In this segment of the YouTube video, the hosts discuss how the current downturn in new‑car sales creates a strategic advantage for dealership fixed‑operations (service and parts) departments. They begin by noting aggressive, low‑down‑payment lease offers on foreign‑made models (e.g., an MX‑6 lease with $0 down, employee leases for Volkswagen EVs at about $100) that reflect manufacturers’ need to move excess inventory. They then highlight the steep mark‑ups on imported parts—citing a $1,000 Land Rover mirror that can carry a 25% markup—exacerbated by the fact that most components are sourced overseas. The conversation shifts to the impact of “Buy American” policies, which have accelerated the decline in volume for non‑American brands, causing dealers to lose up to 25% of their sales volume. This volume loss erodes profit margins (a 10% labor discount can wipe out net profit), forcing many dealers to recapitalize, sell, or be bought out. Meanwhile, consumer demand for new vehicles remains weak, so owners keep cars longer (average age rising from 13 to 15 years), driving up service and parts revenue. The hosts argue that fixed‑ops are positioned to thrive in this environment, provided they can secure enough technicians to meet the increased workload. Overall, the discussion frames the new‑car slump as a catalyst for growth in service and parts, while warning of dealer financial stress and the need for strategic transitions.
Chapters
So just a little automotive news before we get to the 3 mistakes you're making with video inspections is the— a lot of these foreign car lines I've seen are doing crazy leases. Have you guys seen that? Like, I got a thing for a lease on an MX-6, zero down. Like, and the lease is pretty good because they got so many cars sitting on the ground. They're getting very, very aggressive.
Yeah. Yeah, they are. You can get the Volkswagen, whatever they call their electric. You can get that on a lease if you're an employee. I forget what the employee lease—
like $100, right?
Crazy. Yeah, it was nuts. But yeah, there's a bunch of those. There's a bunch of those out there right now.
If you just think like you add 25% to a Volkswagen or to a BMW or to a Mercedes, And also in service. So that's the thing I was thinking about is if it, if you are buying parts, like I had to buy a mirror for my Land Rover, every $1,000 is another $250 that then they're marking up. The, the price of parts gets outta hand really, really quick. None of that stuff is made here. It's all made somewhere else.
No.
I wish they'd make an exception for that stuff. Maybe, I don't know, it's—
or maybe a better transition, something.
It's, it's, uh, yeah, I had a different opinion about it, seeing what it's doing to car dealers. It's killing some of our clients, especially the non-American-made ones, are really— the volume is just not—
it's brutal.
It's brutal. I get the Buy American, but We might have moved a little too fast.
It's rough. It took— part of me is, uh, when I think about that, it, it, it didn't take us overnight to get to this point though either, right? Took decades for sure to get here. So it's not going to take, you know, it's not going to be overnight where it's fixed. I kind of, I try to look at personally both ends, but it's like, yeah, I agree with you. Like There needs to be a little bit different of a transition in how we get to that.
I think I don't disagree with the, with the theory.
Yeah.
I don't disagree. Yeah. With that. But it's just, it's, it's, uh, it's going to be interesting because a lot of these, you know, Volkswagen dealers, BMW dealers, they're, they're built to make money. And when you, when you lose 25% of your volume, that's the, that's more than what you were making in profit. You know, it just, it's kind of like we we talk about in service when we show like when you discount 10% of the sale amount of an hour of labor, your net just went away. Because you're whole, you know, maybe you're 20 or 30% net to gross, but if you take it off the top, it comes— it, it's, it's brutal on the, on the bottom. And so when you lose the volume, if you were selling 200 BMWs and now you're, you're selling 150, You're built for $200,000. They're, you know, they're losing money. And then some of these dealers are going to have to recapitalize. I think we're going to see a lot of buy-sells. Now, on the other side of that, clients aren't— consumers aren't buying cars, so they're driving their cars. So for us in fixed ops, this is the time to thrive. Like, we're, we're set up for success.
Double down. Yeah, double down.
We just need more techs, but Beyond that, like, if people are keeping— if the average car was 13 years and then it goes to 15 years, it, it works for us. Like, we're, we're busy.
