Latest / CBT Live / Fed Raises Rates, Toyota and the China Question, Tariff Fears Ease (09.17.26)

Transcript

Fed Raises Rates, Toyota and the China Question, Tariff Fears Ease (09.17.26) · CBT Live

0:23
SPEAKER_09: Hello, everyone, and welcome back to CBT Live.
0:25
SPEAKER_09: Today is Thursday, September 17th.
0:27
SPEAKER_09: I'm Bridget Fitzpatrick, joined by Jim Fitzpatrick.
0:32
SPEAKER_05: I think you ever got my name again.
0:34
SPEAKER_05: You looked to be like, who is this guy?
0:35
SPEAKER_09: What's your name again?
0:36
SPEAKER_09: Who is this guy sitting next to you?
0:39
SPEAKER_05: It's only been 20 years.
0:40
SPEAKER_05: Who are you?
0:43
SPEAKER_09: All right.
0:44
SPEAKER_05: I'm your companion.
0:45
SPEAKER_05: That's who I am.
0:45
SPEAKER_05: You are.
0:46
SPEAKER_05: That's all.
0:46
SPEAKER_05: I'm just through and through.
0:48
SPEAKER_05: Right.
0:49
SPEAKER_05: I'm here for you.
0:51
SPEAKER_05: So by the way, I love the CBT uh apparel today.
0:55
SPEAKER_05: Rocking the brand.
0:56
SPEAKER_05: That's right.
0:57
SPEAKER_05: If you two want a shirt like that, this is just cool.
1:00
SPEAKER_05: We gotta get into the merchant.
1:02
SPEAKER_09: I'll send you one.
1:03
SPEAKER_05: That's right.
1:03
SPEAKER_05: She'll give you the shirt off her back.
1:06
SPEAKER_05: But not on the show.
1:07
SPEAKER_09: No.
1:07
SPEAKER_09: That'll be weird.
1:09
SPEAKER_09: All right.
1:10
SPEAKER_09: Coming up, we'll be joined by Scott Falcone, owner of World Auto Group, to talk about AI.
1:15
SPEAKER_09: And then we'll also be joined by Frank Eckert with Eckert Solutions Group to talk about closing the year strong.
1:23
SPEAKER_09: But we have to start today's show with the interest rates because we finally got the Fed decision yesterday.
1:28
SPEAKER_05: That's right.
1:29
SPEAKER_09: Raise the rates by 25 basis points, bringing the federal funds target range to 3.75 to 4%.
1:36
SPEAKER_05: So and that's the first increase in three years, I think.
1:40
SPEAKER_05: Yes, in over three years.
1:41
SPEAKER_05: Which I think was a little bit of a I don't want to say a shocker to President Trump, because that was his hand-picked guy, if you remember.
1:48
SPEAKER_05: Yeah.
1:48
SPEAKER_05: And um in fact the last guy was his hand-picked guy, although there was a period of time there where he tried to make it like Biden brought the Brian uh Biden brought Powell in when in reality it was Trump that brought Powell in.
2:01
SPEAKER_05: And um, but anyway, he's he was like this whole new this guy is the guy, right?
2:06
SPEAKER_06: Yes.
2:06
SPEAKER_05: And uh they go ahead and raise rates first time in three years.
2:11
SPEAKER_09: So yes, first time since July of 2023.
2:14
SPEAKER_09: Yes.
2:14
SPEAKER_09: Yes.
2:15
SPEAKER_09: So to talk more about this, we are bringing in John Murphy, founder and managing partner of Murphy Automotive Partners.
2:21
SPEAKER_09: Thank you so much for joining us again, John.
2:23
SPEAKER_09: It's great to see you.
2:25
SPEAKER_05: Thanks for having me.
2:26
SPEAKER_05: Yeah, it's great to be here.
2:27
SPEAKER_05: We felt you're just the guy, John, to turn to in times like this.
2:31
SPEAKER_05: Uh uh, so talk to talk to us about this.
2:34
SPEAKER_05: What is what does all of this mean when you've got a 25 uh basis points increase in the rate?
2:40
SPEAKER_07: So I I think for for most of the folks on uh on on in your audience, this is this is a bit of theater because they've been facing higher rates because the market has been driving rates higher uh for the better part of the last year.
2:52
SPEAKER_07: So you know when you look at prevailing rates on auto loans, they've been going up and they are relatively high to where they have been for the fast few past few years.
3:00
SPEAKER_07: So you know it's not necessarily big news here, but it is another sort of factor here in making affordability tougher for the consumer.
3:09
SPEAKER_07: And that's you know, that's not a good thing for sales and ultimately uh for supply.
3:14
SPEAKER_07: So I think there's there's some real challenges that are being put in place here.
3:16
SPEAKER_07: But broadly, this also does ri raise uh borrowing for consumers across the board.
3:20
SPEAKER_07: So it crowds out um the ability to buy all sorts of goods, including autos.
3:25
SPEAKER_07: So it's a real challenge.
3:27
SPEAKER_05: Yeah.
3:27
SPEAKER_05: And it also uh will increase a dealer's floor plan, right?
3:32
SPEAKER_05: I mean, if if it's tied in to the rate.
3:35
SPEAKER_05: Correct.
3:35
SPEAKER_07: And I think there's a there's a big question from the automaker standpoint, you know, how they they deal with subvention um and support on um the floor plan as well as what they're doing to the consumer right now.
3:46
SPEAKER_07: Because obviously a lot of consumers are getting subventive rates right now as incentives, which are relatively low-cost incentives.
3:52
SPEAKER_07: Because when you think about a 100-basis point increase in an auto loan rate, it's about 23 bucks a month.
3:59
SPEAKER_07: We're talking about 25 basis points right now.
4:01
SPEAKER_07: So the grand scheme of things, the bigger issue for consumers on affordability is just the outright price.
4:06
SPEAKER_07: Because we're even at you know seven-year or six-year loans, the amortization of the principal is much greater than the interest expense.
4:14
SPEAKER_07: So um the reality is we need supply to go up dramatically to drive prices down or more affordable vehicles to be introduced to really help the affordability issue in the in the industry.
4:24
SPEAKER_07: Yeah, no question.
4:25
SPEAKER_05: This also, though, does does it put from a historic standpoint, does it put a damper on sales because of the perception from the consumer that goes, oh, rates are high.
4:36
SPEAKER_05: You know, rates just went up.
4:38
SPEAKER_05: Maybe now's not a good time to buy a car.
4:41
SPEAKER_07: Well, you know, it it certainly does.
4:42
SPEAKER_07: And Jim, it's uh it's a really interesting point on consumer confidence.
4:45
SPEAKER_07: And consumer confidence is near all-time lows despite most economic metrics looking like they're pretty good.
4:52
SPEAKER_07: Um, you know, auto auto sales running 16.2, 16.3 is not a bad rate.
4:57
SPEAKER_07: So something, there's a real disconnect between what's going on with consumer psychology and auto sales.
5:03
SPEAKER_07: And the reality is if you look to most economic factors and what's going on from the cycle in the past couple of years, you should, you know, see a sales rate that more in the mid-16s, potentially into the mid-17s.
5:14
SPEAKER_07: So that confidence is a real big issue, and you're right, this doesn't help at all.
5:18
SPEAKER_05: Yeah, yeah, there's no question.
5:19
SPEAKER_05: And that's just one more thing that uh dealers have to deal with right now in the showrooms, right, is the is the fact that rates went up.
5:25
SPEAKER_05: Uh, do you think we'll see from the manufacturers uh maybe more of an aggressive civented type lease or program out there to combat that with consumers?
5:36
SPEAKER_07: Yeah, I I I I think so.
5:38
SPEAKER_07: Um but the reality is that the automakers, and this is you know a study that we recently did with with um our product pipeline analysis called the MAP, where there's not a lot of new product coming out.
5:47
SPEAKER_07: So the reality um is when you want to push demand and advertise is really when you've got a lot of really good new product, and that's really a year to two out.
5:56
SPEAKER_07: So I think that the motivation is always to drive profit returns for the automakers and any any private company, but really the need to push really hard um is is not necessarily there and the follow-through is not there.
6:07
SPEAKER_07: And Jim, one of the really interesting things um when you think about from uh install base of capacity at the production level at automakers, um the reality is capacitation in the industry is running around 70%.
6:20
SPEAKER_07: So if automakers really wanted to hit the gas and push volume, uh they've got the capacity to do it.
6:28
SPEAKER_07: But the reality, as you know, and I think a lot of your viewers know, is the automakers are putting up still near record profits at these trend, slightly below trend levels.
6:38
SPEAKER_07: So I don't think they're gonna really push that hard to drive sales much harder.
6:42
SPEAKER_07: But there is this significant question that you raised about this consumer confidence and their willingness to buy.
6:46
SPEAKER_07: Um and I think that's gonna be a real challenge.
6:48
SPEAKER_07: And I'm not sure subvented rates or even lower pricing is really gonna pull a lot of people back that quickly.
6:54
SPEAKER_07: I think you really need some really good, dynamic new product, and that's a year to two out.
6:59
SPEAKER_05: Yeah, I I can see that.
7:01
SPEAKER_05: Um what what is the likelihood?
7:02
SPEAKER_05: And I know that this is just kind of like an educated guess, but what's the likelihood that the next time the Fed meets, which I think is just in a few months, right, that they have another increase?
7:13
SPEAKER_07: Well, I I think the market's telling you, and the betting odds are that it's you know north of 50%.
7:18
SPEAKER_07: Uh what I think might be more interesting is when you look at the dot plot, and I'm not sure how accurate the dot plot is from the uh the uh the board of governors at the Federal Reserve, but when you look at the distribution over the next two years, uh the reality is next year it looks like it's it's about flat.
7:33
SPEAKER_07: And when you get out to 2028, it looks like rates are back down um you know 25, 50, maybe even 100 basis points, depending on which dots you're you're you're looking at.
7:42
SPEAKER_07: So yeah, even if we have a bit of an increase here, it doesn't seem like we're on a significant rate hike path um above the the next potential rate hike, which seems like it will occur at the next meeting.
7:53
SPEAKER_07: And the reality is we're not looking at sort of a sustained recovery.
7:56
SPEAKER_07: Now, what happens in the market, in the bond market, is happening independent of the Fed.
8:00
SPEAKER_07: So the Fed can raise rates or lower rates, um, but if the bond market is saying the market, you know, the the market dynamics are getting riskier, uh, the government is deficit spending, uh, there's real potential troubles ahead in in the economy, rates will naturally go up.
8:15
SPEAKER_07: And we've seen this with the 10 year that's now at 5%, plus or minus, which is uh the highest we've been since the early 2000s.
8:22
SPEAKER_07: So um, you know, the the dynamics of of rates are really be borne out or driven more by market forces as opposed to the Fed themselves.
8:28
SPEAKER_07: So certainly a little bit upside in in the Fed here, potentially some downside as we go through the next couple years.
8:35
SPEAKER_07: But I think there's some real risk out there uh more broadly in the financial markets that rates could stay pretty high uh for the next, you know, for the extended period.
8:43
SPEAKER_05: So two major things are happening in the next couple of months, or or hopefully in the next couple of months.
8:48
SPEAKER_05: One in the midterms, and then the other is the prospect that the war would be over.
8:53
SPEAKER_05: Um and I would think that maybe Trump wants to get this war behind him before the midterms hit, because I know it's gonna play a big role in who votes for who.
9:02
SPEAKER_05: But uh how much of a role does the current war play in all of this?
9:08
SPEAKER_07: Well, I think if you look at any dynamic, either geopolitics or economic that are drive that's driving inflation higher, uh, that creates the the need theoretically for higher interest rates.
9:20
SPEAKER_07: So I think as it plays into higher oil prices, which is an input cost to you know everything we all consume, um, that creates some inflationary pressures and drives rates um higher, either from the Fed or really just in in the market uh in general.
9:34
SPEAKER_07: Um you know, I think Jim that the war is an interesting thing to to bring up because it's one of many um sort of two or three stinger deep events that everybody in society around the world keeps um running into, right?
9:49
SPEAKER_07: And and these tail events that we think are tail events, and I shouldn't really make light of this because it is a real challenge.
9:55
SPEAKER_07: I think folks are generally being desensitized and are able to fight through.
10:02
SPEAKER_07: And what you're seeing is the economy pushing forward despite all these headwinds.
10:06
SPEAKER_07: Now, people remain a bit depressed, so when you measure consumer confidence emotionally and psychologically, they they they don't feel great, and they're they're answering that in the surveys.
10:15
SPEAKER_07: But the reality is the nuts and bolts and and numbers here are looking uh fairly fairly good.
10:21
SPEAKER_07: So I think you know, once again, you just get back to this dichotomy of perception uh versus reality, and it's not great if consumer confidence is lower, but I think these major events like the war are things that the most consumers on a day-to-day basis are fighting through themselves, even though they don't feel great about it.
10:38
SPEAKER_07: Um, and the economy is soldiering on.
10:40
SPEAKER_05: Yeah, for sure.
10:42
SPEAKER_05: Wow.
10:42
SPEAKER_05: Well, thank you so much um uh for for coming on and talking about this because I know that there's a lot of people out there in the auto industry that's like, ah, we really didn't need this kind of news right now.
10:52
SPEAKER_05: So John Murphy, thank you so much.
10:55
SPEAKER_05: We'll fight through it.
10:56
SPEAKER_05: Yeah, that's right.
10:56
SPEAKER_05: Thanks, John.
10:57
SPEAKER_05: Yeah, absolutely.
10:58
SPEAKER_05: Thanks, guys.
10:58
SPEAKER_05: Murphy Automotive Partners.
11:00
SPEAKER_05: And uh congrats on the new on the new venture.
11:03
SPEAKER_05: And uh we love having you in here, man.
11:05
SPEAKER_05: It's great.
11:05
SPEAKER_05: I know a lot of dealers count on what you say.
11:08
SPEAKER_05: So thanks so much.
11:09
SPEAKER_05: Thanks for having me.
11:10
SPEAKER_05: All right, take care.
11:11
SPEAKER_09: Yes, great insight there.
11:13
SPEAKER_05: Yeah, for sure.
11:14
SPEAKER_06: Yes.
11:14
SPEAKER_09: So um one thing that's interesting that I read this morning, Goldman Sachs is predicting another hike in October.
11:20
SPEAKER_09: Bank of America is predicting potentially two October and December.
11:23
SPEAKER_05: So is Bank of America still able to operate and forecast without John there?
11:27
SPEAKER_05: I don't know.
11:28
SPEAKER_05: I mean I don't know how they do it.
11:29
SPEAKER_05: They gotta be lost.
11:30
SPEAKER_05: He's gotta he's the guy.
11:32
SPEAKER_05: He was the guy.
11:33
SPEAKER_09: That's right.
11:33
SPEAKER_05: And now he's now he's doing it without him.
11:36
SPEAKER_05: Couldn't be happier for him.
11:37
SPEAKER_05: He's a great guy, and man, he's very, very well respected in our industry.
11:41
SPEAKER_05: Has been for years.
11:43
SPEAKER_09: So all right, guys.
11:45
SPEAKER_09: AI is changing the way dealerships operate from the sales floor to the back office.
11:51
SPEAKER_05: That's right.
11:52
SPEAKER_05: So uh Scott Falcone, owner at World Auto Group in Illinois, uh, has taken a very hands-on approach to AI and how it can be used to solve everyday dealership challenges.
12:03
SPEAKER_05: This is just the guy we want to talk to, then, right?
12:05
SPEAKER_05: Scott, welcome into the show.
12:07
SPEAKER_05: How are you?
12:08
SPEAKER_05: Fantastic.
12:09
SPEAKER_05: So thank you for taking the time with us today.
12:11
SPEAKER_05: Before we jump in, let's start with business today.
12:14
SPEAKER_05: How is how's business at your dealerships, which I might add is a Hyundai and Kia store?
12:19
SPEAKER_03: Yeah, it's been a good year.
12:20
SPEAKER_03: We um we're exceeding metrics uh from uh 25 and almost almost every level.
12:26
SPEAKER_03: So we're pretty happy with what we've got going this year.
12:28
SPEAKER_05: Wow.
12:29
SPEAKER_05: Did you not hear that uh sales are tough right now?
12:31
SPEAKER_05: And in in uh maybe in Illinois, they're not getting the news there.
12:35
SPEAKER_05: You're not buying the news.
12:39
SPEAKER_03: But not CBT news, though, right?
12:41
SPEAKER_03: Sentiment, absolutely not.
12:42
SPEAKER_03: Yeah, that's the good news.
12:43
SPEAKER_03: Yeah.
12:44
SPEAKER_05: So we recently uh spoke to Eric Watson, uh, and I guess you had already answered this, but uh vice president of sales at Kia, he was very happy to come on, like 84,000 units sold.
12:55
SPEAKER_05: Uh did you also have a record-breaking month in August?
12:58
SPEAKER_03: We were right there, yeah.
12:59
SPEAKER_03: I mean, it was it was one of our you know best months in the history of the store.
13:03
SPEAKER_03: Um, I you know, we've like I said, the the year's been really strong, you know, month after month we've seen some some pretty stellar results.
13:09
SPEAKER_03: So we're we're really pleased with the Kia franchise right now for sure.
13:12
SPEAKER_05: Yeah.
13:12
SPEAKER_05: And I know I might know not to take some wind out of your sales here, but Hyundai sales were a little bit off.
13:18
SPEAKER_05: When you're when you own both stores, a Hyundai and a Kia, do you feel as though Kia, with what it's doing in the way of their styling and their pricing and everything else, takes a little bit from the Hyundai showroom and puts it in the Kia showroom?
13:30
SPEAKER_03: Those I think that that's been going on for a while in chipping away.
13:35
SPEAKER_03: You know, um, and and I just the other day, you know, somebody who um, you know, and somebody that I I you know respect and you know, an intelligent person who wanted an intelligent answer said, you know, if you were gonna put somebody in one or the other, what would it be?
13:48
SPEAKER_03: And you know, when you go, you know, comparing the lineup model to model, yeah, good question.
13:53
SPEAKER_03: Uh yeah, it really does.
13:55
SPEAKER_03: You know, I mean the quality is gonna be great in either one of them.
13:57
SPEAKER_03: You know, everything about the cars is amazing.
13:59
SPEAKER_03: It's uh at that point, it really is, you know, what do you like the way you know things look?
14:02
SPEAKER_03: Just that simple.
14:03
SPEAKER_03: Um and Kia does have the hot hand when it comes to to product and design, and and we feel it and we see it.
14:09
SPEAKER_03: You know, there I do think Hyundai, you know, they they've evolved their product over the years, you know, tremendously.
14:14
SPEAKER_03: The quality bolts, you know, their storied um franchises for sure.
14:19
SPEAKER_03: And and I'm sure that you know Hyundai will have something that's exciting, you know, on the horizon for all, you know, for for the dealers and for customers as well.
14:27
SPEAKER_05: Yeah, yeah, no question about it.
14:29
SPEAKER_09: So, Scott, you were recently featured in Automotive News for building your own AI tools.
14:33
SPEAKER_09: So, talk to us about that.
14:34
SPEAKER_09: What are you doing with AI in your stores?
14:37
SPEAKER_09: Um boy, that's uh not loaded question, right?
14:41
SPEAKER_03: Yeah, big one there.
14:42
SPEAKER_03: Um we um when when uh AI you know came on the scene, I really felt like it was a watershed moment and that you know it needed to be you know embraced and and and we really had to have a champion.
14:55
SPEAKER_03: And I quite honestly uh think that you know our team was not set up to have an AI champion, and so it had to be me.
15:03
SPEAKER_03: I had to raise my hand for it.
15:04
SPEAKER_03: I wanted to.
15:05
SPEAKER_03: Um, I certainly couldn't afford to miss out on what it might be.
15:09
SPEAKER_03: And so if anybody was gonna spend time or waste time or invest time, I thought it ought to be me.
15:15
SPEAKER_03: Our team is is designed to, you know, they're thoroughbreds and they're designed to run fast and sell a lot of cars.
15:20
SPEAKER_03: And so I didn't really want to pull them off of the mission and and commit to that.
15:24
SPEAKER_03: And as you know, the models evolved and the ability to generate things evolved and the ability to solve problems in the store evolved with with AI that ultimately led into vibe coding.
15:36
SPEAKER_03: Um, I've you know, I was really glad that you know I was the one that was driving it.
15:41
SPEAKER_03: I realized that I needed help as well.
15:43
SPEAKER_03: So we've recently hired an applied AI software engineer to join the team, um, and that's made a huge difference.
15:50
SPEAKER_03: So the evolution of you know simple models that were building simple tools to solve simple problems has really now grown into um you know much bigger, more complex tools in different um parts of the dealership doing different things.
16:06
SPEAKER_03: You know, there's there's sales and communication tools, there's a lot of modeling tools where we want to make a decision on do we make this move and do we offer this to the customers, and what does that look like financially?
16:18
SPEAKER_03: And we can model that out with with cohorts and over a period of you know years to make sure that it it aligns with the business from a profitability standpoint, um diagnostic tools uh in the service drive, you know, helping advisors and technicians um do dye eggs and then present the dye eggs in a in a in light that um that the customers can understand, yeah you know, a lot less technical.
16:46
SPEAKER_03: Um and that's been uh a huge, huge success for us in service where customers you know are handed some you know just a different look of what's going on with their car, just not an RO at the cashier's window or at the at the advisor's desk, um, you know, minus the technical language.
17:03
SPEAKER_03: And you know, they they see the transparency there and the trust there, so you know, drive on with the work.
17:08
SPEAKER_03: So we're seeing you know that work very well too.
17:10
SPEAKER_03: So it's really touched, you know, uh everywhere.
17:14
unknown: Yeah.
17:14
SPEAKER_05: Have you figured a way that uh it can do walk-arounds uh on all on the surf drive yet?
17:20
SPEAKER_03: If you figured that out, you can be a very wealthy man.
17:24
SPEAKER_03: We do have a tool that helps write scripts for uh sales walk arounds.
17:30
SPEAKER_03: So when you're TikTok, you can upload, we can put the car in the feature, you know, everything about it, and you know, the tool will go out and and and and help you write a script for your party.
17:40
SPEAKER_03: Are you a first-time buyer and you want to buy this car?
17:42
SPEAKER_03: Well, then we're gonna lean into that.
17:43
SPEAKER_03: Are you an enthusiast?
17:45
SPEAKER_03: And so we we can help with a script.
17:47
SPEAKER_03: And if it's a 30-second or a five-minute or whatever you want to do, a full walk around or just a features and benefit real quick one.
17:53
SPEAKER_03: So we do have that as well.
17:54
SPEAKER_05: Where was that when I was selling?
17:55
SPEAKER_05: I was not good at the walk-around presentation at all.
17:59
SPEAKER_05: I was uh I was I was more of a get to know them, become their friend, get into negotiation, and uh didn't spend a lot of time on on uh product knowledge or walk-around.
18:08
SPEAKER_05: Not that I say that that's the correct thing to do, by the way.
18:11
SPEAKER_05: That's that's that's right.
18:12
SPEAKER_05: Build value.
18:13
SPEAKER_05: I was I was more of the now, let's sit down and start negotiating.
18:16
SPEAKER_05: Not the thing to do.
18:18
SPEAKER_09: So, Scott, this AI consultant that you have, is that a full-time employee that you have on staff?
18:22
SPEAKER_09: Talk to us about that relationship.
18:24
SPEAKER_03: Yeah, he's not a consultant, he's an engineer.
18:26
SPEAKER_03: He's a he's a CS trained engineer.
18:28
SPEAKER_03: Um plucked him right out of college.
18:30
SPEAKER_03: Um, you know, 250 resumes, quite honestly, that I went through.
18:34
SPEAKER_03: And yeah, uh, everybody, you know, that applies for this job is a plumber.
18:39
SPEAKER_03: They all you know can code and do all that.
18:41
SPEAKER_03: He had uh he was a builder, and I like that about him, you know, that his hobbies and and some of the things that he had done, you know, when he was in college were were were projects and they were building, and that's what that's what we're doing, right?
18:52
SPEAKER_03: We we're we're building in the store, we're gonna keep building tools for ourselves in the store because we continually have problems that need to be solved.
18:59
SPEAKER_03: And I'm you know, we can't wait for a vendor to come to us with that.
19:04
SPEAKER_03: And you know, quite honestly, the vendor, you know, uh tools that are gonna be solving problems are gonna all look an awful lot alike.
19:11
SPEAKER_03: And, you know, if if it's if the past is an indicator of the future, you know, the the graveyard of tools that we all have, you know, didn't end up solving a lot of the problems.
19:22
SPEAKER_03: Or these were problems that we didn't need solving in the first place.
19:25
SPEAKER_03: But we signed up for$19.95 a month thinking that it was gonna generate ROI.
19:29
SPEAKER_03: Uh and it hasn't.
19:31
SPEAKER_03: And so, you know, we can't afford to wait around for a vendor who's gonna spend time inside of a dealership um, you know, in the weeds, really identifying what problems we have.
19:42
SPEAKER_03: Right.
19:42
SPEAKER_03: And so we're gonna we're gonna build the tools um and solve our own problems in the store.
19:46
SPEAKER_03: And you know, there's gonna be big problems, right?
19:48
SPEAKER_03: We're gonna there's gonna be a bigger, better CRM, you know, around the corner that somebody's gonna build, you know, whether it's a dealer or it's gonna be a vendor who's really gonna you know do it right.
19:57
SPEAKER_03: Yeah, uh, and it's gonna get better.
19:58
SPEAKER_03: And there's gonna be other you know, big projects, you know, along those lines.
20:02
SPEAKER_03: Those those are not things that we're tackling or even have any desire to tackle.
20:06
SPEAKER_03: You know, we get near you know, data problems or compliance problems, you know, and you know, uh customers' information and things like that, those aren't projects that we want to tackle.
20:16
SPEAKER_03: You know, we know our lane and we're gonna stay in our lane, but we're just not expecting anybody to come to our rescue, you know, to help us with analysis tools of our financial statement or our 20 group composites and things like that.
20:28
SPEAKER_03: Sure, sure.
20:30
SPEAKER_09: So uh talk to us a little bit about how you measure that ROI.
20:34
SPEAKER_09: I'm I'm assuming that you're saving money up to time, better decisions, all of that.
20:38
SPEAKER_09: Can you talk to us about how that's helped?
20:41
SPEAKER_03: Yeah, I I think if it was one word, it would be outcome.
20:44
SPEAKER_03: And you know, outcome, you know, we'll cover a lot, and and it could be money, it could be time, um, it could be customer experience.
20:52
SPEAKER_03: For us, the the the um what we went after was again solving a problem.
20:57
SPEAKER_03: And for me, not selling enough cars is a problem.
21:01
SPEAKER_03: Not you know, that's a simple problem, right?
21:03
SPEAKER_03: We want to we want to do better.
21:04
SPEAKER_03: Not selling enough service is a problem.
21:07
SPEAKER_03: Well, how do we go about you know removing friction?
21:09
SPEAKER_03: How do we go about closing more deals?
21:11
SPEAKER_03: How do we move the the metrics?
21:13
SPEAKER_03: And that's you know how we define kind of the ROI.
21:16
SPEAKER_03: Are we selling more cars this year because of some of the tools?
21:18
SPEAKER_03: Yes.
21:19
SPEAKER_03: Can we put a pencil to it and say, hey, we built this, we used it, we closed a deal today.
21:24
SPEAKER_03: That's gonna work, you know, great.
21:26
SPEAKER_03: And that's what what's been happening is you know, we're finding two and five deals a week as we evolve new tools for the sales team to use, additional ROs, um, you know, higher-ticketed ROs, holding more gross on deals that we do close because of the tools we've built.
21:41
SPEAKER_03: So that's the ROI that we went after, and and we're seeing it.
21:45
SPEAKER_03: We're we're I didn't really go into it to save money.
21:48
SPEAKER_03: And I think that the money saving um tools that are going to get built are probably gonna be more complex and they're gonna be more agentic.
21:56
SPEAKER_03: And that may be outside of our wheelhouse.
22:00
SPEAKER_03: As well.
22:00
SPEAKER_03: Mine, more than likely, since I'm not technical.
22:03
SPEAKER_03: Um, you know, as I continue to hire and evolve the team members, you know, they'll be able to work with that.
22:09
SPEAKER_03: And we're already seeing some, you know, some agents, you know, in the store uh in a safe environment.
22:15
SPEAKER_03: Um, you know, it's very um, you know, controlled atmosphere and and and and testing and so on and so forth.
22:20
SPEAKER_03: But so that's the type of ROI I think, you know, it's really it's just what's the desired outcome that you're after?
22:26
SPEAKER_03: You know, a lot of people are gonna want ROI and it's gonna be saving money.
22:30
SPEAKER_03: We weren't looking to do that.
22:32
SPEAKER_03: We're not looking to uh cut head counts, you know, we're looking to enhance our people and just make them that much stronger with AI, with the tools, and create an entire culture, you know, in the store that is is really you know blanketed in AI as a solution.
22:50
SPEAKER_03: Look, let's look there first to see if this if it can help us be better anywhere and make the customer experience better as well.
22:57
SPEAKER_05: Sure, sure.
22:58
SPEAKER_05: There's a a dealer that I spoke to last week that's got 10 stores, and we were talking about AI and the cost factors and and savings and what have you, and he said, My forecast is that within 10 years, and maybe it takes 10 years, I'll be able to run my stores on 30% less staff than I am right now because of AI.
23:20
SPEAKER_03: Is he crazy or or I mean 10 years is you know, 10 years is tough enough to predict without AI in the mix, right?
23:29
SPEAKER_03: I think I've started to look at, you know, when people talk about in a year with AI and in in a month or six months, you know, we've a dog year is seven years.
23:39
SPEAKER_03: So my perspective for AI is that it that an AI year is maybe somewhere between 10 and 20 years of a human life.
23:47
SPEAKER_03: So that's pretty far out there.
23:52
SPEAKER_03: So I don't think that he's he's wrong necessarily.
23:55
SPEAKER_03: Um, but you know, we're we're we're not there yet, right?
23:58
SPEAKER_03: We're not, you know, there's no agents that are going to fulfill the license and title soup to nuts.
24:03
SPEAKER_03: And I don't I don't know when that will be.
24:05
SPEAKER_03: Uh there's nobody that's there's no AI, you know, that agent right now that's going to close a month and remove a controller.
24:11
SPEAKER_03: It's just not gonna happen.
24:12
SPEAKER_03: Right.
24:13
SPEAKER_03: The goal would be to make them more efficient.
24:15
SPEAKER_03: Uh, I think we'll be able to level headcount and we won't have to have so many micro positions or assistance to the assistant to the manager um with with tools like this.
24:25
SPEAKER_03: But uh I it's it's certainly possible that we we we could be removing it.
24:28
SPEAKER_03: I think that um the the the areas of real opportunity um to to remove and reduce headcount and and I don't I don't want to do that again.
24:40
SPEAKER_03: I would rather be so busy that I needed to have the human element, but I do believe that the BDC and Outbound will be a great opportunity to um to not have to overhire but to enhance their skills because you know we in in some instances we just can't get to the opportunities that we have.
25:01
SPEAKER_03: We spend the money on it, they can't get to it, they want to, right?
25:04
SPEAKER_03: Um, the training, um, you know, there's just so much that goes into that.
25:08
SPEAKER_03: That that and and there's so many campaigns and so much data mining opportunity in our you know DMS right now that we're not getting to either.
25:17
SPEAKER_03: And so, you know, a agentic outbound to me is where we can reduce some headcount, but just really blow up our sales.
25:25
SPEAKER_03: Yeah.
25:26
SPEAKER_03: Um that that that's not far off.
25:28
SPEAKER_03: I mean, you know, there are some compliance issues, there's TCPA, there's things like that, but those are already being addressed, and there are already outbound things happening.
25:38
SPEAKER_03: It's just a you know, it's not very far from when we're gonna be moving to um some real ROI with outbound calls.
25:45
SPEAKER_05: Yeah, yeah, I could I could totally see that.
25:47
SPEAKER_05: In our last minute together, um, share with us what you're seeing from the consumer using AI and chat uh to either, you know, shop for a car, negotiate on a car.
25:57
SPEAKER_05: I mean, we're we're seeing some kind of some funny videos now where people are you know saying, hey, I'm in the showroom right now, I'm looking at a car.
26:04
SPEAKER_05: What's the first question I should ask the salesperson or how should I how much off should I ask for this particular car?
26:09
SPEAKER_05: And it's giving back some good answers.
26:11
SPEAKER_05: But are you seeing where consumers now are coming in saying, hey, chat told me this is what I should pay for the car, this is what I should get for my trade?
26:19
SPEAKER_03: I ask all the time, and in our environment, the answer is no.
26:24
SPEAKER_03: Okay.
26:24
SPEAKER_03: And so myself, we're an outlier and everybody wants to hear a great story that I have, but I don't have one on that.
26:30
SPEAKER_03: So we are preparing and doing everything we can uh you know to be cited in LLMs.
26:37
SPEAKER_03: And you know, that's a that's the wild west right now.
26:40
SPEAKER_03: I mean, you know, anybody that's selling you a story that we'll get you cited, we'll do this.
26:44
SPEAKER_03: You know, it's the new SEO, um AEO, GEO, AIO.
26:48
SPEAKER_03: I mean, it's it's just enhanced SEO at the end of the day.
26:51
SPEAKER_03: And um, but that's an area that we all do have to pay attention to because there will be definitive guidelines to be there.
26:57
SPEAKER_03: Yeah, and um, and and you need to be in front of that, that's for sure.
27:01
SPEAKER_05: Yeah, no question about it.
27:02
SPEAKER_05: Scott Falcone, thank you so much for joining us on the show.
27:04
SPEAKER_05: Very much appreciate it.
27:05
SPEAKER_05: Thanks for having me.
27:06
SPEAKER_05: Yep.
27:07
SPEAKER_05: Thanks.
27:08
SPEAKER_05: Wow, I love it.
27:09
SPEAKER_05: I know he he's out there in front of it all.
27:12
SPEAKER_05: He really is going, hey, we gotta build our own.
27:14
SPEAKER_09: Doing it itself.
27:15
SPEAKER_05: Yeah.
27:15
SPEAKER_05: Wow, love it.
27:16
SPEAKER_05: Very good.
27:17
SPEAKER_05: Yep.
27:17
SPEAKER_09: So I would like to thank today's sponsor before we get into our next slide.
27:21
SPEAKER_09: Yeah, great idea.
27:22
SPEAKER_09: So today's sponsor is Radar by Auto AI.
27:25
SPEAKER_09: Keeping up with advertising compliance can be a full-time job.
27:28
SPEAKER_09: Radar by Auto AI helps make it easier.
27:30
SPEAKER_09: Radar monitors your VDPs and meta-ads for pricing and disclosure issues, flags potential compliance risks, and can even keep an eye on what your competitors are doing.
27:39
SPEAKER_09: Protect your dealership and stay ahead with radar by auto AI.
27:44
SPEAKER_05: So you're able to check to see if your competitors are that's interesting.
27:50
SPEAKER_05: And I will tell you that uh you know how passionate I am about this whole FTC situation.
27:56
SPEAKER_05: And uh radar.
27:57
SPEAKER_05: It's funny that the name of the company's radar and their campaign is Stay Off Their Radar.
28:01
SPEAKER_05: You know what I mean?
28:02
SPEAKER_05: Right off the FTC radar.
28:04
SPEAKER_05: But man, if you're a dealer today, you just and you don't pay attention to this FTC thing, you're making a big mistake.
28:10
SPEAKER_09: I know, I know.
28:11
SPEAKER_05: Yeah, you know how I feel about those.
28:12
SPEAKER_09: So I cannot believe we're talking about this already, but we are talking about the end of the year.
28:17
SPEAKER_09: It is As we know it.
28:19
SPEAKER_09: It is approaching.
28:21
SPEAKER_05: It is the end of the year as we know it.
28:23
SPEAKER_09: That's the end.
28:24
SPEAKER_05: That's right.
28:25
SPEAKER_05: There's a song there.
28:26
SPEAKER_09: But don't break into song.
28:27
SPEAKER_05: I won't.
28:27
SPEAKER_05: You don't want to hear me.
28:28
SPEAKER_05: I know.
28:29
SPEAKER_05: For the dealer, this is when the pressure really starts to build, especially for those chasing year-end profits and manufacturer awards and want to finish the year strong, and the publics are all, you know, pushing, pushing, pushing for a stronger stock price by the end of the year to show profits, and everybody is just really focused on that.
28:49
SPEAKER_09: That's right.
28:49
SPEAKER_09: And that pressure can lead to some interesting approaches to getting customers through the door.
28:53
SPEAKER_09: Yep.
28:53
SPEAKER_09: Frank Eckert, owner of Eckert Solutions Group, joins us live to talk about how dealers are making that final push without losing sight of what happens after December 31st.
29:04
SPEAKER_09: Frank, welcome to the show.
29:05
SPEAKER_08: Hey, thanks for having me back.
29:06
SPEAKER_08: Super excited.
29:07
SPEAKER_08: Absolutely.
29:08
SPEAKER_09: Excited to have you.
29:09
SPEAKER_08: Thank you.
29:10
SPEAKER_09: So, as we go into the fourth quarter of the year, um let's talk about if you had to pick one or two things for dealers to focus on, what would that be?
29:20
SPEAKER_08: So, look, I think everybody's in that hard push, and and every dealer fits in usually one of two categories.
29:25
SPEAKER_08: We're gonna make the end of the year, keep doing what we're doing, we're gonna be okay.
29:28
SPEAKER_08: But then there's the other side of that coin where it's the fourth quarter, we gotta hit.
29:32
SPEAKER_08: Maybe we're down on our O count, maybe we're down in factory retention metrics, right?
29:36
SPEAKER_08: I think the the hardest part is not falling trap to, you know, how do we um how do we how do we show desperation, right?
29:44
SPEAKER_08: We don't wanna, we don't wanna do the the uh the extremely low price offer or free this or free that just to attract or get customers back.
29:52
SPEAKER_08: I think the trick here is is knowing how you've been going throughout the year.
29:56
SPEAKER_08: Look, if you've been increasing throughout the year two tenths, three tenths, whatever the number is, well, how are you gonna finish at the end of the year?
30:02
SPEAKER_08: If you're close, maybe I'm a point off, maybe I'm a point and a half, okay.
30:06
SPEAKER_08: Maybe you get a little aggressive.
30:07
SPEAKER_08: However, if you are so far off, those bad habits could really get you in trouble, especially going into the following year.
30:14
SPEAKER_08: I think the the trick is, right, is to understand the calculation.
30:18
SPEAKER_08: Um if if you know you've got some room uh uh to go after it, then go after it.
30:22
SPEAKER_08: Right?
30:23
SPEAKER_08: Get with a get with a good, good marketing company, one that can honestly help you get there.
30:28
SPEAKER_08: Look, nobody's out there trying to do$9 oil changes and think that's going to drive retention, right?
30:33
SPEAKER_08: I think at the end of the day, just trying not to be scared with doing doing a nice offer, but getting in front of that guest.
30:39
SPEAKER_06: Yeah, for sure.
30:40
SPEAKER_09: Absolutely.
30:41
SPEAKER_09: Now, how do you make sure that the team isn't creating bad habits that can trickle into January or the next year?
30:47
SPEAKER_08: Yeah, so I think it's when you do those really aggressive or those really um uh almost unbelievable offers.
30:54
SPEAKER_08: So what usually happens, most manufacturers, uh most manufacturers have some sort of rolling 12 months or at least one or two visits within the year.
31:02
SPEAKER_08: If you wait until the fourth quarter to do it with all the guests that have maybe gone risk or inactive, and you do send out that really aggressive offer, guess what happens?
31:11
SPEAKER_08: You've devalued not only your dealership, but the brand and the experience.
31:15
SPEAKER_08: So that guest who might have come in on that offer, guess when they're gonna have to come back when we send them another one of those low value offers.
31:22
SPEAKER_08: The hard part there is every guest is looking at that rolling 12 months.
31:26
SPEAKER_08: So, for example, you did a highly aggressive offer in the fourth quarter.
31:30
SPEAKER_08: Guess when that guest is gonna show back up again?
31:32
SPEAKER_08: Yeah, in the fourth quarter of next year.
31:34
SPEAKER_08: But now you're also piled on top of all the other guests that are going inactive.
31:38
SPEAKER_05: Yeah, no question about it.
31:40
SPEAKER_05: And for the most part, dealers right now, they've got other things to worry about, right?
31:44
SPEAKER_05: In addition to trying to close the year strong, such as AI tools that they're looking at for 2026 and the latter part of 2026, and of course 2027.
31:54
SPEAKER_05: I'm sure at NADA this year it will be like walking through a car wash of vendors out there going, AI, AI, AI.
32:02
SPEAKER_05: Are you seeing obviously we're seeing more AI used?
32:05
SPEAKER_05: Uh just had a great conversation uh with Scott Falcone.
32:09
SPEAKER_05: Um, but uh are you seeing much more AI used in service right now?
32:14
SPEAKER_08: Yeah, I think AI is great to help us do that outreach, right?
32:16
SPEAKER_08: Get in front of that guest.
32:17
SPEAKER_08: Uh, also with AI, it also allows you to to translate the data maybe to put it in a little bit easier position.
32:23
SPEAKER_08: Yeah, yeah.
32:23
SPEAKER_08: I think I think that's where the AI is gonna really help.
32:26
SPEAKER_08: I think it'll take the the good analyst and make them a really great analyst when it comes to those metrics.
32:32
SPEAKER_05: That's right.
32:32
SPEAKER_05: The dealers that you're talking to uh obviously still challenged in getting good technicians, right?
32:37
SPEAKER_05: Talk to us a little bit about that.
32:38
SPEAKER_05: Uh NADA says we need some 75,000 technicians uh over the course of the next 24 months, and uh dealers are still struggling with trying to get good technicians, right?
32:49
SPEAKER_08: Yeah, absolutely.
32:50
SPEAKER_08: And I think it really comes down to, and and boy, this is such a coin word, but it's that work-life balance, right?
32:55
SPEAKER_08: I think the new workforce that's coming in, I I don't necessarily believe they want to work 12 hours a day, 12 days a week, right?
33:02
SPEAKER_08: I think there has to be that good work-life balance.
33:04
SPEAKER_08: But I think at the same time, the dealership's responsibility is to what?
33:08
SPEAKER_08: Continuously drive that RO count.
33:09
SPEAKER_08: So there is work here for the technicians.
33:11
SPEAKER_08: I think it comes down to two things giving that technician a clear path to growth, getting that technician trained, and then giving that technician the mentorship that they genuinely need.
33:21
SPEAKER_08: Yeah, yeah, for sure.
33:23
SPEAKER_08: Wow.
33:24
SPEAKER_09: So any before we let you go, any final words of advice that you would give to dealers as as we go into Q4?
33:32
SPEAKER_08: Yeah, I think the trick is is look, if you're close, go ahead and and and uh good send out your best offer of the year.
33:38
SPEAKER_08: But don't get caught into that numbers management, which is a complete vortex, right?
33:42
SPEAKER_08: Creates no value, creates no loyalty.
33:44
SPEAKER_08: Getting that guest back in on a loss leader ad for service doesn't do anything for you in long term.
33:50
SPEAKER_05: Yeah.
33:50
SPEAKER_05: Right.
33:51
SPEAKER_05: One more question for you while I got you here.
33:53
SPEAKER_05: Um dealers, should they all be thinking mobile service?
33:58
SPEAKER_05: Is there a dealer out there from your perspective that shouldn't do mobile service?
34:02
SPEAKER_08: Yeah, look, I think mobile service gives you that extra stall.
34:05
SPEAKER_08: You don't need it, you don't need any brick and mortar.
34:07
SPEAKER_08: And guess what?
34:08
SPEAKER_08: Guess where you get to meet the guest, where they want to be met.
34:10
SPEAKER_08: I think mobile service, mobile service is truly for the guest, and I think that separates that dealership from everybody else if they can offer it.
34:19
SPEAKER_08: That's right.
34:19
SPEAKER_09: Yeah.
34:20
SPEAKER_09: When I we're all consumers, think about what you would want as a consumer.
34:23
SPEAKER_09: That's what we all would want.
34:25
SPEAKER_09: No question about it.
34:26
SPEAKER_05: Yeah, yeah, for sure.
34:27
SPEAKER_05: Hey, we have a question for you.
34:28
SPEAKER_05: What should managers do in January to reset the team after an intense year-end push?
34:34
SPEAKER_05: Good questions.
34:35
SPEAKER_08: Yeah, no, I think it's that's a great question.
34:37
SPEAKER_08: I think for for me, setting the year up with okay, what worked for us in 26?
34:41
SPEAKER_08: What do we need to continue the momentum on?
34:43
SPEAKER_08: And then more importantly, what do we need to look at as far as growth, right?
34:47
SPEAKER_08: Did we get the R roll count that we wanted last year?
34:49
SPEAKER_08: If we didn't, why?
34:51
SPEAKER_08: I think more importantly, if we're trying something, there's an old adage, fail fast, right?
34:55
SPEAKER_08: Don't hang on to something just because for the sake of hanging on to it.
34:58
SPEAKER_08: You've got to experiment.
34:59
SPEAKER_08: I always tell dealers, the first quarter of the year is your chance to try stuff.
35:02
SPEAKER_08: Let's see what we can do.
35:03
SPEAKER_08: Can we stay open an hour later?
35:05
SPEAKER_08: Can we uh uh you know uh continue with the dispatch process?
35:08
SPEAKER_08: Maybe we change to lateral support and try it.
35:11
SPEAKER_08: I think 27 is gonna be the year of learning what worked well in 26 and turbocharging it.
35:17
SPEAKER_05: Yeah.
35:17
SPEAKER_05: Last question Have you considered cleaning that wall up behind you?
35:20
SPEAKER_05: Because that's not the way a service manager.
35:24
SPEAKER_05: Come on, it's not the it's not the way a service manager needs to present.
35:30
SPEAKER_05: What I mean, come on, what if you have a client, a client that comes in?
35:34
SPEAKER_08: I can tell you this, that that's not attracting new new technicians to my service department information.
35:39
SPEAKER_05: I swear I worked in that when I was in service for a very short time in my automotive career.
35:44
SPEAKER_05: That's what the service department manager's uh office looked like.
35:47
SPEAKER_09: So there were probably some other things on the walls, too.
35:51
SPEAKER_05: Yes, there were some, you're right.
35:53
SPEAKER_05: There were some other things on the walls, especially the technicians that would never fly today.
35:58
SPEAKER_09: No.
35:58
SPEAKER_05: Yes.
35:59
SPEAKER_05: Boy, that's the truth.
36:00
SPEAKER_05: Well, that was yesteryear.
36:01
SPEAKER_09: The Fair Fawcett poster.
36:04
SPEAKER_08: I'm not saying, I'm not saying the only reason you bought the snap-on toolbox is so you can get that poster.
36:10
SPEAKER_06: Right, right.
36:12
SPEAKER_05: They can't they can't send those calendars out there.
36:15
SPEAKER_05: No questions about that.
36:16
SPEAKER_05: Well, thank you so much for joining us.
36:18
SPEAKER_05: Really appreciate it.
36:19
SPEAKER_05: I know our viewers to get a lot out of it.
36:21
SPEAKER_05: Thanks so much.
36:21
SPEAKER_05: Great, great seeing you guys.
36:22
SPEAKER_05: Take care.
36:23
SPEAKER_05: You as well.
36:24
SPEAKER_09: Jinx.
36:25
SPEAKER_05: Yeah, that's right.
36:26
SPEAKER_05: That's right.
36:27
SPEAKER_05: You're polite, it's so true.
36:29
SPEAKER_05: When you'd walk through a service department, and you know, the thing about it is that even back then, I'm really dating myself.
36:34
SPEAKER_05: So I was like, how old is Jim?
36:36
SPEAKER_05: Right?
36:36
SPEAKER_05: Because I talk about Jim.
36:38
SPEAKER_05: I talk that would be a good question.
36:39
SPEAKER_05: Yeah, look.
36:40
SPEAKER_09: But I talk about sending your guesses.
36:42
SPEAKER_09: I know I was in, I was, you know, but don't send in guesses about how old I am.
36:46
unknown: Okay.
36:46
SPEAKER_05: I was selling cars in the 80s for a very short period of time in my career, actually, that I sold cars.
36:51
SPEAKER_05: I didn't sell cars because I went into FI and what have you.
36:54
SPEAKER_05: But it was it was embarrassing because you'd walk through the service department, right?
36:58
SPEAKER_05: Yeah, and you would have these incredible pictures, you know, on the wall.
37:02
SPEAKER_05: And meanwhile, you've got a family and maybe little kids or whatever, and you're like, don't look over there, you know.
37:06
SPEAKER_09: It was so kind of like a just standard with so many things back then that I'm really glad that it's not that way anymore.
37:12
SPEAKER_05: Yeah.
37:13
SPEAKER_09: It does, yeah.
37:14
SPEAKER_09: That's right.
37:15
SPEAKER_05: And with my wife sitting next to me, I'm glad too that that's not there anymore.
37:19
SPEAKER_09: I know you are.
37:20
SPEAKER_05: I'm kidding.
37:21
SPEAKER_05: I'm kidding.
37:21
SPEAKER_05: I'm glad.
37:22
SPEAKER_05: I'm glad we cleaned up that.
37:23
SPEAKER_09: Do you have a funny clip for us today?
37:25
SPEAKER_05: I do have a funny clip for you.
37:26
SPEAKER_05: Yes.
37:27
SPEAKER_05: Let's um I I I do like this clip, and then we'll talk about it.
37:30
SPEAKER_05: So, guys, roll clip, as they say.
37:33
SPEAKER_04: We are live here down on the showroom floor with Doc Feez.
37:35
SPEAKER_04: He just finished up the deal.
37:36
SPEAKER_04: Doc These, what was going through your mind during?
37:39
SPEAKER_02: I mean, yeah, the desk really heavy boxed in.
37:41
SPEAKER_02: Um, not a whole lot of leg as always, but uh took it out of the front, put it all in the back, and it worked out.
37:46
SPEAKER_02: Worked out down the stretch.
37:48
SPEAKER_01: Dude, this dude is the best.
37:49
SPEAKER_01: Let's go.
37:50
SPEAKER_02: Yeah, so I mean, uh, I'm just grateful for how it turned out.
37:53
SPEAKER_04: Yeah.
37:53
SPEAKER_04: So coming down the stretch, any other thoughts that we're going through today?
37:57
SPEAKER_02: I mean, well, anybody who's going 84 months at 13% is gonna buy something.
38:01
SPEAKER_02: Um, I think it just came down to executing.
38:04
SPEAKER_02: Someone basically says, yeah, they want to go over$350 a month.
38:07
SPEAKER_02: They can't afford it.
38:08
SPEAKER_02: Well, can you afford to fix your car then?
38:10
SPEAKER_02: So it's like, hey, do you want to be screwed or not?
38:12
SPEAKER_02: If they didn't want to be screwed, it was gonna make us.
38:15
SPEAKER_04: Thank you, Duffies.
38:16
SPEAKER_04: Thank you.
38:17
SPEAKER_09: Oh my gosh, I love these.
38:18
SPEAKER_09: I love these.
38:19
SPEAKER_09: That guy nailed it's so funny.
38:21
SPEAKER_05: And I will tell you that uh as an FI manager myself, um, I did do that job for like four years.
38:27
SPEAKER_05: What job did you not do?
38:30
SPEAKER_05: Listen, if for the GMs that are watching right now, the dealers, you do them all.
38:33
SPEAKER_05: You really do.
38:34
SPEAKER_05: Yeah, I mean, uh everybody that I meet, you know, that's that's a dealer principal or a GM or GSM, when you say, well, what positions have you had?
38:41
SPEAKER_05: You have them all.
38:42
SPEAKER_06: Yeah.
38:42
SPEAKER_05: Because you you gotta get to know the operation of the dealership.
38:45
SPEAKER_05: And so your used car manager, your new car manager, your FI, your, you know, GSM, whatever the case might be.
38:51
SPEAKER_05: So that that's not uncommon in the industry.
38:53
SPEAKER_05: But what's funny about that clip is that when you're an F and I manager and the sales manager says, Look, we're making nothing on this deal, okay?
38:59
SPEAKER_05: It and we put more in the trade than we should have, okay?
39:02
SPEAKER_05: So it's all up to you.
39:04
SPEAKER_05: And you'd get that, you know, you would get that direction more times than not, and you F and I managers know what I'm talking about, where they would say, It's all up to you, you gotta make, you gotta get a full, you know, you gotta get a three-pounder on the back end or four-pounder, whatever the whatever the number was.
39:17
SPEAKER_05: And uh so you would often come out feeling like that, you know, and go, Yeah, I just got a four-pound deal.
39:22
SPEAKER_05: We took a nothing deal, or maybe a loser deal, to a uh very, very nice gross profit commission.
39:29
SPEAKER_05: Or gross profit, I should say, and a nice commission.
39:32
SPEAKER_05: But uh so I think that that video is very uh cute.
39:35
SPEAKER_09: It was it was very clever.
39:36
SPEAKER_09: It was just in get getting ready for football season and all that too.
39:40
SPEAKER_05: Football season.
39:42
SPEAKER_05: That's right.
39:42
SPEAKER_05: So FTC is shaking their head at that clip.
39:45
SPEAKER_05: Right.
39:46
SPEAKER_09: This is a comment that just came in.
39:48
SPEAKER_05: You know, Nick Nick Anderson sent that in.
39:50
SPEAKER_09: And um that's a very funny because as you were describing that, I'm like, uh, but make sure you're FTC compliant, make sure you're compliant, make sure the whole time I'm going.
39:57
SPEAKER_09: So, yes, great comment.
39:59
SPEAKER_05: So you know that Nick, that brings up a great point.
40:02
SPEAKER_05: Um, I wonder I wonder what part of that is actually not compliant.
40:07
SPEAKER_05: And I think that that's probably, Nick, one of those uh situations out there that we're still asking ourselves, is it okay to sell products in F and I that you're making money, you're not advertising one thing, it's not a it's not a bait and switch.
40:22
SPEAKER_05: Isn't it isn't it okay to still uh bring out the menu, sell products?
40:27
SPEAKER_09: You know, you you want to gotta go back and read the FAQs from yesterday, or I don't know if that was on there.
40:33
SPEAKER_05: But I mean, if in the event you advertise a price, you sell it at that price, you included the doc fee, you did everything you're supposed to do, it goes into finance, and then the finance manager does his or her job and step sells everybody on hey, you need this, you need the service contract, you need pre uh prepaid maintenance, you need all of these things.
40:52
SPEAKER_05: I don't know, Nick, that's a that's actually a great question.
40:55
SPEAKER_05: I will have an answer for you on our next show.
40:57
SPEAKER_05: Because I think that's a great question.
40:58
SPEAKER_05: But that seems to me to be legitimate, you know?
41:01
SPEAKER_05: Yeah, but maybe Nick's on to something.
41:03
SPEAKER_05: Thank you for the question, by the way.
41:05
SPEAKER_09: So yeah, good question.
41:07
SPEAKER_09: A good comment.
41:07
SPEAKER_05: Yeah, and a great show.
41:08
SPEAKER_09: Yeah.
41:09
SPEAKER_09: Great show today.
41:10
SPEAKER_09: Wonderful guests, lots of information, and um a little comedy to end with.
41:16
SPEAKER_05: That's right, that's right.
41:17
SPEAKER_09: Thank you so much for joining us today.
41:19
SPEAKER_09: We look forward to seeing you back here again tomorrow.
41:22
SPEAKER_09: If you would like to stay connected on all things CBT, be sure to sign up for our newsletter, and you'll get all of our news and content and stories, and you'll get live updates and everything.
41:33
SPEAKER_09: So be sure to do that.
41:34
SPEAKER_09: But thanks again for joining us.
41:35
SPEAKER_09: We'll see you back here tomorrow, Friday.
41:37
SPEAKER_05: See you guys.
41:38
SPEAKER_05: Have a great day.
41:39
SPEAKER_05: Make it a great day.
41:41
SPEAKER_00: And now listen, breaking news with the constitutional views in the glass one plate's up in the left, but the money is a plant up in the body's blue, look up, look up.