, it's mandatory. You gotta have.
• 13:39
  You gotta. Force field around.
• 13:40
  You gotta protect your car. Your car will be protected.
• 13:42
  Yeah. Are you buying a small statue of
• 13:44
  Jesus to sit on your dashboard? It's a medium sized statue of
• 13:47
  Jesus. It's not small.
• 13:48
  It's a medium size. Alright, but like, it's a
• 13:50
  racket. Like the whole point is that
• 13:51
  it's a racket. Protection package?
• 13:52
  Yes, you're saying the protection package is a racket.
• 13:54
  Yes, unless they call out to their Cousin Vinny sitting
• 13:58
  outside. Hey, Vinny, this guy says here
• 14:00
  he does need the protection package and he's just like
• 14:03
  holding like like a wire brush in his hand and.
• 14:05
  He's gonna scratch your car on the way out.
• 14:07
  Yeah, exactly. He's got like a big janitor ring
• 14:09
  of keys. He's just jingling out.
• 14:10
  There, it's extortion. Yeah, a lot of extortion.
• 14:13
  I mean, which by the way, this does feel a little extorty when
• 14:15
  you go to a car dealership, just just feel a little distorted
• 14:18
  Totally. Then you don't need to buy the
• 14:19
  protection package. You could tell them to quote
• 14:21
  take it off. Just the name, the protection
• 14:23
  package, everything about that screams extortion.
• 14:26
  It's got a little Italian flag behind it, just like really now
• 14:29
  did that on the nose. Hey, I don't know what Vinny
• 14:31
  does. Vinny does.
• 14:32
  He's not an employee here. Can't be sure you would want
• 14:35
  anything to happen to your nice pretty car, would you?
• 14:37
  Exactly. You would want to see your car
• 14:39
  damaged, would you? That blue Chevy Bolt?
• 14:42
  I'm going to. Recognize it around town.
• 14:43
  I don't really want to get the protection package above all
• 14:46
  else. Hey Vinny, play K6A9. 6.
• 14:51
  Envision Vinny outside just with this.
• 14:53
  Anyway, with a baseball bat these.
• 14:55
  Add-ons. My point is, you don't need and
• 14:57
  you can say no to and you can you can take them off and that.
• 15:00
  Is a big chunk and add-ons do add up because all these little
• 15:03
  silly things do add up and forget that that's even before
• 15:05
  you get to the financing. When you get into the the maths,
• 15:08
  the maths are what get crazy. This is where they really stick
• 15:11
  it to you, right? I want to tell you math is hard.
• 15:13
  I, I don't think math is hard, especially with the tools that
• 15:15
  we have today, Excel or a calculator or just, you know,
• 15:19
  pen and paper. But man, I see people get
• 15:21
  railroaded with the math. I mean, absolutely railroaded.
• 15:25
  And my favorite is just how they position they being the, the,
• 15:27
  the evil salespeople, how they position the conversation.
• 15:31
  When you get there, they'll almost never talk about the
• 15:33
  price of the car. They'll say, oh, hey, Mr.
• 15:35
  Parker, you want to buy a new vehicle?
• 15:36
  What, what monthly payment are you looking for?
• 15:38
  And I'm like, how does that have anything to do with anything?
• 15:40
  What's, What's the relevance? What?
• 15:41
  What's? Yeah.
• 15:42
  Tell me what the term is. Tell me what the interest rate
• 15:44
  is. Tell me all the things I need to
• 15:46
  know. You want to know how much you're
• 15:47
  paying for the vehicle and then you figured in financing should
• 15:49
  be all separate layer. But what what they're trying to
• 15:51
  do is understand what can you afford and then how much crap
• 15:55
  can we shove in there? So they'll vary things like the
• 15:57
  term. Maybe they'll they'll go from 60
• 15:59
  months, which is five years for those who can't do the math at
• 16:02
  home to 84 months. That's insane, insane, right?
• 16:05
  They'll just take you up they'll add a couple years onto the
• 16:07
  term. Now mind you, you're paying
• 16:09
  interest on this, so your monthly rate goes down, but now
• 16:11
  you're paying on it for seven years.
• 16:12
  Yeah, and that car, by the way, might only last three, which is
• 16:15
  another problem, right, Right. So you never want to negotiate
• 16:17
  by payment. You only want to negotiate the
• 16:19
  out the door price, the thing you're actually paying for the
• 16:22
  vehicle. Start there, lock in that, and
• 16:24
  then go figure out the other things like financing.
• 16:27
  Right. How long you're going to pay for
• 16:28
  it and all that sort of stuff. Yes, I have a real problem with
• 16:31
  the way cars are sold. You mean bulge?
• 16:32
  I don't have a solution for this.
• 16:34
  This is my own. I do, yes, but this is my own
• 16:36
  issue and it has to do with financing.
• 16:37
  Part of it is, you know, you don't walk in and say I would
• 16:39
  pay cash for the car because then they're going to really
• 16:41
  load on those other three areas for profit center.
• 16:43
  Sure. So you kind of want to go
• 16:44
  through and actually go through the motions of financing the
• 16:46
  car. And then if you can, when you
• 16:48
  get the first bill for the car, yeah, there's no penalty for
• 16:51
  paying off the car early. So you just write a check and
• 16:54
  pay off the entire car. So you're not paying any
• 16:56
  interest on the car? There might not be any
• 16:58
  prepayment fee, there might be an origination fee.
• 17:00
  You just got to look through the paperwork and see what's.
• 17:01
  There, there is an origination fee, Absolutely there's an
• 17:03
  origination fee. And by the way, they'll put try
• 17:06
  to put markup on the origination fee as well, which is also crazy
• 17:09
  lunacy. Yeah, yeah, you have to make
• 17:10
  sure you're paying the actual origination fee, not some
• 17:12
  made-up number. I mean, I would try to figure
• 17:14
  out both. Typically if I can get a really
• 17:17
  cheap below market financing rate that they're designed to
• 17:20
  move the car, then I'll take it because I can do better with
• 17:22
  that cash not being in the car. Sure.
• 17:24
  If you're paying 1% or 1 1/2 percent interest on a vehicle,
• 17:27
  you're almost always going to be better off paying whatever the
• 17:29
  couple $100 origination fee is and to keep your money longer.
• 17:32
  I only see those deals when it's a new car or CPO car that's
• 17:36
  that's being backed and financed by the manufacturer itself.
• 17:39
  It's the only time I've ever seen those things.
• 17:41
  If it's a bank, there's no. Way so you see them very, very
• 17:43
  rare. Yeah, I mean you'll, you'll see
• 17:45
  it if they're, if they're at, you know, mid model year and
• 17:47
  they want to push them, you'll see them bring the lever down on
• 17:49
  the finance rate just to get those cars moved.
• 17:51
  But I also always ask the cash rate because sometimes you can
• 17:53
  get the thing cheaper for cash. Usually the dealer will tell you
• 17:56
  where they're going to be at because they want to move the.
• 17:57
  Car, I always see the cash is the cash rate is more expensive
• 18:00
  because they think they're going to make it up in the finance.
• 18:01
  If they're not getting in financing, yeah of.
• 18:02
  Course, but this is this is what I was starting to say earlier.
• 18:04
  I just hate the fact that we penalize people who don't have
• 18:07
  money. Yes, we penalize them by making
• 18:09
  the car cost more. We penalize them by by making
• 18:12
  them pay an interest rate as opposed to if they could just
• 18:14
  write a check and pay off the car.
• 18:16
  Yeah, as quickly as possible. Then they don't have to pay that
• 18:18
  interest rate. It sucks in this country to be
• 18:20
  poor. Well, yeah, but I also
• 18:22
  understand baked in that interest rate and baked into
• 18:24
  your credit score is if you're going to pay it or not.
• 18:26
  And that also doesn't help folks that don't have money and
• 18:29
  haven't kept their capital. By the way, this is a dealership
• 18:31
  trick where they'll give you a bogus credit score.
• 18:34
  Yes, even though your your bank is charging your real credit
• 18:36
  score, they'll assay your credit score is a little higher, so you
• 18:39
  pay a little more and they'll keep the difference.
• 18:41
  Yes, which is in how that's legal is beyond like how that is
• 18:45
  not illegal. And I don't mean civilly, I mean
• 18:47
  like criminally. How is that not completely
• 18:50
  illegal to say? Oh, what Jeff's saying here is
• 18:51
  your bank might be offering you a 6% rate based on you, your,
• 18:55
  your credit score, whatever the vehicle is you're purchasing,
• 18:57
  yadda, yadda, yadda. And the dealers feel like, Oh
• 18:59
  yeah, we need a free for 8%. Wait what?
• 19:02
  That's terrible. They just mark it up.
• 19:04
  That's just interest rate, which for me is relatively easy to do
• 19:07
  and I think most people get the gist of it.
• 19:09
  I. Was going to ask you about when
• 19:10
  they were selectively choosing what tax rate that they're going
• 19:13
  to charge. Oh.
• 19:14
  OK, You just want to see me explode, don't you?
• 19:16
  Yes. So I've actually had this happen
• 19:18
  to me where I had a dealer. I knew every number to the 2nd
• 19:22
  digit to the right of the decimal.
• 19:23
  Yeah, I knew exactly what I was paying.
• 19:25
  The purchase price was fine. The dealer was being great.
• 19:27
  They had one of these crazy financing offers which I want to
• 19:30
  take advantage of. It was like little like 1 1/2
• 19:32
  for 1.8% interest. So it's free money, Sure, of
• 19:34
  course. And then when I got the final
• 19:35
  paperwork, it's like, that's weird.
• 19:36
  The payments off by a few bucks from what I calculate.
• 19:39
  Now instead of doing what I should have done and assuming
• 19:41
  that the dealer was trying to screw me 'cause that's what
• 19:43
  they're always doing, sure, I made the assumption that my math
• 19:46
  was wrong. Maybe I missed a couple digits
• 19:48
  on the the interest rate or? Nothing wrong with that.
• 19:50
  That could happen. Whatever.
• 19:51
  So I'm literally on my phones. I didn't I didn't brought a
• 19:54
  laptop. I'm on my phone looking at my
• 19:56
  Google sheet trying to figure out where I screwed up What,
• 19:57
  what, what did I screwed up here?
• 19:58
  And I'm double checking and looking at my my formulas and
• 20:01
  everything was right and I was like but the.
• 20:02
  Numbers don't match. That can't happen.
• 20:03
  And then I figured it out. What this particular dealer was
• 20:06
  doing was charging me a higher sales tax rate based on a
• 20:10
  made-up address that I didn't live.
• 20:12
  At and they keep the difference. Whoever you're buying the thing
• 20:14
  from, whether it's a car or whether it's a water bottle
• 20:16
  dealership, they are responsible for paying the sales tax.
• 20:18
  They will charge you. It's sort of just a a standard
• 20:21
  to say they charge you the sales tax and they remit to the state.
• 20:24
  So they were charging me a sales tax rate that was higher than
• 20:27
  where I live, and they were going to bake that into the
• 20:29
  financing. But also higher than where the
• 20:31
  dealership was. It wasn't like they're charging
• 20:32
  you because the dealership was there.
• 20:33
  It was. It was they're.
• 20:34
  Charging you the Santa Monica. Rate.
• 20:36
  It was an address in a city that I don't live in.
• 20:38
  And I was like, huh, yeah, once I figured that out.
• 20:40
  And then they were gonna charge the higher rate, but then the
• 20:42
  financing, get the money, remit the the proper amount to the
• 20:45
  state of where I lived in and then keep the difference.
• 20:47
  I marched into the finance manager's office, who I had not
• 20:49
  met up until this point, and told him very clearly that I
• 20:51
  knew what he was doing. And then if he kept doing it, I
• 20:53
  was going to call the FTB. And then he should, you know,
• 20:56
  maybe stop and give me. FT BS California tax the.
• 20:58
  The Franchise Tax Board, Yeah, right.
• 21:00
  And maybe give me the difference of what he was going to screw me
• 21:04
  by and and take that off the purchase price of the vehicle.
• 21:06
  And as if by magic, the vehicle got cheaper before I signed for
• 21:09
  it. It was really an incredible
• 21:10
  thing. Couple 1000 bucks right?
• 21:11
  Yeah, a couple 1000 bucks. But just the fact that they were
• 21:13
  doing this and yeah, and hiding that, I was appalled.
• 21:16
  I was like, Oh yeah, of course you guys are a dealership.
• 21:17
  This is what you do. And they probably do it
• 21:19
  regularly. Without a doubt, do it without a
• 21:21
  doubt. And that that was one of the
• 21:22
  more nuanced ones. The other one that that I just
• 21:25
  it it it breaks my brain that they get away with this is when
• 21:28
  you're doing a lease and lost something called the money
• 21:30
  factor. You look at the money factor,
• 21:31
  you're like, oh, we're gonna charge you A-25 money factor,
• 21:34
  right? That's great.
• 21:35
  What a great deal. It's like 2.5%.
• 21:36
  People will say this, it's not 2.5%, right?
• 21:39
  They're saying the money factor is point OO25 to get a rough
• 21:42
  approximation of what that is in an APR.
• 21:44
  That is 6%. You got to multiply, yeah, you
• 21:46
  got to multiply by 2400, which gets you to about 6%.
• 21:49
  So that point OO25 money factor is actually about a 6% APR, give
• 21:54
  or take. I'm not familiar with this
• 21:55
  phrase though. The money factor What?
• 21:57
  Every lease you've ever seen. Every.
• 21:58
  Every lease and. Has something called the value
• 22:00
  factor. That is the only thing it has.
• 22:02
  It doesn't have an interest in it.
• 22:03
  You'll have you'll typically have the the capitalized cost
• 22:05
  and the money factor and residual.
• 22:06
  But it's just a different way of saying.
• 22:08
  Interest it's in how they calculate the lease 'cause
• 22:10
  you're only paying on the depreciation of the vehicle.
• 22:12
  So it's not an exact approximation for APR, but
• 22:15
  effectively it's APR. But the, the number looks nice
• 22:18
  and small and I think most people sort of get interest
• 22:21
  rates and they go Oh well, 25 that's a great interest rate.
• 22:23
  Sure, if it was interest, right, but it's not right.
• 22:26
  It's actually 6% wow so and, and, and, and also same thing
• 22:29
  with with money factors. You want to shop those around.
• 22:31
  Typically if it's anything other than manufacturer financing, OK,
• 22:35
  you're you can probably get a better.
• 22:36
  Rate if you shop. Good to know, but at least they
• 22:38
  aren't packing your payments. That's yeah, right.
• 22:40
  I see you've been a while since you bought a car that, that is
• 22:42
  exactly what they do, right? We've talked about some of the
• 22:44
  stuff previously, interest rates or money factor, or maybe they
• 22:47
  add on the LoJack or the extra tint on the windows or whatever.
• 22:51
  You'll see them throw things in because if you've already told
• 22:54
  them what you're expecting to pay, So if you say Oh well, your
• 22:56
  payment's 5:40, well, they may be able to get you financing
• 22:59
  based on your credit for 490, right?
• 23:01
  For that same people, the same car, Sir, they're going to
• 23:03
  quote, throw in like some service contract because you're
• 23:06
  a nice guy, but really all they're doing.
• 23:08
  Is happens to be 10 bucks a month.
• 23:10
  Pulling out more cash. Yeah, exactly.
• 23:12
  Just to to pull that out, right. So they created this gap and
• 23:15
  they're going to shove something in there to take that out.
• 23:17
  Happens. All the time.
• 23:18
  That's why magically your price does always come out to be
• 23:20
  whatever you said your right monthly payment could be.
• 23:22
  Or a couple bucks less like what we came in less.
• 23:24
  So you want to know the buy rate, You want to know the
• 23:26
  contract rate. You'll also see this thing that
• 23:28
  breaks my brain where the upfront cost, you'll see this on
• 23:31
  leases and on purchases. People don't factor that in.
• 23:34
  They're like, Oh well, as long as my payment's less than 300
• 23:36
  bucks a month, I'm I'm happy. They're like, OK, well, so for
• 23:38
  $6000 drive off, you can have that.
• 23:40
  And I'm like you got to put that across the term of what you're
• 23:42
  paying of. Course, of course and
• 23:44
  technically. You need, you need to really
• 23:45
  think about the future value of that money.
• 23:47
  But that's a level of of conversation most people aren't
• 23:49
  going to be able to to get their brain across.
• 23:51
  On a three-year lease, you probably don't have to worry
• 23:53
  about too much exact rate of inflation, how it applies, and
• 23:55
  how it affects the cost of money.
• 23:57
  But you could have done something else with that money.
• 23:58
  But. You do want to look like what is
• 23:59
  my upfront cost? What is what is my drive off
• 24:02
  cost? Yes.
• 24:02
  And then what is with tax? What is the entire amount that
• 24:05
  I'm paying over the term of? That's exactly what I.
• 24:07
  Do and then divide that by the number of months of the lease
• 24:10
  and now you can. Now you have an apples to apples
• 24:11
  comparison if you want to go look at other.
• 24:13
  Cars, the total of your drive off, the total of all your
• 24:15
  payments, add that up, that's your total cost of ownership
• 24:17
  over that term. Yeah, divided by the term that
• 24:19
  is a normalized price. Now that you're paying again,
• 24:21
  it's not perfect, right, but it's a pretty good.
• 24:23
  Approximation, but at least now you can compare other cars that
• 24:26
  have different drive off numbers.
• 24:27
  When? When I I bought that vehicle at
• 24:29
  1.3%, they asked how much money I'd like to put down.
• 24:31
  I said -1 $100,000, please. Sure, that was my answer.
• 24:35
  I didn't know you can do that and.
• 24:36
  The guy just looked at me and I was just like, well, you're
• 24:38
  gonna give me a 1.3%? I want to put down as little
• 24:40
  money as possible. Yes, take me negative, please.
• 24:43
  I would very much like that loan.
• 24:44
  You really want to know up front what those are.
• 24:46
  And it's not very hard if you just know the the total drive
• 24:49
  off of some of which you can't move.
• 24:50
  You have some licensing fees. Yeah, that's gonna be state
• 24:52
  mandated. You can't change those.
• 24:53
  But the point is it'll be the same across all the vehicles and
• 24:56
  dealers that you're comparing, right?
• 24:57
  So that stuff will normalize itself out.
• 24:59
  And now you can actually look at the pieces, the levers that
• 25:01
  they're moving. Around my favorite part of the
• 25:02
  dealership experience is when the salesperson has to go ask
• 25:05
  the manager a question to see if they can do this or that.
• 25:07
  Yeah, and then they go and disappear for about 1/2 an hour.
• 25:09
  I follow them sometimes they really don't like that.
• 25:11
  I mean, the, the, the real solution on this, by the way, is
• 25:13
  like, once you're there, you've already given up half of your
• 25:16
  leverage by being there, maybe more, right?
• 25:17
  Don't go there. Talk to the Internet.
• 25:19
  Desk. Yeah, they have an Internet
• 25:20
  sales guy you can just call up and you can do all this over the
• 25:22
  phone. If there are only games to screw
• 25:24
  with you, why would you buy that vehicle from them unless they
• 25:26
  only have one of one, That's the only place you can get it.
• 25:29
  Why are you doing this dance right?
• 25:30
  There's no point. My favorite people walk in and
• 25:32
  then proudly announced the walk into the ship.
• 25:34
  I am buying a new car for my wife today and I'm like.
• 25:37
  Wow, we are not leaving this dealership until we have the.
• 25:41
  Car until I get severely screwed by one of you like why would you
• 25:45
  do that for most people this is the second biggest purchase of
• 25:49
  their life so you'll and you'll see this with like fees right
• 25:52
  like acquisition fees we talked about this earlier they'll just
• 25:54
  mark them up call the bank and find out no going.
• 25:58
  In sounds like it's a fee for me to acquire the car.
• 26:00
  It's not. It's a fee that goes to the bank
• 26:02
  for initiating the loan. Yes, typically on your home
• 26:04
  you'll see it called an origination fee, right?
• 26:06
  It's, it's the start of the loan.
• 26:07
  So you're paying a fee to them for the loan and almost all of
• 26:11
  them are going to have. It's the basically the paperwork
• 26:13
  for the loan, the cost of putting together.
• 26:15
  And some of the spiff comes out of that.
• 26:16
  So whatever they pay back to the dealer comes out of that.
• 26:19
  So you at least want to know that number and I strung is just
• 26:21
  going in having a backup. You want to know what your
• 26:23
  credit union or bank would give you that same financing and it
• 26:26
  gives you some leverage because there is some room in it.
• 26:28
  It's not just is what it is. There is some room in that and
• 26:31
  they might tell you that the bank fee is 1500 bucks when in
• 26:34
  actuality it might be 1000 bucks and they're just pocketing the
• 26:36
  $500 difference. Sure, sure.
• 26:37
  How nice of. Them So get financing for your
• 26:39
  car from your credit union or your bank before you go in to
• 26:42
  negotiate with the dealership. Is that what you're saying?
• 26:44
  The lender sets the real rate. The dealer will set the rate to
• 26:46
  whatever the hell they want. That doesn't matter.
• 26:48
  You want to know what the lender?
• 26:49
  Think they can get away with? Whatever they can get away with.
• 26:50
  I think most people buying a new car are going to be buying with
• 26:53
  manufacturer financing because that's the better deal and they
• 26:56
  want the manufacturer wants to move cars.
• 26:57
  So they finance most of these. If you're buying from VW
• 27:00
  financing or Toyota financing, their acquisition fees are well
• 27:02
  known. They're they're usually
• 27:03
  published. You can find what that number
• 27:05
  is. If you're buying from a bank,
• 27:06
  it's a little harder to find, but you can look up the bank and
• 27:09
  find out and again, go in with your own.
• 27:10
  If you bank with B of A, know what B of A is willing to give
• 27:13
  you a loan at, and now you've got a place to start from a
• 27:15
  negotiation not trusting the dealer that is almost certainly
• 27:18
  lying to. You, at least I, don't play most
• 27:19
  of these tricks when you lease. Have you been listening?
• 27:22
  Are you even here right now? What do you what do you mean
• 27:24
  when you lease? What's going?
• 27:25
  On oh when you lease it's fine. They they really love it when
• 27:28
  you lease. No, when you lease it's like a
• 27:29
  free car. Yeah, there's nothing.
• 27:30
  No, I'd argue leasing is even harder for people to wrap their
• 27:33
  brains around. At least with with a straight
• 27:34
  purchase, you have a price that typically doesn't have a lot of
• 27:37
  ways to hide, right. There's a number, yeah.
• 27:39
  And then there's a financing rate and the term and that's it,
• 27:42
  right. You might have a little bit of a
• 27:43
  loan reduction up front. But that's it.
• 27:45
  I should put a big asterisk here and explain to the listeners
• 27:47
  that mostly through my adult life I have leased cars, as you
• 27:51
  should, and there's some tricks to that because I own a
• 27:53
  corporation. The corporation is actually who
• 27:55
  is leased and there's some tax benefits to that, and we have
• 27:57
  professionals who actually are negotiating those leases for us.
• 28:00
  Yes. It's not like I'm going into a
• 28:02
  car dealership and personally signing a lease for a car.
• 28:05
  There are reasons to do leases if you're an individual, though
• 28:08
  not a corporation. Probably not.
• 28:10
  I mentioned earlier that most people, their vehicle is their
• 28:13
  second largest purchase of their life.
• 28:15
  It is also the the biggest depreciating asset they're going
• 28:18
  to buy. The first biggest being the
• 28:20
  purebred dog they buy. Yes.
• 28:22
  That's. What I meant they don't realize
• 28:23
  the end of that dog's life. The last quarter of that dog's
• 28:25
  life is going to be the most expensive time you've ever
• 28:28
  survived. You are going to pay every
• 28:30
  dollar you have. Very, very few vehicles are
• 28:33
  going to appreciate in any normal period of time,
• 28:36
  especially if you are driving them and using.
• 28:38
  Of course they are all depreciating.
• 28:40
  For most people. Especially if you want a new car
• 28:43
  every so often and you don't want to be bothered with fixing
• 28:45
  it yourself or having someone maintain it, then leasing is
• 28:48
  probably a good deal for you. We could debate that some other
• 28:50
  time. When you get into leasing, the
• 28:51
  number just get a little harder for a lot of folks I think to
• 28:54
  understand because now it's not just a purchase price.
• 28:56
  You have a capitalized cost and there might be a gross
• 28:59
  capitalized cost or there might be the actual cap cost that you
• 29:03
  have negotiated. You have a residual value, which
• 29:05
  is what the vehicle is going to be worth, at least based on
• 29:08
  their sort of actuary table at the end of the lease.
• 29:10
  You've got to worry about miles and overage.
• 29:12
  You're going to pay some rate for going over on those miles.
• 29:14
  There's more moving pieces to it.
• 29:16
  I'm not saying you shouldn't do it.
• 29:17
  I'm just saying it's a little harder for folks to understand
• 29:20
  that. I do suspect I have no data to
• 29:22
  back this up, but I do suspect that for the average person,
• 29:24
  they're probably going to get more screwed by the dealer in a
• 29:27
  lease in a lease than they are in a purchase.
• 29:29
  More places to hide stuff. You have lots of tax benefits if
• 29:31
  you're a corporation and you're leasing a car that you don't
• 29:33
  have as an individual. So if you're just an individual,
• 29:36
  probably leasing is not for. OK.
• 29:38
  And by the way, so now you've already negotiated many, much of
• 29:40
  this with your salesperson, hopefully online before you've
• 29:44
  come in and you've gotten through the options.
• 29:46
  You don't want the LoJack, you don't want the VIN etching.
• 29:48
  You've already fought what feel like numerous battles on the
• 29:50
  floor of the Coliseum, and you somehow you've made it this far.
• 29:53
  And then they take you. Tired, dishevelled.
• 29:56
  You just want to go home. You're hungry, sure.
• 29:58
  And they then put you into the finance.
• 29:59
  Office the box. And here's where the fun begins,
• 30:01
  right? So you may have already
• 30:03
  negotiated interest rate. You might be doing that with the
• 30:05
  finance person, but then they really bolt on all the extra
• 30:07
  garbage you don't need. Like, for example, GAP
• 30:09
  Insurance. This is my favorite.
• 30:11
  They're like, oh, you got to have GAP Insurance.
• 30:12
  Explain what GAP Insurance? GAP Insurance I do believe is
• 30:15
  valuable. GAP Insurance covers the
• 30:17
  difference between what the vehicle is worth and what you
• 30:19
  own on the vehicle, usually for some some period of time.
• 30:22
  Which is of interest when you buy a new vehicle?
• 30:24
  No, but I mean it's it's of interest if you get into an
• 30:26
  accident. And you total loss, Yeah, if you
• 30:28
  get a total loss. So let's say you buy a new
• 30:29
  vehicle for $50,000. The moment you walk out that
• 30:32
  door, that vehicle is not worth 50 grand.
• 30:34
  It's worth some number less than 50 grand.
• 30:36
  Sure, let's be aggressive and say it's worth 10% less.
• 30:38
  So it's now worth 45 grand. And let's say maybe another six
• 30:40
  months, it might be worth 20% less because who's going to pay
• 30:43
  new price of a vehicle minus a month of use when you just go
• 30:46
  buy the new vehicle? So now you've had your $50,000
• 30:48
  car for six months, Maybe it's worth $42,000.
• 30:51
  Like, that's what Mark good value is sure for that because
• 30:53
  nobody really cares that you got the sparkly blue.
• 30:55
  Like you wanted the sparkly blue if you're happy to pay for it.
• 30:57
  So now you own $49,000 on that vehicle.
• 31:00
  And if you're in a total loss, you still owe 49 grand.
• 31:03
  Your insurer may only pay out 42.
• 31:05
  Yeah. So now you're responsible for
• 31:06
  the difference. And that's where GAP Insurance
• 31:07
  covers. It by the way, that amount of
• 31:09
  money is what you can probably save if you're willing to buy a
• 31:12
  car that somebody bought 6 months ago.
• 31:14
  And 100% of sites you can go to where you can find cars so that
• 31:17
  are used cars but they've only been used for like 6 months.
• 31:19
  You just take over the payments. By the way, that's the magic
• 31:22
  unlock, especially if you like premium vehicles.
• 31:24
  There's this weird little Gray area.
• 31:26
  It's getting smaller because of people like me where you can get
• 31:28
  a CPOA certified pre owned. This is typically only for
• 31:32
  luxury vehicles. But not pre owned even for three
• 31:34
  years. You can get them that are pre
• 31:36
  owned for six months for tiny amounts of time.
• 31:38
  I'm saying you get a CPO and if you buy it right, if you buy it
• 31:41
  typically less than a year old, they'll add on to the warranty
• 31:44
  for more periods. You get a longer warranty than
• 31:46
  had you bought it new, yes. So now you get the depreciation
• 31:49
  benefit. Somebody takes a depreciation
• 31:51
  hit and you get a longer warranty.
• 31:53
  The only difference is somebody else farted in it before you.
• 31:56
  That's the only difference. Who cares?
• 31:58
  The point is GAP Insurance. I have yet to find an insurer
• 32:01
  that doesn't offer GAP Insurance for for pennies on the.
• 32:04
  Or nothing. GAP Insurance should cost a very
• 32:07
  tiny amount of money. Call your insurer if you're
• 32:09
  buying a new car and ask them what GAP Insurance costs and it
• 32:12
  is usually a number to be measured in like single digit
• 32:14
  dollars per month and that's it. Unless you're somebody who's
• 32:17
  gotten into a lot of accidents, if you have a history of a lot
• 32:19
  of accidents, they're gonna have to charge you more for the GAP
• 32:21
  Insurance. The dealer's going to sell you
• 32:23
  GAP Insurance for hundreds of dollars.
• 32:25
  Oh, yeah, yeah, right. It's all.
• 32:26
  It's just. Purely 300 bucks.
• 32:27
  Or whatever their extended warranty is, or the tire and
• 32:30
  wheel protection or whatever else they're trying to mark up.
• 32:32
  You thought you already ran the gauntlet, right?
• 32:34
  Because you already got rid of the VIN etching and you already
• 32:36
  got rid of the, you know, whatever the the LoJack system
• 32:38
  was. But no, no, there's more at the
• 32:40
  finish line. And that's that finance office
• 32:42
  where they're just upselling and all this other stuff that they
• 32:43
  now consider part of quote finance.
• 32:45
  But. They're not done.
• 32:46
  Oh, no, there's more. I thought they were.
• 32:47
  Done. There's one other big component
• 32:49
  to this that we've neglected the one of the the big boxes, right.
• 32:53
  Remember we had four boxes. Sure.
• 32:54
  You had the car price. Yeah, you had the financing.
• 32:56
  Yeah, you had the add-ons. What was the 4th all?
• 32:58
  Places where they gouge you, yeah, and always I'm grateful.
• 33:00
  When you get gouged in those areas, I'm always grateful.
• 33:02
  Well, at least they are going to gouge me on the trade in value
• 33:04
  of my car, my own. Car OK trade insurance?
• 33:06
  This to me is the most obvious one.
• 33:09
  I really think this is even easier than knowing the price of
• 33:11
  the vehicle going in. Especially in 2026.
• 33:13
  They are not going to give you what your car is worth even at
• 33:16
  wholesale period, full stop. Sure.
• 33:18
  I've never seen a dealer do this.
• 33:19
  Especially if they've got the deal pending on the new car that
• 33:22
  you you're salivating over now. Because they've been yes, you've
• 33:25
  been in the dealership for 6 1/2 hours.
• 33:27
  You've already lost 3 lbs of water weight.
• 33:29
  Yeah. And so you're shocked when you
• 33:30
  find out your car is only worth $500 that you just bought 2
• 33:33
  years ago. Exactly.
• 33:34
  This can be hard, right? You've got some indexes like the
• 33:37
  Kelley Blue Book that will sort of give you a rough sense, but
• 33:39
  there's a range in that. Listen, all you have to do, if
• 33:41
  you're thinking about buying a new car, before you go there, go
• 33:44
  to CarMax. Yeah, right.
• 33:45
  Go to CarMax, give your car, it'll take like 30 minutes.
• 33:47
  They will give you a quote that is good for a couple weeks
• 33:50
  typically. Take that with.
• 33:51
  You the quote you're going to get from CarMax is probably
• 33:53
  still 2 grand or so less than you could make if you sold it
• 33:56
  yourself, but you're going to do at least $2000 probably worth of
• 33:59
  work if you're going to sell it yourself.
• 34:01
  Maybe, maybe not. My point is you at least have
• 34:03
  some leverage and it's not just this black hole of price when
• 34:06
  you go to the dealer and you negotiate everything.
• 34:08
  And, and I would suggest leaving the trade until the very end and
• 34:11
  you get all the way to the end of the finance guy and they go,
• 34:13
  oh, do you want to do a trading? You're like, yeah, sure.
• 34:14
  Carfax is offering me $27,486. If you guys can do that, great.
• 34:18
  Otherwise, no, that's it. Won't be able to, period.
• 34:20
  Full stop. CarMax, let's let's back up and
• 34:22
  say Primax is making their money.
• 34:23
  They're making their money on finance.
• 34:24
  That's where I think they make most of their margins on the
• 34:26
  financing. Yes, yeah.
• 34:27
  So they filled this weird gap where I don't know this for
• 34:30
  certain, but my observation of the industry is if you go buy a
• 34:33
  new car, you're getting vehicle manufacturer financing.
• 34:35
  Those are typically greatly subsidized financing to push new
• 34:38
  cars from the manufacturing, The manufacturing, they typically do
• 34:41
  not offer that unused vehicle, sometimes on CP OS, but not on
• 34:44
  the strict used vehicles. So if you're gonna go get used
• 34:46
  vehicles, you have to get financing from someone else,
• 34:49
  typically a bank, your credit union, something like that.
• 34:51
  Those are gonna get marked up by those dealers trying to find
• 34:54
  margin on a cheaper car because it's a used car.
• 34:56
  I think CarMax said, hey, you know what, we can normalize
• 34:58
  this, get economies of scale, finance it ourselves and make a
• 35:01
  fun of money. So the last report I saw last
• 35:03
  fiscal quarter, they did 170 million bucks just in interest.
• 35:08
  Sure, across their whole network they're selling something like
• 35:10
  800,000 cars a year. That's the CarMax business is,
• 35:13
  is basically they're they're doing banking.
• 35:15
  That is the CarMax business. So I'm not saying you can't get
• 35:18
  a better price than CarMax. I'm saying that gives you a
• 35:20
  number that would you would start to negotiate from, gives
• 35:23
  you a floor with a dealer. And if they say no, Oh yeah,
• 35:24
  we're not going to make any money on it, great, we'll take
• 35:26
  it to CarMax no problem. And like I suggest, this is a
• 35:28
  bit of an aside, but if you have a lease and your lease is coming
• 35:31
  up a month before your lease ends, go to CarMax, get a quote,
• 35:35
  they're going to give you a number.
• 35:36
  If that number is higher than the buyout, right hand your car
• 35:39
  over to CarMax because they'll just give you a check.
• 35:42
  There's no benefit in taking it back to the dealer.
• 35:43
  By the way, they do this all the time.
• 35:45
  They're used to doing it. They'll do all the paperwork for
• 35:47
  you, It's done. They'll just give you a.
• 35:49
  Check. It might only be a couple grand,
• 35:50
  but it's a couple grand for doing nothing like you.
• 35:52
  Might as well. Why give that back to the dealer
• 35:54
  and they're just going to screw you on the next car anyway.
• 35:56
  You can tell where my my passion lines here.
• 35:58
  I can tell and I'm excited when we're going to do the episode
• 36:00
  about dealership service. Oh, yeah, yeah, yeah, that's
• 36:03
  all. Yeah.
• 36:03
  OK, You might have to. That might be a double length
• 36:05
  one right there. So there's so much.
• 36:06
  Technology in cars these days, it's a good thing that at least
• 36:09
  they're not screwing you on the technology because they could
• 36:11
  really scream. And that's the new frontier,
• 36:13
  which now like it's hard for folks to wrap their brain around
• 36:16
  de etching a window with a VIN, right?
• 36:19
  Like a relatively straightforward physical
• 36:21
  process. Imagine they're in the
• 36:22
  technology grifs. So my favorite is like opt out,
• 36:26
  like oh, hey, we want to secure your digital footprint.
• 36:27
  You know, you're signed a loan here, loan documents, that's
• 36:30
  that data is going to be out there for $300.
• 36:32
  We'll make sure that that you're the manufacturer won't sell your
• 36:35
  data. OK, that's cool.
• 36:36
  They probably do that for 300 bucks.
• 36:37
  You just bought a car from the manufacturer and asked the
• 36:39
  dealership. Be a shame if your data got out
• 36:41
  in the. World.
• 36:42
  Hey, Vinny, this guy over here says he doesn't need the data
• 36:46
  protection policy, and he's just over there, like putting all
• 36:48
  your data into Craigslist. Like.
• 36:50
  Yeah, yeah, exactly. Yeah, it's 100.
• 36:51
  Percent extortion. Such extortion.
• 36:53
  You can do it yourself with like 15 seconds of Google Foo, right?
• 36:57
  What? What are you doing?
• 36:58
  Why are like? Most apps most car apps have
• 37:01
  from the manufacturer have some way you can opt out of them
• 37:04
  selling your data. Yeah, the, and then you'll see
• 37:06
  this, like they'll package this up in all sorts of different
• 37:08
  ways. My favorite is you'll see some
• 37:09
  menu, right? They'll dumb it down for you.
• 37:11
  You'll get some menu that'll be like here's the silver, gold and
• 37:14
  platinum protection options. OK, the option you want is on
• 37:17
  the backside of the page and it says D none of the above basic.
• 37:20
  That's the one you want, right? You just want to take that thing
• 37:22
  and put it in the shredder and just keep doing it until they
• 37:24
  stop handing it to. You at least The good news is
• 37:26
  the cars rule in the US is looking out for us so we don't
• 37:29
  have to worry about any of these scams.
• 37:30
  I love your optimism. Yes, there is a alternate
• 37:34
  timeline where that would be true.
• 37:36
  However, the timeline that we're on, Sir, that is not true.
• 37:40
  On Earth 1. Yes, a couple of years ago the
• 37:43
  FTC did put in this this quote car rule right now, I love this.
• 37:47
  Sometimes I just I love the names of these these laws
• 37:49
  they're trying to put in. This was the combating auto
• 37:52
  retail scams. That's the name of the rule.
• 37:54
  Sure. Which again, a great name who's
• 37:56
  like yeah, I I'm really against the combating auto retail scams.
• 38:00
  I wish there was more retail. Scams.
• 38:01
  Well, car dealerships are exactly.
• 38:03
  That they're against that. Which means that your local
• 38:06
  television station is 'cause that's how they're making their
• 38:08
  money on those auto dealership acts, yes.
• 38:11
  And your local politician who's making their right, who, who's
• 38:13
  getting elected right, based on that local news station, who's
• 38:15
  running their running their, their promos.
• 38:18
  Listen to this estimate from the FTC.
• 38:20
  The FTC estimated that this rule would save consumers nationwide
• 38:24
  about $3.4 billion every year and wait for it 72 million hours
• 38:31
  of shopping for vehicles. That was their estimated savings
• 38:34
  from this. What percentage of that is just
• 38:36
  waiting for them to go talk to the sales manager 2.
• 38:38
  Thirds of it is just me waiting for the guy to come back with
• 38:41
  whatever the options are. No, this is insane to me.
• 38:44
  My understanding of the way that this guy got knocked down.
• 38:46
  So it went to an appellate court last year, 2025, and ultimately
• 38:50
  the FTC withdrew it. And the reason was their
• 38:52
  dealership associations where they ultimately got this wasn't
• 38:55
  based on like, oh, this, you know, shouldn't be legal or this
• 38:57
  is bad for consumers. No, no, they got it on a
• 38:59
  technicality because the FTC didn't put it out with enough
• 39:02
  advance notice to get comment from the folks that it was
• 39:05
  affecting, which, generally speaking, I would think is a
• 39:07
  good thing. But OK, start again, then with
• 39:09
  the with the the law start again and and this time follow the
• 39:12
  actual. Rules, but the point is you
• 39:14
  don't have legislation at the national level to protect you.
• 39:17
  Some states by the way, have said, OK, we're not waiting for
• 39:19
  the Fed, we're going to go ahead and do this ourselves.
• 39:21
  You are seeing something of course, but generally speaking,
• 39:23
  I would say don't rely on regulation protecting you here
• 39:27
  right now. The best advice I can give you
• 39:28
  is to to know the numbers when you go in.
• 39:31
  Everything online is your friend.
• 39:32
  You can find as, as we've talked earlier, the MSRP, the market
• 39:36
  rate, which may be be less or more than MSRP.
• 39:39
  You should be able to know acquisition fees we mentioned
• 39:42
  earlier, you should be able to know all of this at least have a
• 39:44
  general sense of just how how much they're trying to screw you
• 39:47
  when you get. There which will help you
• 39:48
  prevent them from screwing you when you get there.
• 39:50
  Yeah, well, I also you don't go there, of course, right.
• 39:53
  Do it online, use the Internet desk.
• 39:55
  Every dealership that I've looked at in the past, I don't
• 39:58
  know N years, 10-15 years has had an Internet desk.
• 40:01
  Those people will actually do work for you if you call them
• 40:04
  and say hey. Let's get this all figured out
• 40:06
  ahead of time. Yes, exactly.
• 40:07
  And you can call two or three or four or six of them, as you
• 40:09
  should. You can have them all work on
• 40:11
  getting you the same car and whoever gets the best price.
• 40:13
  Wins. The point is you want to
• 40:14
  negotiate the before you go in, right?
• 40:16
  And having all of your data allows you to do this right,
• 40:19
  whether you're in person or or online, whatever.
• 40:21
  Knowledge is power is what you're saying.
• 40:23
  So the point is there, there's a way to get these done where
• 40:25
  you're not getting entirely screwed.
• 40:27
  All right, we have to get out of here quickly before we do.
• 40:29
  Have you seen it read anything good this last week?
• 40:31
  Oh yeah, I have. And I'm not going to plug
• 40:33
  Coachella again. I know that's what you're all
• 40:35
  thinking. Shocking.
• 40:35
  Shocking to tell. You 2 weeks in a row was enough
• 40:38
  in my opinion, which is of course the only right one.
• 40:41
  Second only to the Olympics. Yes, I think April is the best
• 40:45
  time for back-to-back amazing competition in sports.
• 40:48
  Because both the Dodgers and the Lakers are still playing.
• 40:51
  This is my recommendation. You can do your recommendation
• 40:54
  afterwards. No, I'm going to plug the NHL
• 40:57
  playoffs. Yes, because it is the best
• 41:00
  time. It's just it's the fast-paced
• 41:03
  back-to-back action. This year is no exception.
• 41:05
  Now for the record, my team is not in the playoffs this year.
• 41:09
  They haven't been for a decade. Now mind you, this is the
• 41:12
  Detroit Red Wings. They were most recently up until
• 41:14
  2016. They were in the playoffs for 25
• 41:16
  seasons straight. Sure.
• 41:18
  Which I think is the second or third longest run in the NHL.
• 41:21
  What changed? Did they get new ownership?
• 41:23
  No super cheap or what? Nope.
• 41:24
  Same ownership. They're rebuilding.
• 41:26
  That's what we like to tell ourselves.
• 41:28
  They're. Yeah, while they're playing
• 41:29
  golf. Yeah, they're rebuilding.
• 41:30
  So they haven't been in for a decade, which is the second
• 41:33
  longest drought behind, I think only the Buffalo Sabres.
• 41:36
  Why that team still plays, I have no idea, but that's how
• 41:39
  long it's been since the the Red Wings have been in the playoffs.
• 41:42
  Now. Also bad news, my second team is
• 41:45
  also no longer in it. The Kings.
• 41:46
  They were knocked out in four straight to Colorado, which is a
• 41:48
  team that I still haven't forgiven for rearranging Chris
• 41:50
  Draper's face 3 decades ago. The point is, amazing hockey is
• 41:54
  super fun to watch. You get a couple weeks of
• 41:56
  nonstop games, multiple games a night.
• 41:57
  It's just incredible and I love it.
• 41:59
  I never take full advantage of it, but you all should watch
• 42:02
  some hockey in the coming couple of days.
• 42:04
  It's a lot of fun. Exactly what I need is more
• 42:05
  sporting events. More sports while you're at the
• 42:07
  Dodgers game, you can have the the hockey on in front of you on
• 42:11
  your phone. I can.
• 42:11
  Feel the cold floor while I'm at the Laker.
• 42:13
  Game. That's true.
• 42:14
  That's true. You are there.
• 42:15
  Yeah. The floor.
• 42:16
  Underneath is the ice, and you can feel when the ice is turned
• 42:19
  on. It's cold.
• 42:19
  Alright, how? About you What have you seen?
• 42:20
  2019's Ford V Ferrari is driven by a high octane grit and
• 42:24
  captures the relentless pursuit of automotive perfection.
• 42:27
  Since that's what we're talking about.
• 42:28
  Matt Damon stars as visionary designer Carol Shelby, who teams
• 42:31
  up with the brilliant but volatile British driver Ken
• 42:33
  Miles, played by Christian Bale. Cast by Henry Ford 2 to the
• 42:37
  throne Ferrari's racing dominance, the duo battles
• 42:39
  corporate interference and engineering limits to build the
• 42:42
  revolutionary GT40. The film peaks during the
• 42:44
  grueling 196624 hour of Le Mans, where the visceral roar of
• 42:48
  engines and high stakes maneuvers brings the track to
• 42:51
  life. Miles drops the hammer, pushing
• 42:53
  the car beyond its theoretical breaking point trying to set a
• 42:55
  horse record. It's a master class in technical
• 42:58
  precision and raw human spirit, proving the championships are
• 43:01
  one in the garage as much as the cockpit.
• 43:03
  It is a delightful, delightful movie.
• 43:05
  It's so fun. Ford V Ferrari streaming
• 43:07
  everywhere now. I find it so ironic that you're
• 43:10
  plugging Ford V Ferrari when one I'm the guy that loves cars, 2
• 43:13
  the guy that does endurance car racing.
• 43:15
  Push the button on music. And yet somehow you're the guy
• 43:17
  plugging this. I feel like I'm really off my
• 43:19
  game here. The car episode.
• 43:20
  It's a really great film. I was just this about two
• 43:23
  weekends ago watching the IMSO race.
• 43:24
  Which friend of mine drives in, which is like our sort of
• 43:28
  American ish version of like the Lamaze series.
• 43:31
  Yeah, ish. They do some long 24 and 12 hour
• 43:33
  races, but this is in Long Beach for a 2 hour race, which was
• 43:36
  lovely. There's so much more fun than
• 43:37
  short Sprint races. I really enjoyed.
• 43:38
  Them that is the episode. Thank you for joining us for all
• 43:40
  this nonsense. Truly terrible podcast from the
• 43:43
  awful company. This is on the web at Nonsense
• 43:45
  dot Productions. I'm Suji.
• 43:46
  Little I'm Jeff Parker. If you like this program, please
• 43:48
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• 43:57
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  SmartThings and Google Assistant.
• 44:09
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• 44:11
  We'll be here every Tuesday and Thursday mornings.
• 44:12
  For more nonsense, please join us.
• 44:27
  I do have this question in my mind, how long is this car going
• 44:29
  to last? And I think the answer might be
• 44:31
  forever. I've been to a lot of junk
• 44:32
  yards. One time I saw a Toyota 1 and it
• 44:34
  was just in an accident. That was it.
• 44:36
  They never die. They go forever.
• 44:37
  But I want an electric car. So you're saying, like
• 44:40
  computers, this is not going to fall apart, I'm going to just
• 44:42
  get bored? With yeah, if you truly want an
• 44:44
  EV, you are going to need to have Vinnie come over and steal
• 44:47
  your Toyota. That's the only way you're going
• 44:49
  to get out of it. That's it.
• 44:49
  Otherwise it's going to run forever.
• 44:51
  What is the deal? Japanese are incapable of doing
• 44:53
  anything less than than a 9 1/2 out of 10.
• 44:54
  They're just incapable of they just won't do it.
• 44:56
  But then they do it one day and then it ruins it for everybody
• 44:59
  else. Like whiskey.
• 45:00
  The Brits and Scots were good at whiskey.
• 45:02
  The Americans kind of got into it for a while.
• 45:03
  We half assed it and it's OK. And the Japanese were like, oh,
• 45:05
  we're gonna do this really well. And now some the best whiskey
• 45:07
  can buy is Japanese. I'm sure like we do the into
• 45:09
  pasta, it's over. Sorry, Italy, they're going to
• 45:11
  do it. It's inevitable.
• 45:13
  They do everything that they set their mind to, They do
• 45:15
  perfectly. It's in.
• 45:16
  They're in Asia though, isn't there pasta going to have to be
• 45:19
  called by law? Noodles.
• 45:20
  Noodles. It's the same thing, right Man?
• 45:22
  Not my blood. Pressures and I'm calling Vinny
• 45:23
  over to your house. Vinny, you call them noodles.
• 45:26
  Don't touch your Toyota though. I want him to suffer with that
• 45:28
  thing for the 10 years.