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The Truth About FTC Crackdowns & Dealer Transparency | NY Auto Forum · Auto Collabs

• 0:00
  Okay, we're here at the NY Auto Forum. I'm here with John Fitzpatrick, CEO of Force Marketing. Uh, John, thank you so much for helping us get out here and do all this.
• 0:08
  But, um, more importantly, you have a keynote coming up with Senator Moreno today, and, uh, I would love to get your perspective on why you think the season that we're in right now is such an impactful one for dealers.
• 0:19
  Yeah, no, and, and, uh, Senator Moreno's been a longtime friend of mine, and he's, he's just been, you know, our cars are really, if you think about it, the first, um, dealer to be elected into Senate, and he's really driven a voice for our industry- Indeed...
• 0:32
  in a really, really big way. And if you remember, we were here last year with him. Mm-hmm. And there was a little bit of doom and gloom from- Yes...
• 0:37
  some of our friends in the, uh, you know, the economist side of, uh, of the world saying, "Oh, we're gonna be at a 13 million SAAR due to the tariffs." It was pretty grumpy. A little grumpy.
• 0:46
  It was a little bit grumpy around here. And, and, and you know, I think Senator Moreno may get a chance to do a little bit of a victory lap, 'cause if you recall- [laughs]...
• 0:53
  last year he said, "I just don't see that in the cards. I don't know how we go that far, 3 million units." Yeah, he- I think last year he said, he's like, "I think we're like 90 to 120 days and then- That's right...
• 1:02
  we start to see things- That's right... a little bit more clearly," is what he said. And he pretty much nailed it, right? He did. He pretty much nailed it.
• 1:08
  So we, we were at, like, 16.2, and he said, "I think we're somewhere between 16 and 17 million," and that's where we landed.
• 1:14
  And so I think that gives him a tremendous amount of credibility, where he was able to sit back and say, "It's not quite as bad as you think it's going to be." That's right. Uh, and, and sort of his outlook was good.
• 1:23
  So we're gonna ask him about tariffs moving forward. We're gonna... But look, you know, dealers sit, you know, at the intersection of the economy and the American consumer. Very much. Right?
• 1:31
  And so here's a, here's a guy that's in Senate that is seeing things from a different perspective now, but also carrying forward with him everything he learned- He didn't lose that perspective. Yeah...
• 1:40
  right, in his- Just added to it... 45 years in the auto industry. And so it's a unique perspective. Uh, we'll talk about a lot. We'll talk about, uh, China. We'll talk about EV.
• 1:49
  We'll talk a little bit about the Iran war. I mean, that's, uh, on everyone's minds. And, uh, it's unavoidable- And how does that affect-... at this point, it is... the auto industry?
• 1:56
  And we'll just get his unique perspective on a variety of issues, uh, that dealers are dealing with, one of which is affordability, right?
• 2:03
  And, uh, interest rates and sort of, you know, all of the dynamics that go with affordability. Um, that's something that, you know, we wanna have some discussion around. What is, how is policy shaping that?
• 2:13
  What is that gonna look like? And then, of course, the FTC, uh, recently came out- Sent a couple letters They sent 97 letters out. They have some pen- they have some new pen pals. Yeah. They sent 97 letters out, right?
• 2:21
  And said... Here's what they basically said, Paul. They said, "Okay, the rules that we've had, we're just gonna start to enforce them."
• 2:27
  There's really nothing new in what, what they've got out there other than you guys gotta treat the consumer right. Whatever you advertise, that needs to be the price they pay.
• 2:37
  And you can't advertise, you know, a discount that includes, for example, a veteran's discount when you know everybody looking at that is not a veteran. It is not applied to veterans. Right?
• 2:48
  I think you have- That has to be something the consumer clicks...
• 2:50
  you have an interesting purview on this because you get to see hundreds and thousands of what dealers are doing on the front line, so you get to bridge the gap through what you do, through what's happening on the policy side and actually what's happening on the front line.
• 3:03
  Um, what are you hearing from your dealers as far as what's working, what's not working? What are consumers responding to the most? Yeah, look, c- c- consumers respond to transparency.
• 3:11
  Consumers respond to the unique selling proposition- There's your pull quote right there [laughs]... that all of these hyperlocal dealers are able to give them, and have given them for generations.
• 3:19
  Let's give dealers credit, right? A lot of times they, they don't really get enough credit, right? No. I agree. But you go to any Little League field in America and you're gonna see the dealer that sponsored that. Yes.
• 3:26
  And, and, and- And far beyond that... And far beyond that, right? And so, um, are there bad actors? Of course, there are in every, in every area, and I think that's partly what the FTC is trying to say.
• 3:36
  "Okay, now we're just gonna sort of regulate the bad actors." Yes. 'Cause that... We- you gotta police the bad work, right? Otherwise, you know, everyone jaywalks.
• 3:43
  You gotta say at some point, you- "No, only cross the street- I haven't heard-... in certain areas"...
• 3:47
  I haven't heard a single dealer who is really hyper-focused anyway on the consumer experience and their brand reputation have any problem with anything that's come out. Right. Like, zero. Right. That's exactly right.
• 3:59
  That's exactly right. And then there's the bad actors out there that are gonna continue to do the thing, and if they get policed, I think over time that creates a better scenario for the consumer- Without a doubt...
• 4:08
  for the dealer, for everybody.
• 4:09
  You know, um, you're familiar with CarEdge and Zach Shefska, and they've re- they, uh, have this AI system where they're, they're actually getting out the door prices, and they're comparing them what the people actually paid.
• 4:20
  And they released a report card, and if you're a dealer you can go and you can look at it. And, um, I saw some headlines saying something about, like, 3 or 4% of dealers are doing all these bad things.
• 4:30
  I'm like, well, hold on a minute. Let's not bury the lead on this one. It's like, you mean 94%- Are doing good?... of dealers are, like- Yeah... get an A on the report card? Yeah, yeah, yeah. That's a good point.
• 4:40
  Like, you never hear that. That's right. But that's actually the truth. That is right. Yeah. I believe that. I believe that. I believe that.
• 4:45
  Okay, so moving forward, we're heading out of this, this kind of like a little bit of a tumultuous season. We don't know what's gonna be next. We see a lot of u- used EVs about to hit the market. Yeah.
• 4:55
  And dealers starting to step up and think about how am I going to advertise, uh, my used inventory. Yeah. What strategies are they deploying the best th- that is, like, heading into that season?
• 5:04
  What are they thinking about? What are they doing? Well, look, I think a, a used EV presents an opportunity to get a buyer to consider an EV where maybe they weren't before.
• 5:11
  There's certainly an affordability angle to the EV, especially when you think about the total cost of ownership. Without a doubt. Right? And with gas prices now at 3.79 on average- It's a consideration again...
• 5:19
  and just a few months ago they were at $3- Right... and we've got an, uh, a war going on that, that could increase that even further- Oh, yes... um, then yeah, the, the used EV is absolutely an option, right?
• 5:30
  I think dealers need to, need to make sure they're, you know, communicating with those folks, just like they are with anything else. Look, here's the thing. Toyota got it right. It's the same story. Right?
• 5:38
  Toyota got it right. You have that as an option. Hybrid is an option. ICE vehicle is an option, right? Continue to say that s- to have that same message. Don't treat them any differently, right?
• 5:49
  If they were your customer and you sold them the EV, communicate with them and bring them back in. Hopefully, you were servicing the vehicle first, right? That's right.
• 5:56
  'Cause we know seven times more likely- That's right... to earn the second purchase if you have their service business. Oh, yes. Right?
• 6:02
  So it's, it's the same blocking and tackling basics of communicate with your customer, and they'll be a customer for life. Just communicate with them. By the way, we're gonna get into AI. What does AI allow us to do?
• 6:13
  Do you think- Communicate faster. And more ac- Everyone's getting- And more accurately... And more accurately. This is why I said, hey, let's think about AI as progress, not perfection. Yeah.
• 6:21
  Think, the AI naysayers out there are like, "Well, it's not perfect." We're not trying to be perfect. Can we be faster to the consumer? 'Cause that's what the consumer wants. Look at our attention span.
• 6:30
  It's three seconds lo- That's right... We need it now. That's right. So can an AI tool be faster than your BDC agent to at least communicate and get their attention- Yes... and then hand it off to a live BDC agent?
• 6:41
  Every time, all day, yes. Of course. Of course it can, right? It can answer at 1:00 in the morning, 2:00 in the morning, nights, weekends. With correct information. With correct information.
• 6:48
  Or just, it doe- again, it doesn't have to be perfect. Yeah. Just have it be faster. Move it along. That's right. So- John, as always, thank you so much- Thank you... for paying attention.
• 6:57
  Thank you for, uh, investing in, I think, the higher level conversations in the industry- Yeah...
• 7:01
  that most people don't tie to the ground, but the decisions that are being made here are going to affect dealers for the next two to three years. Yeah. Yeah. JD Power does a great job with an elevated audience. For sure.
• 7:10
  Uh, and they've got a good mix. It's a different- Good mix of OEM, good mix of vendor partners, good mix of dealers, uh, that are progressive. You know how I metric an elevated audience? How?
• 7:18
  I don't see a lot of black hats. Yeah. [laughs] Yeah. [laughs] They keep those out mostly. Well, yeah. That's also a unique selling proposition for you. You stand out. Oh, it's o- it's okay. [laughs] Yeah. Absolutely.
• 7:27
  John, as always, thank you so much- Yeah... for the work you're doing. Thanks for giving us a few minutes here today. Thank you. Thanks for all you're doing. Make a lot of this possible. Thank you.