Latest / Auto Collabs / More Hype than Hope with Rick Ricart

Transcript

More Hype than Hope with Rick Ricart · Auto Collabs

0:00
Oh, we get to have, I, is this our first repeat guest on the show? Yeah. Is Rick Reichert our first repeat guest, I think? Mm, mm-mm. [upbeat music] This is Auto Collabs. Mm-hmm. Mm-hmm.
0:17
Extremely insulting to whoever might be watching that we forgot about that could be- [laughs] We're so sorry if that's you. We really are. [laughs] We promise that we didn't mean it.
0:26
If it is, if it is, we didn't mean it. I, you know- [laughs]... Rick is one of those characters, and he is a character, if you follow him on social media- Full character...
0:34
that is just, I, I've never, like, been in, like, a barbecue situation with him. [laughs] But I feel like that's one of the things that needs to happen. [laughs] Right.
0:43
He's the, he's definitely the first guy to jump in the pool with all his clothes on, I'm telling you right now. Every time- Yeah, or the opposite... 100% of the time. Or the opposite. Right. Or- [laughs] It depends...
0:53
or the second half of that sentence gets a little dicey. [laughs] Yeah. I get it. I get it. I get it. I'm not gonna lie, like, I see his resume, I got him up on LinkedIn, all the things. He's well outspoken.
1:03
I just wanna talk to him about motorcycles. That's it. Yeah, well- That's all I wanna know... that's kind of a, well, 'cause you have the same challenge that I do. Right.
1:10
Is that, well, you don't anymore 'cause you live in Texas, but when you lived in Canada, you know motorcycle season was approximately two and a half weeks. [laughs] That's right. It's like- Get out.
1:18
Go, go, go, go, go [laughs] Oh, man. [laughs] So true. That's, that's so us. Well, look, he's definitely one of the most savviest dealers- I, I wanna see, wait.
1:26
I, now I wanna see Michael Cirillo riding a motorcycle next to Rick Reichert, 'cause I've stood next to both of you, and- Yeah... the size difference is staggering.
1:37
So- We're gonna put Rick on a small bike and Cirillo on a huge bike We're gonna be like circus bears on a tricycle. [upbeat music] [laughs] That's unbelievable.
1:46
Well, hey, we hope that you enjoy this conversation, uh, with Rick Reichert. Probably get a little bit crazy, but also insightful. Uh, here's Rick.
1:57
Rick, thank you so much for taking some time out to spend a little time, uh, talking about all the important things in life. Uh, cheese fries, mullets, and the car business a little bit, too. [laughs] Easy on that.
2:08
Tapered mullets that can only be seen from behind, do they actually exist? [laughs] They... Do they exist? That's like the tree that fell in a forest. That's exactly- The tapered mullet... right. Exactly right.
2:20
So, um, you go by President, Dealer, but, uh, a really interesting title that you go by is Chief Vision Officer. Mm-hmm. Um, give, why, why Chief Vision Officer?
2:30
How do you, like, think through that and deploy it on a regular basis? [laughs] So we, um,
2:36
three years ago, uh, the summer of 2020, that, you know, first infamous summer of COVID, uh, we had an opportunity to, you know, take a step back and relook at things. We had a lot of time on our hands.
2:48
You know, business was closing early. There wasn't, um, a whole lot to do on a day-to-day basis. And we've been in a succession, kind of transition in our company for about the past seven, eight years.
3:02
Uh, my uncle, Rhett Reichert, was the, uh, chairman of the NADA, um, organization in 2020. Right. So, you know, he has kind of removed himself.
3:13
And I have a cousin, Jared Reichert, who's Rhett's son, and we were named as the co- co-presidents. And my uncle basically sat us down and said, "Okay.
3:23
Well, I'm heading off to do all this NADA stuff, and then I'm gonna semi-retire after that. So you guys run the company." Right. We're like, "Okay. Cool. Well, what, what does that mean?
3:33
What, what does, what does that mean?" And it's, uh, you know, "There's not a playbook for this. There's not, you know, just, just do it. Just do the job. Right?" So, um, kinda let us go. And we were t- we were
3:44
trying to figure out what roles that we should have and how that should look and what our, what our responsibilities should be.
3:50
And then, uh, my cousin's in a, um, peer group organization that, that gave a presentation on the EOS business model, or the- Yeah... Entrepreneurial Operating System. Mm-hmm.
4:01
That, uh, the famous book Traction by Gino Wickman- Mm-hmm... is all about that EOS business model. And, uh, we met a, uh, implementer who, who basically takes companies and helps them launch this EOS business model.
4:17
It's the org chart, it's the meeting cadence. It's a lot of things to help us get organized and help us figure out the right path. And the two positions at the top are the visionary and the, and the integrator.
4:29
[clears throat] So- Yep... the integrator position, which my cousin holds, is really the one in- responsible for day-to-day operations, for profit and loss, uh, for lead manage accountability.
4:39
Um, kind of a COO type of role. Uh, his job is to make sure that the trains run on time. Yeah. Yep. Um, my job as visionary is more to look out in the, look out into the future, be responsible for creativity, culture,
4:54
um, big, big deals, acquisitions, uh, major external relationships. Uh, so that kind of fell into my wheelhouse. I am not a structured, I'm-gonna-be-in-at-this-time-leave-at-that-time type of person.
5:10
[laughs] Um, and my cousin is. And he, he, he came up through the fixed op side of things. So it's- Natural, yeah... totally normal for him to be here at 7:00 AM, 7:30 AM unlocking the gates.
5:20
Um, and I was always pushing to, you know, that's why our sales don't start till 10:00 AM 'cause I wanted- [laughs] I pushed them back for years, you know? [laughs] Nobody shows up at 9:00 AM to look at cars.
5:31
We can't wait. We gotta get this mullet right. We're gonna sleep in. We're gonna, you know- We got dreams to have while we sleep. Come on. Right. How you gonna dream if you're not sleeping?
5:38
[laughs] And that's this, what are dreams? Dreams are visions. Right. So I gotta do a lot of sleeping- [laughs]... a lot of dreaming. Yeah.
5:46
And, um, and it really gives me the opportunity to take the time to build on, to work on the acquisitions and the growth of the company. So I, I look at it as my, my main responsibility is to grow, expand, and diversify.
5:58
Yeah. And if I was stuck in the weeds of day-to-day operation, we would only be focused on growing what we organically have. Um, we want to expand. You know, three years ago, we got into the motorcycle world.
6:08
We acquired America's oldest Harley dealer-Uh, with two, with two locations now here in Columbus, and then the end of 2021, uh, we acquired a Chevy Buick GMC store, uh, to keep growing our portfolio for our customers, and really a lot of that has to go back to the fleet and commercial world.
6:26
Um, the business-to-business side of the, of the new cars has been growing for, you know, 10, 15 years rather rapidly.
6:33
Uh, so being able to offer a different variety of products to all of those business owners in Columbus has been a really good thing. So when... Like, obviously you're looking out over the horizon there.
6:44
There's a lot, you know, probably coming for you as, as an organization, but there's still the necessity to kind of, like, understand what's happening in the market and connect everything that you're doing from visionary culture standpoint to what's happening for the consumer right now.
7:03
What are you s- how are you taking, like, a forward vision, like, "I'm, I'm wanting to innovate, I'm wanting to grow," and draft that back into how your team, how your employees, how your, um, how your showrooms and service drives look right now for customers as they're dealing with the market the way it is?
7:24
Yeah. So there's always a strategy and a process because we're never gonna get from 0 to 100 on any of those things, right? This is a
7:32
aircraft carrier industry, as I call it, and it takes, you know, 24 hours to turn around an aircraft carrier. We, we make- Wow... little changes that compound over time. Um,
7:43
there's no hotter two letters in our industry than EV, right? Right. What is EV? What does it mean? Where are we at today? What's that look like, you know?
7:54
And I'm having to kind of build my crystal ball, and then at the same time decide, "Okay, what actions are we taking today?"
8:04
Um, and I could spend the entire time talking about that because I sit through all the lectures, seminars, read articles, newsletters, talk to industry experts, and, and listen to our manufacturers, what they're telling us, and then the same time keeping my pulse on consumer demand and connect, and collecting all those dots.
8:22
And, um, that's a very muddy water topic. I mean, it is so, it, you know- [laughs]... difficult to really decide what are we doing today? Right. Mm-hmm. 'Cause I'll just give an example.
8:35
Between our, uh, really three automotive locations, um, we have 37 chargers installed active right now. We will have 50 chargers by the end of the summer based on our manufacturer's requirements.
8:52
Um, we're investing a ton of money into these things, and we have, like, seven EVs in stock total across 11 brands right now. [laughs] What? Whoa.
9:03
And it's not because they're- Yeah, so it's like this, this, this kind of- Yeah... like, balance thing. It's like, "Okay, I need- It's chicken and the egg... 50 of these things, but I got seven.
9:10
Are the customers coming for what, you know, where are we going with this?" Yeah. Well, and the, the- 'Cause the OEM is almost like what...
9:16
I, I don't know if you, have you, I don't know if you deal with this with your, um, with your OEM brands, right? You've got brands across a, a bunch of different brands, but, like, I was talking to some OEM partners.
9:29
They're, they're struggling with this fact that on the ground at dealers right now is ICE vehicles, right? ICE and hybrid vehicles. That's where the inventory lives.
9:39
But the, the culture and marketing demand is all pushing on EVs, and there's this, like, how do we match- Yeah...
9:47
these two communication patterns in the market today, and it's, like, you're dealing with that with the, e- even down to chargers, right? Yeah. It's, it is a, um, and it's a super regional thing also.
10:00
I mean, there, I'm gonna say things that dealers in California are gonna be like, "He's absolutely wrong." Right. 'Cause we are in two completely different worlds when it comes to EVs.
10:11
California, Florida, Texas, like, there are states that are, where the hype is real. Yeah. Bigger adoption- The hype, the hype is real... bigger infrastructure demand.
10:20
They have the, they have the climate, they have the weather. The manufacturers are pumping 80% of those vehicles to those states.
10:28
Um, but Ohio is required to follow the same, you know, dealer requirements as those other states. But there are literally models of brands that we sell that I cannot even sell you.
10:40
I can't dealer trade and sell it to you if I wanted to. They will not even let us have those vehicles. What's, what's one of those? Give me an example of that. Like, what? Um, some of the Hyundai IONIQs. Hmm.
10:51
You can't even get 'em. Wow. You can't. Some of the, some of the trim levels are only for California and those, those zero emission states. So there's, um- Wow.
11:00
But it's not like we really want them because there's not the demand here yet. So when we talk about the marketing, um, I'm gonna call it the hype. There's a lot more hype than hope right now. And you have- Mm...
11:12
the hype being built for Wall Street, the stock market. I mean, you know, these, these major automotive, you know, manuf- you think of Ford and GM and how important stock value is to them.
11:22
Well, Tesla came on the scene, absolutely lit up Wall Street like, "Oh, this is the greatest thing, put your money into." Mm-hmm. "Now, what are you big old traditionals doing?" Mm.
11:32
So they created a ton of hype around their EV products, and in the past six months they've quietly just disappeared. They quietly quit building things like the Mach-E and limited production of the F-150 Lightning.
11:45
Like, they don't actually exist to the level that- How about that? [laughs]... the media and the marketing. No way. You know?
11:50
So there's a lot of hype around these things, so people put their money in the stock market, but the truth is, at the ground level at a dealership in Columbus, Ohio,
12:00
ain't nobody talking about- There's no hope that that's actually the future of your business in 2024. [laughs] It is not the...
12:04
Like, we were-- So the building I'm sitting in right now, we're building a brand new Hyundai showroom. It's beautiful. We're having a grand opening next month. You should come out.
12:12
Two story, beautiful Hyundai showroom.We're in our former Mazda showroom that was empty that we converted to our offices while that's being built. Um, 'cause that's where kind of our offices are.
12:22
So we're moving out of here in, like, three weeks, and I kept looking at this space that I'm looking at out to my, my window here, and I thought why not build an EV experience center?
12:31
Why don't we go get, you know, every single model that we sell new that's 100% electric, put a couple- Love it... chargers out front.
12:39
Put a little coffee bar, have an hourly EV champion be able to go on test drives or let somebody rent one for the weekend and experience it, and we were gonna invest in some of this, you know, EV stuff.
12:50
And then, um- Absolutely... we started really looking at the consumer demand and looking at inventory, production, what allocation's gonna look like,
13:00
and I think we have two to three years before we even have to think about it. Mm. It's no- it's nowhere close. Um, a lot of, a lot of manufacturers, um, or OEMs are building plants right now.
13:12
They're building these big battery plants. They're all doing it. They're building battery plants. They're building new plants to make these EVs. Those plants won't be open until 2025, 2026, 2027. Yeah.
13:23
They're all telling us that they think they'll be at, you know, 40% production or 35% production all EVs by 2030.
13:33
So I- it's like, you know, all this hype that's happening, um, and I was following the hype and buying in on it. The more research and thinking that we've done, it's like, "No, we've got the chargers.
13:44
We'll sell them out of the showrooms if we can get them, if someone wants one."
13:48
But for us to try to create and push that market is, uh, I, I don't quite have the, the hope that it's gonna have the impact for at least a couple years, at least in the market that I'm in.
13:59
Such a different- You, you bring up a- Such a different understanding. Yeah...
14:01
but you bring up a really good point here, and, and it's a distinction that I don't think a lot of people make, especially in this digital era, that tech companies by their nature must
14:12
produce hype because they have nothing else to sell. [laughs] Yeah. Like, like you, you brought up- [laughs]... the distinction about, like, Wall Street. Wall Street is all based on hype.
14:23
Everything that they buy into, I mean, that's, that is the product that they sell. It's not actually the tech product, 'cause we all know that doesn't work the way it's being pitched. It's all about the hype.
14:32
Um, this leads me to two questions. One has absolutely nothing to do with what we're talking about. [laughs] And the other has m- maybe, maybe there's a loose tie-in.
14:45
Uh, I'm gonna start with the one that has nothing to do with what we're talking about- [laughs]... and then swerve us back into, into the lane here. Um, h- you, you mentioned Harley-Davidson. Uh-huh...
14:54
that you acquired the oldest Harley-Davidson store in America. Sin- uh, upon acquiring that store, does it infuriate you as much as it does me to see dudes riding bikes that are either too big or too small for them?
15:07
[laughs] I knew you were going some motorcycle culture thing. [laughs] But you know what I'm saying, like, dude- [laughs]... dude rolls up to a... Dude rolls up- He breathes out very slowly. He knows what you're saying.
15:18
Hey, he just has customers of all types, Michael. [laughs] It's like, I'm just saying, dude rolls up to the stoplight and his- Yeah. Yeah... knees are... He's flat-footed- Yeah...
15:26
but his knees are right up un- underneath his helmet. Yeah. And you're like, "Bro." Yeah. So, uh, I'm guilty of that. [laughs] I'm guilty. That's why I, that's why I'm laughing. This is where the pause came.
15:36
He's like, "Both sides. I have a tiny one, it's like this, and a big one that's like this." [laughs] Got eight panniers on there. Actually, there's gonna be a lot of truth to that. So I do. I ride a 2019 Road Glide.
15:46
It's CVO- Ooh... and I've got the bigger bars, and it's, it's a performance bagger. It's a touring bike. It, it kind of does it all. Mm-hmm. It's big. It's loud. It's 150 horsepower. Oh. Big, loud stereo.
15:56
Does, does all the things. I also have, um, on order a LiveWire Del Mar. See, that's different. See? Oh, okay. That's different though. Okay. Okay. Because... Yeah. This- But the, but the, but the size of it.
16:11
So, you know- Yeah... for years, we've been taking in stuff on trade-in for years, and someone will trade in, you know, a Ninja 600 or... Uh, actually, that's not really, that's probably not cool enough to talk about.
16:22
Maybe like a, uh, you know, a D- a, a Ducati 916 or something- There you go... back in the day. There you go. Yep. And I'm pushing 6'3", 250, and it's probably not the thing that I... But I love to ride everything.
16:35
Trying to clutch the whole thing. Yeah. [laughs] Oh, I'll be on a, uh, I'll be on my 50cc Honda Ruckus cruising down the road- [laughs]... on my scooter to go grab Gatorade. Like, um, so I- Okay. I, I, I-...
16:46
I kind of, if I gotta ride anything- The jorts, he threw Gatorade on. [laughs] Flip-flops and the mullet extension with the flip-flops- Yeah... going to get Gatorade on the 50cc bike. Well, not, not orange Fanta.
16:54
Now the picture's all shaking up. [laughs] Yeah. But that actually- Thanks, Michael... the hap- Yeah... by happenstance, the, uh, we did not plan this beforehand, but you- No...
17:01
you kind of led right naturally into my second question about the EV thing and, and market conditions and what customers are doing. How soon and if ever, ever does a market segment like a Harley buyer,
17:17
uh, adopt an EV Harley? Mm. Right? Never. [laughs] That's- Kind of a strange thing- Never... where, where...
17:27
'Cause a lot of the narrative- If, if- You, I mean, you brought up the hype, and that, this is what got me thinking about it. A lot of the narrative is we're gonna phase out all of this.
17:36
P- petroleum products, forget that. We're going back to gravel roads, people. No a- no asphalt anymore. Petroleum's gone. Oh. But now you've got the Harley segment, which is a big segment, who are like, "So what?
17:49
I turn this thing on and it doesn't make any noise?" Yeah. Like what? Or like Audi, I mean, I... You don't have Audi stores, I don't think. No. But, like, Audi, same way. It's like, "Hey, we got-" Yeah...
17:58
"high performance car, all EV. Here it comes." Yeah. You know? And, and w- you know, whatever, whatever type of, of model.
18:05
Like, how do you, how does a brand or, or even how does a dealership group start to, you know, work with those customers that have kind of leaned in on this high performant type brand and, and-...
18:19
move them over as this starts to come down the line So there's been cars that have come out for years that I think are deemed high performance that really take no skill to drive them. Um, what's an obvious one?
18:33
Nissan GT-R. [laughs] Right? Mm. Cool car, fast car, Godzilla engine, all those things, but it's an all-wheel drive automatic with a computer system that's smarter than the driver every time.
18:45
Won't let you do anything, right. Won't let you do anything. Right. Won't let you really do anything. Um, I just came out of a F-150 Lightning. I had it since September. I put 8,500 miles on it.
18:56
That thing was as fast as a GT-R. It's four-wheel drive, it's automatic. All the powers to the wheels right away. You hit the, you hit the accelerator- Yeah... and whoa, it goes real fast.
19:06
Um, but it takes a lot of the thrill out of driving, and I cannot wait to get out of it and to get into something I can actually shift gears. I like stick shifts. I like older cars.
19:20
I like, I like having to work and do a good job to make it go fast. Mm. You know? They just do it for you. It's really kinda lazy performance.
19:30
And I think that's one area that the purists, kinda like the Harley riders, you know, they like that big loud engine. They wanna downshift. They wanna go through the gears.
19:39
Uh, and there's just, I think there's a lot of people that, um, and I said this for the past few years, there's gonna be a day that I wake up and a autonomous electric car pulls up in front of my house to take me to work and I'm reading a book in the backseat with no driver, but I'll be damned if on weekends I'm not banging gears in a GT350 through the- Right, you're like, "Just drive me- Hey...
19:58
to the graveyard- Right... and leave me there." Hey. Yeah. Yeah. [laughs] I mean, I think there's a place for both. I think that- Yeah, yeah, yeah... the world of- Yep...
20:04
multimodal transportation has been, you know, around since the first, you know, really Uber hit the ground or in some cities, you know, where, you know, taxis were more, um, prevalent and stuff like that.
20:15
And we work with what's called the Smart, Smart City here in, um, um, Columbus, that five years ago they started with the NHTSA grant to figure out electric vehicles and autonomous and all this adoption.
20:25
And, um, e- even they have come to realize that there's, y- there's gonna be a, there's gonna be a vehicle someone owns at their house, could be hybrid, could be ICE, maybe electric.
20:36
Um, but then there's gonna be o- other public transportation is, and, and, and other alternative transportation options that to get from point A to point B may look a lot different in 10 years. Let me ask you this.
20:47
So we're, we, we're kind of, like, going full circle now 'cause we only have a few minutes left. Oh, wow. Um, we, we've went, we've gone chief vision officer, right? And then we've kind of gone the whole cycle, right?
20:57
EVs, what the adoption, the hype versus the hope, um, the different mentalities around multimodal transportation. Let's get back into the showroom. Yeah. Because you have people coming in- Yeah... every day.
21:08
You have salespeople and service people and a BDC, and people have a, a real sentiment, right? And a real desire to do a certain thing. But, like,
21:17
you are gonna be the best litmus test to that 'cause you're on the front lines, your team is on the front lines. What are you seeing are the trends that are in the showroom right now? Okay.
21:27
Number one is, uh, negative equity is just through the roof. We are seeing- Yeah...
21:33
a lot of people that we're having trouble get them out of their cars, get them out of the trucks, especially those that bought in the past two and a half years when the market's been super high, new cars going for well over MSRP, late model used cars going for MSRP or close by.
21:49
Now that the market is normalizing, um, it has been, uh, very difficult. So you see a lot of, a lot of negative equity. And do you see this as the, the very beginning of that trend? Yeah.
21:59
Do you see this as continuing for a while? Yeah, and that's why I think, you know, as I wrote down some notes here about what would I say to the fellow dealer, like- Mm-hmm...
22:06
my focus is more on repair than replace right now. The service department- Mm... we just had a meeting this morning, how do we get back to seven days a week in service? How do we staff techs seven days a week?
22:17
Uh, pickup and delivery has increased demand big time. We, we started pickup and delivery during the summer. So three years ago we started it. Um, didn't really have the demand yet.
22:28
We partnered with a local company with a driver network service. Uh, now it's becoming something that people are now asking for and realizing, um, they don't really wanna bring their car in for service.
22:38
So being able to really get big on offering pickup and delivery for service, being able to get people into service quickly.
22:46
Um, a lot of dealerships, you call them for a major repair, they're gonna tell you they're four or five weeks out. You gotta fix that problem. They're gonna go somewhere else.
22:54
Service is gonna sell the next car because a lot of people are gonna be forced to repair rather than, uh, replace anytime soon. The other thing we're seeing is- Really interesting, yeah... is, um, leasing is really good.
23:06
Leasing is str- if there's a lease program. Back. Some of our, uh, you know, Kia and Hyundai and some of those brands have some really good lease programs. They seem to be doing well for us.
23:14
What are the best ones right now, in your opinion? What, what's leasing out best? Well, Hyundai's and Kia's. I mean, we've got- Oh, all of them... uh, yeah. Yeah. I mean, they're... Well, no, no, no. I got you.
23:23
No, no, no. I mean, Elantra, Forte.
23:26
You know, the cars- But that's a big deal because when you think about the showroom, when you think about the showroom, that's, that's extremely important right now because the last two years leases haven't been good.
23:35
No. And so even just, like, new salespeople understanding a lease, understanding how to m- you know, talk about a lease, talk about a residual- Yeah...
23:42
talk about a money factor and educate the customer on a lease is, like, the first step in making sure that you can get someone to even see that lease payment, right? Exactly. So that's, uh, that's a- Yeah...
23:52
that's a whole training step that I think a lot of people, people are talking about, like, training the BDC, training people from, like, customer acquisition into the showroom.
24:01
But training on that lease part p- in particular is we haven't seen good lease rates over the last two years because inventory has been shallow, meaning subvented leases haven't been there.
24:10
But those are coming back before rebates are even coming back probably. Is that right? Yes. Yeah. Um, there is a, there's an education that has to happen with every customer right now.
24:21
And you just hitA major word, too, I was gonna bring up, which is training. Getting the sales staff back to training.
24:27
We're watching our website visitors drop because as people go online now and they start doing their, they start doing payment calculators and they start doing, you know, equity analysis of their current vehicle, they're not even talking to us.
24:39
They're not even coming to the website- Mm-mm... because they realize there's negative equity, rates are high, wow, look how high this payment is.
24:46
Once, if we, when, when we get someone in the, in the actual showroom and we can sit them down, that's a whole conversation that has to happen.
24:54
Because if you think back, in 2019, the number one problem in our industry was affordability. Cars were getting too expensive. The average transaction price of a domestic pickup truck was over $50,000.
25:06
Luxury cars were over 55,000 and, and people were not being able to afford them. All that's happened in three years of those prices have gone up and up and up. The manufacturers have followed the demand.
25:18
Oh, well, people are willing to pay 80 and $100,000 for a new pickup truck. Well, there was some economic things happening two years ago that allowed them to do that. Mm-hmm.
25:28
So now they bought those vehicles, they're coming in to trade them in, and even those that don't have the, um, have that type of negative equity, we're having to sit them down and explain to them and show that formula to explain why it's an $800, $900, $1,000 car payment now.
25:45
Yeah. That's where, that's where we're at. Where three, four years ago it was, you know, 400, 450 was kind of that sweet spot and most pe- most people would be comfortable.
25:55
Now it's easily 700, $800 on average, and that's including some of the late model used stuff. Um, you know, interest rates are, you know, up, um- Right... but the subvented rates are one of the bright spots.
26:09
One of the bright spots are manufacturers with 0%, with 1.9. Um, that is working. People are coming in because they know that, you know, the rate is such a major factor.
26:20
I think one of the most popular things [laughs] right now is a subvented rate of 5.99 for 84 months. That is something- Golly... people are coming in asking for. Wow. Coming in asking for that.
26:31
That's in- They want the lowest rate- Because of the inequity or because of the high prices?... for the longest term, 'cause it all comes back to payment. Wow. And it's obviously something that we don't push for.
26:40
We've always pulled up what our average term is on a quarterly basis and discuss it with everyone in our, you know, all the, all the upper management.
26:46
And when, you know, national reports came out, uh, c- I think maybe this was probably a year and a half ago, that the average term was, like, 67 months, and we were at 62. Like, we started, like, clapping about that.
26:58
Like, we, it's not a contest to see who can have the longest average term. Right. 'Cause that's tougher to get that trade cycle, to get people, you know, out of their vehicles. Um,
27:09
the other thing we're fighting is the inventory mix, you know, sucks. Like, there are a lot of ICE vehicles. We've got a lot of stuff on the ground, but it's not a lot of desirable product.
27:17
It's not a lot of the stuff that we really wanna order and get. We've just been saying yes to anything we could possibly get our hands on for two and a half years. So- Interesting. Yeah...
27:26
now we're sitting on a lot of inventory that we're like, "Okay, we, we gotta blow some of this stuff out," and then now start being selective as to what we're saying yes to because, no surprise, the OEMs are now over manufacturing.
27:39
[laughs] We knew that was coming. They couldn't- We knew, yeah... figure out how to balance that. They're like, "Wait a minute." Unbelievable. "You don't want 1,000 more-" We called that years ago. Yeah.
27:45
It's a tough business. You don't want- It's a tough business... 1,000 more white, you know, base model somethings. [laughs] Like, we, we've got 'em. They're coming. You know? They're coming. They're here.
27:56
Well, Rick, uh, I'm telling you what, if there's not enough to think about there, it, it, it...
28:01
Like, if someone's not thinking about something every single day, it's blowing my mind because it's clear you're thinking about a lot of these things.
28:07
So from mullets to motorcycles, we've had a ton, a ton of fun hanging out with you. Really appreciate you being on- Yeah...
28:12
uh, Autocollabs, and, uh, on behalf of all three of us, it's just been a, a super fun and, and insightful conversation. It always is. Thank you. [upbeat music] All right.
28:25
Uh, did not disappoint [laughs] is my rating of that episode. [laughs] You know all I could think about? I don't, I can't, I can't remember now- Motorcycles? Yeah. Well, motorcycles, yes.
28:37
[laughs] But the lines are blurred. I can't remember what we talk about pre-show and during show anymore. But he did bring up the gentleman's mullet, and I'm not kidding you here. Uh, no, he called it a tapered mullet.
28:49
Tapered mullet list. And I wrote, I wrote down, "Tapered mullet could equal new word for hairy back." [laughs] The scary part is you- Ah...
29:00
you wrote it down, which means there's the opportunity for you to get to read that a year from now. Uh- [laughs] I'm gonna be like, "And then-" And then be like- "... wait, what were we talking about?" Yeah.
29:10
Uh- Well, it's like why Italian dudes- Or someone else find that... wear gold chains. Yeah. Right? You know why Italian dudes wear gold chains, so we know where to stop shaving. [laughs] Oh, man.
29:21
The other thing, the other thing that actually struck me about that conversation is, you know- But I feel like we're doing Rick Reichert well by this outro. Like- Absolutely...
29:29
he's gonna hear this outro if he listens to this episode. He's gonna be like- And he's gonna be like, "Yeah"... "Ah, it's the, that's the better thing." "I knew I liked those guys."
29:36
[laughs] But at the end there- I don't know... when he was just, like, rattling off all of the things that the market and dealers- Mm... and consumers are having to a- approach right now, it's like,
29:50
it's EVs, it's, you know, how to market ICE vehicles among EVs. It's inequity, 84-month payments, whether I'm gonna go loan or lease.
30:00
There is just the, the, the mass amount of education that a consumer and a dealer has to assume and ingest and then flow out from- Staggering... to be able to buy a car is staggering to me right now.
30:15
So that speed of education just has to be so quick. It is. It, it's really one of the things that breaks down, one of the, one of the kind of, like, leanings that we always have in when we say dealers or retailers.
30:30
There aren't very many retail industries that are that complicated. Yeah. You know what I mean? Like, it really is a complex way of, um- Like, do I want the white socks-... supply... or the black socks? [laughs] Right.
30:42
Right. Okay. That's retail. Small, medium, large. [laughs] That is retail. Yeah. That is. All right. Well, look- No, I- If you have it... Oh, but, no, you're gonna take it out? Cerillo, do it. No, Michael, please.
30:53
Cerillo, take us out the way we should go out. I was like, I, I really love your conversation- Complain... with each other, but I'm gonna close this. [laughs] Hey, we hope you enjoyed this episode of Autocollabs.
31:05
On behalf of myself, Michael Cerillo, Kyle Mountser, Paul Jay Daly, we'll catch you on the next one.
31:10
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31:23
If you love this podcast, please leave us a review and share it with a friend. Thanks again for listening. We'll see you next time.
31:30
[upbeat music] Welcome to Autocollabs. [laughs] Welcome to Autocollabs. [laughs] Why are we recording?
31:47
Are we rolling yet? Not yet