The car sales industry is divided between those who support the traditional dealership model and those advocating for direct-to-consumer sales; proponents of direct sales argue that manufacturers should be allowed to sell directly to consumers to reduce costs, improve transparency, and eliminate the need for franchise laws, while opponents contend that dealerships provide essential services, create jobs, and maintain the ecosystem that supports the automotive industry.
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Car Broker DEBATES Me Live Then ADMITS I Changed the Industry?!
Added:Today, the day today, I want to give sales people a voice. I believe there's a lot of sales people out there that are calling me out, saying I'm >> horrible, saying that I lie, saying I'm gaslighting.
>> I want to give them an opportunity to come my live in front of all the people I talk to and prove themselves right. I want to have a conversation with the other side. So, we're allowing anybody come on here to debate and have conversations. You can debate any topic you want. I've given people days to prepare. I've talked about this a few different times. Anybody wants to debate if you're in car sales, we will bring you up and you can have a conversation.
If you guys want to come on, you just DM me on Instagram, show me your dealership, and then give me your number and I'll call you. That is how we do this, guys. The idea behind it, guys, I want you to defend. I want you to come on and debate anything that I believe.
Again, I believe the dealerships are not entitled to a profit. They have to earn that profit. And I believe that most consumers don't believe that the profit is earned. And that's the point that I was trying to make in that conversation.
I'm very curious to see how this one goes.
Hello.
>> What up, bro? How's it going?
>> Hey, Tommy. How are you?
>> Doing well. Doing well. Let me turn you up a little bit. Boom. Okay, you're good. You're live. Okay, so I know you agree with a lot of things I say because we've talked before, but you have to have something you disagree with me on.
>> I do. And here's what I disagree with you on. I believe that a majority of car manufacturers do not want to go direct to consumer. And here's my reasoning. We as the dealers are their true customers, right? At the end of the day, we're the ones that pay them for the product. And whenever they feel like ramping up production and dumping an extra 20 to 50 units on us one month, more than we have customers for, they get to do that because of the franchise agreement. We, you know, take on that extra. And then it's up to our entrepreneurial skills, our nice smiles, and our abilities uh to move those payments, right? You're you're going into the service department and we're saying, "Hey, if I keep your payment the same or drop it, can you you know, would you upgrade?" Things like that. So now I see how Tesla, you know, or like I get it. Toyota, they don't have enough cars for the customers that they have, but that's not the case for the majority of the manufacturers and I'm waiting for you to kind of open my eyes to why you believe that that's incorrect.
>> Yeah. So, so I think a few different points. So, I actually think this is probably one of the most valid points somebody could have. My innate argument, but I'll challenge your I would challenge the point to challenge the point so I don't just do a copout answer. Um, but my answer is let's let manufacturers decide, right? Um, that that's the easiest answer. You might be right. Maybe we get rid of franchise laws and every manufacturer says, "I'm out." Right? I believe that they should have the option to because it allows competition to exist. But I'm going to answer your question on why manufacturers would want to jump in.
First off, I believe that their reputation is genuinely getting hurt by dealerships. You saw Ford in the uh during COVID era that was having to jump in stopping their dealerships because they were getting such a bad reputation for charging dealerships above MSRP that they tried to jump in and sell cars and then it got sued out of oblivion.
Secondly, I actually think it would make cheaper cars because I think you're right. I think manufacturers are have the option to release a lot of vehicles, a lot of colors, a lot of options just because they can. But if they sold direct to consumer, I believe they would have to put their sales hats on because I think they'd want to and they would make cars more efficiently like Tesla, limit the color options, make it a more streamlined option, make things that actually make sense rather than going crazy. Probably get rid of some trims that don't need to exist and make it a more efficient model, which would in the end make it cheaper because that's how Tesla's able to do a lot what they do.
There's there's six different color options. There's, you know, only four different options you can put on a car.
You don't have like a I mean, you sell Ben. You sell Benz, right?
>> I said BMW. Yes.
>> Oh, BMW. Oh, yeah. BMW. The amount BMW the amount of options you have, the most amount of customability you have is insane. So, being able to customize that, change that is just insane. So, I I would say those are the two major things which would be first, I think manufacturers would get smarter if they had to. I would say that we should just give manufacturers the option. And and then third and finally, I believe that their reputation is getting hurt more by dealerships and they want to take that on because they're losing market share because of their dealership.
>> Well, allow me to push back on one of those points that the vehicles would be lower price. You know, every dealership has margin and hold back and you know the the stairstep programs and things like that. I mean, I'm in a market that is competitive. We don't look at MS like an MSRP deal for us probably doesn't even come by once a month, you know, if I'm if I'm honest, you know, I mean, there's there's discounts, there's movement, there's movement on the price.
And I don't see how if the manufacturers and and here's really to add to that, they'd have to buy us out, right? I mean, they'd have to these facilities that, you know, either the Publix or privately held, you know, they're they're millions and millions in dollars and, you know, to run a dealership. And would they be smaller? Maybe. But there'd be a lot of like huge investment for them to kind of take this over and say from now on we're going to give the vehicles, you know, directly to the consumer. And I don't necessarily think it means lower prices when you have 50 Honda Civics on the ground, but you can only sell 25 of them per month for the most part or you know, whatever. Input any make, model, you know, dealers get aggressive and like you said, they're loss leaders, right? So like that loss leader price in a lot of places and you hope to make it up on the back, you hope to get a trade. whatever it is that those loss leader pricing I don't think happened. I I actually do think cars would be now not into places that are four and five and $10,000 addendums and they do things a certain way and because their dealership is backed by private equity. You know what I'm talking about.
I'm talking about as a whole I do think prices go up. I >> mean there's a there's a few different ways to combat it. So first off again I I will go by the default answer which is I believe that business owners are intelligent and smart people and they're going to fix a lot of problems. For example, like if I was to work for a manufacturer tomorrow, I'm not getting rid of dealerships. I'm allowing dealerships to run. And one thing we still need is service centers. And I think you just said it perfectly. A lot of dealerships do lose money on new cars to make that money back on service. If I was a manufacturer, I'd probably make a deal with a lot of dealerships. And I think a lot would say yes is, hey, we're going to we're going to actually send five employees out there. They're going to work in your dealership. In return, you get to still service our vehicles.
We still pay for your warranty work. we still do that, but we're going to pay hourly and we're going to use your lot.
And I think most people are going to say yes because the amount of money that dealers make in service and you could just make it into the dealer agreement that they could use at a showrooms. But even if they had to build it from the ground up, Tesla's proven that they can do that pretty effectively uh without it costing an arm and a leg to the to the net user, right? But but I I believe that dealerships wouldn't go away tomorrow, right? I believe that dealerships should work side by side because service is still a thing and service is going to be one of those things where dealerships if I I believe if you gave every dealership owner the option to get rid of their new car sales department, they get to keep the franchise name, they get to keep service, and they get to keep used cars.
Over 50% of them are saying yes and getting out.
>> Okay. I got one more question. Have you heard of or looked into JLR's uh modern luxury initiative? Have you heard of this at all?
>> No. I I mean I know what they're I know that Jaguar is completely changing their brand.
>> Well, Jaguar's gone, right? But JLR, they turned into JLR because there's no Jaguars and whatever. So, here here was their idea. They go, we're going to we're going to compromise, right? Where we're going to build out Allah Tesla.
You can order the vehicle through the JLR website. If it exists in your town, great. It's at this dealership. Go get it. If you're in Chicago and the vehicle's in California, hey, it's going to cost $2,500 to get to you. what they decided on and it they've been talking about implementing it and they really haven't got it off the ground was basically let's order cars. We'll have a pool of cars at like a VPC or whatever, but everything's going to be MSRP. They uh using Acutrade for trade values and like we'll give you the Tesla buying process, but we're not getting rid of our dealerships because when they do break down after a week like the previous that does happen at JLR to be fair, it happens quite a bit. Okay, I know I worked for them for 5 years.
you've got that dealer support, right?
What do you think about something like that where it's a true sort of the manufacturer designing the sales process, doing real market research on what a proper sales processes? And when I tell you, Tommy, they want to go all the way down to the uniforms to make it look like an Apple store and the dealerships, again, hasn't really gone, but a manufacturer truly getting in there and designing it for the clients.
What do you think about that? Yeah, I I think the problem and I didn't touch it on the last point and I'm glad we brought it up so we can bring up at this point is that the idea that MSRP is a fair price to begin with because as of right now when a when Ford, BMW, Chevy, whoever sells a car to a dealership, it already has all the profit built in, Ford has come out to say that their cars are $2 to $3,000 more expensive than Tesla just because they have to subsidize the dealership experience. I understand that people like to say that because dealerships buy in bulk, it's a cheaper price for them, but manufacturers are plenty happy and plenty profitable while selling their cars at invoice while still offsetting marketing money, while still offsetting warranty service money, while offsetting everything that a dealership needs in order to survive, they're offsetting a lot of that cost. So, I think the idea of MSRP, you're inflating a price and not allowing the consumer just to go directly to the source. And again, I think I think the idea of making a manufacturer jump in to make the dealership process easier, why not just skip the entire dealership process and allow manufacturers to sell direct? Why why even have a franchise law at that point? You're just you're so close to skipping it. Just get rid of it.
>> Because of my first point, they're not going to have they need to have a willing buyer at any given time, right?
Most dealerships, if you look around the country, have three, four, five, maybe six months of inventory on the ground.
So, the thing that you're going to have to convince manufacturers to do, and it's easy to do with maybe Toyota, it's obviously Tesla's proven they could do it, but you're gonna have to convince manufacturers to build fewer vehicles.
Do you think that they would do that?
Now, again, they build fewer vehicles.
They probably don't have to incentivize things. There's probably not going to be special rates as often. There's not going to be rebates, conquest, things like that, cuz that's costing them money, too. And I agree. But that's because those exist because they, for lack of a better term, overbuild vehicles. We build more vehicles than we actually need. So you'd have to convince the I could be wrong, Tommy, but this is my point that I I live by. I think that you're going to have to convince manufacturers to build fewer vehicles and they make money building vehicles.
>> Yeah. And this is this is this is where my stance is and I'm very firm on it, which is I don't believe I need to convince anybody of anything. I believe that I should allow the market to make a decision. So as of right now, it's illegal for the manufacturer to do it.
They don't have the option. I would feel much better sleeping at night is if manufacturers had the right to sell cars and then they decided you know what we're out but we do see manufacturers attempting Ford attempted Mercedes-Benz attempted Volkswagen's attempting with Scout we are seeing manufacturers even if we look at the Saturn experiment that did so well then GM shut it down because it was doing so well the manufacturers have tried to do it but again I I think the answer is really hard to defend of all the reasons why the manufacturer can't or won't do it when they don't have the option. Like I I couldn't imagine me starting delivered and car dealerships going up. Well, consumers wouldn't trust a third party to deal with a third party and it would cost more money cuz you don't have a marketing and you'd have to find like it's somebody else making decisions on your business rather than allowing somebody just to be able to say, you know what, let's try this. Let's see if it works. Consumers want it, right?
There is a vast majority of the public that wants it. Manufacturers are clearly trying. Let's just see it works. And you know, the beautiful thing I love about this is if it doesn't work and it fails miserably, dealerships now become stronger because they can say, "Hey, you know what? We tried the direct to consumer route. They we allow them to do it and people are still choosing us."
And now that allows you to have a leg to stand on. It makes dealerships better if they survive. I I I think and I think they do survive. I think dealerships become better when when direct to consumer exists because dealerships have to become experts at selling vehicles and building value because I do think it would be cheaper. I think that's one of the reasons why manufacturers would be able to do it. They'd be able to sell the cars cheaper. They'd be able to sell it from the source. And again, I think you have a sidebyside model. I don't believe in one model. I believe dealerships should exist and direct to consumer should exist and those that those models should compete out. So, if somebody wants to deal with you raw and they want to work with you and they want to have experience and they're willing to pay more for it, all power to them because they made that choice and they knew they had a decision to make and they made that decision. But I believe consumers deserve the right to have a choice of do I deal with the dealership or do I just deal with the manufacturer?
So, I got to get Tommy certified and I'll sell more cars. Is that what you're saying?
>> Again, I I I just think I I know you're a well-trained salesperson. I'll give you props there, but I think I think when we look at it, we have 80% of people that or sorry, 70% of sales people that fail in the first year and have crazy turnover. Uh we do have bad apples and and again, we have dealerships that can't even agree what online pricing is, what's fair. And I think the reason is there's just nothing stopping the bad apples out there. I believe if you allowed Toyota to sell cars tomorrow, it would make either dealer like the dealerships that are bad would not survive and the dealerships that are good would actually thrive.
>> And here I don't disagree with you. I've been I'm in the business firsthand account. You were too. We've seen the bad apples, the GMs that make everybody's lives miserable and it's 70% turnover and all that kind of stuff. The thing that I fight for for the only reason is that you know this business in this country there's fewer and fewer businesses where you could kind of like hey no college degree you know what I mean and just be a good person do good business kind of like you're doing I think you're doing a good business I I don't I'm all for you. We were in a live just half an hour ago and I said and everybody's like all bashing Tommy and I'm like I'll take any deal from Tommy because if you're going to tell me I get a lowfunnel customer that hey just deliver this who cares like I'll take a short deal it's no big deal you know let's go there's volume bonuses there's incentives let's go I don't even disagree with what you're doing obviously you know we've talked but my point is I am very weary about just like throwing this business away when it's done so much to help so many people that's my point so from the inside. I know you're trying to fix it from the outside and I don't and I'm not against what you're doing. Some of us are trying to fix it from the inside. I don't just want to decimate this thing that has helped so many people. That's that's just what I'm going to >> and I will agree that I think that it does allow people to have income. Like I said, I made over $200,000 a year in the industry just being able to sell. But but I would I would also disagree that the vast majority of people making really good money in the industry are doing it by helping consumers. I'm not saying you, but I'm saying that people make more money because they sp they are getting consumers to spend more money on the same exact product. And I think that behavior doesn't outweigh the idea. And again, I'm not saying you're doing that, but I will say there is because I don't think you negotiate. Uh, but I will say there is a vast majority that the people the reason why they make so much money.
The reason why I made so much money was cuz I could convince somebody to spend more on the same exact product as somebody else on the same day on the same car. And that's why that profit is there. It's not because I'm truly adding value. I'm just convincing you to spend more and hoping you're not educated and know enough that price is overpriced.
>> Okay. But I mean, let's bring it back to MSRP, right? During during COVID, you were lucky if you got a car for MSRP in a lot of places. So suddenly MSRP was a fair price, right? And don't get me wrong, it's us that are doing this to ourselves, right? Because if you if every dealership just said, "Hey, we're one price and it's a sticker price.
Let's go the you know, and you're right because you're going to make a a living if you, you know, go above that or charge extra fees." And I get that. But if the I know that we're we're a self-inflicting business. Most of what the issues we go through is because of what we do to ourselves. Because if everybody would just be like, "Hey, we're 5% off." Or, "Hey, that it's the price on the window. Let's talk about the experience. Let's make sure you you don't get intense after you leave here.
Okay, that was interesting. You know, I think people as a whole, but but so many times, I mean, the client too, you know, you show them a one price. You go, "Hey, I'm the number and it's even on pre-own, right? Hey, I'm the number one guy in the area. You I get you out of here in 45 minutes. I'm going to give you the experience. You get free car washes. You get free Starbucks here. Let's go." And the customer goes, "Yeah, right." They spit in your face and they run away.
Right. It it happens and we get it.
That's that's not everybody, but uh but again, you know, the MSRP is is not a dirty word, right? I I don't think it isn't. Like I said, we don't typically sell at MSRP because, you know, we're in a we're in a tight market. But again, here, thanks for having me. I'm glad you called and I hopefully it's not too much uh you know, I think we had an okay conversation, right?
>> I think we had a good conversation.
Thank you so much for having on. Thank you so much, man.
>> Absolutely. Take care.
>> Bye.
>> Okay, we got Zachary. So, Zachary here is not again. I would like car salesmen to come in, but Zachary has a fundamental thing with my argument. He's a roofing salesman. This might be interesting. Uh, but he says he has he disagrees with what I say. So, we're going to let him on and see if this is worth it or not.
>> Zack.
>> Hey, Zach. It's Tommy. How's it going, man?
>> Oh, it's going good, man. Longtime listener, first time caller.
>> Okay, man. Absolutely. Thank you, man.
Appreciate it. Let's just dive right into it. I don't know any of the topics here. I just know that you're roofing and you disagree with something.
>> Okay. So on sales and provide a service all that I completely agree. Obviously for roofers we sell an actual service.
The big argument I have I think is that if you were to get rid of the dealership model I see it a lot more like a Walmart or a place a marketplace or distri distributor of goods. If you were to get rid of dealership model entirely would you not just aggregate more of the wealth in a handful of car car manufacturers? And since it's so difficult to make cars in the first place, would it not just like localize the wealth even more? You know, I'm not saying it's that the car industry is not a great place to make money, but if you were to get rid of that model entirely, there's a lot of guys out there that can't find a way in this world that now that entire position industry line of work is gone and all that wealth just goes right back to, you know, the dozen or so car manufacturers. And I think that I think that you would lose a lot of value in between where where you would just end up making the rich richer and the people in the middle that did find a way up like yourself wouldn't have another opportunity to do it.
>> I mean, it's it's not a bad argument. I mean, there's a few things to piece together. First off, you you can make an argument that the wealth is already centralized in the food market when it comes down to like Walmart. Like Walmart is one of the most profitable companies in the in the world and they're not uh and farmers are the ones getting shafted here. Uh so I mean you can make an argument that the middleman is able to profit even more and that that wealth is centralized even with a mandatory middle or even though it's not a mandatory middleman but a middleman but uh secondly we've already seen this model work when it comes down to a high ticket item with Tesla. So we see like right next to us Tesla is able to do it and they're able to do it at a more effective model. So like that's the problem that we have right here. It'd be different if again farmers can open up their own grocery store, sell their own, but there's a reason why they don't. it it doesn't make financial sense to them.
Manufacturers want to try to do it.
>> To your point with Tesla, the richest man in the world is the owner of Tesla.
I would just say I agree that I'm not saying that just dealerships don't need to provide more value, but if you were to remove the restrictions on that, I think you would find a lot more of the wealth would aggregate towards the audit. I would say I would counter your point of allow get rid of the dealership laws but also at the same time make it extremely easier to produce cars like remove some of the regulations behind creating cars so we could obviously I'm a dreamer and I hope that we can one day get the toy the Hilux in America but something along those lines. Otherwise I feel like you would just end up moving all this wealth that the dealerships have directly to the car manufacturers.
Yeah. I mean, and again, this is one of the reasons why I say do not get rid of dealerships. Just allow manufacturers to sell on their own because it adds I believe manufacturers and dealerships would have to earn their spots in both situations. Like I'm never a proponent of just having one model cuz you're right. It just it would just be if we only allowed manufacturers, it'd be a transfer of wealth. Now, I would argue the reason why Tesla is so profitable isn't because they sell cars. It's because they're a technology company and their technology is so valuable. Like that is why Tesla was able to kind of flip everything on their head. They became a tech company that sold cars rather than being a car company that built really good tech. And they're also a publicly traded company. They're an Elon. I'm not saying I like or dislike Elon, but Elon also has multiple other companies that he's doing that is, you know, like SpaceX, for example, that does attribute a large part of his wealth. But I I I digress. I don't think that Tesla I think if you allowed manufacturers Toyota with that Mr. Toyota would now become the second richest man. I I but I just believe that we should have that. So competition should be existing. manufacturers and dealerships should be able to work side by side.
>> That's fair and appreciate the allowing me to say my two cents. It's one point I just never saw anyone say. I love what y'all are doing and I plan to get you all as soon as I buy my next car.
>> No. Yeah, absolutely, man. I appreciate it. It's a really good point.
>> All right, y'all. Take care.
>> All right. Bye. I'm going to read a message out. This is a message we got from a client yesterday. I'm going to read this. They gave us a five out of five star rating. They said, "Yeah, funny story and this is why you guys are doing great business and your business actually helps people. The dealership you guys got my deal with is the closest Toyota dealership. I went there. I test drove the car before shopping to see if I really liked it in person and see how I liked it on the internet. I tested the car and one of the salesmen were talking me into buying one, right? My husband and I both said we wanted the price range and we said we wanted to negotiate the outdoor price. The salesperson said, "Good luck finding someone who would discount a 2026 Rav 4 when they're selling like crazy and the demand is pretty high. I can find someone who will pay your price out the door." My husband and I were shocked about the rudeness and I've been told that that specific dealership is very hard, almost impossible to get a discount. We've always negotiated the outdoor price ourselves, but with this dealership, it was impossible. My husband is a longtime fan of Tommy, and we learned about his YouTube videos and successfully negotiated a car in the past just using his technology and tips. But we couldn't with this dealership. My husband suggested we try the service since he really wanted to gift me a brand new 2026 Rav 4 since I've been in love with this car since the first videos came out last year. We contacted you guys. you were able to get a deal with that same dealership. My husband and I were in shock, but mostly happy because the convenience of the deal. Thank you once again for proven that you can in fact negotiate with any deal the out the door price for a high demand brand new car. I hope to share this message with the team and hopefully you share this message with Tommy. My husband is the best and he wanted to get me a new car. It was a gift from him and he is sorry and he is a very smart guy and works in tech. I know he would love if Tommy could send him a little message or say something like he would like. We watch Tommy's videos even for fun because we think he's fun and his videos are hilarious and informative as well. Hopefully you get the message to Tommy and maybe make a happy husband, a kind enough gift to a brand new car. So like that experience, they went to their local dealership.
They actually tried to buy a car, but it was such a bad experience that they hired us and we were able to work with that dealership. Diane. Okay, Diane is here. This is car mom. We're going to allow her on here. Is this it? I got the right number. Okay, let's go through.
Let's see it.
>> Hi. If you record your name and reason for calling, I'll see if this person is available.
>> Tommy the beach.
>> A few moments later.
>> Hey, Tommy.
>> Hey, Diane. How's it going?
>> Good.
>> Okay. So, I just want to clarify. I'm not texting and driving. It's talk to text.
>> No, you're you're f you're you're fine.
No worries. Okay. So, you've had a lot to say. I'd love for you to speak your mind.
>> I'm sorry. What did you say?
>> Oh, I said you had a lot to say. So, I want I want to give you the floor to speak your mind.
>> Can't hear you.
>> Hello.
>> Hi. There you are.
>> Okay. Yeah, I'm g Oh, sorry. So, so you've got a lot to text, but I'm just going to give you the floor to speak your mind or anything you agree disagree with. I'm all for you uh speaking your mind.
>> Well, great. You know, you're breaking up quite a bit. So, yeah, I I understand where you're coming from. I do exactly what you do for a living and I appreciate what you do. However, the dealers are a big part of the ecosystem.
So in order for us to do what we do, we rely on the dealers, right, to carry out certain functions of that sale and also to service the customer after the sale.
They also provide a lot of jobs in the not just sales but service, the business office. I mean, they they employ hundreds of people in the community and they pour a lot of money into the community. They bring a lot of taxes to the community. there's there's a lot of overhead and I just don't think it's really fair to beat them up the way that you do cuz they are important part of the ecosystem. They're possible, right?
>> Yeah. I mean, I I would disagree that I think consumers would disagree that they're an important part of the ecosystem. If they were, then they shouldn't be afraid be afraid of getting rid of franchise laws, right? If they're not they're not afraid of getting this.
Now, I will say your mentality I I think you're a broker versus I consider myself a car buying advocate. I do think there's a difference and I think that's the biggest >> I'm both. I'm only I'm I'm an advocate all over the United States. I only have a dealer's license in the state of California. So I most of my deals are done outside of California.
>> Yeah. And that's and that Yeah, that's totally fine. My my my agreeance here and where where I will say is that my you want >> I do I only have a broker's license because for a fiduciary responsibility number one. Number two, I have a uh I'm insured, so I have a bond, >> which is important to have. And I mean, I I'm not going to get licensed in all 50 states. There's too many regulations to do that. But I mean, there is a reason why I have a dealer's license here.
>> Yeah. Yeah. And I would ar I would argue that having a dealer's license or having a broker's license, I don't it depends what state you're in. There's >> And I don't accept And I don't accept money from dealers. So that's your next point in >> No, that was not my next point, but I'll get I was going to get there. I was going to say that me having a dealer's license. No, I wasn't. Let me let me just I I promise you I've let you talk and didn't cut you off and when you cut me off, I let you keep going. My point was means that you don't have like me having a dealership license does not give me or have force me to have a fiduciary duty. No dealer's license gives you the or forces you to have fiduciary duty. Otherwise, we wouldn't have this problem, right? So, >> you have you have certain protections for the consumer when you have a bond and having dealer license. You have to get licensed. You have to abide by certain laws. There is a benefit to the the consumer for that.
>> But but the the benefit is not a fiduciary.
>> Google that. That's Googleable.
>> Yeah. Yeah. I did the the the Google part which is you don't have a fiduciary duty which basically means I have no I have no >> fiduciary protection for the consumers.
>> A fiduciary duty is different than fiduciary protection. So the with fiduciary duty I have to I have to do what's financially best for you in every single scenario and not what's best for me. Uh that that is what a fiduciary duty means. Dealerships do not have a fiduciary duty. Otherwise when it came down to rate they would have to disclose this is the best rate that we can get for you because it is the best rate for you not what's best for the profit. When it comes down to brokers or when it comes down to dealers there's no fiduciary duty there. There's no there's no state that says that you have a fiduciary duty. You have fiduciary responsibilities could do the service.
>> No, I do. I have one.
>> But you don't have a fiduciary duty. Not legally.
>> Okay. So, let me ask you a question. You worked at a dealership. Were you in finance?
>> I was. Yes.
>> So, have you ever had a customer come in and say, "I got 12.9 at Bank of America." And you submit the deal to Bank of America and Wells Fargo. And you end up getting them two points better, but you're still holding two points.
>> Yes. Because I didn't have a fiduciary duty. But do you think that they shouldn't be allowed to keep those two points when they just save the customer two points off their very own bank?
>> No. So, so again, the argument is do dealerships have a fiduciary duty and they don't have a fiduciary duty.
>> No, they don't because they're not financial advisors, but they do have certain responsibilities and bonds protect the consumer.
>> Bonds protect bonds protect the consumers from the the actual work being done.
>> The FPB is does as well. There's different like the FTC and and the FTC is taking care of it and there are totally I agree with you in that there's dealers that are not doing the right thing by the consumer. But there's a reason why there's become more transparency. There's a menu during the process to show them what their their rate is. Like there's different protections for consumers. And I think that you're you're going a little overboard in regard to how some of this plays out. Like different dealers have different models and different philosophies and and there's a lot of bad dealers out there but there's also a lot of good ones.
>> Yeah. And and nobody's disagreeing that there are good or bad dealers but what what I am saying here is consumers are right now are forced to use the dealership model. I have to go through that adventure if I want to buy a new car. Right. So the idea behind >> there people like you and me they're not forced to do anything.
>> But even going through me or you they still have to deal with the dealership or one where unless unless you truly are a broker and you can handle the paperwork which Yep. which again I'm not a broker I can't handle the paperwork so they do have to deal with the dealership eventually they have to buy from the dealership and that tax is still on there and when it comes down when you're forcing the government is forcing a consumer to use this is the only way to buy this car I do think that there should be a fiduciary duty from the dealership because the consumer doesn't have any other option or at the very least they should have to sign a disclosure to say we do not have a fiduciary duty here there is an expense for using our finance office and we believe that you should pay that expense but you should sign here to let us know otherwise you can go get your own financing but the problem is is that dealerships don't use that language.
They use the language, we have the best finance team. We've been doing this for 35 years. We, you know, we've worked with, we can probably get you a better rate than you can with your own bank, right? That's the things they say which would imply they have a fiduciary duty.
The whole reason we have this conversation was you said you had a fiduciary duty because you have your dealer's license. And I'm disagreeing with that point. That doesn't give you a fiduciary duty. That doesn't make you have anything. And and you can choose a deal if you were taking money from the dealership that doesn't make the most sense for the consumer, but makes more sense to you. Now, I'm not saying you do that, but you have that option as a broker to whatever makes the most sense.
And whatever you advertise to the client is the deal that you can give them. You are not you are not fiduciarily obliged to go through and say, "I have to give you the cheapest car I can find that makes the most sense for the consumer because I have a duty to you or you have to pick the lowest rate or anything along those lines." None of that is needed because you that doesn't that's not implied with a dealer's license or a broker's license.
>> Let me ask what do you have protects? Do you have financial a fiduciary responsibility to the consumer? I mean, if you don't like what what is it about you that's protecting the consumer?
>> Yeah. So, so one thing that I believe is so no, I don't have a fiduciary duty as well. There's no fiduciary duty needed.
The only ones that needed financial advisors, but again, I believe if you're going to have a business model that's required, you should have a fiduciary duty. But when it comes down to it, the reason why I believe consumers can trust me is that I'm very public with everything I do. I'm very transparent.
all my business, my profits, my expenses, my pay, everything goes out there. And consumers get to make a choice. Is this person worth it or is there not based on the words they say?
And if they don't like that, they can skip me and go to the dealership and avoid the process. What I don't like is that people don't have that option at the dealership. They can't say, "I don't trust you. I don't believe you have my best interest. I want to buy from Toyota." They don't have that option with me. They have the option just to say, "No, right. You you hire me because you believe I'm going to do what's best for you."
>> Well, they do have that option. and they can say to the dealer, "I don't trust you." And they can they can grind the dealer down, right? And >> but they can't skip the dealer.
>> If if they pay you and they don't trust you, then they can't get their money back.
>> So, we we charge on a consulting fee, but I will tell you that anybody who hires us wouldn't hire us and not trust us. Uh that would be weird. We charge an upfront fee for our service. So, there has to be an implied trust the second you hire us.
>> They don't they don't want to do the deal. Like, I mean, they don't get their money back. So, >> yeah. Correct. Because they're paying for they're pay again. I don't advertise. Again, this is where you have to go through advertising. I don't advertise this as a money-saving service. I'm very clear upfront that I don't guarantee you a certain deal, right? I guarantee you to go out to the market, figure out what's a good deal, and then tell you what that information is. Some clients like it, some people don't. And you can do your research to decide if it's worth it or not. I would say my my reviews, my I've been doing this for 3 years. We're doing over 400 deals on a monthly basis. If we were screwing over a lot of clients by doing that, it would be unfair. I will tell you, you know, I'm we are Yeah, I would say I I' I don't think I've run into a situation where somebody's unhappy with a deal and we've done 5 6 thousand deals. It's one of those things where we're pretty transparent. We show everything we do. So, like you get a customer profile page where you see every dealer we talk to. You see every dealer that we're actually working with and you see every bid. So, it's it's very easy for you to go and say, "Deliver, did their work? I feel confident with this." And then you make a decision, right? And and clients don't always even pick the cheapest option.
Sometimes they pick like this client that I read the review on earlier. They didn't pick the cheapest option. They picked the one that was closest to their dealer because that's what made the most sense for them. It's not my job to make a decision for them. It's my job job to get the information and let them make a decision.
>> Why did they choose the dealer closest to them?
>> Because that's what they wanted to do.
>> Is it because maybe the dealer offers a service that you don't offer? Like what?
>> No. No. So, so reading this review, they didn't want to have to ship the car with an unnecessary expense. They tried to buy the car from that dealership and the dealership was refusing to give them the deal they asked for. So, they ended up paying for us. We ended up covering our fee and getting them the deal they asked for at the same exact dealer. So for them, they got to skip that entire process where somebody basically was rude to them and said nobody's going to negotiate the deal. They ended up being able to work with that same exact dealer, skip the entire thing in and out in 15 minutes while still not having to ship a car, not having to do anything.
Uh, everybody's different on why they picked the deal, but for them, they don't have a relationship with the dealer. They bought the car because it was going to be the best option that made the most sense for them. But no, they didn't buy the car because they're going to do their service work. you know, if you work anything in dealers that service and sales are basically two different businesses, >> right? So, I agree with you on that.
>> Like, like it there's no benefit to the consumer to buy a car at a dealership because the service like the service isn't going to treat them any different.
>> So, I just think that honestly the whole $1,000 is fine, but you realize that most sales people aren't making $1,000 on a car deal. I mean, if they're making a couple hundred bucks for all the work that they do, then that's, you know, that's about average. And the dealers in most cases on the front end aren't making $1,000 in a lot of cases. Most cases. So you can sit here and quote Group One and Autoation and all these other, but for the amount of work that they do on a car deal, every business is entitled to a profit. I think it's the experience and in some cases that you're speaking to, right? But at the end of the day, they're definitely not saving money. It's actually costing them money to work with you or me for that matter.
Yeah. So, so first off, $1,000 per deal is not my profit, right? Like just people keep saying that that's not my profit. I have $1.6 million of payroll every single year that I have to pay. We have expenses that we have. We build out our CRM, our client experience. But again, our profit is about 550 per car.
So, and again, you can argue that that's more than what a car salesman that is correct because way we have an optional service. We have demand for it. We like for example, our wait time right now is over 3 weeks. Like that's our wait time right now. The market has said that people are willing to pay a thousand bucks because they believe our service is worth it. And that that's the beautiful thing is that people didn't see value in it. If people were like you like that's too much, they wouldn't pay, right? Like so you charge $1,000 and then the dealer still has to do all the work really. Like they still have to deliver the car. They have to do the paperwork. They have to get the deal financed. They have to do all the things, right? They have to deliver the car.
>> Let me play this video. I got today.
This is 4 hours ago from a car salesman that posted on TikTok. I just want you to listen to this real quick.
>> Did a deal with Tommy from Delivered and to be honest with you, it was one of the easiest experiences that I've had. He had a client all the way in North Carolina looking for a Rav 4 XSC. I ironically had one in the same exact specs. Meteor shower, black interior, all the bells and whistles, everything like that. He has actually a portal where you can go ahead and submit a bid.
I submitted my bid. I ended up winning.
Uh, they gave me a deposit, sent them the outdoor number, everything like that. Good thing is the dealership I met is actually very straightforward and transparent. Gave me the deposit, did the credit app, all of that stuff.
Waited 2 months for it to come in this morning. Ended up picking him up from the airport. He was finished with me in 20 minutes. It could be that easy, guys, to be honest with you. So, shout out to Tommy.
>> And we we get those videos every single day. The car salesman in total spent less than an hour, made $150 mini, so made $150 an hour, which would be $300,000 a year. had to do little to no work on the deal compared to having to chase uh and how many car salesmen have you been in car sales? I've chased a 9-hour mini where you're working with a car salesman for 9 hours going back and forth and in the end they they end up not even buying a car or they buy a car and you make a hundred bucks, right? One of the things that I value myself in >> a lot of work that goes on before the customer ever shows up.
>> That car salesman just today that that video you can find was posted 4 hours ago and there was three other ones that were posted yesterday. Uh like that that that is a car salesman's opinion from doing a deal with us, right? We have Ryan that was making that.
>> You've got sales managers that you're dealing with in a lot of cases and those guys are the ones that are doing the work.
>> And if it didn't make sense for dealerships to do deals with us, they wouldn't do deals with us. Right? The dealership has all the information possible, right? They understand if it's worth it or not. And I will tell you, nine times out of 10, most dealers that do business with us for the first time say, "Oh my gosh, I didn't realize how easy this is. This takes 15 minutes of our time." Yeah, we'll just do as many deliver deals as we humanly can.
>> Sorry, I can't hear you. What did you say? I I said when it comes down to it, our deals are faster for the dealership because we know exactly what we want because we have the market data. The idea that it's spending no no dealership is spending hours of time on delivered deals. They are spending at most all in an hour, but most dealerships are spending less than 30 minutes all in on a deal with delivered. That's just that's just how fast and efficient we are. Because I've worked in the industry and I understand one of the reasons why car sales people like to do business with us is that I understand the pain they went through. So, we try to make things fast and efficient. There's a reason why the dealers that have done business with us have been like, "Oh my god, this is great. This is easy."
That's why that car sales made a TikTok out of >> Tommy. That is not true. It takes 30 minutes to just put the deal paperwork and all the stuff in the computer to finalize.
>> Why does it take 30 I was in finance.
What do you What What do you like What do you like I was in finance. How long?
Like it does not take 30 minutes to load a deal >> behind the scenes that you don't see that you're not accounting for.
>> I'm I I was in the industry. I was sales, finance, and sales manager. If you have an efficient deal and skip the entire process does not take more value, you are diminishing the value of the dealers. They are very big part of the ecosystem and you're bashing them and they're they're your partner. So >> So here here's the difference between me and you. You want this business model to continue because it's your business and you want to keep profiting off it and they're your partner. No, one second.
They're your partner as you said.
They're your partner. So if they go out of business dealers, you're not. So if they go out of business tomorrow, you go out of business tomorrow, which is their partner. I don't consider this. I am willing to keep fighting this fight to fix this industry if it means putting myself out of business. If it means deliver does not exist, but >> believe that for a minute. I don't believe that for a minute. What are you going to do?
>> Every single employee that starts here in our employee handbook, the first thing they look at says, "We are a business that is trying to put ourselves out of business a thousand%. Why would I be why would I not be doing exactly what you're doing, which is advocating that direct to consumer, right? I'm advocating for direct to consumer. That puts me out of business.
>> I don't believe that you're okay with you going out of business. I think that's not true. I think >> so. So, here's the here's the thing.
That's the difference between me and you. Uh is I believe I have a skill set that if I solve people's problems, they then I can make a profit. to do with the dealers going out of business.
>> But the problem is if dealerships go out of business tomorrow, I'm still and I I'm still going to be a profitable business owner.
>> If it goes direct to consumer, the dealers will figure it out. They'll pay me flat fees for a delivery for the car.
They'll figure it out if they become experience center >> and that and that's exactly what I've said, which would make it a better experience for the consumers.
>> But they've been talking about that for years. You're not the first guy to come up with this idea. But uh but I I I am by far the person that has popularized it and moved it. Right. I'm not the first person to think about this movement. But the first >> Musk did, but that's okay.
>> Elon Musk is doing it for his own business and doing it at one car. Right.
>> You're doing it for your own business, too.
>> No, I'm doing it for every brand and trying to change Tesla is not trying to change Toyota's business model. It doesn't make sense. Tesla wants Toyota to keep having dealerships because Tesla has a competitive advantage.
>> How are you changing Toyota's business model? Are you talking to Toyota about this?
>> I I am advocating every single day that direct to consumer should exist. Yes, I am fighting for it in every single b video that direct to consumer should allow and I'm fighting for franchise laws and yes, I am building a movement strong enough, which we're not there yet, but as we grow, as we continue to grow, once we start doing, let's just say a,000 deals a month. Let's just say I have 10 million followers and now we start making a movement to say, "Hey, let's have a conversation, Toyota. Let's have a let's try to figure out a way to get rid of franchise loss." we have a much stronger access to be able to do things. And people call me crazy. That's totally fine. But guess what? That's exactly what most businesses are. A little bit crazy to believe that they they have the world to be able to change an industry, but I believe I can change this industry. I believe my selfish intent is that I want a Wikipedia page saying, "Tommy Mcula, change the way Americans buy car." That that is way more exciting to me than making a few million dollars on selling and owning delivered for as long as I need. Right?
I believe consumers shouldn't have to deal with my service, your service or dealerships if they don't want to. And the consumer's process should just be easy. And I'm telling you, we are changing an industry. I'm telling you, dealerships have been have to change the way they do business because we exist.
They understand that consumers are becoming more and more educated every single day. And you can argue through the moon and back, but I will say that I 100% made an impact.
>> I think it's great. I think a more educated consumer is the best thing ever. They're so much easier to work with. Again, so when it comes down to the dealership model, again, all I say is that direct to consumer should exist.
I'm not saying dealerships should go out of business tomorrow. I'm saying manufacturers should be able to allow to sell cars, and I believe that would fix all problems.
>> So, what are you going to do after it goes direct to consumer? I'm just curious. What will you do for a living?
>> As long as the business model is fixed, which I believe it would be fixed, I would fix another problem. Like, here's the thing that I've learned building this business, and I love that I've done this, is I've realized if you solve a consumer's problems, they're willing to pay you money for it. So, all you have to do is find consumers problems and then charge money for it and you have a business. I've proven that with Delivered. And again, we were able to turn a business with 0 of ad spend into a business in its third year that's going to be making well over 5 million.
Like, this is a skill set that at the very worst case I could take into any major corporation and say, "Look what I've done on social media. Hire me to run your entire marketing team." I believe if I wanted to, I could probably get a pretty high up job at any manufacturer that would love to have me for the impact I've had in the industry.
But I believe that I would just keep running businesses, right? I believe I'd keep solving problems. I believe there's so many industries, the real estate industry, the furniture industry, so many industries that consumers do not like. And I would just keep solving problems and keep running businesses. I think that's what I want to do and what what I'm passionate about.
>> Okay. Well, furniture industry really does need help. So, >> yeah. But as of right now, the biggest industry in my eyes is the second biggest purchase in people's lives, which is buying cars. And that that's what I'm going to keep fighting for. And if it means putting me and you out of business, frankly, and 200,000 car salesmen, like I believe that 13 million Americans every single month deserve better.
>> Awesome. Well, it's been a fun debate.
>> Yeah, it's been a fun debate. I wish you the best and all the adventures in your in your in your uh business.
>> Great. I appreciate that.
>> And guys, what what I will say, guys, is like in my opinion, this is like and I understand she said she's a customer advocate, which is what most brokers are going to say. I believe if there was any proof in the model if you guys understand what is the difference between a broker and me it is the mindset right which is my mindset is I work for my consumer right that is what I do that's it I don't give a like dealerships I want to make their life simple and fast and quick but in the end if that dealership doesn't make sense for me I move it on to the next one because there's 17,000 dealerships and we'll get a deal but I work for the consumer my job is to make the consumer's life as easy as humanly possible and dealers will work around it thank you Guys, double double tap, follow, like, subscribe, do everything you can.
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