Why Dealers are going to start DYING VERY SOON
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- Опубліковано 20 лют 2023
- Between decreasing prices market adjustments and increasing interest rates on Floor Plans car dealers are going to be in real trouble very soon!
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I've got a old chevy that's payed for and still runs like a clock , completely out of debt and single... today's world is just too stressful. All people care about is money and what they can get for themselves. I go for nature hikes in the Georgia mountains while the rest of the world fights over every last nickel and dime.
Ditto for my older & newer Ford trucks . Pd for & will drive for decade + or more.
I’m still driving an 04’ Tacoma and I will keep driving it until the wheels fall off with these car prices. I really wanted one of those new Mach1 Mustangs until they showed me what my payments would be with the higher interest rates
No thanks.
I live in a minivan
I drive a car that's 13 years old. If something goes wrong I UA-cam it and fix it. I've done front and rear brakes and front and rear shocks and struts. My car is what most people would consider a POS but after learning how to fix and replace things, I've gained respect for the car and I appreciate it more than I ever thought I could.
"All people care about is money and what they can get for themselves" 💯
I was a corporate trainer for the largest Automotive Dearship Network in the USA, training salespeople and managers. 5 years ago, I was telling salespeople that I thought the " Dealership Sales Model" was 10 to 15 years away from becoming extinct and that manufacturers would go direct (like Tesla). As you can imagine, my bosses were not happy with me saying that..... I do not work there anymore!
So you, was right about you?
Not going to happen. Sales reps are needed because Americans are impulse buyers. Now the philosophy on how vehicles are sold has and will change. A lot of dealers are going to best price or one price and taking the negotiation out of the deal. They still need sales reps to work the process. A majority of Americans hate waiting on a vehicle order.
@Andrew Pansch Perhaps I wasn't being clear enough with what I was expressing. Allow me to explain. I agree with you that there will always be sales raps. That's was not a point I was trying to make. My point is that manufacturers (Ford, Chevy, Toyota, etc.) are going to cut out the dealership or franchise model and go to a direct sales model like Tesla. I understand that many states (Most State) have laws REQUIRING that New Vehicle sales be done through a franchise model. Also, there will always be used or preowned. car dealerships and/or franchise models, as every preowned vehicle is different (I do not believe that will disappear).
But, just because a manufacturer goes direct, does not mean the customer will have to wait to get their new vehicle in every delivery or even in the majority of deliveries.
@@rockymountainstemcell651 still won't happen. Manufacturers don't want anything to do with trades and the majority of people buying vehicles have trades. Tesla customers were able to utilize carvana ect in the past. Yet those maybe the ones that fail. It's not easy to just sell a vehicle on your own for the majority of people. At the end dealerships are needed and will always have a purpose.
@Andrew Pansch I certainly respect your opinion, and you may be correct. Time will tell!
But it's already happening. Cadillac was the first to start forces out smaller dealerships (back in 2016) with a $1.5 to$ 2.Million dollar remodel and a willingness to agree to a one price model to keep their franchise. Now Ford and Toyota/ Lexus are doing the same. Next, they ( the manufacturers) will started test marketing direct sales in some large metropolitan markets with a plain that will have a large single wearhouse with a limited number of mechanics that can do accessory add-ons and/or changes, allowing the elusion of choice and a same day or next day deliver.
Also, dont get me wrong, I think it's a bad idea, and in the end, it will only hurt the consumer. The semiconductor short already proved to the manufacturers that customers will put up with higher prices and fewer choices.
I'm 66 and driving a vehicle I purchased new...in 2002. It's been properly maintained by me, and runs great. I'm going to stick with this until the wheels fall off. It's actually in my top 3 favorites that I've ever owned.
I drive a 23 year old toyota 4runner. It has 300k miles and is mechanically 95%. Everything works, sunroof does not leak. No oil leaks. I do all my own work, replace parts ahead of failure.
If you were to use $2,000 per year in maintenance or replacements, you would have a very mechanically sound vehicle for the cost of only a few monthly car payments. This is especially true if you can perform the work yourself. Even if you paid a shop, it would still come out cheaper than 12 months of payments.
Sir today's generation wants to keep up with Joneses
You're lucky you don't live in New Hampshire. The amount of salt they put on the roads destroys everything, oil coating only slows the process. You're lucky to get 10 years out of a daily driver in the salt hell.
We know we are not young anymore when our new car may very well last longer than we will. ... Even my 66 Cadillac may outlast me.
I think it is a great strategy to a point. After 15 years modern cars typically start deteriorating at a greater rate. Parts and service follow inflation just like everything else. At some point the car is just not worth the money putting into it with the likelihood of more problems on the way. I'm 67 and my nephew and I repair autos. The cars that have been well kept generally last longer with fewer repairs. But not always. We have been keeping some real money pits going for customers entirely too long. We have even warned them of what will go out next and the cost. Quality after market parts keep gradually becoming more scarce.
I suggest that when the market is favorable for New Used buyers they should jump on it and try to find one where the previous owner had extended warranty. The market is still way too high today because the dealers are in hopes of still unloading a few during tax season. They actually purchase cars for tax season. Simply wait 60 days after April 15 and see what they got setting on the lot for too long.
It won't be long before the market goes out of our favor once again. When the old car suddenly becomes no longer worth fixing and we are forced to buy in a less favorable market is how we get burned. Right now we are into fix the car no matter what mode. But keep checking regularly on that New Used market. Think, we are going to in our 70s before we know it. Fooling with car troubles after car troubles is not going to be a pretty sight.
I drive and maintain a 2007 Subaru 165,000 miles for my daily driver. I purchased cash a 2023 Forester last year because I have a friend who manages a dealership out of state. Or I would not have bought new, the market was way overpriced. I was wanting a New Used but dealers wanted a few thousand less than new. I needed a dependable vehicle that got great mpg for my weekend long trips 8 months out of a year. I could no longer see taking the chance of being stranded on the hi-way in 90 degrees at my age. I throw competition Atlatl and I can't be worrying about a stupid car getting me there and back. My days of worrying and pinching every penny is over. I'm enjoying my retirement!
Wait! I remember Tom Jones LOL
Here from 6 months into the future , cars are still super expensive , interest rates are through the roof and dealers are brain dead with their markups
Glad to hear that a small car dealer can have an advantage over the corporate car dealers. Everyone is under pressure in today's economy. Keep up with the great videos Craig.
We all need to support Ukraine war.
Sounds like the movie FARGO
@@dont3222 no we don’t
I don't feel sorry that any of these larger dealerships are under "pressure". They have been beating the common man over the head for the last few years under this fake inflation model they are claiming has sweeped the nation. They got the chance of a lifetime to finally put the hurt on the customer and they didn't even think twice to raise their prices. They thought these used beat up vehicles were sometype of trade able commodities. Now they are worried. Rightfully so. They probably are hoping their will be some type of auto bailout. Just like these greedy banks which mis managed so many peoples investments. Just imagine these out of control prices they have been charging lately, I can't even fathom how many people they over charged. As well as people who have been ripped off for their recent home purchases. It's just plain and simple wrong and needs to come back to reality. I couldn't be happier
@@siberian5089😂
This video should be shown to all middle and high school students once a year so they can understand supply and demand in terms of economics especially in terms of how interest rates affect pricing and what people can afford. Once again world-class stuff brother thank you
middle / high schoolers think public transportation or those idiotic ev stand up scooters are ' car culture '
Excellent idea!
I like the sentiment, but public schools are not in the business of educating young people.
There’s a lot of things that should be taught in schools that are not.
And I guarantee you that only about 2-3 out of a class of 30 Middle Schoolers would get the gist of it, or even care. If you're lucky.
I bought one new car in 45 years of driving and I still have it 21 years later. 2002 Civic! $13,500 was a lot of cash for me back then.
Never forget and forgive dealers (new or used) that ripped customers off when the market allowed them to. Everything comes full circle and when the power dynamic returns to the customer vote with your dollars and spend money and buy cars from honest dealers.
Don't know any HONEST DEALERS and never have, and I am over 65 and had been in the automotive industry for more than 30 years. Not now though since 1990.
When cars cost more for consumers they cost more for dealers. Where do you think dealers get cars? Either the manufacturer or consumers trade/sell them. Manufacturers, in some instances, were actually charging the dealer to sell cars when the market was good. He gave the example of dealers paying too much for cars... Did you miss that part? People somehow forget that a dealer has to actually buy the cars, the cars weren't born on those lots. Even when things were rocking they might have seen 5-6% gross profit. Do you complain when Walmart makes double on a bag of chips?
It's like having sympathy for the realtors who wallow in the market as the bubble forms and cry when the bubble bursts. Cry me a river.
A very naive individual.
Story time: This time last year I went car shopping, my company has 28 properties, every 4th of July we give away 2 cars. So I wander into the local dealership we have been using for the 20 years or so, grab the fleet manager and let them know I need 56 EV SUV's, he lets me know upfront it's going to take a while to get that many and he won't be able to cut me a deal, shortages...
Okay I ask, "how much over?"
"$15k". I laugh, "okay we can do that"
"No, $15k over for each car"
"So I am going to walk in here, spend almost $3million and you want to charge me an extra $800k, f**k you" I took out my phone, called my assistant and asked her to order 56 Tesla model 3 LR.
Fast forward to this past Friday, I get a call, yep from my friendly buddy who suddenly has a lot full of cars he can't move and how he can cut me some great deals.
I did actually think about hanging up on him, but no, he gives me a price at MSRP, I give him an offer of $20k below...Each car $20k below".
Can we be friends ? I live in Illinois
Great story, did he accept your offer? I think you played it smart
So you went $5,000 over his $15,000 Bahajahajajahajah Bahajahajajahajah Bahajahajajahajah Bahajahajajahajah Bahajahajajahajah Bahajahajajahajah Bahajahajajahajah Bahajahajajahajah Bahajahajajahajah
Beautiful 😂
@@reaumursebastopol 🤣
I went under in Sept 08. Selling cheap cars, recreation vehicles. Started seeing the change in 07. Saw that someone could get a new widget by signing on the line. Why pay me cash. I started taking payments on cars for cash flow. Then the state of NH said I was banking without a license and mailed,out cleared titles, removing me as a lien holder. Taking people to court is expensive and non productive. Burn rate killed me.
Now....seeing incentives and subsidised below market interest rates, sign and drive. Leasing advertisements. 19 year old kid buying a 25k side by side ATV for no cash, sign and drive. deja vu all over again. I remember good credit people paying 15% on car loans in the 80's. I was pumped to get a 9% mortgage in 1984. I still buy and sell. Sellers are slow to adapt to reality. Spent over a month trying to buy a low mile late model 2x4 pickup. Finally made a mutually disagreeable deal on one. Most of the others still for sale.
The shit is about to hit the fan.
In the '80's, under wonderful Jimmy Carter, I remember people sleeping outside of banks to get a 12% mortgage! Just like climate change, when the whole Midwest didn't get rain for 10 years during the '30's--important history is no longer taught in our schools!
Where can ya sign & buy!? Lol Gotta have decent credit out here in Upper Midwest..but they still moving lots of dirtbikes /ATVs & UTVs.
@Apple Account s Well ppl make more $ on average & credit flows easier now. Still homes became "investments" 1st & roof over everyone's head 2nd. Warped thinking got us here + greed. - NY
Great video !! Good to know this information. As for me, I’ll never go to a car dealer again in my life. It’s always a stressful shell game and I’m done with it. I buy cars privately now, mano a mano. No more dealership hat dances for me. Having said that, your video is excellent!!
Really enjoyed the video.,I was a wholesaler for 10 years at 1st, right out of the house in the late 80s , it was so simple I would go to 3 auctions a week and to about 15 new car dealers and did about 700 bucks per unit, close to 60 units a month-reason not so many is because I always wanted to make sure I was safe on it for a profit- I passed on so many cars that would make me a profit ,but with transportation and auction fees I really had to buy under the true cost-I bought 100s of cars thur Fords Red carpet lease, always killed it-than in my final 3 years I would just do a buyers fee of 100 -200 bucks and did about 200 cars a month -I had over 30 dealerships to sell to in Michigan-this way I didnt have to worry about anything ,shipping fees was all theirs, that was a great time to be in the business, now I fully agree with you their in big trouble, so are auctions-the guy like you with no floor plan ,sharp and can move fast will be fine -Best of luck
Every time I visit a dealership there’s always a huge number of new salesmen on the point. It always reminds me of cow pastures as I always wonder if the new cows ever wonder where all that old cow poop is from, and ask themselves “I wonder what happened to the previous cows”? The slaughter house is the answer.
That's because when sales slow down, the easiest finger to point is at the sales team. "Y'all don't know how to sell." Is the go to excuse.
Meanwhile, there is no demand, your inventory may be junk, or you just don't have the resources to get an ass into that seat.
It's time for us cows to take revenge! I never ate lion meat but it's time for us to get a taste.
Oh shit, what an analogy. On point
People leave the business because they don’t want to put in the hours. Your conclusion is ridiculous
Average people are like cows, oblivious.
Excellent video, and you are exactly right on all your points. I've been a dealer for 18 years and I have basically kept my same selling model for all 18 years. Low overhead and buy cars that I can sell for under $5k, unless a customer requests a specific car for a budget they have. Dont use floorplans, use your own cash. I'm still seeing many dealers here in Atlanta pay 2, 3, and sometimes 4 times over MMR price and I think wonder how long they will be in business? I do agree those dealers with 30, 40, 50 cars on there lot they bought months ago, are NOT going to make it to the Summer because it's mid February and tax season money seems as if it's already been spent and these dealers are paying double and triple over what they should be buying cars for. Those dark days aren't just going to affect the big corporate dealers, it's also going to bite the small dealers as well, as I witnessed a dealer at Manheim today that paid $5,000 for a 2012 VW Passat with nearly 200k miles on it and the run fee was $400. How do you plan on convincing a customer to buy a 2012 Passat with nearly 200k miles on it and you own it for $5,400 when you should have been all in at $2,500 selling that thing for $3,500 at the most?? Good luck with that!!
We sell passats for 1800 at my auction
That car in my market lowest trim with those miles is 4-5k Kelly. New cars are hard to get still, I’ve been looking. Interest rates are higher now. People don’t have cash. In the end someone will finance that car and put 2k down at a high APR with a low credit score. It’ll get repoed, rinse and repeat 2k down payment. Car pays for itself.
What's your dealerships website I'm looking for a new vehicle
@Don Robinson
You're 100 percent correct.
I quit the business about 10 years ago when the big boys got in and were driving the prices up ABOVE RETAIL at all my watering holes. I understand their model was to sell a 4k car for 8 grand to low credit people, but it Still didn't work.
There's still shipping and preparation costs. And once you report it there's ANOTHER repair bill....their "business model " had NOTHING to do with cars and EVERYTHING to do with the stock market.
that was a tdi!
Really appreciate the info in your videos. Glad to hear you’re not in this credit crunch. I hope these dealers that have been adding “market adjustments” to their prices lose their shirts. My local Honda dealer was adding $8000 to their sticker prices but not telling customers until they showed up to buy a car in an ad. That’s shady! I hope they go bankrupt! Don’t feel sorry for them at all!
Everything you said is right on the money!!! I started a small dealership in October. About 7-10 cars in inventory on average, $5,000-$15,000 per car. I operate on cash only right now because I seen this coming. My floorplan is ready to go if need be, but I'm sticking to cash only for the time being. I'm down to 2 cars in inventory this month. I'm being very conservative on buying at these prices. I rather be very low on inventory, then loosing my A** on a bunch of cars.
At this point, budget cars are the way to go. No matter the time people will always need a forte, elantra, sentra etc. Best to hedge your bets on those from my experience.
At my local auction we sell cars for $500+ trucks for $1500+ so easy money 💰
The problem is if you’re only buying when you think you should. You’re gonna get killed. You got always buy. And it levels out. You’re down 2 cars if they sell. Now you’re gonna pay up for inventory cause you need cars now. Always buy and move metal
Cash is king again due to interest rates!
I’m a used car dealer in Vegas, I started a year ago and this month we sold 52 cars so far. Sometimes if you have an aggressive selling strategy you can turn cars in the subprime space. Everything is floored , but I don’t take any money out and am slowly transitioning to a 50/50 cash flooring split.
If you don’t have a bunch of money like me then you need to use floor plan companies to build the inventory to sell.
This right here is exactly what I was thinking was going to happen for a long time if the Fed pushed up rates and crushed the car market, and also the housing market. Prices crash way too fast for the dealers to be able to turn the cars and trade out for cheaper inventory and they get stuck. One guy I work with wants a used car and the dealer wouldn't budge a penny on the price and kept saying it was at the 90 day auction price being on their lot that long. They will take a bath on those cars at auction and I bet my coworker will be able to pick that car up for $15K instead of the $17k they are asking now in a few months. Great info.
As an old timer I have purchased more than 50 used cars in my life, not professionally, just for myself and/or family members. They come to me because one of my hobbies is paying attention to trends in the used car market, it's just something I find enjoyable, I NEVER buy a car without doing my homework. When I bought my first EV, since I knew little, to nothing about EV's I spent close to a year scoping things out. Everything about this video is great information. Usually these types of videos focus on either the lack of, or abundance of used cars on dealer lots. This video captured the bigger picture of rising interest rates and consumer budgets shrinking with the economy, and what that means to the used car market as well as the buyer. Best video on the subject I've seen so far. Great job.
Thank you for your insight!! this will be helping a lot of people make better decisions when they're back in the market for a vehicle OR maybe entice them back in to looking for a car with their eyes open... great content!
I guess what irritates me most, is when dealers are more willing to send a car to auction than knock the price down to what they would get at auction and sell it to a consumer/customer. I'm almost 70 years old. I have owned over 47 vehicles in my lifetime back in the late seventies I did Auto brokerage that was back in the days before people knew about invoice pricing. Yes I've been around automobile buying and selling my whole life.
While watching this video I was wondering the same thing. Why would dealers send a car to auction where it would presumably get the lowest price, rather than lower it some and sell from the lot?
Hit the dealer sent the cars to the auction they get a check for the full amount couple days of it selling. Then there's the other aspect that if they sell one vehicle of a sudden four-way last and where they had it offered for and there's other comparable vehicles there that had the same higher price will the community in that area then expect that same deal then at all the prices across the board to that vehicle their perception of the value now that is lower when really the dealer might just be wanting to have some cash on hand why they continue to perhaps not lose so much on the rest of the inventory.
@steadGang When they sell the car to the public, the sales price gets reported and that lowers values for that model. Therefore they have to balance that effort and for a small dealer that has to micro manage inventory
Because we are the little man - the working man - the poor man - and the bottom of the barrel 😂- we always get screwed by the government by our job and by the car dealer - it’s the way of the world 😂😂😂
They want it both ways. Get cash now and limit the impact of lower prices in their area.
Since you are buying with your own money, you have developed a knowledge and insight that an employee never will. As an old used car dealer once told me, "I make my money when I buy." When I asked him what he meant, he said "because I am limited on what I can sell it for." He got in the business when he came home from WWII and had it until he passed 45 years later. He was one of the few used car salesmen that had repeat customers and sold cars to several generations of the same family. Thanks for sharing your knowledge.
I make my profit at the purchase
That is true for every purchase, you make the money when you buy. It has worked well for me in real estate. The very reason I don't smoke, drink alcohol or attend overpriced events, the fun is not worth the cost. I put all my extra cash into an account so I can take months or years off work. 🙂 That is real fun. The guilt of friends and family, insists you are losing money when you are not working. Silly thing is, they are losing money, while pretending they are enjoying themselves. Jealousy. I considered myself semi-retired the year I graduated high school, in 1973. I am well off enough, I won't start collecting any pension for another three years, when I turn 70. PS I have personally owned 200 vehicles, half I flipped for a profit.
It's not like a job just because you put the effort doesn't mean you get paid. Numbers have to be right. Car has to be dependable and previous owners couldn't be a POS.
Do you usually know what your retail price will be before purchase? or just hope to get it as low as possible from the purchase and price it accordingly after car has been gone through?
@@chrissoto1657The max to realistically sell would be book retail value, since despite all the “Only buy an old Toyota in cash” advice everybody gives, most retail buyers still finance their purchases unless the price is so low that it becomes a cash car. But even cash cars have a book retail value for insurance purposes.
I hope your premise is right, I dont really disagree with you.
That being said, one thing I do disagree on is prices being "rock bottom". People are still selling used vehicles for almost the same prices as new vehicles right now. Hoping this changes in the future.
Keep up the content. First time listener and will be back for the next one.
You did a great job of explaining an idea that regular people like me never had to think about. And you didn’t lose my interest. Great job.
Prices have not plummeted. Was in a Honda dealer two weeks ago and their showroom Civics had a $10,000 dealer markup still. Everything else was still at or above MSRP. But a great video with a lot of great info.
Used cars* new dealers can regulate prices
@@FlyingWheels True. You got me there. I thought about that shortly after I posted. Thanks for sharing trends as you notice them. Great info.
Correct. No crash coming in prices. Basic affordable transportation is disappearing since manufacturers are focusing on high end and EV vehicles. This will trickle down to the used market. Good luck finding a work car or safe reliable transportation for your daughter to take to college.
@@FlyingWheels and as used prices moderate/fall, that will put pressure on new prices especially dealer markups. I'm waiting for the return of factory rebates. I think it is coming, maybe a year from now. One can argue that the Tesla's $20,000 in new car pricing is like a massive rebate.
@@FlyingWheels Fact-checker; TESLA EV market crash. NOT really. It's about having the best marketing strategy ahead of any market condition changes. Tesla by design have positioned their infrastructure line production where they can produce EV at a lower cost, therefore they can make price adjustments high or low and still profit and that's something the competition can't compete without facing additional profit loss.
great advice and insight. you are amazing. During COVID most Dealers stuck it to the consumer/ now tables have turned.
Lmao, Yeah, is Craig wonderful? He’s just out walking genius. We’re all so dumb. And he is so smart.
No the tables have not turned. It may a little bit for a Porche but not average cars for average people. Prices will stay high for the foreseeable future
Still be 6 months + before dealers lower their prices. I’ve been watching these “market is crashing” clickbait videos for 6-9+ months and yet to see any dealers actually reduce their prices.
3 years ago i got a new 2020 ford ecosport 4WD for 19K after a 7K rebate. That was during the covid hype. Anyways, i know it's not the greatest vehicle but I've put almost 100,000 miles on it already and it's never broken down once. Haven't even changed the brake pads yet lol. Almost zero maintenance so far. Guess I was one of the lucky ones during covid.
Hey Craig, appreciate the solid video, great information and thanks for sharing and highlighting for us! Keep hustling!
Great, fast moving content. Well done!
Prices are not at the lowest point yet. Dealerships are still charging mark-ups and used car prices are still relatively high. Not to mention the high interest rates if you finance. People are still willing to over-pay, which needs to lesson if we want to see prices truly go down. This is very similar to what we are seeing in the housing market. Hopefully later 2023 there will be a huge crash. A legendary crash!!
Interesting video. One thing I recall you saying is that what you see at the dealer auctions today, us consumers won't see for about a month. I've been in the market for a new car for a couple of years now, but I was not going to pay a dealer some stupid markup on a regular car. I just invested a few hundred dollars doing major maintenance items that would make my care reliable for a few years more so that I could ride out the stupid market. Those were not potential investment cars, every day cars were being sold way above MSRP. The other thing I see is that now average cars have MSRP prices over $40k. These are cars that were under $30k about 5 years ago. Salaries have not gone up that fast to account for the price increases. Between high car prices, high interest and car makers wanting to do direct to consumer sales, dealers are going to get squeezed.
That’s why you should finance for 8 years ….
Steve in Florida caught your video and enjoyed it thank you ya know I keep hearing about all the foreclosures on vehicles but where are they lots here in my area are 50 to 75 percent full and what's for sale are still wayyyy to expensive
Good stuff, best to you during these crazy times
Bought my 1st and 2nd car ever in 02. A Mountaineer and a Vette. Both taken care, garaged and still on the road.
I see the same thing happening with the housing market..big companies buying up houses at excessive prices and driving housing and rent prices up that people can’t afford which eventually leads to a collapse of the market. Once the stock prices start to fall and investors start to pull out the revenue dries up and the prices collapse…it’s inevitable.
Houses near me dropped from average 850,000 to 550,000 for the month of September.
About right years ago the tow company I drove for was hired to help repo an entire used car lot for Westlake 's floor plan. Over the course of 3 days we got over 120 cars in various locations in Maryland and took them to the repo companies yard. Then since we did transport form the auction and my boss was friend with the repo company's owner, we got all the transportation to the auction. That week was one of the biggest paychecks I ever made at any job.
time for a repeat!
Great and accurate video. I'm a wholesale dealer in Michigan and we are experiencing very high auction prices and a very limited amount of inventory.
Just started watching, THANK YOU, excellent video.
Not too buy a lot of vehicles but I’ve owned quite a few. Banker by person, classic car/corvette buyer hobby. I always support the small dealerships as a lot are my customers and give such better services and products for the money. Great to hear the small dealerships will get the upper hand this go around
I took advantage of the idiocy happening at Carvana and Vroom. They were grossly overpaying for cars. I had a couple cars I didn’t need anymore and they paid me more than I even paid for them at retail. One car I had for a year, and vroom paid me over $3k more than I bought it for. I literally got to drive that car for free for a year since what they paid me more than covered what I paid for insurance and fuel and maintenance.
THANKS FOR CARING AND SHARING...
I just subscribed & I'm binging your previous stuff, very educational I wish I had this in when I brought my '12 CX9 2 yrs ago.
I’m so thankful my floorplan is set at 7% and I got my mortgage fixed at 3%. It’s a rough time for people now.
That fixed mortgage is going to keep all the preplanners safe!
I only got 3.45 and that was a ReFi rate.
11:27 that's the same problem with people and houses....they try to hang on to their houses until it's too late and the bank takes it. I saw an issue in 2009....business tanked, lost my job, instead of hanging onto my house and not being able to pay for it, I got rid of it and ended up with some money in my pocket. That's the same as the dealers, it's better to liquidate BEFORE the bank comes for them and before the prices drop.
It's better to take a small loss and survive than gamble and take a loss so big you're fubar.
Thanks for that! And also thanks for your good dictation it’s helps a lot.
Great vid. Thank you for your insight!
You are spot on Craig. I'm definitely taking my time on buying my next car.
I just got one! No issues. Have your financing already lined up ahead & go for it. Got a good deal to boot on high selling SUV. They wanted move the metal I guess.
Spot on in your analysis.
Also the Floor Plan Bank can devalue your inventory and you have to pay the Bank that difference while you are suffering the lack of sales squeezing your cash flow. Cash Flow management is key.
I am a dealer too, and you are right. Same as you, low overhead and no loans to nobody!
When I bought my first house in 1992 I was paying a 16.5% interest rate...Interest rates today are very low but the price of a house is astronomical which means if the interest rates get as bad as 1992 a lot of people are going to lose their homes...Something has to be done about the ridiculous house prices.
During the inflationary day of 1977-78, the chevy dealership my father worked at went under due to rising interest rates on a floor plan they could not afford.
Interesting, educational AND full of value! This guy packs more words per minute than any other content provider on all of UA-cam! Liked and subscribed!
Good video it really helped me to see where the dealer is coming from.
ALMOST 1 MILLION VIEWS CONGRATS CRAIG!
Thanks Craig. Your videos give great insight to what is happening now and in the future. You are one of the Good guys in the used car business. Love your videos. Keep the content coming.
I believe your spot on Chief! Rates aren't done climbing, layoffs are far from done. There will be a reckoning back half of the year into 24 in my opinion. Will be a wonderful time to start a business if you're liquid.
Great info. Much appreciated 👍
First time i see your video, thanks for your advices , i think are very interesting.
I’m subscribing now 👍🏻👍🏻
Thank you for these videos. I’m in the market for a newer car and these help a ton. Keep up the outstanding work. I feel fortunate to have found this channel.
Exactly
Very good background info on this business! Thanks a lot!😉
Thanks for the video, including knowledge and information
Absolutely love videos like this! Keep these coming!
Awesome content and very informative explanation on current auto sales trends. As a cash customer I have experienced many dealers add lots of wacky things to the final price such as PPF, bank fees, $2k commission and Lo Jack which raised the advertised price average $5k. I call BS. Thanks for sharing.
Very interesting. Love following auto sales trends because they tell me about other things. Another housing bubble is developing for the same reason. Home builders, home owners and some banks will relive 2008. I’m a new subscriber.
This was some great advice, thank you for sharing.
Thanks Craig, Always good info. I see some people are reporting slightly rising prices at the auctions this last week or two. I’m thinking it’s a short lived spring/tax season jump. Then back to dropping. What do you think?
Where I’m at (northern Virginia), prices at the auction are still high even though retail sales are extremely slow.
same in vegas too....greed to the max. even the facebook marketplace hoopties are grossly over priced
Yup, auction prices are still high from what I’m seeing. People are still overpaying banking on grabbing that tax refund check people have coming. Tesla dropping prices also has lots to do with qualifying for tax incentives too. But who knows
Same in California
Thanks for the video, you are breakin' my heart😉😉. If I'm not mistaken, car dealers are the most complained about business entities to consumer agencies. Let the market work and get rid of some of the crooks, incompetents and miscreants in the industry.
Very informative channel. Love it
I'm a 59 yo who still finds your videos informative and learn from them. You sure know your stuff. Enjoy every video!
To be fair… As a non american person i never understood the dealers from the US. It always seemed sketchy to me. I have since watched a lot of mini youtube documentaries about the way dealerships work in general. It saddens me the see the corruption& greed of people& this industry is no exception to it. I do own my personal business and i can assure everybody about one thing. Profit is the key. I don’t care about the buyers feelings outside my business at the slightest. Yet i always try to give them a pleasant experience. The reason is not moral on a personal level. Yes the profit is the key but what good is a key when there is no door to open it with. You should always be aware of your buyers motives& assumptions. In the end you will fail if you don’t care about the people that use your services if you don’t provide them with a good deal. The markups in the US are ridiculous. The credit based apr payments are a scam. The way dealers treat the non rich is unfathomable. There is always new excuses to f with their customers just cs they can. I am not sorry for one bit that the industry is failing. I know that there are good hearted smart individuals who runs their dealers fair& relatively by the book and i respect them but that doesnt change my general view on the current climate
Buying a car in the U.S. at a used car dealership s like haggling for a fake pair of nikes in vietnam. Both parties are trying to take advantage of each other, and if you don't go into with that attitude you will be taken advantage of.
Just curious- how are Cars sold/bought outside the US?
Just curious- how are Cars sold and bought outside the US?
Most of them are straight up criminals.
@@ronniegillaspy when I bought my fiat in Europe a used car dealer wasn’t an option, all private sales
Excellent video, Craig!
Thank you so much for sharing all this very useful informations.
I remember a few years back that a car company, maybe Jeep, had a prototype truck that looked like a shrunken Willys. If I remember it had a 3 cyl diesel engine, manual tranny, 2 stick transfer case, and lock in/lock out hubs. It had a cloth roof not metal. It was a bare bones truck. Didn't even have a radio but was a DIYers dream. Sure wish they'd consider producing it.
I would definitely be interested in something like that. Let me know if you remember the name.
I know the Indian company mahindra sold a small willys like thing with available diesel, locking hubs, and stick shift; but they got sued by Jeep and stopped selling it really quick
@@AimForTheBushes908 I've looked and looked and can't find a thing on this little truck. A friend of mine at work showed it to me on his laptop. It must have been 15 years ago or longer. I think it was Jeep and I want to say it was called a Gladiator. Neat little truck. They could sell millions of them.
@@WhysafraidofCauseI'd love to find something about the truck. This thing looked like my 59 Willys pickup but shrunk. Like wet wool in a hot dryer.
Do you usually know what your retail price will be before purchase? or just hope to get it as low as possible from the purchase and price it accordingly after car has been gone through? Great video Craig
I have been watching a lot of car videos and have not come across this particular guy who is now my favorite! This is a great video, completely transparent on the front and back end of dealerships, which was very interesting. I sold my truck 45 days ago because of all the information on these blogs and got top dollar and now waiting to replace the truck with a new truck may be in December, when I think we might really be moving prices down? Thanks man.
I really enjoyed your video I just subscribed And how I 1st seen you Was at the round table And that was a lot of fun keep it up
In regards of new car dealers, they were definitely taking advantage of people. In my area in Florida a year or so ago I was quoted $46k for a TRD Camry that stickered for $33 ish. The sales guy told me it was "supply chain issues" and if I didn't want it somebody would buy it. Somebody did but it sure as hell wasen't me. That dealer was Stadium Toyota. Another dealer in California has a TRD Pro 4Runner in Lime Rush for $88k, it stickered for a little over $55k. It's borderline criminal. The actual pics that I've seen from people taking pics of window stickers make me sick thinking about it. I hope they go out of business.
sadly, those mark ups are what kept them in business.
They might go out of business wether they sell the car at 88k or not.
If they no longer get a volume of autos to sell in order to pay for their cost by volume or no not.
NOBODY MAKES PEOPLE BUY THESE CARS GENIUS
It was supply chain problems. Supply goes down, price goes up.
Really great to have you here uploading content like this and it’s amazing being able to get this kind of information thanks man appreciate the content a lot I hope to follow your footsteps later in the future I have a friends who tows and buys cars from coparts and resells them so that’s going to be a great starting help and these videos help so much and entertain at the same time please don’t stop making great content keep being you! 💕
Cool. I knew this was coming also, except I figured it out from my living room. Thanks for telling us how the business works. great video.
Thanks for the video.
Good stuff, Using general numbers as you did, and if negotiating with a dealer on used cars, How quick does the black book or other value guides react to these changes, NADA, KBB etc.. What percentage of printed value can we expect the window of negotiation to have?
Very informative ..love the insight how and where the market is..gives the consumer some knowledge
Thank you so much for this informative video,I'm glad to see the cost of cars plummet
This video was like a 3 credit college course in value. Enjoyed it tremendously!
I 100% agree with this I live in Nh as well and I was looking at Audi s4 and bmw 330-335. 2-3 months ago they were listed 5-6 grand higher in the market. But now im starting to see them listed for market value.
Some of the best car market talk on youtube. I really enjoy your insight. I have an 07 Tundra its paid for and runs well don't plain on buying another vehicle for a long long time. Had to buy my wife a new vehicle last year hers was unsafe to drive(2010 Equinox) for a number of reasons. Got a good deal MSRP on a Santa Fe at a time when there were hardly any cars on lots We are scheduled to have it paid off early as well. Vehicles are just way too expensive and the market will have to adjust or car makers wont be selling cars. My Ford Dealer in my town now has F150's up to 9k off MSRP they are loaded with trucks and they aren't selling. I wouldn't touch a Ford with all of the quality issues they've had in the past few years. It wouldn't surprise me if car manufacturers go to to Tesla model of selling cars. Cars would be sold at a better price and dealers would just become repair centers.
excellent video. Thanks for sharing.
Been in auto industry since 1997 . I’m glad I found your channel ! Even I , have enjoyed your perspective and you are doing g a great job with the knowledge transfer to all of us ! Thank you ! Keep it up !
“Even I?” lol. I have owned multiple new and used dealerships since 1972, even I ……..Great job Craig. You nailed it.
Great and informative video. I appreciate your insights!
Great insight info..thanks
Thx for the info!
Very informative Craig and it's not just telling us, for the sake of patting yourself on the back, but you've explained how this situation has occurred and how you've gained experience over the years to spot those trends.
This translates the same over here in the UK and it is evident that car dealers are equally feeling the pinch, however at least our loan rates aren't as spiteful as those in the US (at this time....!!).
Great content as always Craig. Thanks 🙂
Where’s a good place to find the current market price as a buyer?
Thank you for the info
Been a car and truck junkie for decades and am fascinated by the business. And now after sixty years of following markets, there is no better source than Craig - thanks so much for these great and informative videos!
Agreed. Similar thing happened in my country where interest rates climbed up to 32% where it was 8% a year back. Now the car prices has gone down over 10% (used cars). Even though people won't buy and the market almost crashed.
10% is nothing, Tesla is more like a 30% or was until Biden passed the 7500 credit, prices all went up $8000.
The biggest problem I am seeing is that yes dealers are being forced to liquidate BUT when these cars are being represented in auctions, their floors are current (30 day) retail prices. So with that going on, if dealers are remote and truly depend on sourcing vehicles from auctions they are finding themselves in the same situation to where they need the inventory to turn $$$ but continue to try and break out when your buying in already too deep. Weird market going on right now.
I inquired about an rv on their website...literally had 12 different commissioned sales people call me within 2 days...scary times
Not quite the same in the UK as yet. Classic cars in certain cases still seem to be rising. I agree that the more inventory dealers are holding the more they will suffer. Sadly, not many people realise what's going on. It's going to get very bad for those unprepared.
I don't think classic cars will get hurt nearly as much as regular cars; as they have been in our dreams since we were young! Cheers!
I don't think classic cars will be hurt much by the current market. They've been in our dreams since we were young!
Craig thank you so much this was helpful, been desperately watching the market since November I typically only buy cars on December 31 and by that they have already done 2 to 3 months of research and sent out offer request to several dealerships but now I won't even touch vehicle and I'm now in need of 2, that's right not 1, but 2 😢. Can you make a video on which brands to purchase right now that are well below these crazy prices?
When the prices started going up the dealers had an inventory that they bought cheaper. So they should have made extra on all of that inventory to balance what they are losing now.