The Car Market Has A New Problem.

[00:00:00]Good afternoon. How many vehicles did you sell during tax season? I have the answer, so you're not really put on the spot so much.

[00:00:06]>> Yeah, so how many cars we sold during tax time? I would give you the correct right answer right now if I knew it, but my wife's here and she's got the number pulled up, so she can tell you. So, give us a February and March.

[00:00:17]>> Okay, so we're going to change the answer now. One second.

[00:00:20]>> We'll change the answer.

[00:00:21]>> Uh no, no, no. It would like if you're going to get So, in in February and March, we sold 89 cars in February and 80 cars in March.

[00:00:28]>> 89 in February, uh 80 in March, so that's 169 cars.

[00:00:33]I would say tax time really didn't start probably until like the third week in February.

[00:00:38]So, just if you're looking for basic our tax time numbers, I would drop that from February to March, 169 cars between those two months. So, what I will say was different about this year versus last year is last year we had a lot more cars going into tax time, and this year we didn't have as many, but we were able to buy all the way through tax time.

[00:00:59]Usually that's not the case. What typically will happen is tax time will hit us and then we'll stop buying cars for like three or four weeks. And I guess just the market, other dealers, whatever was going on, maybe they didn't get hit by tax time the way that we did, but prices didn't spike the way they typically do. They went up. They went up. Don't get me wrong, but they didn't spike the way that they usually do where I can't even touch a vehicle throughout tax time. We were still able to buy, not at the same volume as we were before or even right now since tax time is done.

[00:01:34]Um but we were able to still bring in a steady supply of cars throughout tax time, and that's what was is different than really most other tax times that I've dealt with. And it was very weird this year, but also a positive for us because tax time would not have been as good as it was for us if we hadn't been able to actually get that inventory throughout because we were not loaded up as much as we have been in prior years. And the reason for that is like throughout January we we had a good January. And that's weird, too. So, um it was weird that we had a really good January. We sold through a lot of cars. It was weird that we didn't have enough vehicles as I as many as I wanted going into tax time.

[00:02:14]And then it was weird that we were able to buy all throughout tax time. Um so, market's changing. I hope this is uh this something that that keeps up cuz next year I would love to have a good January. I would love to continue to be able to buy through tax time and then still kill it during tax time. So, um it was it was really a net positive for us everything. And I think um it being a net positive for us shows that it was probably a net negative for a lot of dealers, especially if they did load up and then they weren't able to sell through a lot of their product because I shouldn't be able to buy cars throughout tax time. And this year we were we were able to. So, I think it shows more weakness on the market on the market.

[00:02:53]And then our ability to go in there and undercut a lot of other dealers and still be able to sell cars when other car dealers have been more weak than what they would have anticipated.

[00:03:04]>> You got one more weird to add into that list.

[00:03:06]>> Yep.

[00:03:07]>> Uh back after the stimulus money in 2022, that was the year that we our inventory cost the most because prices had just gone through the roof at and and our the demand was at an all-time high with all the stimulus money that was out there. So, prices had doubled on the cars of what we were paying for them at auction. And then every year since 2022, it's gone down. But this year it went down the most. And so, just compared to last year, which was also the lowest year since 2022 at the time, it's dropped another 6%. So, we have more cars, lower average per car, um and uh in our inventory right now after tax time.

[00:03:42]>> So, yeah, we get a lot of this where people are screaming like I'll talk about car prices going down and they're like, "Well, I go and I see a $70,000 truck." I'm not talking about Ford. Like I'm I'm showing what exactly what my wife just said is that we're seeing year-over-year the cost of our cars are going down and they're going down by I think it's like $200 almost a year is what I saw.

[00:04:04]>> Well, it it varies. It like it it's it's a little bit up and down, but it's I mean it's not that small of an amount, but it was a pretty big drop this year.

[00:04:11]>> Yeah, but since since the pandemic used car prices that we've had to pay have gone down every single year. Now, you might have car dealers that keep their prices steady even though they're getting some cheaper prices, but that's that's not what what we're doing and what I'm reporting on is what I'm seeing on the wholesale markets and the wholesale markets over the last 4 years have absolutely been dropping and that's going to be a trend that I think continues as we get more volume getting pushed into the system where a lot of these new car manufacturers and their dealers they're going back to play the volume game and that only helps everyone except for the manufacturers. Even the big franchise dealers, when they go back to volume, they'll start they can they can make a lot of money selling a lot of back-end products. They're not going to make a lot on the front end, but they'll sell they'll make a lot on the back end and then we get more trade-ins to the system. We have more velocity of money that moves through the system, more more buys and sells on consumer and dealership level. And when you get that, then we can push some of these used car prices down and that's what we're seeing. And then if you throw in a weakness on the consumer side, then that can be some that can set up for some hurt in the short term, but that only can make prices go down even more and the what what's the what's the saying? The best cure for high prices is high prices because then you just have consumers that say no and then eventually all the prices have to come down to meet where the consumer is and and I think that's what we're going to see and I'm going to see it before a lot of other dealers and a lot of other markets are because of how agile we are and actually pricing and we price off not what the market values are, but off what we're paying for the cars. So, if the wholesale market drops by 10%, retail usually doesn't see that for months, but I'll see it instantly and my customer will see it instantly because if I was paying $2,500 for a car a month ago and now that same car is $2,000, well, that car that I bought for $2,500 a month ago, I had to price that one at 3,500 bucks.

[00:06:07]But when that new one's coming in at $2,000, I'm not pricing at 3,500 bucks, pricing at $3,000. That's how we operate and that's why we can uh see these in the market a lot quicker and that's why we can see uh what really what where the consumer is because as the market moves, so does uh so will the prices that our consumer is getting. If the market goes down, but our customers aren't buying cars as frequently as they were a month and a half ago, well, that's going to tell you something because prices were higher then, but customers are were more willing to pay that price still then, even if our you know, if our prices go down, but the the customer's not willing to pay that price even though the price went down, that's showing you that the market's not doing all that well and then uh something like what's going on now with gas prices being higher, uh then that can we can make some connections in the market of how my customer is doing. My customer is not the market, but my my customer is uh the lower end of the economic spectrum and usually those consumers will get hurt and they'll um they'll tighten up uh faster than the rest of the market. So, we can kind of we can take some of uh the signals that we see from my customers and extrapolate that out. Uh now, like I said, my my customer does not make a market, uh but we can we can take some signs of what I am seeing and then uh and then kind of gauge of what we think might happen uh in future months to these other consumers that do have a little bit more money than my customer.

[00:07:33]>> You've been stocking more Subarus lately. How are they selling? Are they are they causing any issues?

[00:07:38]>> Yeah, so we've been uh buying a lot more Subarus here lately. The the reason being is not necessarily because I like Subarus any more than what I have been in the past. Um we have an auction that just picked up a brand new Subaru dealership. Massive Subaru dealership.

[00:07:53]So, what ends up happening is whenever this dealership gets more trade-ins, more more than likely they're going to get more Subarus than any other trade-in cuz usually somebody likes a brand, they stick with the brand. If the car's good, then they'll trade in their old Subaru and buy another Subaru. So, uh the reason why I've been having more Subarus on my lot lately is because I've just had more available to me at auctions.

[00:08:18]And as far as I'm concerned, I know there's a there's a like a common thing with me not liking CBTs. Say CVT transmissions, but the T is the transmission, but CBTs, I don't necessarily like them, but Subaru, I think, actually got them to where they're they're at least halfway decent.

[00:08:35]I I I like them, and we're we're buying these Subarus that have 150,000 mi on them, and we haven't really had any problems. I think of all the ones I bought, I've had one transmission issue uh that we've had to deal with. Um but other than that, I mean, it's probably since this we've picked up the Subaru dealer at this auction, I've probably bought 50-plus Subarus from this one store, and we've had one transmission issue. So, I don't know what Subaru has been able to do really well over the years that Nissan just hasn't been able to figure out with a CVT. Uh but Subaru seems to have done it very well. So, I'm not scared of a Subaru CVT. Um and I keep buying them.

[00:09:14]And the thing about it is, too, is that we're we're selling them. We sell them pretty well. And we're able to sell them at the upper end of our our limit of where we like to price our cars.

[00:09:25]So, I can spend a little bit more on Subaru because I know that I have customers that will come and buy a Subaru for 4,000, 4,500, 5,000, and it doesn't necessarily have to be be 2,500 or 3,000 car for me to be able to sell it. So, um that even opens up more cars uh from that store that I'm able to buy because I don't necessarily have to have a limit of I can only spend $2,500 on this car cuz all I can sell for is 3,500 bucks. I know I can go up to $3,500 on some of these nicer Subarus.

[00:09:54]Um we're even buying like newer models. I say newer, but newer for me. Like 2013, 14, 15, 16. Um usually we can't buy stuff like that to be able to sell it at $5,000 and under. But in a lot of these Subarus, a lot of these Foresters, a lot of these Imprezas, I'm able to buy those and still be able to get them for 32, 33, 3400 bucks and sell them for 4500 or $5,000 to keep my cap of that $5,000 and under. And I've I've really I've really liked having a lot of Subarus on my lot.

[00:10:26]Um it it brings it it brings more customers in that we wouldn't um have been uh really open to a lot of uh like small families that are looking for not necessarily a cheap sedan or an SUV, but that hatchback. And Subaru, I mean, that's what they do. They do they do hatchbacks. The Forester and uh they have a lot of Imprezas that have the uh have the hatchback on them.

[00:10:48]Um I don't know if Legacy is considered a different model in their I know there's like a Outback Legacy. I I I don't I don't haven't learned all that about them yet, but I know about a lot of Foresters. I bought a lot of Imprezas right now. And uh and they seem to do well. Um not run into any really any motor issues. Um and we've had that one transmission issue that I know of. Now, obviously, as we continue to buy more of them and stock them on my lot, I'm going to run into more problems. So, ask me again in 3 months and I might have a different view on them. Uh but right now, uh the ones I bought is I would guess it's probably been 50 since we picked up that store.

[00:11:24]All all seem to be uh good and I'm going to continue to buy them and uh and and buy a lot of them. Lots of dog owners though. Yeah, lots of dog hair. So, we've uh we've had to I see I see dog hair uh popping up in the chat right here. It's very It is very funny that you'll pick that up. Uh that yes, um if I I will always say if there are if there's no dog hair in a Subaru, then that means that there was a dog that's trying to cover up a crime because a Subaru will have dog hair all in it at all times, and that's just it comes standard.

[00:11:55]>> Has your wife slapped you as soon as you brought a car onto the lot?

[00:11:58]>> No, she trusts me with the with the stuff that I mean we talk a bunch of junk to each other. And but at the end of the day, she trusts me with how we're how I'm spending our money, and it it took a long time for us to get to that point, and I needed to form a a track record to show success with me with money. And right now, it's not even like cars. Like I'm I've got so many little side hustles and side hobbies that I pick up every once in a while that involve money. And she's gotten to the point where she trust like question some stuff. Like, why are you doing this?

[00:12:31]This is stupid. And but >> I don't say it like that. You will ask me things, and you'll ask what I think, and I'll tell you what I think because you asked. But I'm I'm not like saying, "Oh, where did this money go?"

[00:12:42]>> No, no, no, I'm not saying that. But if I want to get into a new venture or something like that, then it we've gotten to the point where I have proven myself enough to know how to make money that she will allow me to try some weird stupid thing that she doesn't understand. And it's quite quite frankly, when I get into this stuff, I don't understand it either. I just want to try something new and try to make money out of it. And most of the time it ends up just working out. Um and my wife says I'm lucky, but I think I'm just good. Uh but >> [laughter] >> And humble.

[00:13:17]>> I'm so humble. Nothing more I like more than a uh a humble humble guy talking about this.

[00:13:23]Uh but uh It's funny. I had a I was talking uh this is sad. Never mind. I'm not getting to that that side of it.

[00:13:31]>> Okay, two things. I need you to to go ahead and say what you were going to say, and then I also would like to reply to the >> It was just a funny thing. We were talking about humble, and I was talking to some guys, some older guys, obviously, about playing pickleball, and tell them how how good I was and how good my serve was, and one of them just spoke up and said, "You know what, Brandon?

[00:13:51]There's nothing more I like better than a humble pickleball player."

[00:13:55]>> [laughter] >> Yep.

[00:13:57]>> And he just He was making fun of me.

[00:13:58]That's why I love old people, cuz they just tell you how it is. They don't care. They have no filter. That's why I hang around I don't hang around with people my own age. I only hang out with old people because there I can learn some stuff. They've already messed up and tell me where what I shouldn't do, and then they have no filter. And that's my favorite. They don't care. They don't care. Just tell me exactly what I need to hear right now, please.

[00:14:21]>> All right, now my turn to talk about the slapping with whatever car you brought back to the lot. Um if you've heard enough of his stories, he's brought back a car I mean, he bought a car that was like missing half of it. Um he has >> The other half was there.

[00:14:34]>> He's missed like some major things. Like he's he's he's really messed up on some buys, and those are on quite honestly my very favorite cars that he's ever bought because he buys few enough of them that we're not damaged by it, but enough of them that it keeps him from being more I'm sorry.

[00:14:53]It keeps him being as humble as he is.

[00:14:55]>> Yeah.

[00:14:56]>> So that at least it's not worse, and we need to see some mistakes come out of him because he does do really well. He makes mostly good decisions, and I like to to make fun of things and laugh at them and enjoy them. And because he can do that, oh, I love it when he messes up really good because it it's it's a lot of fun.

[00:15:11]>> And you guys have actually seen some of my mess-ups. There was a There was a Mazda ball that I put in an auction video.

[00:15:16]Like the whole front end was gone off of it cuz I always I was only watching the back end whenever it was going through the auction.

[00:15:22]And then there was a Mercedes I did a whole video about and I thought it would go it's going to be a a great video and I thought it was a great car and it I was going to make it's going to be an easy $1,500 I'll be able to make on it.

[00:15:33]And nobody bought it and then I lowered the price so much till we about broke even. I think I made $300 on it but the work I put into the car we basically broke even so but yeah I'm I'm messed up and I realize that in buying cars the way that we buy cars we buy so many like we're we're going we're going to take some losses and a lot of them are are my fault.

[00:15:54]>> And I like to learn from things and as long as he can have a good attitude with them. My my opinion it's not like the way that life is going well isn't in how you deal with the good things it's in how you deal with the bad. So if you're not you need those challenges and they're and the the way that we're able to deal with those together is my favorite. So I'm all for it.

[00:16:11]>> Oh Dan pointed out no the F-150.

[00:16:14]Um >> How about that car behind you right now?

[00:16:16]>> No we [laughter] won't talk about that.

[00:16:18]Yeah the F-150 I bought an F-150 and we had to redo the whole motor. The stupid thing about this F-150 I won't buy another Ford truck I don't think.

[00:16:27]We had to take the whole cab off the truck just to get to the motor to to work on it.

[00:16:32]Disaster.

[00:16:34]>> Oh that was it?

[00:16:35]>> That's it.

[00:16:35]>> Okay.

[00:16:35]>> Um I don't want to I don't want to go down that rabbit hole.

[00:16:38]So frustrating I hate Ford.

[00:16:40]>> Oh we need those tissues again.

[00:16:42]>> Yeah I'm not whining I'm I'm angry.

[00:16:44]>> Oh okay.