Latest / Auto Collabs / Why Pricing Transparency and Affordability Are The Top Issues of 2026 | NY Auto Forum

Transcript

Why Pricing Transparency and Affordability Are The Top Issues of 2026 | NY Auto Forum · Auto Collabs

• 0:00
  All right, I am here at the J.D. Power, uh, and NADA New York Auto Forum, standing here with Tom Castriota, former chairman of NADA.
• 0:09
  You get a little break this year, but the break isn't, the break isn't fully on, 'cause I'm still interviewing you. That's okay. [laughs] Uh, we're still past chairman, so I'm still on the executive committee. Right.
• 0:18
  And still represent Florida to the NADA board. I absolutely love it. Well, we were chatting just before.
• 0:24
  Obviously, the conversation over the last month has been so much centered around, uh, what the FTC has sent- Right... in these, in these letters to, uh, some of the largest dealer groups in the country.
• 0:34
  Uh, but it's, it's a downstream impact to everyone.
• 0:37
  What's your perspective and, and how are you communicating with dealers that are, that are e- encouraged or even discouraged about, uh, some of the stuff coming down from the FTC?
• 0:46
  I, I think it's a, it's a, it's a good question, but I don't think there's a simple answer from the dealer perspective. The Federal Trade Commission is very clear.
• 0:54
  The law states that when you give the price, it has to be the clear price. There's nothing hidden when you go in, and I, I... You know, as you might say, let's say a dealer says, "I'm giving you $8,000 off."
• 1:04
  You go in and find out that that 8,000 isn't really 8,000 off the MSRP. It's some addendum sticker that might be 4 or $5,000.
• 1:13
  And, and so they're very clear that, that, that they wanna go after the, those dealers that are, that are doing that.
• 1:19
  And quite frankly, whatever the number is, probably 95% of the dealers would say, "Let's clean this up." Yeah.
• 1:24
  And I think it's a consistency where the Federal Trade Commission is saying, "We're gonna enforce what the laws tell us to do."
• 1:31
  And that is whether you're in the auto industry or the phone industry or the real estate industry. If you're quoting a price, it's the price to the consumer beyond the natural state- Taxes, yeah...
• 1:41
  state, state, or federal laws. State and federal taxes. And I think that's clear. Now, is there some ambiguity to it? Sure there is, because, you know, some states allow a doc fee to be disclosed.
• 1:51
  Well, does that go on the bottom? Does that go on the top? And I think that's some of the things that I think we're trying to clarify with the Federal Trade Commission. Sure.
• 1:58
  How does that overlap with some of the federal or, and the state laws that w- when you're talking, uh, dealer fees or doc fees or whatever you wanna call that fee. But I think they're pretty clear.
• 2:06
  They're very clear is if you're given a price, it has to be inclusive of everything. There's nothing hidden when you go in, and all of a sudden you're surprised. Yeah.
• 2:15
  I think the, the, for me, the value here is dealers getting the level playing field understood, right? It's like, "Okay, this is what we're dealing with." Yes. This is what, this is what everybody has to, uh, abide by.
• 2:26
  Yeah. And so now we can price correctly in the market. We can be competitive and continue to have a competitive, uh, marketplace, and provide great pricing structures to, to consumers. It's when there's ambiguity- Yes...
• 2:37
  that it actually creates dissonance for dealers and consumers, right?
• 2:40
  A- and as the dealer, uh, and that's where [laughs] my, my role is, is, is back being at the dealer, so to speak, and not the, not the chairman of NADA. So from a dealer's perspective, that's correct.
• 2:50
  Because how does a dealer compete from a standpoint of, of value if, if that, whether it's a newspaper ad or a TV ad or an online ad, and it says, "We- you're getting this terrific discount"? Yeah.
• 3:03
  And the consumer- And then all of a sudden, yeah... and the consumer says, "Well, how come you do what this dealer's doing?"
• 3:08
  And you try to explain that, well, they have an addendum sticker that might say you have to buy all this ancillary stuff that they, uh, they may say is on the car. Well, now you have to negotiate for that.
• 3:20
  And, and that puts us in a bad position because it gets back to that whole position again, "Oh, there's those dealers again." Yeah. And so where is that, whether you wanna call it fairness or, or...
• 3:30
  Let's try to sell ourselves on ourselves on the value, but let's not mislead the consumer, and that's what we're facing today. Yeah, and I think this is gonna be a great, great outcome for everyone. I hope.
• 3:40
  There's other outcomes that, that are coming, and, and because of your perspective on what's happening in the House, what's happening in the Senate.
• 3:46
  There's some things that we were dealing with last year that maybe have been either curbed or c- or, or changed. Uh, what are you seeing kind of over the horizon that dealers may have been looking at? Yeah.
• 3:54
  Well, yeah, the big issue we talked about last year, a- and, and, and even on your podcast, was the right to repair.
• 3:59
  And that sounds great because right to repair means, oh, uh, you know, everybody, consumer can fix their car. Well, everybody has that ability to do that under what's, you know, the MOE.
• 4:08
  The manufacturers agreed with the independents that they'll provide them what they need so they can fix a car. But what right to repair is really not right to repair.
• 4:16
  It's allowing an independent to go into your car and, and have the ability to change that computer system and all that data. Mm. Yeah.
• 4:25
  And it's no different the way I see it, and I tell consumers, it's not about the right to repair because you have the right to take it to any, any garage.
• 4:31
  And quite frankly, I think the statistic's around 70%, maybe 75%- I, I wanna say... of all cars repaired are done independent of a franchise dealer.
• 4:39
  But the point is this: Would you take your telephone and just give it to somebody and say, "Well, here's my phone. Go ahead and fix it"? Yeah. And you don't know who they are. Well, guess what they've done?
• 4:49
  You've just given your computer data to that person. Or you take your laptop computer to... Maybe it's not, maybe it's an Apple. You don't take them to an Apple.
• 4:57
  You take it to some independent who you don't know who the independent is, and now you give them the right to go in, into your computer and change the data.
• 5:03
  Well, that's- Into the actual computer side of the- That's what this is talking about. Yeah, exactly. Yeah. Uh, they, they, being these independents and this bill, wanna go in and change that data.
• 5:11
  They want the ability to download all that information on you to them, and you don't know who they are. And that's what they're trying to do. Yeah, yeah, yeah. So- And let alone what...
• 5:18
  Let's not even pa- say, talk about the Chinese, what the Chinese can do by replicating all this. You give them all that, that ancillary, uh, uh, data or what has been, uh, from the manufacturer's standpoint, trademarked.
• 5:32
  Yeah. Well, now you open up for the Chinese or an off, off-brand, if you wanna call it an off-brand, to go in and mirror that. Yeah. Well, that's not really what the intent of the law is. But anyway. Yeah.
• 5:40
  That's what the effect of the law is. Yeah, yeah.
• 5:42
  Well, it's good to hear that there's, there's, there's movement there and- So right now the c- the committee, uh, the Energy Committee has, has, has, uh, said that it's- Put that aside, yeah... they put it aside.
• 5:49
  Yeah, yeah. I think, 'cause I think the representatives come to realize this is not a right to repair f- It's, it's, it's really giving out personal data to anybody without control.
• 5:59
  Yeah.So a lot of these, like, broader conversations are, are taking the media by storm, and obviously Iran conflict- Sure... is, is now taking media by storm.
• 6:08
  But earlier in the year, and even at the end of last year, so much of the conversation was around inventory, but not just inventory, right-priced inventory and affordability.
• 6:15
  But you're saying from the dealer's perspective, that story hasn't gone away at the ground level. No, I think there's still a lot of dealers, and I, as a GM dealer, we're short of inventory.
• 6:23
  We're short of Silverados, we're short of our, you know, we get our Tracks, you know, from overs from Korea. We get our Equinoxes between Canada, Mexico, and United States. We're short of those.
• 6:33
  And that's, that's the affordability issue. Mm. And I don't think that's any different than General Motors. I think you've talked to every dealer that says, "We don't have enough affordable cars for our consumer." Yeah.
• 6:43
  And it's quite evident as I've talked throughout last year traveling, whether it was international or, or going to talk to the state associations, it's about affordability.
• 6:51
  Because again, the average consumer, whether it's $800 a month or 850, whatever that number is, whether it's $48,000 a, a- an average transaction or 50,000, the average consumer, which is more than- Cannot be in that range...
• 7:03
  60, 70% of this country- Yeah... can't afford 800, $900. Not a chance. So those average consumers can't drive our industry to grow beyond where it is, 15.8, 15.6, maybe 16, but I just don't see it this year either.
• 7:15
  Yeah, yeah. Not, not, I'm, I'm, I'm not talk- I'm ta- honestly- So that challenges the SAR on the new car side- I don't, that is correct... but it also challenges the trade-in matrix on the used car side, right?
• 7:22
  Well, sure. Well, sure it does, because again, as we all know, what we see today, we- we're, we're seeing these 10-year-old cars, 15-year-old cars, 100,000, 200,000 miles.
• 7:30
  And, and cars that, that really aren't even safe anymore, it would take astronomical numbers to put 'em back in, in- Right... to drivability. Same cost of the car to put 'em back on the road. Well, they're wholesale.
• 7:39
  Yeah. So we don't have all those f- we don't get no three and four-year trades that we did in the past. Mm. Yeah. We're seeing eight, nine-year-old, because those people have to get out of 'em.
• 7:47
  So all that, that gets back to, I just don't see our industry going beyond 16 million in the near future. One is economics, and two, it's affordability.
• 7:55
  And because of that, we don't get the trades coming in that helps the, the part of the used cars. And, and affects the way the industry is.
• 8:02
  We have less fleet, we have less leased cars coming off, and, and there sh- and quite frankly, fewer rentals. 'Cause, you know, again, when we're talking 18 million, 19 million- Yeah... you put all that together,
• 8:13
  it, it's a growing industry for the retail side and for the OEMs. Yeah. Well, a lot to consider, obviously- Certainly... as a dealer. [laughs] You're battling all this and you've got people to deal with, right?
• 8:23
  [laughs] Right. Uh, but Tom, thanks so much for being- No, appreciate it... a proponent of the industry- Thanks... and always hanging out with us. That's cool. Thanks. Appreciate it. Yeah.