Should Dealers Be Charging This Much For A Used Car?

Foreign.

Dealers are selling used cars with beyond 150,000 miles. So back in the day when I think you and I were in the, in the dealer world, over a hundred thousand was the taboo. Like once it got over a hundred thousand, that's when we started to get the things. Like you can't finance everything like that. Well.

There'S a store in El Monte, California, right out here that they had three cars listed on their inventory. One, a Corolla with 195,000 miles on it, a 2004 Infiniti, which I used to sell those brand new by the way. 196,497 miles on it. And then a Prius. Like seriously, first off, they should give this person an award. 2016 Prius, 360,000 miles on it for sale.

Yeah, the.

300,000 mile car is now the new 100. It's like guys will say, you know, because of testosterone and HGH and having a young girlfriend or whatever that like 60 is a new 40.

And it doesn't say here on. Hold on, let me look. Yeah. How old's your girlfriend? 19. Yeah, she doesn't look a day over 17 though.

But that's what used cars are turning into, is old, old guys.

So the 360,000 miles Prius is a 50 year old man, 40 with a.

With a 19 year old driver owner.

That's great. Well, if you got to pick apart a car that's going to get wrecked the first time around, a Prius of 360,000.

But, but I do like nothing to sell. So they got to bring them back to life.

I like that they're putting metal on the lots.

That's a time when you would appraise one of those cars and you would tell the customer like, oh, we'll give you 1,000. But you're like, you know, I can't, I can't put tires on this thing for a thousand or whatever. Now it's like anything that'll get from stoplight to stoplights worth five grand.

Yeah, easy. And I think that so many times those cars were, it was a courtesy to give somebody 200 bucks. Like you would just, that's what you would pay to dispose of the thing. But I don't know, they're, they're resellable now because nobody can get a car any other way. It's interesting what's happened, it really is. But I thought that was pretty cool. And it really, that just nicely segues us into our next story, which is talking about Toyota and how they used to have, you know, 60 to 90 day inventories for the dealers. So on the lot you'd have a 63 months worth of sales just sitting right around the lot. And they believe that once the chip shortage is over and everything like that, they're actually gonna target a 30 day supply, which makes a lot of sense to me.

Well, yeah, I think that a lot of manufacturers should think that way in the sense that if you have Tesla selling.

Direct and they're just orders. Right. So they're making it when it's ordered. The old model of having 90 days, you're burning through money. Especially if interest rates are going up and dealers have to floor those, it's going to be more expensive to floor them if they had a 90 day supply. So there's, there's a lot of reasons to, to bring that day supply down and keep the grosses higher. I think also that helps the used car market because if, if they flood the market here next year with cars, these customers that have paid over.

Those cars are going to depreciate to a degree that isn't sustainable.

That's right.

And it's going to mess with the used car prices.

Yeah.

So by, by holding back the new supply a little bit, you're, you're going to protect the used car market to a degree or the drop in, in depreciation.

Yeah. There was another thing I didn't think about. I was watching a, I was watching a YouTube video on the shortage of inventory that I.

Another, that's where I get all my medical advice. YouTube?

Yeah. Why not? Anything you need to know. YouTube. But I thought it was really interesting. Something I never thought about because they were talking about the new car and the used car shortage is something I never even remotely considered until I watched this thing. Was thinking about leased vehicles, right. So people that leased a vehicle back in 2019. Normally when someone leases a car, they drive for three years, they turn it back in. But what's been happening lately, they keep them, they keep them because they're worth so much more than what the residual is. So the used car market has lost all those lease returns. So there's another shortage happening on top of this shortage, on top of that shortage. Like it's a fricking mess.

And I think it's a perfect storm.

It is a perfect storm. And then the cost of metals and all the things going on overseas and everything like that are making it so that the cost of producing cars is going up. So there's going to be a shelf between the way that the New cars are priced now and they are priced later. Like, there's a lot of.

It's a good time for them to reset the model.

I think the 30 day thing is brilliant.

15 is brilliant. Why not? I mean, you know, people are accustomed to ordering also. Like, why can't they order and wait 30 days?

Yeah.

I mean, there's nothing that we're trying to do right now that isn't 60 days out.

That's exactly.

Order speakers. You try to order glass for our new building, for windows. Whatever it is, it's 60 days out and then it'll be late. So they say 60 and it's actually like probably 90.

But it does remind me, before I get too far into this next story, is that, you know how there's all these people that believe that the Earth is flat.

Yeah, the Earth is flat.

Flat. Our society and everything like that. Yeah.

You don't believe the Earth is flat?

Well, I didn't until very recently. Because I do think the Earth is flat. And it's because the oceans aren't carbonated.

We get it.

That was a good one. All right, so rolling into our next one. I love when he doesn't laugh, by the way.

You gotta tell him it's a good one.

That's a sign of a bad joke.

It's like when you have to say, I'm not racist. Like, you're probably racist.

Oh, no, it's the same thing.

That was a good one. I did that the other day when I was speaking. What did I.

God.

I said something really funny and nobody in the audience laughed. And so then I go, by the way, you should have laughed at that.

That was funny.

Let me help you. That's great.

I imagine that that's probably something I will do when I do the stand up and nobody laughs.

So funny.

But I mean, this is probably the most exciting news that's happened in the last seven years.

Lean Mean grass cutting machine Honda breaks record for fastest lawnmower. Acceleration.

Chip shortages don't matter when you're talking about lawnmowers.

Who's the dude that has so much free time that they're souping up their lawnmower? Why do you want to go fast on a lawnmower?

Okay, so that just makes me think.

Of like Tim Allen from Tool Time.

Like, and the thing blows up, right? Poor Al's being like, no, Tim, don't do it.

We got so much free time. We're going to modify a Honda lawnmower.

Okay, so this is. I'm gonna have you guess so they measure the speed of the lawnmower to break the Guinness Book of World Records.

For a lawnmower.

For a lawnmower there is a record. There was a record and Honda has broken it.

What was the previous record?

I can't tell you that. But what I can tell you is that they measure lawnmower speed for this particular Guinness Book of world records from 0 to 100. So dead stopped, 100 miles an hour.

So how fast this lawnmower goes 100 miles an hour?

Well, actually it reached 150.99 at top speed. But just talking about a 0 to 100. Let's be realistic.

50 miles an hour.

Yeah. So what do you think?

It's 0 is the. Are they strapped into this thing? If you crash you're dead.

Right.

It's like sitting lawnmower.

Yeah, the.

There's no cage. Right.

The helmet doesn't matter. Right. But yeah. So the average riding lawnmower five to six miles an hour. Yeah. Yeah. So it's, that's what it should be. Right. But what do you think? The 0 to 100 time modifications you have to do, you're gonna blow, it's gonna blow your hair away.

What is it?

0 to 100 on a lawnmower. 6.29 seconds.

Wow.

That's pretty fast. That's faster than lawnmower.

It's just basically an engine and a steering wheel.

There's not much to go other than.

What kind of tranny they have in that thing.

I don't know. I wouldn't, I would expect to have a lot of gears.

Gas combustion.

It's not a Tesla.

No, it's not.

That's crazy.

Oh, it's a, it's a combustion. It's the same engine that they put in the CBR1000, the race ready bike. So it's a motorcycle engine.

That's nuts.

Thanks so much for watching this clip of Service Driving Revolution. We're uploading new stuff every day, so make sure you subscribe and click click the bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call 8333 Ask SDR and we'll answer your question on the show. That's 8333 Ask SDR. For special deals on our books and training, head over to offers.chriscollinsinc.com now that's offers.chriscollinsInc.com I'm Chris Collins and I'll see you in the next video.

Sam.