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00:00:04.160Hi everyone, welcome into another edition of the Executive Profile on CBT News.
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00:00:05.440I'm Jim Fitzpatrick.
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00:00:18.879On this edition of the Executive Profile, we sit down with Paul Sandstone Jr., owner of Sandstone Jr.'s Auto Group, a family-owned dealership organization that has grown into one of the most well-respected automotive groups in the Northeast.
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00:00:32.719In this exclusive conversation, Paul reflects on carrying forward a family legacy, leading a modern dealership group, building a strong company culture, navigating today's retail automotive challenges, and his vision for the future of the business.
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00:00:38.079Here's my conversation with Paul Sandstone Jr., owner of Sandstone Jr.'s Auto Group.
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00:01:08.959Thank you, Paul, for joining us on the show.
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00:01:10.159Thank you for having me, Jim.
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00:01:11.040Pleasure to be here.
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00:01:12.079Great, great, great.
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00:01:14.959So and I appreciate you making the pilgrimage into our studio.
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00:01:18.959We had this set up at your showroom, but uh schedules uh conflicted.
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00:01:22.400It turns out we have uh alternate plans anyway.
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00:01:22.640Right.
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00:01:24.400So it will all work out well.
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00:01:25.599Yes, yes, exactly.
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00:01:27.359So uh so let's let's do this.
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00:01:38.079What I'd like to do with the executive profile show is to is to kind of get behind, pull the curtain back a little bit um on the dealer themselves, you know, and and learn where were you brought up?
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00:01:40.879I know you're brought up in a car family, you know, with with your dad.
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00:01:43.920And uh, you know, how many kids in your family growing up?
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00:01:45.920Where did where did you stand in the lineup?
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00:01:49.439How did you get into the auto industry and when did that start?
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00:01:51.439Well, I am second generation.
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00:01:56.480My father, Paul Sansone, uh is still a very successful auto dealer in New Jersey.
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00:02:01.120Um I'm sure we'll chat about it, but we split up around 08-09.
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00:02:05.040But in reference to the business, I'm one of four boys.
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00:02:05.359Okay.
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00:02:08.400Uh all of us uh got into the business.
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00:02:13.360Um unfortunately, one brother had passed away about 25 years ago.
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00:02:19.599Uh the others have been in the business, one's in a warranty business, the other one's still working for my father.
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00:02:30.479Uh so the automobile business has been my whole uh my whole life in and I where I live in New Jersey is a very uh uh Wall Street oriented town.
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00:02:35.680So uh so everybody else sort of thought New York City, that kind of stuff.
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00:02:36.719I never thought of anything else.
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00:02:39.439Never I never flickered in my mind.
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00:02:42.719Never flickered in my mind I was gonna do anything else.
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00:02:43.120Really?
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00:02:44.639You you from the time you were a kid.
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00:02:51.360You were you we like most dealer kids that you were running around cleaning cars and moving cars and doing all that stuff?
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00:03:03.680I I remember my father opened up, uh father opened up his first uh Toyota store back then when they were giving Toyota franchises away just just to have a new car shingle for a used car dealer.
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00:03:04.400That's right.
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00:03:12.479And uh brand new building, General Toyota back in the day, and I was cleaning cars, and he wanted me to get a car for the showroom floor.
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00:03:17.360And I pulled the car around and you know, I'm whatever, 12, 10, 12 years old.
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00:03:19.199Shouldn't have been behind the wheel of a car.
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00:03:20.719I was gonna say 10, 12 years old.
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00:03:24.879Whatever it was, I was too young and actually clipped, clipped the car.
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00:03:31.599I got into an accident, clipped the car, and it wasn't so bad that anybody really noticed.
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00:03:31.919Right.
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00:03:38.879And uh my father walks in the showroom, the first thing he sees is this crease in the side of the car, and he starts flipping out.
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00:03:39.120Right.
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00:03:41.439And a manager actually took the heat for me.
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00:03:42.879He knew he knew I did it.
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00:03:43.759He goes, uh oh.
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00:03:45.680The manager actually took the heat for me.
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00:03:46.479Pretty cool.
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00:03:47.199Pretty cool.
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00:03:49.680Does he does that manager run your business today?
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00:03:50.719No, no, no.
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00:03:55.439But uh he definitely saved me from my father's fury of the day, that's for sure.
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00:03:56.240That's pretty cool.
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00:03:57.039Nobody will notice.
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00:03:58.800There's a little crease in the side of the card.
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00:04:00.400Now, are you the firstborn son?
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00:04:01.280I'm number three.
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00:04:02.000You're number three.
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00:04:02.719I'm number three.
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00:04:06.000The old Italian, the oldest is named after my father's father.
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00:04:06.479Okay.
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00:04:08.400Number two after my mother's father.
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00:04:08.879Okay.
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00:04:10.240Is that typical in Italian family?
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00:04:10.879I don't know.
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00:04:15.199It is in our family, and uh, that's why we have a lot of Pauls running around our family.
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00:04:17.759My oldest brother had his first son, was a Paul.
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00:04:18.480That's funny.
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00:04:20.800So it gets a little can it gets a little confusing.
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00:04:23.360Actually, and my son is Paul III.
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00:04:24.480That's right, PS3.
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00:04:26.480That's why we call him PS3.
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00:04:30.160I was getting uh all of his phone calls at the dealership.
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00:04:33.120Everyone assumes Junior's the younger version.
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00:04:34.480In this case, that's not the case.
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00:04:34.959That's right.
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00:04:36.480So I said we got to come up with something.
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00:04:38.000So I said, how about PS3?
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00:04:39.519I said, All right, let's go for it.
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00:04:50.079Now, so you spent if you if you got if you and your dad um uh broke up kind of in in 2008, um which was a tough time, you you spent some time with him then from the time we were in the business.
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00:04:55.920Yeah, I was in the business in 1980, so we really spent 20 25, 28 years together.
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00:04:56.560Right, right.
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00:05:04.720And really started uh from selling cars like everyone else, and uh F and I, and I was more of a front-end guy.
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00:05:05.279Okay.
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00:05:07.839Uh you know, F and I was I loved F and I.
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00:05:09.839That was that was my wheelhouse.
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00:05:11.360Uh you're dealing with buyers.
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00:05:12.959Oh, I I I loved it.
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00:05:13.680I really did.
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00:05:24.959I was always that was always my strength as uh you know working with customers, yeah uh uh with less than perfect credit and the financing and everything else, and it was really something that I was very good at.
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00:05:25.279Yeah.
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00:05:32.879Um so yeah, and then I uh at when my father had 12 or 13 dealerships, I was like the company fireman.
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00:05:33.199Okay.
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00:05:38.079If a store was a a problem, I could go into the store, hire, fire, retrain.
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00:05:38.480Okay.
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00:05:43.360Uh that led me to uh a year out in Robasonia, Pennsylvania.
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00:05:44.000Yeah, wow.
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00:05:49.120A year in uh this was a nicer duty, a year in uh Palm Beach, Florida.
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00:05:50.399I remember those stores.
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00:05:52.800I think you were like on North Palm Beach Boulevard.
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00:05:54.959Yeah, North Lake Boulevard, yeah.
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00:06:02.480So uh yeah, so it it it it allowed me uh not to be in the showrooms day to day, but it was it was a lot of fun.
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00:06:04.879And then I actually ran the mall.
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00:06:11.519Uh my father's got a uh 60-acre auto mall on Route One, and we ran that for uh 10-15 years until we split up.
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00:06:13.279Wow, that's so the day-to-day operations.
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00:06:16.079Now, your your story is not that unique.
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00:06:27.279There's uh so many dealers that I've spoken to over the last 15 years here at CBT News where you know the the son and the father, you know, go their separate ways for whatever reason, for a multitude of different things.
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00:06:28.959But that happened to you guys, right?
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00:06:30.560Family dynamics is tough.
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00:06:30.800Yeah.
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00:06:33.759Um sometimes between siblings.
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00:06:40.639We never really had the siblings issue, but I could certainly see how the siblings working together is a challenge.
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00:06:42.079We never did have that.
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00:06:49.120Uh and then really with my father and I, quite frankly, it was that he just loved working so much, and I he did.
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00:07:00.800He was a very passionate guy, and I I am also, and uh I shared this off camera, but it really got to be a point in time I said, look, one of us is gonna play golf and one of us is gonna work.
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00:07:10.399I said, Your call, you're called and uh so I I just think uh we just butted heads too much, and that you have two chiefs in the kitchen or two, whatever.
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00:07:11.759Well you're his DNA.
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00:07:15.839So you're gonna be like him, and and uh sometimes that's the very problem, right?
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00:07:20.319Yeah, and uh you know it was a hard you know decision.
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00:07:25.199He decided it was best that we split, and that was a hard decision at the time.
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00:07:30.800Of course, of course, and especially in 08-09, if anyone remembers what that was like in the car business.
00:07:31.120 -->
00:07:31.279Of course.
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00:07:34.560That was uh challenging time to be on your own for the first time.
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00:07:35.199Yeah.
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00:07:44.240Um, but it it it really created uh a lot of uh uh a lot of grit and a lot of you know fortitude.
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00:08:00.639And uh and you know uh I have a beautiful home in New Jersey off the beach and uh and a story that I think is interest or worth telling is uh you know that when you get into a new business and everything everyone thinks it's always one way.
00:08:00.720 -->
00:08:01.680It's always it's always easy.
00:08:01.839 -->
00:08:02.879Oh yeah, yeah, absolutely.
00:08:03.199 -->
00:08:05.600You're going off here, you're going off there, uh look, that guy's got paying.
00:08:05.839 -->
00:08:06.800Payroll just suddenly happens.
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00:08:08.240Oh yeah, it's all easy.
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00:08:18.000But at there was a point in time where I had was going, I had put my house on the market, you know, to make the dealership go, to float the dealership, to capitalize the dealership.
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00:08:27.279And we live across the street from the beach, and I walk across the beach with my wife, and all of a sudden the the for sale signs in the lawn, and my wife starts crying.
00:08:27.360 -->
00:08:28.000Oh of course.
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00:08:35.279And I'm like, uh I pulled the sign off the lawn and I threw it in the gr in the in the in the trash, and I said, I gotta come up with something else.
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00:08:37.279And I just just did.
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00:08:39.360I just uh put my head down.
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00:08:42.240I and this isn't funny today because it's true today.
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00:08:51.600Yeah, I remember saying to myself, I want to be the uh cool grandfather bringing your kid across the street to the beach, and now that's actually the stage I'm at, which is exciting.
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00:08:58.080Do you think that experience with your dad has really helped you with dealing with your kids now, your son's in the business?
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00:08:59.440Yeah, no doubt about it.
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00:08:59.840Yeah.
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00:09:08.799Again, my father error growing up, that level of management style was always very top-down and force-driven.
00:09:08.960 -->
00:09:10.720I was old school, old dealer, yeah.
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00:09:14.399Old school dealer mentality, a lot of war stories about that.
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00:09:23.120And uh there's no doubt I am different in many ways of a management style than my father, but there was still that in me, actually.
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00:09:34.159Yeah, uh, so I really did have to be conscious of uh of of what mistakes were happened between my father and myself because I certainly didn't want to replicate them with my kids.
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00:09:47.919I mean, I'm I'm blessed to actually have uh two sons and a nephew in the business with me that are all uh hardworking, motivated, right, talented young men, yeah, which is making it you know a lot easier for me.
00:09:48.080 -->
00:09:51.039But the communication is uh is the number one thing.
00:09:51.120 -->
00:09:54.559And and quite frankly, I'm not as good of a communicator as my kids are.
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00:10:06.559I mean, they're they they like to chat about everything that went on in the day and ask me questions, and I I I have to you know force myself to, you know, I'll just do it myself and you know that kind of stuff.
00:10:06.879 -->
00:10:11.440So there's still a difference of style, yeah, but we've really done well with working through.
00:10:11.759 -->
00:10:12.320Yeah, that's great.
00:10:12.399 -->
00:10:12.720That's great.
00:10:12.879 -->
00:10:14.399And even your wife is in the business, right?
00:10:14.480 -->
00:10:17.039She's kind of the spokesman great on the commercials.
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00:10:17.519My wife is.
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00:10:18.639She does an incredible job.
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00:10:19.120Thank you.
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00:10:22.080She actually she's so pretty, she looks like a hired you know model that's a very good thing.
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00:10:29.360Well, the funny stor when I was with my uh ad agency, you know, you guys have the reels that come in of all the commercials your dealers are doing.
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00:10:29.919Yeah.
00:10:30.159 -->
00:10:38.960So uh a dealer came into my old ad company and they saw this woman on the uh commercial, and he's like, Oh, I'd like to hire that person as my spokeswoman.
00:10:39.120 -->
00:10:41.360And the guy's like, I don't think you can afford her.
00:10:44.879 -->
00:10:48.799But anyway, so she actually did some uh TV work for other dealers too.
00:10:49.039 -->
00:10:51.039But yeah, she's the spokesperson of the dealership.
00:10:51.360 -->
00:10:51.759That's great.
00:10:52.000 -->
00:10:55.279And uh now it's really transitioned even to her and my son are doing some stuff.
00:10:55.519 -->
00:10:56.000Oh, that's great.
00:10:56.080 -->
00:10:56.559Yeah, that's great.
00:10:56.720 -->
00:10:57.679Yeah, it's gonna make you proud.
00:10:57.840 -->
00:10:58.799Yeah, that's fantastic.
00:10:59.039 -->
00:11:00.480Well, let's kind of jump into the business.
00:11:00.639 -->
00:11:02.960Um, you do uh we've got your logo right here.
00:11:03.039 -->
00:11:04.639You've got a you've got a Nissan store.
00:11:04.799 -->
00:11:05.440Talk to us about.
00:11:05.679 -->
00:11:08.480I mean, you're uh the uniquely qualified to answer this question.
00:11:08.639 -->
00:11:09.919What do you think about Nissan?
00:11:10.000 -->
00:11:15.679There's a lot of uh concern about that, or at least there was among Nissan stores or Nissan dealers.
00:11:15.759 -->
00:11:17.759What what's your take on the future of Nissan?
00:11:18.240 -->
00:11:25.120I am very proud of the change in Nissan over the last uh I'd say six months.
00:11:25.279 -->
00:11:25.440Okay.
00:11:25.759 -->
00:11:31.679Where a few years ago, one or two years ago, I really thought that they didn't realize how desperate a situation they were in.
00:11:31.759 -->
00:11:31.840Yeah.
00:11:32.080 -->
00:11:33.679And it was business as usual.
00:11:34.000 -->
00:11:34.159Sure.
00:11:34.639 -->
00:11:40.559And um and I really think a sense of urgency is definitely in it within Nissan.
00:11:40.960 -->
00:11:52.240And uh, you know, in talking to some of the Nissan uh upper management, you know, I said, look, you either need to have a blowaway product, yeah, a blowaway incentive, or a blowaway lender.
00:11:52.399 -->
00:11:52.559Right.
00:11:52.799 -->
00:11:54.639I said, Nissan at this point has none.
00:11:54.720 -->
00:11:55.440They got insulted.
00:11:55.519 -->
00:11:56.480I said, your product's good.
00:11:56.559 -->
00:11:57.279The product's very good.
00:11:57.360 -->
00:11:57.840Yeah, it really is.
00:11:58.159 -->
00:11:58.799The product's very good.
00:11:58.960 -->
00:12:03.919It's not really, you know, but to be outstanding to cut through the clutter is really what I meant.
00:12:04.000 -->
00:12:09.360Or or your lender has to find one that have to say yes, yeah, you know, to deals.
00:12:09.519 -->
00:12:12.159And I have to say, that's all trained, it's all changed.
00:12:12.320 -->
00:12:14.159Not that the product's changed.
00:12:14.320 -->
00:12:17.519The product's still good, very good, and with new stuff coming.
00:12:17.840 -->
00:12:20.240It's even gotten some uh high marks of the code.
00:12:20.399 -->
00:12:21.279Oh, yeah, quality, yeah.
00:12:21.360 -->
00:12:23.440The commission quality, absolutely.
00:12:23.679 -->
00:12:34.000So the product's always been good, but uh I thought they were very conservative with the uh incentives, and in the Northeast, obviously leasing is very important, so they're very conservative in that area.
00:12:34.159 -->
00:12:37.519And now Nissan Niemak is really stepped up to the table.
00:12:37.840 -->
00:12:38.320That's good.
00:12:38.799 -->
00:12:44.720And in my opinion, if if they want to help you put a deal together, which is what's needed on the retail floor.
00:12:44.879 -->
00:12:56.399I mean, my property my property has Nissan, Kia, Mitsubishi on it, and uh, and I actually was at the dealership with a senior Nissan guy showing them how here this deal's approved at Kia and walking people over.
00:12:56.559 -->
00:13:05.279I used to have 10, 15 customers a month going from Nissan over to Kia because they were getting the deals bought, or sometimes it was product.
00:13:06.559 -->
00:13:08.159Yeah, and now it's the other way around.
00:13:08.240 -->
00:13:13.919I'm actually seeing like five or six coming from the other showroom uh because of the Nissan incentives.
00:13:14.320 -->
00:13:18.879And um of it's driven because of uh a lot of customers are out of equity.
00:13:19.120 -->
00:13:19.919Sure, sure.
00:13:20.240 -->
00:13:24.320And uh Nissan has some pretty good uh rebates that are helping us with some deals.
00:13:24.720 -->
00:13:25.600Yeah, that helps in a big way.
00:13:25.919 -->
00:13:31.200So but the bottom line is I I I feel a sense of urgency I did not feel before.
00:13:31.519 -->
00:13:36.639And uh and I think they are um I think they're turning the corner.
00:13:36.879 -->
00:13:37.039Okay.
00:13:37.200 -->
00:13:40.320You know, it's gonna take a little bit of time, but I think they're certainly turning the corner.
00:13:40.720 -->
00:13:40.960That's good.
00:13:41.200 -->
00:13:50.480And dealer profitability is coming up, and as you know, I've been on the forefront of the whole thing with the brokering too, which they've they finally have taken a uh serious approach.
00:13:50.960 -->
00:13:53.519Yeah, you have you have been uh the one of the leads on that.
00:13:53.759 -->
00:13:55.519Talk to us about that for for just a second.
00:13:55.679 -->
00:13:59.440I mean that that's that's a real issue, especially in your state of New Jersey there.
00:13:59.840 -->
00:14:08.879Yeah, it seems to be a a niche problem, you know, uh, but in New Jersey it's it's a real problem having brokers have use of all the factory incentives.
00:14:09.200 -->
00:14:11.840But we really got a uh uh a multiple approach.
00:14:12.000 -->
00:14:22.000You have uh the state DMV has really sent le letters out to dealers and brokers that you know it's not authorized to be use of a broker in the retail transaction.
00:14:22.320 -->
00:14:24.240The manufacturers have sent letters out.
00:14:24.559 -->
00:14:43.919Actually, Toyota Motor Credit, Mazda Finance, and Lexus, which is all one uh corporation, sent the letter to their dealers just yesterday, sending notice uh January or June 2nd stating that if a broker deal is initiated that they will not finance or lease a broker deal.
00:14:44.080 -->
00:14:49.200And if they find out it's a broker deal, you're it's not full recourse, you're repurchasing the contract.
00:14:49.440 -->
00:14:49.919Wow.
00:14:50.159 -->
00:14:52.559So I I that is the strongest.
00:14:54.320 -->
00:14:55.360Repurchase the contract.
00:14:55.600 -->
00:14:55.759Wow.
00:14:56.080 -->
00:15:00.000You have a hundred broker deals out there, you're right, you're writing a check for two million dollars.
00:15:00.240 -->
00:15:00.799No question about it.
00:15:00.960 -->
00:15:02.000You're talking about rebroker, yeah.
00:15:02.080 -->
00:15:11.519That you're so the tide has turned uh about uh that broker business, and uh I don't I didn't expect it to just stop overnight.
00:15:11.679 -->
00:15:20.799Right and uh but the manufacturers have taken a stance on it, which I think is the right stance that uh yeah, we're held to a standard to represent their product.
00:15:21.039 -->
00:15:33.519Of course, we're given the the the right to represent their product in our communities and our marketplaces and to take care of our customers, and uh I think they're finally uh backing the dealers and the support of it.
00:15:33.600 -->
00:15:43.200So have you gotten some negative uh feedback from people that love brokers and say well I've gotten not from I've gotten negative feedback from brokers.
00:15:43.279 -->
00:15:43.600Yeah.
00:15:43.759 -->
00:15:49.919And I had a few dealers call me up that said uh, you know, about uh they were active in the broker business.
00:15:50.000 -->
00:15:52.399And I'm like, look, I'm not gonna tell you how to run your business.
00:15:52.480 -->
00:15:52.639Yeah.
00:15:52.879 -->
00:16:07.759But if you have a state motor vehicle license that says you can't do broker business, and you have a franchise that says they're not gonna pay incentives on broker deals and you're doing broker deals, I don't know what to tell you other than your exposed your exposure is to the state.
00:16:07.840 -->
00:16:10.639And now the third level of compliance is really the FTC.
00:16:10.879 -->
00:16:11.120That's right.
00:16:11.360 -->
00:16:22.799I mean, I shared with you uh before how there's a guy, a broker that is just spewing least incentive deals on Nissan Armados with no disclosure.
00:16:22.960 -->
00:16:24.240He doesn't own the car.
00:16:24.480 -->
00:16:35.120So there's a like I said, there's three approaches the manufacturer with the incentives in New Jersey, DMV with your motor vehicle license, and the FTC with advertising.
00:16:35.360 -->
00:16:41.120So I think between the three of them, it's going to be hard pressed for a lot of dealers to continue the way they were before.
00:16:41.600 -->
00:16:41.759Right.
00:16:42.000 -->
00:16:45.919Um, since we went there with the FTC, um, let's talk about that for a moment.
00:16:46.080 -->
00:16:49.840Um, that's a real issue out there that dealers are challenged with.
00:16:49.919 -->
00:17:00.720Uh the ever since these 97 letters uh were sent to dealers around the country, both private uh c uh companies as well as publicly traded dealer groups, everyone in between.
00:17:00.879 -->
00:17:02.799Um it it what is your take on that?
00:17:03.039 -->
00:17:06.240You know, yeah, I've spoken to a number of dealers that have said that same thing.
00:17:06.640 -->
00:17:22.720Love it because if you're a dealer that wanted to have full disclosure, if you're a dealer that wants to honor the price you're marketing, yeah uh you know, it was very disheartening that these uh third-party uh advertising sites would rank you on price most likely.
00:17:23.119 -->
00:17:29.359I know great deal, but then there's two, you know, so you're ranked number 55 and nobody gets down to number 55.
00:17:29.759 -->
00:17:30.079That's right.
00:17:30.240 -->
00:17:35.200And it's a great deal because you have a$2,000 uh prep fee.
00:17:35.279 -->
00:17:40.079You have uh you know, you must finance with us, you must do this, you must have a trade-in.
00:17:40.400 -->
00:17:40.559Yeah.
00:17:40.799 -->
00:17:46.000All stuff that is uh not compliant, and uh it really it was hard pressed.
00:17:46.079 -->
00:17:49.759You either had to jump in the fray and deal with it or or not.
00:17:49.920 -->
00:17:53.759And I I actually chose not to do it, but it I'm sure it cost me deals.
00:17:53.920 -->
00:17:54.160Oh, yeah.
00:17:54.400 -->
00:17:55.920But I could certainly sleep better at night.
00:17:56.000 -->
00:17:57.680So I I'm thrilled with the compliance.
00:17:57.839 -->
00:18:01.440I'm thrilled with your the compliance, and I think most dealers actually are.
00:18:01.759 -->
00:18:02.720Yeah, I I I do too.
00:18:02.799 -->
00:18:04.960The dealers that I speak with have said the same thing.
00:18:05.119 -->
00:18:12.559Um they're concerned though that if in the event you've got multiple locations, this is a kind of a cultural shift, right?
00:18:12.720 -->
00:18:19.839Where if in the the that it doesn't that attitude doesn't uh come down or resonate from the top down, um you could be in trouble.
00:18:19.920 -->
00:18:24.960You got a manager that says, hey, I gotta hit a number and I'm advertising this way or I'm putting numbers out there.
00:18:25.039 -->
00:18:27.519They're writing a check for that dealer that they're working for.
00:18:27.920 -->
00:18:51.279Yeah, that's the problem when you get big in any level of uh you know employee handling of employees to advertising to I mean that's the that is the challenge with as you grow, you have more exposure to uh the rogue employee or the rogue situation out there that but I think for the most part they're looking for blatant non-compliance.
00:18:51.440 -->
00:18:51.599Yeah.
00:18:51.839 -->
00:18:57.920You know, I don't think they're looking for one guy that one manager uh quoted a price on the wrong car or something.
00:18:58.079 -->
00:19:03.359I I I I I I think overall in the business, yes, it does add a level of fear.
00:19:03.519 -->
00:19:07.119It just makes you have to be tighter in your disciplines, tighter in your processes.
00:19:07.200 -->
00:19:07.359Right.
00:19:07.759 -->
00:19:16.480Most dealers do have then you have multiple stores of some kind of consolidation of marketing or processes or or business rules.
00:19:16.640 -->
00:19:16.799Sure.
00:19:17.119 -->
00:19:27.279And that doesn't mean somebody doesn't go afoul from it, but I think for the most part, uh dealers uh will embrace this and have to set the policies to make sure that they're not exposed.
00:19:27.680 -->
00:19:38.319Yeah, marketing companies um are uh needless to say concerned about this because in often cases they're the ones that have to police the dealership to say, no, you can't run that number.
00:19:38.400 -->
00:19:43.119It doesn't include the doc fee, it doesn't you know it includes uh incentives that most people don't qualify for.
00:19:43.200 -->
00:19:50.000So sometimes it's the marketing company giving the bad news to the management team to say, hey, I know you want to be competitive, but you can't run that number.
00:19:50.400 -->
00:19:56.079Well, and I guess you would be uh having a challenge if the guy says I want to run it anyway, then at least you told them.
00:19:56.160 -->
00:19:56.799That's up to them.
00:19:57.119 -->
00:20:03.599I mean, uh you know, there's some dealers that that want to find the edge, and I just that's just not the way I want to find the edge.
00:20:04.480 -->
00:20:05.200Exactly.
00:20:05.359 -->
00:20:08.640So um now you've got uh talk to me about about the group, right?
00:20:08.720 -->
00:20:13.039Right now I'm looking at a number of different franchises, Nissan, Kia, Mitsubishi.
00:20:13.119 -->
00:20:15.200Uh how's the Mitsubishi franchise doing?
00:20:15.440 -->
00:20:16.640Uh struggling.
00:20:16.720 -->
00:20:16.880Yeah.
00:20:17.119 -->
00:20:17.680Struggling.
00:20:18.000 -->
00:20:21.279Uh unfortunately it's a used seems like a used car operation.
00:20:21.839 -->
00:20:25.519Um Mitsubishi needs product, product, product.
00:20:26.079 -->
00:20:33.039Um you know, uh I uh I don't know what to say about that brand other than they just need more product out there.
00:20:33.200 -->
00:20:34.720One thing about the car, it doesn't break.
00:20:34.799 -->
00:20:35.039Yeah.
00:20:35.200 -->
00:20:35.920It is amazing.
00:20:36.160 -->
00:20:39.279The car dollar for dollar, the car is spectacular.
00:20:39.359 -->
00:20:39.599Yeah.
00:20:39.839 -->
00:20:44.960They need some more marketing presence and they need they need more uh product out on the street.
00:20:45.440 -->
00:20:58.000But uh I I think they're one they're the ones that got hurt badly by the tariffs that everything's built uh for the imports, and uh I think I don't think they have the financial uh fortitude to sustain it.
00:20:58.240 -->
00:20:58.480Sure.
00:20:58.799 -->
00:21:02.640But uh that is what they need, but the car does not break.
00:21:02.799 -->
00:21:04.960It's a it's a great value for the money.
00:21:05.039 -->
00:21:10.000But do you hear much in the showroom about tariffs or consumers do they bring that up?
00:21:10.480 -->
00:21:10.799Not anymore.
00:21:11.680 -->
00:21:12.400No, not anymore.
00:21:12.480 -->
00:21:23.119It's just it's all baked into the price of the car, and uh the manufacturers I thought uh did a magnificent job of uh sort of absorbed some of the things.
00:21:23.279 -->
00:21:31.920Yeah, they sort of absorb absorbed a lot of it and or made the pain slowly go through the system instead of just a quick jolt.
00:21:32.000 -->
00:21:35.839So uh that must have been a juggling act on their part when that was all going on.
00:21:36.319 -->
00:21:38.480Of course, Nissan's who assembled here in the U.S.
00:21:38.799 -->
00:21:46.480A lot of them, and actually Nissan in that regard had the capacity in the US to move their uh production domestically.
00:21:46.799 -->
00:21:58.640And some of the cars that the incentives are on are cars that we don't have to pay the big tariffs on, which is really, I think, actually giving Nissan an advantage in the current in the current uh marketplace because of that.
00:21:58.720 -->
00:21:58.799Yeah.
00:21:59.200 -->
00:21:59.359Okay.
00:21:59.440 -->
00:21:59.599Okay.
00:22:00.240 -->
00:22:01.359Um Chinese vehicles.
00:22:01.599 -->
00:22:09.680You know, the world is right now looking at Chinese vehicles and just we're the only only area or the only country that really doesn't sell Chinese vehicles.
00:22:10.079 -->
00:22:12.400Well I just came back from Italy actually a few days ago.
00:22:12.799 -->
00:22:13.519Oh, what'd you see?
00:22:13.759 -->
00:22:16.799And I actually went over there and I said to my son, Oh, look at that car.
00:22:16.880 -->
00:22:17.440What brand is that?
00:22:17.519 -->
00:22:18.480Is that a Chinese brand?
00:22:18.640 -->
00:22:19.440Oh, that car is a good one.
00:22:21.279 -->
00:22:22.880And the cars are gorgeous.
00:22:23.039 -->
00:22:23.119Yep.
00:22:23.440 -->
00:22:28.400I I just think the head I think the headwinds are uh against them in the US.
00:22:28.640 -->
00:22:28.960Yeah.
00:22:29.279 -->
00:22:38.240I looked at investing in one of the companies when they were shopping uh for franchises a few years ago and decided not to uh to look at it.
00:22:38.720 -->
00:22:47.519I I I just think as much as their uh competitors, I still still think they're adversaries in many ways uh, yeah, I don't trust them at this point.
00:22:47.680 -->
00:22:47.839Yeah.
00:22:48.319 -->
00:22:57.440And uh we have too much uh I think the US has too much of an auto industry in our DNA to let them in easily.
00:22:57.599 -->
00:22:57.839Yeah.
00:22:58.079 -->
00:22:59.680I'm not saying they're not gonna get here.
00:22:59.759 -->
00:23:10.640I I originally thought, hey, Japan, Korea, China, but I just think the adversarial relationship right now between the US and China is really gonna uh hold them off.
00:23:10.880 -->
00:23:16.720We I think we have some big issues to worry about with China beyond beyond uh trying to sell a few of their cars.
00:23:17.039 -->
00:23:25.359You know, the the um if you do a little research as I did on this topic, and I said, well, what does it look like in terms of China selling you know the domestic brands, you know?
00:23:25.759 -->
00:23:32.640And I was surprised to see that GM in the last 20 years has sold 50 million vehicles in China.
00:23:32.880 -->
00:23:33.200Really?
00:23:33.440 -->
00:23:34.559Yes, 50 million.
00:23:34.799 -->
00:23:34.960Wow.
00:23:35.200 -->
00:23:37.359And and predominantly Buicks, by the way.
00:23:38.079 -->
00:23:44.160It's like we can't sell Buicks here, sorry, Buick dealers, but um but the reality is that they're big on Buicks.
00:23:44.240 -->
00:23:52.799But we yeah, GM has sold Ford has sold uh about six million vehicles, and so the the relationship on the automotive side between China and the U.S.
00:23:53.039 -->
00:23:54.480has been pretty rich, you know?
00:23:54.799 -->
00:24:01.039Well, again, I just the whole thing of them stealing the technology and uh and uh everything else.
00:24:01.279 -->
00:24:15.519It just you know, yes, uh they opened up their markets to our products, but that basically have copied everything and they are doing it cheaper, and they are doing uh uh the car look, as I said, looks spectacular, so I'm sure there would be some demand.
00:24:15.759 -->
00:24:20.240But I just think we have too much of an infrastructure uh to just let them in easily.
00:24:20.880 -->
00:24:24.720So you think it would threaten the the the bigger yeah yeah, definitely.
00:24:24.880 -->
00:24:26.640And uh not everyone's making it now.
00:24:26.880 -->
00:24:27.039Right.
00:24:27.279 -->
00:24:36.480You know, with all the product that's out there now, uh not everybody's making it in today's market to allow uh potentially a major competitor coming in.
00:24:36.720 -->
00:24:44.720And one thing again, I'm no political analyst, but certainly if uh China gets their foothold in the door, they're gonna support it financially.
00:24:44.960 -->
00:24:45.200Yeah.
00:24:45.440 -->
00:24:46.319Yeah, you know, yeah.
00:24:47.200 -->
00:24:54.960In the 60s and 70s, we saw the Japanese car, well, Nissan being one of them, but Toyota, Nissan, Honda, we saw guardrails put in place.
00:24:55.119 -->
00:25:05.440You know, if if uh I don't know if you're a Nissan dealer back then, but um where it was you you couldn't get enough cars because those guardrails were there and the US said, nope, you hit your number, that's all you're getting, you know.
00:25:05.599 -->
00:25:10.960Um do you see maybe where that that could work if if China came in and said, hey, we'll give you 200,000 cars?
00:25:11.519 -->
00:25:15.599200 turns into 300, turns into 400, turns into a million.
00:25:16.240 -->
00:25:18.319Uh I I I really I really don't.
00:25:18.480 -->
00:25:22.960I I I I think unfortunately, I'd like to say we're competitors.
00:25:23.119 -->
00:25:30.559I'd still think I still think the US and China are adversaries of too many areas where uh it could threaten uh a core fabric of our industry.
00:25:30.880 -->
00:25:31.599So not right now.
00:25:31.920 -->
00:25:33.039I don't think it's coming right now.
00:25:33.279 -->
00:25:35.440I mean, I I do believe it'll get here.
00:25:35.599 -->
00:25:39.519I just don't think in the current administration is gonna be the time.
00:25:39.680 -->
00:25:41.200Who knows down the road, but yes.
00:25:41.519 -->
00:25:42.319Yes, yes.
00:25:42.640 -->
00:25:50.079So um so let let's talk uh about um, you know, they're obviously with the Chinese vehicles not to stay on that, but they're big on the EVs situation.
00:25:50.319 -->
00:25:56.079Obviously, we're we're we're in the last uh number of years trying to figure out the EV market, you know.
00:25:56.400 -->
00:26:09.519The government was saying, you know, by 2035 we're gonna be all in on EVs, and uh obviously consumers didn't feel that way, dealers didn't feel that way, OEMs were gearing up for that though, and then when they took that out and said, okay, what this is craziness, you know.
00:26:09.680 -->
00:26:11.680How how are EV sales today at your stores?
00:26:12.000 -->
00:26:14.799Uh EV sales are, in my opinion, where they need to be.
00:26:14.880 -->
00:26:23.359The people that whatever the market is, uh that is what it is, instead of artificially inflating the market.
00:26:23.759 -->
00:26:27.680Uh we didn't have the infrastructure uh to keep charging the cars anyway.
00:26:27.920 -->
00:26:36.559Every dealer had random cars and you know plugged into their EV chargers because local customers found out that they could come and get their cars charged.
00:26:36.640 -->
00:26:40.079We didn't have the infrastructure to pull off what they were trying to do.
00:26:40.319 -->
00:26:40.640Sure.
00:26:40.799 -->
00:26:47.920Uh and and again in the Northeast, uh, you know, with the cold in the winter, a lot of customers had a lot of fears with that.
00:26:48.000 -->
00:26:53.759Uh I'm sure certain markets, California, Florida, are more conducive to uh the EV market.
00:26:53.839 -->
00:26:55.519But I think it's it's really what it should be.
00:26:55.599 -->
00:27:03.279The demand for it, the consumer that sees the value in it, sure, the consumer that has the uh the the consciousness of the environment.
00:27:03.440 -->
00:27:06.480If they see that value, uh it's a great car.
00:27:06.640 -->
00:27:06.799Yeah.
00:27:07.279 -->
00:27:08.000Great technology.
00:27:08.400 -->
00:27:09.119How about hybrids?
00:27:09.279 -->
00:27:10.160Are you selling hybrids?
00:27:10.400 -->
00:27:12.160Hybrid is where it's at, in my opinion.
00:27:12.480 -->
00:27:12.880Okay, yeah.
00:27:13.440 -->
00:27:21.920People still want to have the uh the uh comfort of being able to go to grandma's without having to stop and uh and get charged up.
00:27:22.160 -->
00:27:22.480That's right.
00:27:22.640 -->
00:27:28.240So you can go to where you want to go, you can get the uh the efficiency of the fuel economy is there.
00:27:28.799 -->
00:27:31.279Uh I I think hybrid is is really where it's at.
00:27:31.519 -->
00:27:32.160Yeah, I would agree.
00:27:32.319 -->
00:27:38.160Yeah, and the manufacturers uh that that's one of I'm a Kia dealer also, that's one of the beauties of Kia.
00:27:38.640 -->
00:27:42.799You can get the gas, you can get the hybrid, you can get the electric, you get all across the board.
00:27:42.960 -->
00:27:49.680And and unfortunately, to Nissan, they're just getting into all the other alternative technology.
00:27:50.000 -->
00:28:10.799So that's where, in my opinion, Kia took the bet to be spread out amongst all the alternative uh engine opportunities where uh Nissan was uh slow to the trigger, but now but now they're coming out with that those products, which again is another plus for Nissan now, but it was what hurt them in the past few years.
00:28:11.200 -->
00:28:11.920That's right, that's right.
00:28:12.079 -->
00:28:17.759I know there's another thing that's uh you know i uh influencing the industry and making a big impact, and that's AI.
00:28:18.160 -->
00:28:21.119Every dealer right now is is is focused on AI.
00:28:21.279 -->
00:28:28.640How is it gonna help me uh run my dealership more efficiently, maybe even reduce headcount, you know, which is a beautiful thing for dealers.
00:28:28.720 -->
00:28:34.319It costs so much these days to run an automobile dealership, but uh but AI has changed the world, right?
00:28:34.640 -->
00:28:36.319AI, AI, AI.
00:28:36.960 -->
00:28:38.400I am all in on AI.
00:28:38.720 -->
00:28:39.359You're loving it.
00:28:39.680 -->
00:28:51.839Uh well loving it with an asterisk because uh you go to these trade shows and you have uh Betty talking to your customers saying she's gonna answer every question.
00:28:52.079 -->
00:29:05.759Yeah, we uh uh we have a uh service uh service BDC all AI that if I wasn't so insistent that this is what I wanted, it took 60 days to get it right.
00:29:06.000 -->
00:29:10.079And I actually hired somebody to listen to phone calls, you know.
00:29:10.559 -->
00:29:17.519You have to train the AI, but the beauty of it, after the 60 days, uh the the efficiencies are staggering.
00:29:17.599 -->
00:29:20.960We it's costing me, think about this,$4 a service appointment.
00:29:21.920 -->
00:29:26.559If 100% of your service calls get answered with with no wait time, that's what we're getting.
00:29:26.720 -->
00:29:29.039100% of the service calls answered with no wait time.
00:29:29.279 -->
00:29:29.680That's nice.
00:29:29.839 -->
00:29:33.680Uh almost 65% appointment rate on AI.
00:29:34.079 -->
00:29:38.559Uh the others are people that want to talk to somebody specifically, et cetera.
00:29:38.720 -->
00:29:40.559But a huge appointment show rate.
00:29:40.640 -->
00:29:47.200But$4 an appointment uh is that's really what's the the the cost of it's coming down to that's a beautiful thing.
00:29:47.359 -->
00:29:54.079And uh while I went through two struggling months, we've almost had three record-breaking months in a row uh since.
00:29:54.160 -->
00:29:59.440So I'm gonna caution any dealer that wants to have AI as part of their DNA.
00:29:59.599 -->
00:30:01.359You have to make the commitment to the product.
00:30:01.599 -->
00:30:01.759Yeah.
00:30:01.920 -->
00:30:04.240And you have to, you know, obviously hire the right vendor.
00:30:04.400 -->
00:30:04.640Sure.
00:30:04.720 -->
00:30:13.200Uh you have to make a commitment to the product, but you also have to take make the commitment in uh the internally that I'm gonna train this because that's what it is.
00:30:13.359 -->
00:30:16.960But the beauty of it is once it's trained, it's trained, and you don't have to keep retraining.
00:30:17.279 -->
00:30:18.880And consumers are okay with it, right?
00:30:19.039 -->
00:30:22.720I mean, they're they're though, especially with the level of AI that we see out there.
00:30:22.960 -->
00:30:26.640I just like I just got a survey, uh, a five-star survey.
00:30:26.720 -->
00:30:30.079I appreciate the technology to allow me to quickly make an appointment.
00:30:30.480 -->
00:30:30.880See that?
00:30:31.200 -->
00:30:44.079And and when you listen to the calls, you could see that some people are reluctant initially to talk to them, but uh uh even when I go to make an appointment, I find myself doing it because we're originally just get me somebody to talk to.
00:30:44.319 -->
00:30:44.559Right.
00:30:44.799 -->
00:30:50.559I think the the the the consumers are changing, they are that they're becoming acceptable to it.
00:30:51.039 -->
00:30:54.240Especially as the technology becomes that much more advanced.
00:30:54.720 -->
00:30:55.119Absolutely.
00:30:55.359 -->
00:30:57.119Yeah, it's it's amazing.
00:30:57.200 -->
00:31:01.519Like I I say, um and this one, you know, that that's that all of those things are in it.
00:31:01.759 -->
00:31:05.039You can't tell if you're talking to uh an AI or not.
00:31:05.599 -->
00:31:06.160It's unbelievable.
00:31:07.920 -->
00:31:12.400When I call up Delta or American Express, I just assume deal with AI because it's gonna get what I need.
00:31:12.880 -->
00:31:21.680Somebody moves you over to chat, and that that's AI, and that's changing my seats or getting my you know the answers that I need on my credit card or whatever the key is.
00:31:21.920 -->
00:31:27.519Yeah, I I see so many um I see so many uh uses for AI.
00:31:28.079 -->
00:31:37.200Um you know, uh I have uh that leasing company uh we created an AI collect, you know, lease your payer business that I've been running for many years.
00:31:37.279 -->
00:31:37.519Yeah.
00:31:37.759 -->
00:31:40.400That we actually created an AI collecting agent.
00:31:40.799 -->
00:31:41.359Imagine that.
00:31:41.519 -->
00:31:45.200That you know, text, email, voice, nice, collect payments.
00:31:45.359 -->
00:31:45.599Yeah.
00:31:45.839 -->
00:31:52.720Instead of having somebody in the back room collecting payments, somebody that gets had a bad day, fully compliant.
00:31:52.880 -->
00:31:53.039Sure.
00:31:53.200 -->
00:31:56.480I mean, it's turning into another uh business opportunity, quite frankly.
00:31:57.039 -->
00:32:01.039Okay, so now dealer dealers are gonna say, wait a minute, Jim, you gotta ask about this other business.
00:32:01.200 -->
00:32:04.319So talk to us about this this last time you were in, that's what we talked about.
00:32:04.400 -->
00:32:05.920So give us an update.
00:32:06.000 -->
00:32:06.880What what what is the business?
00:32:07.279 -->
00:32:13.359Well, dealer-controlled leasing is basic, not basically, it's my way of controlling the lending process.
00:32:13.599 -->
00:32:15.519I have a lease here-pay here operation.
00:32:15.680 -->
00:32:15.839Okay.
00:32:16.319 -->
00:32:24.000In the last five plus years, uh, we've done over we do 25, 30 deals a month, so over 1600 leases written.
00:32:24.480 -->
00:32:25.119Just in your store.
00:32:25.359 -->
00:32:26.240Just at my dealership.
00:32:26.400 -->
00:32:26.559Okay.
00:32:26.960 -->
00:32:27.920Just in my dealerships.
00:32:28.079 -->
00:32:28.319Yeah.
00:32:28.559 -->
00:32:30.400And um that's a nice chunk of business.
00:32:30.640 -->
00:32:37.759It's a nice chunk of business, and uh, we've been able to say yes to customers, other dealers haven't been able to.
00:32:37.920 -->
00:32:43.119But the beauty of the product is it's it's a short-term lease with a credit and equity building component.
00:32:43.279 -->
00:32:43.519Okay.
00:32:43.680 -->
00:32:58.640So we could take somebody that's got less than perfect credit today, look them in the eye, and tell them, hey, look, you know, if you do the right thing, you work with our credit coach, you make your payments on time in 18 to 24 months, instead of being a subprime borrower, you can now be a near prime or prime borrower.
00:32:58.799 -->
00:32:59.119Right.
00:32:59.279 -->
00:33:05.519Uh and we are at the you know, every month we have 20, 30 conversions now a month.
00:33:05.599 -->
00:33:10.240The conversion is somebody that started as a subprime borrower and now as on the other end of it.
00:33:10.480 -->
00:33:10.640Yeah.
00:33:10.799 -->
00:33:11.920And you're getting that trade in.
00:33:12.160 -->
00:33:12.799And you're getting the trades.
00:33:16.400 -->
00:33:18.880But you're you're getting three income opportunities.
00:33:19.119 -->
00:33:22.079A, the dealership sells a car that they didn't have before.
00:33:22.400 -->
00:33:25.599B, the leasing company is making revenue as the lender.
00:33:25.680 -->
00:33:25.920Yeah.
00:33:26.079 -->
00:33:29.359And C, when they come back, you're getting them as another customer.
00:33:29.519 -->
00:33:29.759Right.
00:33:29.839 -->
00:33:32.960So is this paper, this isn't paper you're holding, or is it.
00:33:33.440 -->
00:33:33.839It is paper.
00:33:35.200 -->
00:33:38.319Yeah, that's one of the big things that dealers have to solve for.
00:33:38.480 -->
00:33:40.400And we have we have options for everybody.
00:33:40.559 -->
00:33:42.799So how how do I capitalize this?
00:33:43.039 -->
00:33:47.039But as a dealer with liquidity, I can't think of a better return on the money.
00:33:47.359 -->
00:33:54.319I was gonna say percentage to that, and it it it uh beats out taking that money and putting the stock market.
00:33:54.799 -->
00:34:02.319I have not been able to get my financial advisor to come in and say, I can guarantee you X percentage on your money, and I can get that with what we're doing.
00:34:02.480 -->
00:34:06.880And yeah, and for dealers, there's bonus depreciation, so there's significant tax benefits.
00:34:07.359 -->
00:34:07.680That's right.
00:34:07.839 -->
00:34:15.519Uh but the real beauty of it is I feel I'm offering customers with less than perfect credit the best option to put their past behind them.
00:34:15.760 -->
00:34:15.840Right.
00:34:16.000 -->
00:34:20.639And then we have videos and testimonies from people crying, thanking us for the opportunity.
00:34:20.880 -->
00:34:21.039Yeah.
00:34:21.199 -->
00:34:23.599But the but the reality is you are a subprime lender.
00:34:23.920 -->
00:34:24.239Sure.
00:34:24.480 -->
00:34:42.000You know, in my business model, what m what what uh not eliminates but really reduces the risk is the ability that if I lease Jim a car and for whatever reasons it doesn't work out for Jim and I get the car back, two-thirds of the cars we take back can just simply be released.
00:34:42.159 -->
00:34:42.400Oh, yeah.
00:34:42.639 -->
00:34:45.679So I'm not creating another deal, I'm just eliminating a loss.
00:34:45.840 -->
00:34:54.239Where if you're a subprime lender and you have to eliminate the car, you have to repo the car and then just liquidate it at auction and create a huge loss.
00:34:54.400 -->
00:34:54.960I don't have that.
00:34:55.199 -->
00:34:56.239Ah, because it's a lease.
00:34:56.400 -->
00:35:04.719Because it's a lease, I can simply just take the car in, recondition it, and somebody could basically just pick up the payments and keep going.
00:35:04.800 -->
00:35:05.039Yeah.
00:35:05.280 -->
00:35:09.440So my dealership is uh very attuned.
00:35:09.599 -->
00:35:11.679My guys, they own the car.
00:35:11.840 -->
00:35:12.000Yeah.
00:35:12.159 -->
00:35:15.119You know, my dealerships are on full recourse to my lending company.
00:35:15.280 -->
00:35:15.599Okay.
00:35:15.840 -->
00:35:21.599So if they have a repossession, the general manager knows that they have to liquidate the repossession.
00:35:21.840 -->
00:35:26.239And and so the next customer that that car qualifies for is in.
00:35:26.400 -->
00:35:29.679But within the leasing company, we've developed uh AI.
00:35:29.920 -->
00:35:31.679AI credit approval software.
00:35:31.840 -->
00:35:32.000Wow.
00:35:32.400 -->
00:35:38.159Has has reduced the delinquency 50% from when uh from when we started it.
00:35:38.239 -->
00:35:42.880Uh really since uh January of uh year 2024.
00:35:43.199 -->
00:35:43.360Wow.
00:35:43.599 -->
00:35:51.280Yeah, we started with a different approval process, and now we brought AI approval in there, and as I just mentioned, the AI collection.
00:35:51.599 -->
00:36:04.960So uh if a dealer wants to get into the game, you look at CAC, you look at Agore, and these they're giving you options to lend to people that don't qualify today, but you know, they keep most of the cake.
00:36:05.199 -->
00:36:05.679Yeah, that's right.
00:36:05.920 -->
00:36:09.280I just I just wanted to keep the cake, to be honest with you.
00:36:09.519 -->
00:36:10.000Nothing wrong with that.
00:36:10.159 -->
00:36:17.599And and and offer and offer a real uh a real product that consumers uh can benefit from.
00:36:17.760 -->
00:36:17.920Right.
00:36:18.079 -->
00:36:27.039Um, we offer maintenance, we offer I even started I even started paying for repairs, customer just pays for parts, I pay the labor.
00:36:27.519 -->
00:36:44.400You know, even after we have maintenance, we have gap insurance, we have warranties, even the because if I own the collateral, I want them to maintain their cars and we're making enough money between leasing the car to the consumer, the money that we're the that we're charging in the lease.
00:36:44.639 -->
00:36:44.719Sure.
00:36:44.880 -->
00:36:48.079You know, I'm even picking up the uh the maintenance afterwards.
00:36:48.239 -->
00:36:49.599You pay the parts, I pay the labor.
00:36:49.920 -->
00:36:56.079If somebody has a uh one of those, if you're one of those driver or one of those consumers has that car, can they trade that car before?
00:36:56.400 -->
00:36:57.280Clearly, it's a regular lease.
00:36:57.519 -->
00:36:58.079It's a regular deal.
00:36:58.239 -->
00:36:59.920They can trade, they can go to an even other dealership.
00:37:00.000 -->
00:37:00.719They have to come back to you.
00:37:01.599 -->
00:37:03.199But I mean chances are they are coming back to you.
00:37:03.519 -->
00:37:04.079Well, think about it.
00:37:04.320 -->
00:37:08.159In sixteen hundred leases, I think we've had ten other dealer payoffs.
00:37:08.400 -->
00:37:08.559Huh.
00:37:08.800 -->
00:37:11.679Sixty, ten people have traded their cars elsewhere.
00:37:11.920 -->
00:37:12.079Wow.
00:37:12.239 -->
00:37:20.639That means the loyalty rate, and we have over fifty-five percent retention of I leased you today and you're coming back to me down the road.
00:37:20.880 -->
00:37:21.039Yeah.
00:37:21.280 -->
00:37:25.840So it's it's a very high retention rate of the customers, and you mentioned the loyalty before.
00:37:26.000 -->
00:37:26.320Yeah.
00:37:26.559 -->
00:37:31.440And uh and we give the customers, we tell them, we give them a full depreciation schedule.
00:37:31.599 -->
00:37:36.960We show them where they're going to be able to be in equity, which is most dealers don't think of leases and equity.
00:37:37.119 -->
00:37:37.199No.
00:37:37.440 -->
00:37:39.840We have very conservative residuals, so I have zero.
00:37:40.480 -->
00:37:41.039So how long?
00:37:41.119 -->
00:37:42.239What's what's the average term?
00:37:42.880 -->
00:37:44.159Average term is thirty-six months.
00:37:44.320 -->
00:37:44.880Oh, let's see.
00:37:45.039 -->
00:37:48.880And our average turn, T-U-R-N, is twenty-four months.
00:37:49.119 -->
00:37:49.280Okay.
00:37:49.519 -->
00:37:50.719So it's very short term.
00:37:51.039 -->
00:37:51.760Yeah, in and out.
00:37:52.000 -->
00:37:56.559And if you have somebody that really wants in and out, we could do an 18-month lease, have you out in 12.
00:37:56.880 -->
00:37:59.119So you could structure it accordingly.
00:37:59.280 -->
00:38:02.159And it actually opened up a door to another opportunity.
00:38:02.320 -->
00:38:03.119I think about it.
00:38:03.199 -->
00:38:06.639I'm a Nissan Kia dealership and I have a commercial truck division.
00:38:06.800 -->
00:38:07.920Use commercial trucks.
00:38:08.000 -->
00:38:08.320Yeah.
00:38:08.480 -->
00:38:26.239You know, um uh Ford Transit, uh, Ram uh ProMasters, box uh uh dump trucks, even, and my lending company, if you look at what's going on in the world uh 20 years ago or whatever, uh Uber said, hey, look, take your car and you can make money with it.
00:38:26.400 -->
00:38:26.639That's right.
00:38:26.880 -->
00:38:42.000Now in the delivery service business, yeah, Amazon, UPS, all these people are saying, all right, if you have a qualifying cargo van for transit, whatever, yeah, you can go to these load providers and you can contract with us to deliver.
00:38:42.159 -->
00:38:47.440So they're doing the same thing that Uber did in in the uh in the with your personal car.
00:38:47.519 -->
00:38:47.599Yeah.
00:38:47.840 -->
00:38:54.880If you have a qualifying vehicle, you can you know you can hook up with these load masters and have a qualifying car.
00:38:54.960 -->
00:38:57.519So we got knee deep into that.
00:38:57.679 -->
00:39:05.920Somebody presented the opportunity to us, and I uh no commercial truck background, but the business model made sense.
00:39:06.239 -->
00:39:15.599And uh, you know, he was an expert at sourcing the vehicles, and actually my lending company, you know, helps people get started even in in their in their new business.
00:39:15.840 -->
00:39:16.400Wow, yeah.
00:39:16.559 -->
00:39:22.800So the leasing company by having that allowed me the opportunity to to develop another business.
00:39:23.119 -->
00:39:24.000Yeah, very nice.
00:39:24.239 -->
00:39:24.800Wow, wow.
00:39:25.280 -->
00:39:27.440So dealers can reach out to you to get more information on that.
00:39:27.760 -->
00:39:28.239Yeah, absolutely.
00:39:28.400 -->
00:39:28.800Okay, absolutely.
00:39:29.360 -->
00:39:34.480It's it's it's a it's a very cool business model, and uh but you got to be committed to it.
00:39:34.559 -->
00:39:41.360I make more things I have two and a half full-time employees in my leasing company, it makes as much as a dealership.
00:39:41.679 -->
00:39:42.079No kidding.
00:39:42.159 -->
00:39:42.239Wow.
00:39:42.480 -->
00:39:42.719Think about it.
00:39:42.800 -->
00:39:44.320Yeah, seven figure franchise.
00:39:44.559 -->
00:39:45.679Seven-figured net income.
00:39:45.760 -->
00:39:50.079So if you're a dealer that says, you know, I want to go open up another dealership, yeah.
00:39:50.320 -->
00:39:51.599How much capital does it take?
00:39:52.239 -->
00:39:53.280How many people does it take?
00:39:53.519 -->
00:39:55.599How much commitment does it take on the dealer's part?
00:39:55.679 -->
00:39:55.920Yep.
00:39:56.159 -->
00:40:05.840You have to go into this with the same level of commitment that you're starting a new business, or you can actually treat it that, hey, look, it's five, ten deals a month and keep it small.
00:40:06.079 -->
00:40:06.239Sure.
00:40:06.480 -->
00:40:15.199But I wanted to make it uh grander than that, and it's uh it it it generates two million dollars extra revenue a year, nice a year for my business.
00:40:15.440 -->
00:40:15.599Wow.
00:40:15.920 -->
00:40:17.039People that were walking out the door.
00:40:17.280 -->
00:40:17.760That's right, that's right.
00:40:18.000 -->
00:40:24.960So you're talking real money, but the dealer has to be committed to it, and you gotta realize there's an ugly side of the business, the subprime business.
00:40:25.280 -->
00:40:27.119And the two million is spread across the three stores.
00:40:27.199 -->
00:40:34.400So if a group's got twenty stores, and we all know how many people that are credit challenged that are saying goodbye to that showroom and you got nothing for them.
00:40:34.719 -->
00:40:37.760You can create your own captive lender with it.
00:40:38.000 -->
00:40:53.920And uh there are financing alternatives, but for a dealer that's got the capital and trying to figure out what uses of capital, I can't I actually can't think of a better And as we all know, those individuals um usually travel in the circles of those other people that say, Oh my gosh, how did you get that car?
00:40:54.559 -->
00:40:56.400Go over and go see my friend Paul, right?
00:40:56.719 -->
00:41:06.000Yeah, no, no, it's uh yeah, and my people look at it as they really really look at it as an opportunity to help you put your past behind you.
00:41:06.079 -->
00:41:06.239Yeah.
00:41:06.400 -->
00:41:07.360It's not a car deal.
00:41:07.599 -->
00:41:08.480It really is not treated.
00:41:08.719 -->
00:41:13.679If you have a deal with, hey, I got I got another deal, that's not the person that is not right for you.
00:41:13.840 -->
00:41:15.119You're legitimately helping these families.
00:41:15.360 -->
00:41:15.840Right, yeah, right.
00:41:15.920 -->
00:41:18.159And I'm not saying I'm not making money, and we tell them the same thing.
00:41:18.239 -->
00:41:19.440I mean, we're a subprime lender.
00:41:19.760 -->
00:41:19.920Sure.
00:41:20.079 -->
00:41:24.239You know, our goal is to put you in a position to no longer be a subprime borrower.
00:41:24.400 -->
00:41:24.559Right.
00:41:24.800 -->
00:41:25.519That is our goal.
00:41:25.760 -->
00:41:28.639And if you follow this plan, you can achieve that goal.
00:41:28.880 -->
00:41:29.519That's right, that's right.
00:41:29.760 -->
00:41:30.880So it's a very nice product.
00:41:31.119 -->
00:41:31.280Yeah.
00:41:31.440 -->
00:41:37.199We talked a little bit before we got recording today about uh the growth of your company.
00:41:37.360 -->
00:41:40.800There's a lot of dealers that I talk to are, oh, we're always looking for the right deal.
00:41:40.960 -->
00:41:49.199You know, we look at 10 deals a month, we look at this, we look at you know, maybe in our geographic location, maybe something in Florida because it's so popular or Texas or what have you.
00:41:49.440 -->
00:41:51.280Where where do you stand on that?
00:41:51.840 -->
00:41:54.320Um personally not in expand mode.
00:41:54.639 -->
00:42:01.840I mean, there is one opportunity I would do just because of uh proximity to one of my dealerships and real estate, et cetera.
00:42:02.559 -->
00:42:11.360But I am at the point where uh my time and energy is focused on uh some of the AI stuff I've talked about, integrating that, my leasing business.
00:42:11.440 -->
00:42:11.599Okay.
00:42:12.000 -->
00:42:16.800That we actually sell that business model to other dealers, so that's another business.
00:42:17.039 -->
00:42:17.199Sure.
00:42:17.360 -->
00:42:20.159You know, so I'm involved with a lot involved with that.
00:42:20.320 -->
00:42:27.440But as far as expanding my dealerships, uh my kids have that ambition to expand.
00:42:27.599 -->
00:42:28.719That's not my ambition.
00:42:28.880 -->
00:42:44.079My ambition is going to be to make what we have better, uh, expand where we've already put our footprint in other business opportunities, the commercial truck division, NJ Auto Lending, which is my leasing company, dealer controlled solutions, which distributes the leasing business.
00:42:44.239 -->
00:42:44.480Okay.
00:42:44.880 -->
00:42:50.960Uh, but uh but my kids have the vision of of expanding, and and I'm fortunate.
00:42:51.119 -->
00:42:56.719I have uh two sons and a nephew that are talented, motivated, yeah, and want it.
00:42:56.880 -->
00:42:57.119Right.
00:42:57.280 -->
00:43:03.679And I'll be there to coach them from the sidelines, but I want to do it from the beach, the balcony, somewhere else.
00:43:04.239 -->
00:43:10.800No, I mean I it's it's amazing how um you still need that around in certain areas.
00:43:11.119 -->
00:43:11.679Of course, of course.
00:43:12.079 -->
00:43:17.519But my kids are as talented or more talented than I am in certain areas.
00:43:18.000 -->
00:43:19.840You know they're gonna be watching this now that you've said it.
00:43:20.079 -->
00:43:21.280Yeah, I know, I know, I know.
00:43:21.599 -->
00:43:22.719I tell them all the time.
00:43:22.800 -->
00:43:23.440I I I do.
00:43:23.599 -->
00:43:26.320I'm very proud of uh I'm very proud of them all.
00:43:26.400 -->
00:43:31.519And uh, and as I said, my uh nephew is my oldest brother, Joe's son, who passed away.
00:43:32.000 -->
00:43:38.079And uh he's in the business with me, and I'm very proud to give him the same opportunities that uh his dad would have given him.
00:43:38.159 -->
00:43:38.400Yeah.
00:43:38.639 -->
00:43:40.480But it's uh but I'm very fortunate.
00:43:40.559 -->
00:43:44.079I know a lot of dealers are not, but they know I could have sold.
00:43:44.480 -->
00:43:51.199I I I you know in my age, I could have sold and not batted an eyelid, and I told them this.
00:43:51.360 -->
00:43:56.800I said, Look, if you guys want this, I'm willing to hang around to allow you to have it.
00:43:56.880 -->
00:43:57.360Yeah.
00:43:57.679 -->
00:44:07.599But after we get through the Training phase after we get through you know the transition phase, I really don't want to turn back and worry about it.
00:44:07.760 -->
00:44:10.320I don't want to have to jump back in five years later.
00:44:10.559 -->
00:44:10.639Right.
00:44:10.880 -->
00:44:13.039So if you're gonna take it, take it.
00:44:13.119 -->
00:44:14.559And I'll gladly give it to you.
00:44:14.719 -->
00:44:18.639I just want to make sure that I that I'm setting you up on a strong foundation.
00:44:18.719 -->
00:44:33.599And I've invested in in uh coaches to help us and my kids and my nephew communicate in a in a business manner as well as a family manner um projects that we know we want to accomplish.
00:44:33.760 -->
00:44:40.639So I've made investments in uh in some personal uh you know skill opportunities.
00:44:40.880 -->
00:44:45.679I also a guy who was a VP of sales of mine for 20 years who retired.
00:44:45.920 -->
00:44:56.400He even hangs around uh and we pay I pay him part-time to sort of coach in certain areas because you still there's things that come up that you just need that level of experience.
00:44:57.599 -->
00:45:03.280It's just amazing how nice it is to have the phone over there to hey dad, I gotta talk to you about something.
00:45:03.440 -->
00:45:03.920That's right.
00:45:04.159 -->
00:45:05.840But I don't want to be there day to day.
00:45:06.000 -->
00:45:06.320Yeah, yeah.
00:45:06.559 -->
00:45:09.920And so that's sort of my train, my my transition plan.
00:45:10.079 -->
00:45:15.920I want to enjoy traveling with my wife, uh lose a few pounds, play a little bit more golf.
00:45:16.000 -->
00:45:21.760That's does the phone ring much, or is your son at this point in time your are your are your son's pretty much, hey, we got this.
00:45:21.840 -->
00:45:23.039We're not we're not needing to call people.
00:45:23.440 -->
00:45:26.320No, no, I'm at the stage where we're in that transition page.
00:45:26.400 -->
00:45:27.280We talk a lot.
00:45:27.519 -->
00:45:33.519Actually, like we're on the phone, like there's always a three-way call on our ways to work.
00:45:33.760 -->
00:45:34.400Right, right, okay.
00:45:34.719 -->
00:45:41.599You know, we're always on the phone in the morning, and they want to recap the day at the end, and actually they're better communicating than I am.
00:45:41.679 -->
00:45:43.519I want to, I had my day, I'm done.
00:45:43.599 -->
00:45:44.880I'm hanging up the phone.
00:45:45.039 -->
00:45:47.039Um need to revisit these situations.
00:45:47.360 -->
00:45:53.440Yeah, to me, if if I heard a problem and I came up with a solution, I don't want to hear it again for now a while.
00:45:53.760 -->
00:45:56.079But but that but we're in that transition stage.
00:45:56.159 -->
00:46:07.280I think I probably have a year or two of this type of operating, and then I I I'm completely confident they'll all be able to really take off and expand.
00:46:07.360 -->
00:46:17.360And then uh and then the plan, I get this I guess the succession plan would be that that eventually they buy the dealerships from you and what have you, and then take over and buy it again, and we'll figure it out.
00:46:17.679 -->
00:46:23.360I keep telling them I'm spending their money now, so it doesn't you know really I I I I look at it as one pot.
00:46:23.440 -->
00:46:25.840I know everybody's a little bit more sophisticated.
00:46:26.000 -->
00:46:33.280Yes, you have to have estate planning, and yes, you have to have an official uh transition, but as far as I'm concerned, what's mine is theirs.
00:46:33.360 -->
00:46:33.599Yeah.
00:46:33.840 -->
00:46:38.239And uh they they take it that way and they they appreciate the opportunity.
00:46:38.559 -->
00:46:43.679Now, do they have cousins in the business on your brother's side that are working with your dad?
00:46:43.920 -->
00:46:44.320No, really.
00:46:44.719 -->
00:46:45.519No, no, no.
00:46:45.679 -->
00:46:52.320Uh everybody else, other than my uh nephew, Steve, and everybody else, uh no one else got in the business.
00:46:52.480 -->
00:46:52.880Wow.
00:46:53.039 -->
00:46:54.159Um not not for them.
00:46:54.400 -->
00:46:54.960Not for them.
00:46:55.199 -->
00:46:59.599And uh I don't recommend anybody getting to the business unless it's for you.
00:46:59.840 -->
00:47:00.159Seriously.
00:47:00.320 -->
00:47:06.480Like anything else, you don't this is not yes, this is not a uh business that you can't be passionate about.
00:47:06.880 -->
00:47:07.119That's right.
00:47:07.280 -->
00:47:07.519That's right.
00:47:07.679 -->
00:47:12.719I suppose a number of dealers that that you know they they've said, I don't want to push this on my kids.
00:47:12.880 -->
00:47:14.159You know, it's a it's a tough business.
00:47:14.320 -->
00:47:18.159You gotta have a lot of grit, you gotta have a lot of, you know, you gotta have the right stomach for it.
00:47:18.239 -->
00:47:26.960And then also you've got the kids that have seen um, I don't want to say what the business has have done to their parents, but they're like, yeah, that's not for me.
00:47:27.039 -->
00:47:28.239I'm gonna go do something else.
00:47:28.559 -->
00:47:30.239Well, i the business is a lot softer.
00:47:30.639 -->
00:47:33.920It's not the six days a week, 12 hours a day that I grew up in.
00:47:34.159 -->
00:47:35.760Uh even COVID helped that.
00:47:35.840 -->
00:47:37.679I mean, they would close the stores at eight o'clock.
00:47:37.760 -->
00:47:40.800We used to always be uh nine o'clock or ten o'clock on the weekend.
00:47:41.440 -->
00:47:46.480When you were in F and I as I was, you'd left at 12 o'clock because you were the last person doing that contract.
00:47:46.880 -->
00:47:49.280Well, at the end of the month, it's still we had a little bit of that.
00:47:49.519 -->
00:47:56.639At the end of the month, my son was telling me uh so-and-so is here at midnight and he's here at 8 o'clock in the morning cleaning up the deal.
00:47:57.199 -->
00:47:59.679That is the uh that is part of F and I.
00:48:00.000 -->
00:48:00.719Yeah, no question.
00:48:00.960 -->
00:48:02.079Um, fixed stops.
00:48:02.159 -->
00:48:09.440Uh every dealer I talk to now says that my service drive is also slash my used car acquisition drive.
00:48:09.679 -->
00:48:11.679You buying a lot of cars out of the service drive?
00:48:12.079 -->
00:48:13.519It's uh we're trying to.
00:48:13.760 -->
00:48:22.239Everybody has uh you know, used car sourcing of used cars is the number one problem for any dealer that's out in the marketplace.
00:48:22.400 -->
00:48:29.760So it's either you're trading for them, it's your it's your uh your customers that are coming in your lanes, or you're trying to buy them off the street.
00:48:29.840 -->
00:48:40.880So uh is that an aggressive some dealers I'm talking to are have said I've switched the compensation plan and said, you know, not only will you make a commission selling the car, but also buying cars.
00:48:41.360 -->
00:48:51.199You know, I don't get too crazy with that, uh, but I do I I have dealers that I've chatted with that have spent uh 50, 60, 70,000, 80,000 a month to create buying centers.
00:48:51.519 -->
00:48:58.880You know, so I'm actually looking at an alternative uh technology company to handle the used vehicle acquisition.
00:48:59.119 -->
00:49:06.079It's another area that actually some of the AI stuff that we're working with can work with the used vehicle acquisition company.
00:49:06.239 -->
00:49:11.599But I I think I can accomplish the same thing as a used car buying center for half the price.
00:49:11.679 -->
00:49:12.000Yeah.
00:49:12.639 -->
00:49:14.320No if, ends, or buts about that.
00:49:14.400 -->
00:49:23.920The technology's there that you can actually, you know, through meta glasses, look at the car, put the VIN number in, and actually give you a buying price.
00:49:24.000 -->
00:49:26.000It's really sp uh pretty spectacular.
00:49:26.239 -->
00:49:34.320So that actually is something else that I'm going to be that's the next project on the plate is the use of technology with used vehicle acquisition.
00:49:34.400 -->
00:49:40.639And there's a company that we're gonna join forces with Whip Flip that's gonna uh work with us on the technology stuff.
00:49:40.960 -->
00:49:41.360Very cool.
00:49:41.440 -->
00:49:42.239That's the next project.
00:49:42.400 -->
00:49:43.119That's the next project.
00:49:43.360 -->
00:49:50.239Yeah, but that is you keep talking about, you know, no, I'm good, I'll be on the balcony, I'll be at the beach, and then you go, I get the next company that I'm with.
00:49:50.559 -->
00:49:56.559But these are things that I can do creatively in my mind and with the operations, but I'm not gonna be there.
00:49:56.800 -->
00:49:56.960Right.
00:49:57.039 -->
00:49:57.360I got you.
00:49:57.519 -->
00:49:59.920I'm not gonna be the nitty gripy rather than.
00:50:00.159 -->
00:50:00.559Yeah, yeah.
00:50:00.880 -->
00:50:03.119Create the process, make sure it works.
00:50:03.280 -->
00:50:03.440Sure.
00:50:03.599 -->
00:50:05.760Actually, use my dealership as a beta test.
00:50:05.840 -->
00:50:07.039You know, with the AI.
00:50:07.199 -->
00:50:17.679We have uh right now we're doing uh for service marketing, um, you know, customers that haven't been in your showroom uh that that bought from you that didn't come back in service, right?
00:50:18.000 -->
00:50:22.800Recalls of special order parts that the AI is launching this month.
00:50:22.880 -->
00:50:24.800I'll let you know in a few months how it's going.
00:50:24.880 -->
00:50:33.119Yeah is calling the customers, it's not just sending emails, contacting the customers, communicating with them, getting them to re-engage with your dealership.
00:50:33.440 -->
00:50:33.840All AI.
00:50:34.079 -->
00:50:34.719All AI.
00:50:35.199 -->
00:50:41.119On the sales side of it, it's uh customers within 18 months or I think nine months of the lease.
00:50:41.280 -->
00:50:46.800You know, we have uh customers with high interest rates that you want to re-engage with, customers that have equity in their car.
00:50:47.039 -->
00:50:52.400Talk about that the AI is gonna be able to contact them with the scripts and communicate with them.
00:50:52.559 -->
00:50:58.639And each one of these instances you need to create the person.
00:50:58.960 -->
00:50:59.199Yeah.
00:50:59.840 -->
00:51:08.880But after you create the the business model and the communication techniques and everything else, it will be you know seems that's a game changer.
00:51:09.199 -->
00:51:09.840It's it's a game changer.
00:51:10.079 -->
00:51:12.079But Paul, we know that the salespeople do the follow-up.
00:51:12.480 -->
00:51:13.119Yes, they do.
00:51:13.199 -->
00:51:15.920That's another area.
00:51:16.159 -->
00:51:18.079I mean, think about this conceptually.
00:51:18.159 -->
00:51:25.440I I I I do have a salesman that is like a monster follow-up, 40 car a month guy, does everything perfect.
00:51:25.519 -->
00:51:25.679Yeah.
00:51:26.239 -->
00:51:26.960Everything perfect.
00:51:27.119 -->
00:51:35.039But most of us have great salesmen that is that is their not that is not their strength, is their follow-up and everything else.
00:51:35.280 -->
00:51:35.519No.
00:51:35.760 -->
00:51:40.400Imagine creating an AI assistant that, Jim, you are great.
00:51:40.559 -->
00:51:43.360When you put a customer in front of you, bam, deal, close them down.
00:51:43.840 -->
00:51:47.599Imagine having an AI assistant that actually contacts your previous customer.
00:51:47.840 -->
00:51:48.239Beautiful thing.
00:51:48.480 -->
00:51:52.000Ask for the referrals of how is your car and service?
00:51:52.559 -->
00:51:53.280I don't want to do that.
00:51:53.360 -->
00:51:54.559I don't want I'm not good on the phone.
00:51:54.639 -->
00:51:55.119I'm not sure.
00:51:55.440 -->
00:51:56.719Schedules your appointments for you.
00:51:56.960 -->
00:51:57.039Right.
00:51:57.199 -->
00:51:59.440And I'm not talking about for incoming sales calls.
00:51:59.519 -->
00:52:00.800I'm talking about your owner base.
00:52:00.880 -->
00:52:02.480That's that's also on my agenda.
00:52:02.639 -->
00:52:02.800Yeah.
00:52:03.119 -->
00:52:14.079So I think the use of AI is I I am gonna create a dealership that is very AI focused, but I'm allowing myself to make the mistakes on myself.
00:52:14.159 -->
00:52:14.400Yeah.
00:52:14.559 -->
00:52:26.880Because that's that's what I think my uh commitment is, is that I'm gonna make it work for me and invest the time and energy because I think once it's set, it's set and move from next, set, move next.
00:52:27.280 -->
00:52:28.559Set, move the next project.
00:52:28.880 -->
00:52:29.039Yeah.
00:52:29.280 -->
00:52:32.079Wow, you're you're all you're very bullish on AI, that's for sure.
00:52:32.239 -->
00:52:33.599I don't see how you can not be.
00:52:34.800 -->
00:52:38.960Yeah, that's how my son, again, I'm not a tech, I it sounds like I'm a tech guy.
00:52:39.039 -->
00:52:42.159I'm really not a tech guy as far as use of some of the tech.
00:52:42.480 -->
00:52:47.119My son puts something into the chat, but boom, he comes back in 20 minutes with something.
00:52:47.199 -->
00:52:49.440I'm like that's my wife.
00:52:49.519 -->
00:52:50.239That's Bridget.
00:52:50.400 -->
00:52:51.599She she does it all the time.
00:52:51.679 -->
00:52:52.880She's like, stay right there.
00:52:53.039 -->
00:52:56.559And then she goes to what she calls her assistant, and she's like, here's a solution, right?
00:52:56.639 -->
00:52:57.760I'm like, where did you come up with this?
00:52:58.079 -->
00:53:00.800I am like blown away by what it can do.
00:53:01.119 -->
00:53:05.519It's obviously scary, but I think um, you know, there's so many things with it.
00:53:05.679 -->
00:53:12.320But I think in our industry, if you just keep doing working with it, but you can't it's not gonna be a plug and play.
00:53:12.480 -->
00:53:12.559Right.
00:53:12.800 -->
00:53:14.000That's that's the biggest fault.
00:53:14.159 -->
00:53:17.519I talked to a dealer that tried the same vending company that I'm using.
00:53:17.760 -->
00:53:18.400Oh, it didn't work.
00:53:18.559 -->
00:53:19.360I said, How long did you get?
00:53:19.599 -->
00:53:20.400Well, it was a few weeks.
00:53:20.480 -->
00:53:21.440I said, I'm I'm sorry.
00:53:21.760 -->
00:53:26.000Yeah, it took me 60 days, and I swear to God, I was ready to pull the plug.
00:53:26.159 -->
00:53:26.400Right, right.
00:53:26.559 -->
00:53:33.679But I said, no, I know these people are working hard to make it work, and they did, yeah, and now it's like uh a beautiful thing.
00:53:34.239 -->
00:53:34.639That's right.
00:53:34.719 -->
00:53:42.000And as we all know, because of the high turnover rate on the sales on the showroom floor among salespeople, in the industry it's always around sixty to seventy percent.
00:53:42.159 -->
00:53:43.519You need technology like this.
00:53:43.840 -->
00:53:46.639Yeah, and I guess that gets to uh yeah, absolutely.
00:53:46.800 -->
00:53:49.280Uh uh that gets to another thing.
00:53:49.360 -->
00:53:57.119I know Jonathan Dawson is one of your one of your guys that's always a contributor to CBT News, and uh I'm gonna see him after this actually.
00:53:57.199 -->
00:54:05.760And you know, he was always a proponent that uh, you know, your salesman should average 20 cars a month was really always something that I yeah that I was an advocate for.
00:54:05.920 -->
00:54:11.760And uh and my son, who runs one of my new Kia dealerships and is is is killing it, yeah.
00:54:11.920 -->
00:54:20.000Uh, you know, it you really do have to make everyone super efficient because then they can make a real living wage and real income.
00:54:20.400 -->
00:54:23.920The days of, you know, oh 10 cars a month, we've got 10 guys, we'll sell 100 cars.
00:54:24.000 -->
00:54:24.559That does not work.
00:54:24.960 -->
00:54:25.280It doesn't work.
00:54:25.440 -->
00:54:27.280I don't know how that never penciled out for me.
00:54:27.519 -->
00:54:28.239I don't know how that worked.
00:54:28.400 -->
00:54:28.719I know.
00:54:28.880 -->
00:54:36.960Uh but if you can get your store up to that 20 car a month level and keep use these technologies for efficiencies, I think that's great.
00:54:37.119 -->
00:54:44.960I think uh Well it was an industry as you know, because we grew up at the same time in the industry, and that was you know, that that 10 car a month acceptable number.
00:54:45.039 -->
00:54:47.679If you sold 12 or north of 12, you're doing pretty good.
00:54:47.840 -->
00:54:55.199But uh but that allowed, you know, if you work 20 days a month, then you're probably gonna work more than that if you're in the car business, but it's more like 25 days a month.
00:54:55.360 -->
00:55:00.719It really allowed you to be uh a failure half the time you're at the showroom, you know.
00:55:00.800 -->
00:55:01.760It's like, what are you doing?
00:55:01.840 -->
00:55:05.039Let's expect why can't we expect a salesperson to sell a car a day?
00:55:05.199 -->
00:55:10.719That's not no, it's uh you know, no, but technology, selling a car nowadays isn't easy.
00:55:10.800 -->
00:55:12.960I mean, the customer expectation is very high, right?
00:55:13.119 -->
00:55:16.719The manufacturer demands for a quality delivery and everything else.
00:55:17.039 -->
00:55:22.000I mean, it really, if you really looked at what a salesman is doing, yeah, the salesman now is a real professional.
00:55:22.079 -->
00:55:31.280If your salesman's really using his CRM as the uh as his tool as he should be, that salesman is really working.
00:55:31.440 -->
00:55:37.039And uh uh I I I feel that's how you get the quality of people.
00:55:37.199 -->
00:55:43.119You gotta give them the things that allow them to uh be more efficient uh in their business.
00:55:43.360 -->
00:55:48.800And if they can sell 20 cars a month, you have guys that make a very good income and you can be a life-changing financial.
00:55:49.440 -->
00:55:52.320That's why I tell every salesman what does your life look like at$100,000?
00:55:52.639 -->
00:55:54.159Yeah, rookie,$100,000.
00:55:54.800 -->
00:55:55.039I know.
00:55:55.440 -->
00:55:59.119I mean, if that's unimaginable to you, you can make$100,000 in this business.
00:55:59.280 -->
00:55:59.440Right.
00:55:59.679 -->
00:56:00.000Or more.
00:56:00.159 -->
00:56:01.280Yeah, or as a salesperson.
00:56:02.000 -->
00:56:04.320You don't need to have a college degree, you don't have to do anything.
00:56:04.480 -->
00:56:04.800Nope.
00:56:05.039 -->
00:56:09.760But if your life looks that much better at$100,000, then that you're in the right spot.
00:56:09.840 -->
00:56:10.960That's if you put yourself in the right.
00:56:11.199 -->
00:56:15.199And all you gotta do is really reverse engineer that to go, okay, well, how many ups do I need to take?
00:56:15.280 -->
00:56:16.159How many leads do I need?
00:56:16.239 -->
00:56:17.280How many cars do I need to sell?
00:56:17.360 -->
00:56:18.559So, yeah, that's totally plausible.
00:56:18.800 -->
00:56:18.960Yeah.
00:56:19.119 -->
00:56:20.880And 100 isn't what it used to be, is it?
00:56:21.119 -->
00:56:21.519Yeah, no.
00:56:21.760 -->
00:56:24.159No, you really gotta be more like 150.
00:56:24.400 -->
00:56:24.719150.
00:56:25.119 -->
00:56:25.519Yeah, yeah, yeah.
00:56:25.599 -->
00:56:26.320There's no doubt about it.
00:56:26.400 -->
00:56:27.280Yeah, but it's all doable.
00:56:27.360 -->
00:56:35.760Yeah, we've all seen it happen, which is uh so in in kind of these closing uh moments here, um, anything keeps you up at night about the industry?
00:56:35.920 -->
00:56:40.000I mean, obviously you got your kids in it and you've been in it for years and your dad's been in it.
00:56:40.159 -->
00:56:44.079Is there anything that you you look down the road and say, that could be that could be an issue?
00:56:44.400 -->
00:56:45.280Well that threatens.
00:56:45.840 -->
00:56:53.760Obviously, uh the direct sales model that some are that's you know, everybody's trying to knock on that door, scout and everything else.
00:56:54.239 -->
00:57:01.840Um probably a long time though before it would creep into the legacy brands, right?
00:57:02.159 -->
00:57:02.719Yeah, I think so.
00:57:02.800 -->
00:57:09.119I don't think that is uh soon to be an issue in the in the I don't think it's in my lifetime to worry about it.
00:57:09.360 -->
00:57:09.519Right.
00:57:09.760 -->
00:57:17.199Uh I think dealers have to solidify uh their back-end processes and parts and service to keep the customers coming back.
00:57:17.920 -->
00:57:35.519Um I uh you know I there's I'm at a stage where I think I'm comfortable that the generation behind me is going to be up on technology, very customer focused, very process focused.
00:57:35.679 -->
00:57:35.920Yeah.
00:57:36.320 -->
00:57:39.599Uh so I feel comfortable that I'm leaving my business in good hands.
00:57:39.760 -->
00:57:46.400I mean, the future of the car business, as much as it changes, it's still shaking hands and greeting customers.
00:57:47.760 -->
00:57:48.880And I hate to keep going back.
00:57:49.039 -->
00:57:55.760I mean, the the the experience that they are generating at my son's dealership.
00:57:55.840 -->
00:58:08.480I mean, it's just an absolute experience, yeah, a positive experience to buy a car, sure, high CSI, high grosses, within a year, you know, top seven in the Northeast region in Kia.
00:58:08.880 -->
00:58:09.199That's great.
00:58:09.360 -->
00:58:14.800And he's so focused on the experience, and that that's still the core of selling.
00:58:14.880 -->
00:58:15.039Yeah.
00:58:15.199 -->
00:58:27.679You create value through experience, and I think if they keep that in their DNA, all these widgets are going to help make life easier, more efficient, uh, more productive, hopefully more financially rewarding.
00:58:27.920 -->
00:58:32.320So I think as much as it changes, the core of it is still the customer experience.
00:58:32.400 -->
00:58:32.639Yeah.
00:58:32.880 -->
00:58:38.559Whether that's engaging them online, creating that experience virtually or in the showroom.
00:58:38.960 -->
00:58:46.000I I still think it's so old school in so many ways, and but it's but it's changing so fast it makes my head spin too.
00:58:46.079 -->
00:58:50.400So it's a very uh complex uh future, I think, for the industry.
00:58:50.639 -->
00:58:50.960I agree.
00:58:51.119 -->
00:58:51.360I agree.
00:58:51.440 -->
00:58:52.320I'm gonna leave it right there.
00:58:52.480 -->
00:58:55.599Paul Sansone Jr., thank you so much for spending some time with us.
00:58:55.679 -->
00:58:58.159They're very bullish on AI and technology.
00:58:58.320 -->
00:58:59.920You know, it it's uh it's great to hear.
00:59:00.159 -->
00:59:02.960And I don't want to learn any of it, I just want to make sure it's done in my store.
00:59:03.199 -->
00:59:03.920I don't know, invest in it.
00:59:04.159 -->
00:59:04.400I don't know.
00:59:06.480 -->
00:59:08.639Make sure it helps us uh be more efficient.
00:59:08.960 -->
00:59:11.360But it's definitely something I'm a bit bullish on.
00:59:11.519 -->
00:59:12.960Well, thank you so much for spending some time with us.
00:59:13.440 -->
00:59:14.159Thank you for having me.
