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Cars Are Getting Older. Technology Is Getting Smarter. Is Automotive Ready? · Automotive Informants

• IgniteUps.ai: All right, welcome everyone. This is automotive informants. Welcome back. We've got a pretty good lineup today as far as headlines and people to talk to that discuss these. We got Z Fred and Lou back. We got Zach back. we're ready to do this again. So let's let's jump right into it. R before we jump right in, two minutes, just so they didn't if the the peop most people didn't catch you last time because we had some video issues. But Fred and Lou, if you guys could just do a quick Intro for yourselves. that way everybody knows who you guys are. Fred and Lou: Absolutely. Well my name is Fred Lenarts. And I'm Lou Ramirez. And we are the co hosts and the co-creators of Car Guy Coffee Podcast and Media Company and also Certified Solutionaries. That's right. And solutionaries is something big, it's something unique. It's something that we are spreading across the country and there's thousands of people out there right now. Solutionaries creating definitions of that work. we're excited about that and we're excited to be on your show and to be able to share the great news of what's happening here, talk about some insights. that's what we do. We've been in the industry, both of us, for well over two decades ⁓ in ⁓ And now we're out here helping retail people get to the next level in themselves and society. With the show we promote the industry and encourage those that listen and with solutionaries, we're boots on the ground helping dealers, ⁓ helping end of dealership operate in a way ⁓ that definitely becoming of their brand and their mission. IgniteUps.ai: Awesome. Welcome. I'm I'm happy you guys are here. I l I love what you guys do in the industry and and the conversations that you guys have. I try to catch them as often as I see them. but let's get right into it. You know, we discussed headlines of the week. This week been a couple of them that were were pretty, you know, interesting to to discuss. But I know Zach, let's get started with the one you sent me yesterday. I think that was a pretty good topic, and ⁓ I'd love to jump right into that one. Zach Fritz: Yeah. That one's a really fun one, and it actually goes back to a study that started about two years ago with Kelly Bluebook talking about this analog resistance concept. We've seen it pop up all over social media, but people, especially Gen Z and millennials, are preferring older vehicles as opposed to buying new cars. So much so that KBB, yes, the same one who's in bed with the dealerships and they feed each other back and forth, had to go back and say, Well, what the hell's going on? and survey this so their dealers could then stock inventory on older vehicles. I've even seen it in my personal flips. Anything from two thousand to twenty ten right now, I can't keep in stock. Fred and Lou: wild, wild thing. And you know, it what's so funny You know, you talk about live what's happening right now. And we're over here at Beaux Art Ford, and a young lady here, ⁓ Grace Looney, the daughter of one of the owners, and she's she's College grad, Harvard grad, right? And she has a lot of friends. She she has her own company she started out that's that does Sunblock, and called Shiny Honey. I'm I'm throwing a quick shout-out to her. But why I'm about her is yesterday she was talking about one of her friends, well-to-do friends, that's actually a social media influencer that was like, No, only want to buy a CRV, but I want a 2000, 2001, 2002. ⁓ Model. of those, right? Weird s think that. Like we're looking at a twenty six year old vehicle in today's you know, with all the new technology, where are they wanting to go back to that? And to the to your point is that it's the way it to be and the way things are today, it makes cars just fall apart. Like it's constantly having, you know, lights come on and these things have to be looked at when you can get something like that and it's easy to maintain. So ⁓ that's pretty amazing that talking about that and that's actually happening right here at this store right I a picture of them in the car. ⁓ IgniteUps.ai: Well, it's talking about Gen Z specifically too, right? Like, ⁓ you know, before everybody was like the millennial buyer, this and that. Now we're, you know, Gen Z buyer and we're trying to, you know, talk about what they're doing. Zach Fritz: Yeah. Fred and Lou: It's good. And the the look at that and this is just, you know, me being a car guy and considering the market and what we're looking at and who's buying the way I ⁓ See it is that's also a car that we've managed to keep up. The average car that's on the road is old is older. because technology advanced, mechanics have gotten greater than ever, the technology to be able to project and to ⁓ say a vehicle needs is is way more in line now to be able to keep a person's vehicle physically on the road. and keep those older vehicles enough to be able to sell. Go back five, six, ten years ago, we didn't have the terms, we didn't have the looseness in lending that was available. So some of the stats are demographic, the millennial, the the Gen Z ⁓ buying these older cars. ⁓ would almost venture to say that's almost always been the case with every generation before us that we were the ones getting the older, more used of cars, but they were ⁓ a younger to us, they're a little older now, and they've able to sustain and they're at the price point that a new buyer could buy at and the lending is now available. You used to not have on a good retail Yeah. OEM branded what? Over a hundred thousand miles. Over a hundred thousand? Anything over ten years old? Anything like that. That wasn't anything that you would keep. Those were five hundred dollar pieces, right? You you're like, five because we gotta get it out of here. It's wholesale, right? in today's world, it's not wholesale anymore. It's it's gold. you know, it's it's like finding old, you know, like chipboards and have all the little pieces of gold in it. That's what they're looking at. ⁓ I to point, Gen Z people and I and I've been seeing it, they love even analog phones. They love they like going back to the old technology because it's ⁓ it's fun them, it's hip to them. them. They're learning some cool stuff from it. And they're doing things. They're you they're and because of the way that we have technology today, they can use the information that they're getting to tweak those things. And it's pretty cool. So it's it's interesting to see this whole shift. But to lose point, the average first car everybody still wants to spend what, five, six grand. That's how many times you've heard a customer come in, hey I'm looking for my daughter, I something five, six grand. I something five, six grand. But you know, these cars are out there now and they're and they're affordable and yet they're still priced a lot more than we would have priced them ten years ago on that same vehicle. But I IgniteUps.ai: Well, here's here's the thing too, like when you think about what's happened, you know, new car prices over fifty grand now. then the you know, couple that with, you know, the the twenty thousand dollar car is only makes up for like, you know, eighteen percent of th what's online today and used be a lot more, but because the new car prices have gone so high, but it kinda ties into this one Fred and Lou: ⁓ yeah. IgniteUps.ai: article that I I just ⁓ read about with ⁓ the Mitsubishi Mirage being like the most, you know, sought after little car because the it's doing a better job than the Camry and the Tacoma as far as reliability right now. So ⁓ it's kinda interesting to see that. Fred and Lou: The w why Respon would be. Why would that be? Right? The price point that vehicle is a different animal. It's a brand new car ⁓ so many other people can can jump into. ⁓ the five thousand dollar car is now fifteen to twenty grand, ⁓ And it maybe has more miles, maybe it's maintained a little better. But I also consider my son, my son who's in the market ⁓ now ⁓ is is weighing out his options. He's now got his first big boy job, he's making good money doing the right thing, but he's still rocking the same vehicle that he's kept alive since he first bought his first a a Chevy that done a great job with. It's still kicking and running. And yes, ⁓ loves that but I would venture to say that some of the millennials are saying, Yeah, I can get down with this analog. I'm so happy with new car. Thanks. You know what mean? And and he wants to he definitely wants the other technology that's available now. He wants all of that stuff. But when it comes time to Wilson, this is what that looks like. And and it's I sure love this stuff ⁓ You know what I mean? ⁓ IgniteUps.ai: Yeah. Can't afford it, right? Well, you think about what I mean, I I I told you guys this last time, Venezuela, right? Like there's a reason why Cuba stopped, you know, everything, you know, new cars, just all these, you know, tariffs, embargo, all this stuff that, you know, kept them to keep their c their older cars, and now, you know, the old the used car is getting even older. Fred and Lou: Yeah. That's exactly it. interesting. I know Lou was was in Cuba and he was telling me stories about all the cars that were there. So many mutants in Cuba. Like just put together cars, you know, because of that whole point right there. But yet they did it and they and they love it. They made it a a lifestyle, right? Like hey, these kinds of cars are unique here, you know, we have these, so it's pretty cool. IgniteUps.ai: I it's crazy. And Zach, you talk about this often because, you know, from a technician side, you know, what do you like, you know, are do you see more and more of those types of repairs on older cars as when when people when you were in the in the in the bays, were they getting older? Zach Fritz: Not pre COVID, post COVID, absolutely. Now, where I think this you know, my personal experience, I'm probably in my twenties as far as trading out cars over the past ten years. And so kind of gravitated from that newer, hey, I need car play, I need all this new technology, to I don't give a damn anymore. I would just rather have something that's reliable, there's parts everywhere, I can act I'm not sitting on back order and backlog from out of Germany or Asia or wherever the hell it's coming from. And think a lot of people are falling into that category. And I think the important thing to look at out of this study isn't, you know, hey, it's the price point of the cars, you know, whatever, because that's always going to exist. In fact I think it's going to exist even more over the next twelve months, especially with With the deportations happening, you're gonna see a lot of cars hit the market. And it's probably gonna wash all that out. Then you look at these cars in that price point. And then the average new car prices, nobody wants to pay that. Everybody's saying screw the market, screw the dealership, screw these big BlackRock owned companies that are overcharging and just raping and pillaging and are gonna what, shove eighteen percent APR over eighty four months down your throat when you don't need it. You just need it to be Mirage. IgniteUps.ai: Well here's here's here's a here's my challenge to that. So ⁓ the Mannheim just released a new index yesterday and said that the comparable use card was like say in twenty nineteen, it was a twenty thousand dollar car back in twenty nineteen is now twenty seven thousand dollars. So You know, i it's not so much that the new cars it's just now because there's the new cars have gone up so much, now used cars are are holding their value a lot more. And now that twenty seven thousand dollar car's probably wort a hundred thousand miles. It's crazy, right? Fred and Lou: and well, they're everywhere. I I I look I'm you know, I'm always looking and I don't know why, I just kinda just browse through, I check out local dealerships that where I live, see what kind of market they're doing, just kinda keep my ⁓ head in the game a little bit all the time. ⁓ You see that. You see thousand, ⁓ thousand dollar vehicle. You see one with ninety four thousand miles on it, twenty-eight thousand dollars still, you know, and it's it's a give it's a it's and I'm what I'm guessing in a lot of these cases, it's trade ins and we're giving value to it. So the values are going up, so they're trading it in, so we can't short them in a lot of cases, but at the same time, you know, see a lot of dealers having problems even making profit on that number. ⁓ You know, it's it's ⁓ it's it's it's so competitive, you know, because of all the that we're doing now. Dealers didn't do acquisitions ⁓ five years ago, right? It was very rare. Very few out there were doing it. Now they're all doing it. They all have departments for that, right? So now that they're doing that, it it's it's changing the way and the competition for acquiring vehicles from the public. So people are expecting more for these 'cause another store will give you five hundred more up street, or whatever it is. So the we the the idea is that, you know, the prices are always gonna go up. I mean we've seen this our whole careers, twenty plus years, you've seen it. The every year values are going up. we have not seen a car like you talked about, Chris, a moment ago Go from a nineteen model that was a twenty one thousand dollar car and then years later it's worth even more. That's a new thing for us. That's so new. ⁓ that's so wild to think about. But ⁓ folks, you never know. And we used to think, no matter what, you're gonna go backwards. In today's world you never know. It depends on the vehicle, it depends on the things that you want. ⁓ But it's very low, like there's very low out there, it means your values are gonna go up. So it's an amazing thing to do. ⁓ Zach Fritz: Do you think it's because we have too many hands? So you were talking about acquisition and dealerships and how nobody was really doing it. Do you think it's because we have too many hands in the cookie jar in the dealer world right now? With different departments and different roles and people's salaries that we have to pay? That's IgniteUps.ai: And it's that's a real thing. I mean, that's that that that can be a real thing. well, think about it, right? Reconditioning. ⁓ most dealers today have at least fifteen vendors, right? Or I'm I'm exaggerating a little bit, but they have a lot of vendors, right, that go in there and PDR, do like bumper repair, do ⁓ wheels, you know, hubcaps. Zach Fritz: Yeah. IgniteUps.ai: There's the the glass guy that's gonna do something, the touch up guy. I mean, they've got, you know, five, six vendors are gonna go and just ⁓ cosmetically the car. And then, ⁓ you obviously from a reconditioning standpoint, then you've got Fred and Lou: The in the extra. IgniteUps.ai: you know, parts and you got, you know, nobody wants to fix anything anymore. It's just replace it. it's you think about how much reconditioning costs today. I mean it's it's it's up there. I I I don't know that y well there's any real solution for that part of it. but You know, when you when you see the Mirage not not having as much things to be worked on, I mean, what happened of the the quality part where these cars could last forever? Like Toyota, I mean, those things last f for a very long time and why they still hold all and bring all the money. Fred and Lou: ⁓ they we've seen a few dealers, a few dealers that we've been a part of and some that we've ⁓ shift taking a lot of that stuff in house too. That the paint guy. Let's figure a let's figure out a pack, let's figure out the right way, keep him in-house, keeps all this stuff. Of course, your volume ⁓ dictates this. ⁓ have to the right volume to be able to take sustain putting on somebody on your staff but having the the body guy having all of that those people that you just labeled out that's an entire department and if you have enough savings and if you notice your bottom line is putting out that much you might be able to afford an entirely different department that stays in-house and is really ready when you need it because you don't you don't really even think about the the guy doing the tires you don't think about the guy fixing the wheels until he doesn't show up that day and you have vehicles that you know got road rash on them, right? You don't think about ⁓ unt know, until he shows up and says, Hey, you want to check off on these? ⁓ Yeah, cool. And then you're like, hey where's the where's the wheel guy? Right? Where's dent guy? IgniteUps.ai: Well, you I think the biggest challenge, Zach, is that dealers aren't retooling their their their actual base to expand. Fred and Lou: Yeah. IgniteUps.ai: And that's where I think a lot of these jiffy loops all these independence, you're gonna see more of that because I can tell you my platform, ⁓ you know, I have a AI company that we can drive a bunch of business to service. Oftentimes don't take advantage of it because they're too busy already. And instead figuring out a way to create ten more bays or, you know, hire more techs or train their own or have a process, they're not nobody's doing like Zach Fritz: Right. IgniteUps.ai: They're just kind of content with what they're at. And you can see profit is up, RO count is down, and dealers are just thinking that's gonna last forever. And I think that's that's where, you know, there's a a big opportunity in fixed ops right now, understanding that customers are keeping these cars longer. there was that study I told you guys about that in ten more years, by 20 maybe 2040, I think it's was that That number of new cars is going to drop by two million dollars. So right now the SAR is sixteen million. It's going to be fourteen million by twenty forty. So dealers should be waking up and thinking, how can I go after more of the pie instead of keep letting the Jiffy Lubes and all these other companies take advantage of that market? And there was another study I heard that Walmart's like the biggest tire seller in the country. Like Fred and Lou: I believe that. IgniteUps.ai: Why is not no one like thinking, hey look, there's a bigger pie out here. I need to go get more of it. Fred and Lou: Right. I mean Zach Fritz: Do you remember our conversation? This was probably two months ago. We were talking about how all of the OEM technology was kind of being gatekeeped with rights repair going to indie shops. Why do you think that that is right now? With the volume of older cars and cars that aren't brand new off the dealer lot and can only really be service to the dealer, why do you think that technology wants to be gate kept from indie shops that are holding up the vast majority of this market? IgniteUps.ai: It would crush them. Zach Fritz: Because it would be that'd be game over for dealers. Absolutely lights out. Fred and Lou: Would be. Well, I personally feel as though those those third parties, Walmarts, the discounters, other companies are out there that have found a good streamlined process to help it out, ⁓ hey Here's a deal on your tires while you shop and you get your groceries. You're gonna be here anyway. Get your hair cut, get your eyes checked, and we'll be back around with your car with your fresh new tires by the time you get done. tire discounters, they have a very easy, high-tech, process get you in, get you out, get you analyzed, get you prescribed, ⁓ and get back on the road. ⁓ They they fine-tuned, ⁓ doing things their niche. And when the dealer doesn't make the adjustment or start ⁓ I say acquiesce to the customer ⁓ to it is that they're at and what they're used to and what they need, right? Or letting them know, hey, we'll get you to Walmart too while you get your tires ⁓ changed. You what I mean? We can get you to these other places. We have a loner, we have a loaner program where we have a shuttle. Many other dealers inside of our area have gotten pretty hip to the script of using shuttles, ⁓ especially when we were heavily with the military staff, right? ⁓ being able to get them from point A to point B while they wait on their vehicle to get fixed because you're the only dealer in area and Uber and in in are little bit less in that area, ⁓ right? So being to have that shuttle to go take care of the things that you need to get taken care of. Get over to the home, get over to the home. Handle those things, saying that you have that. A lot of times it's a pleasant surprise when you let that customer know, hey, we'll get you there. But many times we don't lead with that, we don't sell that ⁓ the point of sale. We don't let them know, hey, we have these convenience services that you can continue ⁓ maintenance of your vehicle and your relationship with us. ⁓ also provide this type of service. But those brands do get the opportunity, the third parties, to wow factor you and say, Hey, I went over to this new cool. thing and they do this. My dealer never did that. They imag actually they have the same popcorn machine I remember when I was a kid there, you know? And and different things like that don't get necessarily addressed and then becomes a wow factor and it's a little thing, ⁓ it becomes a wow factor at a third party that then gains the trust of the customer and now they're in that person's cycle. Because guess what they have? A process to stay up with that person, to stay texting them and stay communicating with them and stay booking their next appointment. All the same things that the dealer should be leading the way in, at times we become a little bit more reactive to it after we've seen that technology play out and also take a little bit of our Break points. Mm-hmm. IgniteUps.ai: Yeah. No, good points right there. But you know, just gonna jump to this other one that kind of ties into the service part of it ⁓ that this guy a guy named Scott Trainer was ⁓ online, just recently posted something and I read it and was I was pretty impressed because I I had a similar experience on Grok recently, but he recently asked Google AI to find him a an oil change nearby. Well He had the like Google AI actually reached out, found the nearest facility, called the business, asked for pricing, checked availability, collected the responses, emailed him back the response, and he went and and got an appointment, went over there. Never once anybody, did any did any research himself. It was all done on So Fred and Lou: Final. IgniteUps.ai: You know, you think about, you know, who's who owns the customer, who's doing all this, like I mean, this is service you know, this i like I there was already another one that I read that Google's clicks have dropped like thirty percent or something crazy like that since chat GPT and all these other AI companies have come out. What do you guys think of this this phase of, you know, the car edges and you know, things like that where Fred and Lou: I think it's I think it's if if you're not excited or like if you're not somebody that's used to innovation or somebody who doesn't love being challenged a little bit, I think that this could be very cumbersome and very scary. But because you're like, how are these, how am I gonna be there? But I think that if you pay attention, it's no different than how Google Analytics, all these things that we that we all got used to was it's wording. It's how we get things said out there about who we are. It's what other people are saying about us. What I've learned about ChatGPT is that they love dealer rather, they love all these things. They go find data. So if you ask what's the best place to get oil change and if you don't have reviews Views that say best place to get oil change in St. Augustine is here, like we're over at Bozard Lincoln right now, right? If it's not saying that, they can't find you. It's gonna be able to research you. Matter of fact, I would get down to the tech. If I was a tech, I would be like, yes, listen, please include my name in there. Give them your card. Let them know how important it is so that other people using today's technology can find us. If you want s if you want to be if you want your friends to be served like I served you, please do this review. Right. You don't even have to refer. Just give me a great review because people are using Chat GPT, they're using Groc, they're using all these things that need to be able to have the right language out there that they're reading and they're looking for to be able to be lifted up on that list. And it's it's big and it happens very fast. That's the thing I love about all those new AI circuits. Yeah. ⁓ IgniteUps.ai: Super fast. It's quick. And then wait till they put it in the car. Cause I'm telling you, it I'm I was driving the other day looking for a new door, believe it or not, and I asked Grok, I said, Take me to the nearest door company here in town. Fred and Lou: ⁓ yeah. IgniteUps.ai: And I I didn't even know they had door companies. I just hey, that that was my search, right? I clicked Glock Grok. I hey, Grok, take me to the nearest, the nearest door company. And it said, look, what this one has the most reviews. This one has this is the one you should go to. And I said, take me there. And it took me there. So Fred and Lou: Yeah. IgniteUps.ai: And I I didn't know there was another comp there was another competitor that I used to see a TV ads all the time for, or like billboards and stuff that was literally across the street but never recommended that company. You know what I'm saying? So it's it's here. It's not like it's this is something that's coming. It's it's here now. And I think most dealers are just don't really understand. Fred and Lou: Mm. No, we were at a Chevy store Ohio and was doing a just walk around training with one of the sales pros and it up the the Google ⁓ on inside of vehicle and the way that can interact with the Google and the exact things that you just described. You can ask it ⁓ the question, ask where I find a door, ⁓ ask where I can find bolt shop, ask whatever, and it's going to list out in star order the places that are closest in j geographic. the actual store right then and there, ⁓ to the point where we had the salesperson ⁓ where's the best price to purchase this new Chevy that I'm looking at until it became the rec that store showed up as a recommended actual facility. So it was something it another wow factor inside of a car itself to be able to show how it does interact with things like Google. And back to your question, ⁓ just on with Grok and ChatGPT coming up, I think that it's making great things happen Google. I that it's helping them advance, much like King made McDonald step up their game and vice versa. Right? I think that these these technology ⁓ IgniteUps.ai: Well, you know, McDonalds I I I think we could one could argue they've kinda gone backwards there. You know, Chick fil A's kinda taking that that title, I think. Fred and Lou: 'Cause I and I would consider it's almost like I'd say that's the Tesla, right? the Koolet showed up as as No, and it is you know, and they became very fast, but it they also cleaner they also cleaned up their image. They made sure that the people were trained. And that's another side of it. You deal with out there, all this technology out there, the biggest issue you have is you're not training your staff on how to use it correctly. IgniteUps.ai: Yeah, absolutely. Fred and Lou: You know, most of the time you're saying, hey, use it, and you assume because they're Gen Z, they're ch millennials that they can and they will. Well most of them don't even want to do social media posts. And we think they're gonna do it just because of the generation. let's educate, let's encourage, and let's empower them to do so. If we do those things, the experience is gonna be better for everyone, for your customers, for your salespeople, and it's gonna be utilized. But until we train and we talk about what it takes to get us to number one in the search when somebody says ask us where to buy or where to get a hole change, where to get tires, it's big. You know, and I don't wanna go back To the last subject, but that's the other side right there. Tires, folks. dealerships are failing in service department with parts and things because they don't even market that. They barely even talk about it. They may offer wheels because their tires are bad when they get there, but no one knows that this is the place to get the best deals on wheels. So you come here, I watched show, and I just want to talk about it. I watched the show really quick. I forgot what it is, but it's Chain Gillis's show about tires that's on Netflix, right? ⁓ And there a stat on there, and I don't know if it's real, ⁓ but there the guy who's trying to run the, I can't think of his name, but the It's his cousin on the show. He's running the show and he's trying to get some stuff, getting ideas. And what he learned was they a service department, like, you know, third-party service, not their outside sources, like a Jiffy loop, right? They were okay, but when they started, they ⁓ did the people who came in for the discounted tires ⁓ bought extra Right? ⁓ People came, they wouldn't come in there for the other stuff. And if you had stuff and they needed tires, they wouldn't buy the tires. But if they bought tires, the the ⁓ ROI was You could do s they would do so much more because they started to trust you. You gave ⁓ a deal on tires. you already built the trust. Now it's like, hey, by the way, we see this little thing over here that needs to be replaced. Your brakes are looking a little shady in the front. We should probably have those inspected or do those right now and knock it out while we're here. Take us thirty more minutes, that's it. Right? Those things happen if we market We do that, but also we have to be found with AI. And if you're not getting found with AI with all that stuff, putting that out there, then you're never gonna be found. IgniteUps.ai: Yeah, Zach, I'd like to hear from you. I think you're I think you're right, Fred. I think you know, even to get text to do videos, you know, like what what do you think what do you think the challenge is there? ⁓ they video does do a lot more. and so I think if they did more of those diagnosis and pushed them to s social media, I think from a tech standpoint, that would be huge for dealers. Like right now, we you know, there's a big push to get text to do those the presentation of the vehicle of what's wrong and pushing it to the customer, why not push those out in social media and have even more of those those people find you? Zach? Fred and Lou: Sure. Love that. Zach Fritz: Ooh, is a few parts. So with to figure out where to start. Let's start the videos. The videos I feel two different types of way about. ⁓ I like videos because it allows you to explain to a service advisor who's doing twenty other things what to sell and why. So it kind of eliminates them from Their job other than coordinating, which AI could do, so don't really need to exist in the equation, if you want my honest opinion. But at the same time, there is definitely a double standard because techs do not get paid to record these videos. They do not get paid on an MPI. Now, if you want to then try to supplement that pay with a technician saying, Well, then I'm going to film the repairs I do in the shop and post them to social media just like salespeople do. And then monetize that, the dealership would then come after you for licensing and creative and say, ⁓ well, we own your creative, but then the dealership doesn't pay you whenever they give your likeness and image and voice to a customer. So that's not really fair. Then if we look at it from the side of AI, I mean, that not one of those upsells that we saw and we talked about on the last topic where Joe Blow down the road has AI in his indie shop and the dealership sees it and says, now we need to charge, we need to add that in. That's a cost. And so we start stacking these little things that then overall raise our cost. So then we gotta sell a more expensive car, which then goes completely against the analogy. The tires analogy works because it was tires at below cost. It was tires cheaper than anywhere else. The entire premise of the show is that the marketing stuff that they kept trying to do and keep doing over the three or four seasons now that they're out, none of this fancy schmancy stuff works other than just selling tires cheap being good repairs. So then kinda goes show that, well, if keep adding on or we keep adding in AI, does that actually help us or it actually hurt us? Because then we're just driving up the entire cost of the industry altogether. IgniteUps.ai: Well, you know, looking at it from from the platform side that I've I've built, we th there's more there's there's there's more of a a cost reduction across the board. So you think about, you know, some of the technologies that we've created at my company, think about, you know, some dealers are spending seventeen to twenty thousand dollars a month on some of this technology, and I've been able to collapse Zach Fritz: Eliminated certain. IgniteUps.ai: that technology and consolidate it all so that they're paying like a third of what they would have been sp ⁓ actually like a like a an eighth of what they were spending prior. So it's it's definitely helping. then someone could argue too w that, you know, the reason why you need advisors is because, you know, you want to have that that experience and that that person 'cause think about what McDonald's has done. Like I hate going to McDonald's because If you go in the the store, you have they immediately there's someone standing behind the the counter and they immediately point you to a screen and then you gotta go to this screen and it half the time it's not exactly how you want your setup. It's not Burger King, make it your way, right? Like you've got to have it there. It's their way. This is how you're doing it. And so you end up getting something really that you weren't r really wanting. ⁓ and it it just it just makes it more complicated. So that for me, I feel like Fred and Lou: Act. IgniteUps.ai: Chick fil A's winning there where yes, a lot of they have a lot of automation, they got a lot of technology, but they still have a human standing there, having that experience. and they're they're making more money as a result of it per store. So I don't know. I you could look at it both ways, and and n understand lean on the technology. You'll have more customers that you can even handle and you'll make more as a result of it. So I think I think that's that that's part of it. Zach Fritz: Do you think it has that? IgniteUps.ai: But you know, those videos I do think it it if you can if Tex if I saw more Tex doing that, it it would definitely help them long term because they could write a check, ⁓ they could go to any store. Like I mean now Techs can go to any store, but they could they they could create their own platform like some of these other company c dealers like and salespeople online right now that have created a pretty Fred and Lou: Yeah. IgniteUps.ai: good platform on social media, I'd like to see some techs, you know, jump in there and do more of that, you know, showing what's under the hood and, you know, what's broken and especially when you see some of these techs using the the the AR or the V VR goggles to really learn how to fix a car sometimes. Zach Fritz: It's a dangerous game because if we start doing that, we're gonna take business away from the dealership and push it to the indies and then independent and mobile mechanics. Fred and Lou: You know, Zach, and I and I don't disagree all the way, but I I you know, just a little like fight back on that is that what I do believe is that the more transparent, the more that we give, the more education, the more likely people will come. if they go somewhere else, you did something that they won't forget. when you're able to do something that's memorable, educate someone, give them something. Zach, ⁓ honestly, it it does a lot. It they may not do their service today with you, but they're gonna remember you when there's another big one 'cause they're gonna be scared to go somewhere else. They're gonna remember Zach, they're gonna remember Fred. They're gonna remember whoever that was that they're following. get it and I understand your point, but you make a lot of valid points there. What I do believe and I hope that dealers that are watching this understand where I'm coming from is that you have to allow your people to build their brands. their service tech should be able to build a brand for themselves. You shouldn't take anything from that. Matter of fact, you should help that. If don't, they're gonna leave you. If you don't, they are looking for new jobs. If you don't, they don't get the hours that they should be getting so that they can make the money that they deserve. So we wanna make sure that Yes, we want to educate, but even the videos is it even keeping it small, recording a video as a tech to show something to to your point to the service advisor so they can speak to the p customers about it. even if it's a video for the customer, from you, more from you, the actual service tech, saying, Hey look, ⁓ we put your tires on, everything looks good, this is here, but I see this thing here, you show it to ⁓ That makes all the difference 'cause how many times have you heard, Zach, somebody come back, is that really an issue in there? Or you guys just try they're thinking in their head, like they're making stuff up. Cause they don't see it. They're not underneath their car. They're not they're not service techs. They are human beings. I know I am. I've been in the car business for a quarter of a century. And I don't I've never changed oil in my life. Honest. Can I? I probably could 'cause I've watched it, I've seen it, I know the process. There's YouTube. There's YouTube also, right? Zach Fritz: Mm-hmm. Fred and Lou: But even so I don't do it. But where do I go? I ⁓ you can teach me how to fix the issue on my car, but I would rather you do it because you're the pro and because you showed me how easy it was and I could tell that you're just trying to help me, I want you to help me now. Does that make sense? Zach Fritz: Well, it's the same it's the same concept as, you know, I would always bring people back if bring ⁓ back. Show Fred and Lou: I love that. That's a good same thing. I think that's a great idea. I don't think there's anything wrong with that, but Zach, imagine if you're if it's it's me and I'm you give me a shuttle and I take the shuttle to the mall. You're at and I'm at the mall and I'm about thirty minutes before I can come back and you want to work on it now and I can send you the video, say, hey, hey Fred, know, great news. Everything looks really great. We've done all the inspection on it. There's just one little thing here. It's a thirty minute fix. I can have the part here. I just need your okay, ⁓ I didn't want to wait before you got back. I just wanted to make sure you saw it, you knew that this is valid. What do you think? And then they can reply, do it. ⁓ ⁓ those things to me is where that next level, but yes, Zach, there's nothing. better in the world than hey Fred come back here with me, I want show you something. That some real stuff. And we have to remember that this is ⁓ a of ⁓ communication. Media, our phones, our televisions, computers, ⁓ all of these means of communication. ⁓ And the the better that we increase communication, better for everything. ⁓ advertisement and searchability of a business or a company, content always going to be king. ⁓ The you can create of that and you have searchable and findable ⁓ is to help your rankings no matter how how you with the algorithms, ⁓ the more have out there is going to be easier for you to be found, ⁓ especially if good, high quality, that's what gets to be ⁓ then translated describing your business or But there's a cultural thing when it comes to saying how do we communicate with our customers? And and I agree with you, ⁓ if if something is not the norm, everybody's wondering, well, who gets paid for that? Or should I be paid for that? Is that part of my job? Is that what I do? if the standard of a is this is how we communicate with our customers, ⁓ and I them to be communicated with to the way Fred just said, hey, they're out to to lunch, they're out ⁓ doing their grocery shopping, they're in our loaner car. I want them to know about the reco that you're giving so that they don't show up and then have to sit for another hour to fix that other car. They need real time advice. communicate with them by video. Who's responsible for that? The answer is everybody, if our actual culture is, this is how we communicate with our customers. No different than raising a standard to the to the variable side of the house of saying, hey, every customer that says they want my vehicle is going to get a video saying that the car is available, I have the keys, and this is the person that's reaching out to schedule an appointment. vehicle, right? Everybody gets that no different than everybody gets a call and everybody gets a text. the technician when the vehicle comes in, ⁓ yeah, this is the the area where we get the chance to s to surprise the customer with giving them an interaction that they're not used to. They're not used to the text getting on. there and saying something that's actually very valid, right? That's like, this is useful stuff. I'm not being really sold. I'm being educated more than anything. it is part of the culture, not necessarily part of needing the So often many people, many dealerships wait until they get a buy-in to change the standard, you can train a standard, help people to rise up to their level of training, ⁓ then it becomes an expectation that we maintain a standard. This ⁓ with customers, which is a standard has to be maintained. So they are saying this is how we talk to our customers, and then watch the results. Everybody will benefit from it to where it's not a Whose job is that? Well it's it's all of ours to make sure that we maximize the way we can. IgniteUps.ai: I agree. Zach Fritz: I I think that actually just solved a massive issue too. So right now in the dealer world, so if technicians were to kind of take that roll over, right, you've elimin you've basically just said that technicians become service riders because they're the ones maintaining the relationship with the customers, and then a big portion of that used vehicles, CPOs. I mean, that's that could save a ton of money. Fred and Lou: It's there's that's definitely a that could be interesting. IgniteUps.ai: Could it but I do I do think it's a cultural thing. but talking about certified vehicles, there's article before we leave. We got this last one I wanted to touch base on, because this one could be ⁓ could have been the whole show, to be honest with you. but the FTC just released this the dealer in Connecticut, Nissan dealer, just agreed to a four million dollar settlement. Zach Fritz: Yeah. I like those. IgniteUps.ai: the reason why is because this one example. A certified seventeen Nissan Rogue was advertised for fifteen seven and the customer was allegedly charged another fifty two ninety five for the inspection. Sort of get it s to get it certified. So they went back, looked at, you know, years of stuff, and they ended up agreeing to this four million dollar settlement. What are you guys' thoughts on this certified vehicle? Fred and Lou: What was so guess I would always look in the compliance side, what is generally priced for that type of car ⁓ for a ⁓ IgniteUps.ai: Well, you that's where the FTC came in, right? So if that car is online and it says certified and that's the price, you can't come in and charge them a certif and bump them for the certification. Fred and Lou: That's the issue and that's exactly my head. I'm like, you can't market it that way. You know, years ago everybody did that. You know what I mean? Like you came in and then you found out what your price was, and that's that was a problem and that's why so many customers lost like all the confidence in us, right? but that was ⁓ IgniteUps.ai: Well, that's that's not just ten years ago. That's that's why they created a Monroni, right? Like that's you know, forever and a day ago. Now people just got slick with addendums and they just, you know, repackaged it. Fred and Lou: They thought that now and now the FTC is is making sure that that's not happening and they're getting really strict on that and they are up what what they're saying. It's not like, hey, we're gonna say this and and then not enforce it. They're actually doing that and there's proof of it right there, three million. And that's a settlement, my friends. That wasn't what it really was. I promise you it was whole lot more than that. the thing about that is is that they went and found a lot of those cases. That's the first one. Check yourself. That wasn't the first time it happened. Are you doing it? And they're not the only you Seriously, look if you are doing that, you need to stop and then start making corrections. Because the only way that you're not gonna get a three million dollar thing is by showing that, hey, we made efforts and we're it clean from this point on. ⁓ They I telling you that would bring a ton of leniency showing that you're doing the right thing because they already IgniteUps.ai: Looks like they're break they they're breaking up on that last one. Fred and Lou: Know that most of y'all, I shouldn't say most, a lot of you all are out there doing things like that. And that's unfortunate. I mean, I've been at stores, we've done it. You so I'm not saying I'm perfect, right? I've been there. I know what it was like to be able to try to hold the gross because different than it is kind of right now is a race to the bottom and pricing. It was like we had the best price, right? So we had to find profit somewhere. but instead we should be finding profit with great education, clarity, ⁓ the first talk to them, giving them everything they want, right? Instead of hiding things, you know, like we used to. So it there's a lot of ways to fix that. But that's a wild situation and I could say is that we need to go inspect that stuff inside of our stores. A lot of us owners and owners out there I should say that you you may not even know that's happening. ⁓ get with your GM, sit down, 'cause the last thing you need to do is write a big check or possibly lose your store. ⁓ Yeah, Yes. Wow. Check them. IgniteUps.ai: That's that that to me, when y when I read that I was just like, Man, that's that's some cra I mean that's that's some gutsy stuff to just say, Hey, look, I'm just gonna, you know, put somebody together like this and and do that. I mean Fred and Lou: And and that's why I say again, that I don't think that the that was the first time. I don't think that they rolled the dice on it that one time. IgniteUps.ai: Yeah. Fred and Lou: Hey, let's see if we can get away with it, right? And and then like, ⁓ they got me. No, there was probably something else that triggered an investigation that then that let that trickle down to say, what is this we found? It's it's that ⁓ that that chain reaction that occurs, but they did ⁓ it was probably a common practice ⁓ almost celebrated at times, right? How big was that deal? I five guys, great job. How much did they pay on that certification? Whoa, let's go, right? I've seen all of those conversations where the the celebration of the wrong thing is what we're celebrating, but it's also the common practice. So when you inter interact or jump in and say, hey guys, you know that's probably what we should be celebrating, and how did that even happen? And a and an ethical general manager is usually the first one to show up in that position to find those things and say, ⁓ Hey, to my office, what is this, what is that? ⁓ and If it becomes a thing where it is a culture change has to happen to catch those things, the culture begins to change because somebody is determined that, or that general manager is asked f turn in their letter of resignation because you're messing a profit center that we don't know ⁓ we should ⁓ IgniteUps.ai: It's you know, it's funny though, it's easy to find those on the sales side, but what about the service side, Zach? You know, you think about, you know, the text that somehow all of a sudden this this part is broken and they're tryna 'cause they know they get flagged a couple hours for that pretty easy. ⁓ w what do you think happens there? Do you think there's any way to combat any of that? Zach Fritz: Mm. difficult. So I think the the first thing to address is the the issue with the car and the FTC, it's not the price. The price is the price. It is what it is. Everybody's gonna charge whatever they can and get the most amount of money possible. The issue is the marketing and then the after the fact, hey, here's the additional, right? It was said to be a CPO already, but then once you get there, there's an additional fee to make it a CPO. So in my eyes, I guess I look at that as CPO for most people is equivalent to like an extended service plan where it just, hey, we'll take care of it for a little bit longer, we'll make sure everything's good, but if you want that, here's the cost. Okay, fair enough, you're gonna pay a bit more. But even on the service side, I mean, we would see stuff like that too. But I also question, isn't the entire point of service, right? To get a car in for something cheap and affordable, like you know, a five ten thousand mile service, oil change, you know, cabin air filter, something like that, an MPI and see what else we can try to get, what el what other meat is on the bone. So IgniteUps.ai: Well, I don't know. I'll tell you in my experience, you know, I ha I would have, you know, a one of my advisors and techs, a customer would go have their car go through the shop. I'd my salesperson would sell the car. And I'd look at the repair order or everything that they recommended and it was like this thing was clean. This was like amazing, right? Then all of a sudden I buy the car, all it needed was an oil change, right? And then my used car guy, my used car recon tech decides to put his estimate on it. And now I've got a three thousand dollar bill and I'm like, how did this turn in from a perfect clean car, just need an oil change to needs six grand in repairs? Zach Fritz: It's tough because we are trained and conditioned as technicians to not hammer the car. There is definitely a level of don't hammer the CO. Fred and Lou: We still. IgniteUps.ai: It's amazing they're at, you know, a couple doll a couple hours per RO, but in on the used car side they're like six hours per RO. You know what I mean? You're like, come on, man. Zach Fritz: But if you hammer it, you're not gonna get the repairs approved. If you hammer it and every car is tires, brakes, alignment, I mean brake flush, transmission fluid service. If every car has that on the used side, they're not gonna approve any of your hours on the used cars, so then you don't make the money. But then somebody buys it and then they just so happen to realize, hey, the alignment's off. Well, used cars likely wouldn't have approved that. Then they come back, they're pissed, and it is what it is. That's the game. IgniteUps.ai: Yeah. Yeah. Yeah. You know, I'm sure Fred's seen some of those before. Fred and Lou: Thanks. yeah. You know, but what I can tell you is, you that's so you know, I I was a I was a especially when I when I was managing deals, like I hated I just didn't want any repair. I like, I'm sell as is, the way it is, with the warranty. I'm gonna s ⁓ my favorite line this is you know, don't get me wrong, I've done a lot of reconditioning on cars too and ⁓ and sometimes I thought the bill was ridiculous. But at least it was all internal, right? At least the house was still making money. Right. This maybe the end was making a little bit more gross. But ⁓ but the but they at the end of the day, My favorite line, you know, usually was when we didn't fix the dent or something was like that's part of the inconvenience package. We don't charge extra for that. That's free. So that was always my way to get people to laugh when we didn't do the dent. Because as you know, Sarah Melm, that if we repair that, there is cost involved in that. And we're trying to keep the cost on these vehicles as low as possible, make it affordable for its use. Now if we do want to repair, there is cost, we can do that after the fact, things like that. ⁓ let that stop you from buying this car. Let's look at it, make sure you like it first, right? ⁓ IgniteUps.ai: Yeah, and I ca and I could see that. I think it's the challenge with this FTC thing is, you know, and it may it might they may have worded it just the way you did, but if it's certified, we all know the standard certification rules. This is everything that's got basically gotta be a new car, right? if it wasn't that when they were presenting it, you can't just go and say, Well, we're gonna have to charge you now. Like, you gotta ⁓ Fred and Lou: Right. If it's marked certified, that should be the price with the certification. all of the wording to to protect themselves, right? see dealer doing ⁓ right. IgniteUps.ai: Hey Lou, I could tell you were you're a good s a great salesman, sir. You know Fred and Lou: Well because I mean I'm listening to all the angles, right? You you've heard a salesperson come up to you and say, I told them this lean in and you're like Okay, so that was a lie. ⁓ this is what you need to say to correct that, you know what I mean, and make sure that we're right. But you all c you also can hear and see the people dancing between the raindrops in order to get a yes from a customer and stay compliant and out of jail. are very, very important. But at the end of the day, ⁓ ⁓ love the layers that have continuously been peeled off by technology by technology of guarding the truth that the dealerships have done with the customers for years, whether in service, in sales, we've done this masking of the truth. Pay no attention to the man behind the curtain. And the curtains have been completely split and we've been unveiled and everybody I believe is making the adjustment to how do we do business. IgniteUps.ai: No, you know the worst part the worst part, Za is that people just aren't changing still. There's still a lot of dealers that think that this is just gonna fly by the wayside and nothing's gonna happen. So it Fred and Lou: Shit. that are gonna be the next ad or the next article we review. ⁓ that's ⁓ ⁓ IgniteUps.ai: Yeah. Hey you guys. Well, I hate to cut you guys off. This is this is at the end of the the the the the episode, but before we go, ⁓ like to always ask, you know, based on everything we discussed today, what you know, couple seconds, couple a minute or so, what can dealers do? and start with you, Zach. What can deal what should dealers do to help ⁓ their business today? Yeah. You you can't be surprised. Like it's there's there's writing all over the wall, everywhere, right? And these people can't say, I didn't know. ⁓ ⁓ Tommy Boy, what'd you do, right? Fred, Lou, what what is what's your final closing statement? Fred and Lou: Well I'm just gonna hit you with my our five core values of solutionary. And I think that if you dealers out there really implement this and think about this, it'll be big. One is the first one's love. You gotta love what you're doing, you gotta love your people, you gotta love your clients, you gotta love all that stuff, you gotta love doing the right thing. start with love. ⁓ you gotta have faith. Faith is a big thing. Faith that the things that you're doing, the love that you're giving, is gonna bring back tenfold the stuff that you want. And it will, but you gotta put that in there. Number three is you gotta have honor. And is a big thing. If if you do the honorable thing every time, even if it doesn't Bring the profit that you hope, you're doing the right thing and it will come back. four, and it's something that Zach was just talking about, you have to be adaptable. Being adaptable is so big. If you're not adapting inside the way that you're growing right now, you're gonna fall apart and you're gonna end up being in the wayside, much like dealers who did not change their compliance and the wording on their freaking websites. then at the end of it all, is you have to be consistent. If you're not consistent with all those things, and you're not consistent inside your store with the love, the faith, the honor, and of course being adaptable, your team's gonna be inconsistent also. So be consistent, my friends. And that's what I would give you as advice. Always go to core values. Those are ours as a solutionary, and I hope you find ways to use that inside your store. store. And I would definitely champion that is to see what kind of core values do you do operate on at your store. just what's printed and ⁓ posted a wall maybe sometimes we mantra, what could actually be translated by what a customer experiences when they're with your business, whatever side they interact on it on. But do a culture analysis in your store. we maximizing the way that we communicate with our customers and ourselves? And if we can master ⁓ our we can accomplish anything. ⁓ The fighting force the world, our United States military, ⁓ our masters communication, communication you do not know of, ⁓ and communication is next level with technology. But often ⁓ it's right amongst each other. And as we can continue to communicate. communicate better with each other and increase the culture, our language will show it and language shapes culture, folks. And if we can adjust how it is that we do do that, I believe that we can do many things like create the core values, create our missions that we actually uphold. if we do that, we're making the industry better. We are brewing solutions and we are going to that next level. We appreciate you so much, Chris. Thank you for always provoking some great thought, great conversation. We have so much fun with you, brother. Thank you so much for having us on again. IgniteUps.ai: No, I appreciate you guys taking the time. I know you guys are always busy. and I do ⁓ from the bottom of my heart appreciate you guys doing this. ⁓ for the audience, everything said, ditto everything they said, because you know, in today's market, you know, I I think you need to just be the student of the game. I I've always been a student of the game. And ⁓ if you're not out there, you know, practicing what you preach as a dealer, an operator, general manager, whatever. someone's gonna come in and and take your business. So th until next time, subscribe, like, share, do all of the that fun stuff. but we'll see you guys next week. Thank you guys. Fred and Lou: That's it. So much. Have a good one.