#13: Chuck Bonnano - The future of the used car business and the importance of education

Hey guys, Chuck Bonanno here. I have taken over the independent Dealer podcast. I've got a couple friends here with me, Jeff and Luke, and we're going to talk a little bit about NIDA education, 20 groups and my love of all buyer payer, Chuck.

We're so excited to have you here today. Guys, y' all have to listen to one of the best dealer educators out there today. We're going to go over a bunch of things. We're going to invite you to come to convention. We're going to invite you to join the 20 group. So stick around and listen.

Welcome to the Independent Dealer podcast, the podcast for auto dealers to learn and grow together. Here are your hosts, Luke Godwin and Jeff Watson.

Hey, welcome to this episode. We have Chuck here with us. Chuck, can you give us some introduction? Everyone's going to know you by name. We don't even need to give you a last name. People know who you are if they have anything to do with the used car independent dealer space. But real quick, give us just in a nutshell, who are you? Where'd you come from?

Well, my name is Chuck Bonanno. You can just call me Chuck. Been in the used car world for about 30 years. I got in the way most of us do. I went to college and got a finance degree and that really didn't work out so good. Got laid off from a job and my sister at that time had married a buy here pay here dealer.

Oh my.

And he said, I want you to come in and be my cfo. And I didn't know what buy here pay here was. That was in 1988. So we're now in our 31st year. We grew that company because that's what you did back in that day. We got a line of credit, one of the very first lines of credit in the United States for buyer payhere dealers. We grew to seven stores and in 1995 we went public and our real goal was to sell out and go away. It didn't really work out that way. My brother in law became the CEO of this publicly held by her payher company. We grew to as high as 27 stores. I ran our related finance company, had 54 collectors, 12 underwriters working for me and so really jumped into the business that way. Kind of, you know, trial by fire. We sold that company to America's car Mart in 1999 and I've been consulting ever since doing moderating of 20 groups. I've had as many as 12 groups at one time, which is a Lot of travel. It's 36 meetings a year. I've moderated 450 plus meetings at this point. I love the business. Could never now imagine doing anything else. And I, and I certainly love the 20 Grid program. And my most recent job with NIDA is I'm now the vice president of dealer development, which really makes me happy because my goal in life is if I can make more money, more successful dealers, then I'm a successful man.

Chuck, that is awesome. I tell you, learning from you over the last two years that you've been moderating my group has just been. It's been amazing. I had another moderator before and he was great, too. But what you brought to the table of the buy here, pay here knowledge just really has increased my knowledge of the industry. And also what you've done with NIADA and the whole group, the whole association has done to help our business is amazing. We really appreciate you doing that.

Definitely. I want to talk and get your insights into the used car market as it sits today. Maybe get some tips that the dealers can take home and put into their dealership. But also, I mean, we definitely need to talk about 20 groups, right? Luke, I think that was one of the big things that both you and I can, you know, we can say, hey, don't care what you do, where you go to, you need to get into a 20 group. It's gonna, you're gonna benefit.

Sure, I think. And that's, you know, on our Facebook forum, you see a lot of times people ask questions that Chuck, you know right off the top of your head.

Right?

And I know right off the top of my head. But the reason I know these things is because lucky enough to be with my peers on 20 group and see that. What have you seen over the years? What are the benefits of the 20 group to a small dealer, to a large dealer?

If you're only getting your information from a few blurbs online, or God forbid you're talking to people at the auctions, you just might as well just stop and turn it all off because all your competitors are lying to you. I learned that early on when I was learning how to buy cars. One of the guys says, don't listen to what he says. Look at what he buys. Because the guy with the biggest mouth was always buying the fewest cars or being called to the office because he bounced a check. I would just tell you that there's no better program than a group of your peers that meets three times a year and who are very candid. I've got Two of them right here, very candid with their members when they think you're screwing up and there's a better way in many cases. They've tried things, they've tried products, they've tried services, they've tried strategies. They can tell you the consequences of those. And. And they're gonna be honest with you. And it's what's going on today. It's not my old days talking about 1988. I've got great war stories, but they're just that they're not what's happening today. And, you know, everything that you guys have done, you're successful business people. It's awesome what you've done. It got you here. It doesn't mean anything for tomorrow. You know, nothing that we do today may have any impact on what goes on in your futures. And our goal is to make every one of us successful. And those can be profitability issues from our composite as we look at them and see what our financial results. Maybe a succession plan or an exit strategy or a growth strategy or a need for capital. Everybody in these rooms have been through that and will give you the advice and let you know quite candidly where you need to pay attention.

I think, and you're so right, I think in today's market, because I think our market today is probably vastly different than we've ever seen with the rise of the franchise, Buy here, pay here store, the franchise independent store, Carmax, Carvana, all these things. If we don't have, you know, what happens to the people who don't have the 20 group and who don't have the ability to really depend on what the person next door is telling us. What do you see that dealer going through?

Well, I would tell you the one thing that happened is I used to teach a class on how to get into buy Here, pay here, and we would do pro formas of cash needs and portfolio growth and potential return on investment. And when I started doing that class in 2000, 2001, if you had a quarter million dollars or access to a quarter million dollars, you could probably build a nice business. My joke today is that probably lasts you about three weeks.

Yeah, maybe.

So that part of the business has changed a lot. So the capital requirements are tougher. Compliance was not even a word I even knew when I first got in this business. You know, it's kind of wheeled and dealed. Everything was in cash, down payments covered, you know. But today it's a very challenging business. If you've been in it for the last. These will. I would Say, from my experience, have been the hardest five years. So if you're doing okay, if you're doing well right now, congratulate yourselves. But it's going to get more and more challenging to be competitive. Our customers are changing. As an old guy now in the business, I can tell you that what I saw in 1988 compared to what I see in 2019 has been a dramatic shift in the customer. And it's not the customer credit quality that has remained the same, but what has changed is their expectations. Some we brought upon them with better cars and more expensive cars and better warranties and those type of things. But a lot of it is just the changing market and how our consumers view. They now call it mobility. It's not called car buying anymore. It's mobility.

Well, that's the new word, right? That is it. You know, it's funny. And the buy here, pay here, dealer's probably done it to ourselves. You know, we've gone after higher priced cars. And don't get me wrong, I think drive time and people like that have moved the market on us, but we've made it more cash intensive because cars have gone up and down. Payments have gone down, right?

That's exactly right. My average down payment in 1988 was $875. And then for a while, not too long ago, I was one buck Chuck. So I'm part of the problem. I remember those days.

You are part of the problem. But yeah, these big stores are, you know, they're $500 a day. And the subprime market out there has been. The money's been so free in the last five years that it's taken a lot of our customers. Jeff. I don't know if you see it in Utah like we do in the Southeast, but it's tough.

Yeah, yeah. It's a race to the bottom sometimes. One thing that really strikes me as Chuck was talking is, you know, my first 20 group was, it's been a while now, seven years in this exact room, actually, exact hotel, exact room, which is kind of a funny thing. But you don't know what you don't know. And used car dealers have the mentality that they know it all because that's why we're in this industry, because we know everything. And you get those blinders on and you think, I know the best way to buy a car, I know the best way to retail, I know the best way to mark up, I know the best way to do this. But you don't. And that's what really struck Me, the hardest is when I got into this is I thought, I'm doing great. I'm really killing it, man. I made $1,000 on each car.

That's what's great about 20 Group, though, is because it humbles you and you figure out, I don't know everything. I mean, the first 20 group you walk into, man, you can pick it up.

Yeah, but we need it.

We need that.

And you can tell who's going to succeed long term, I think. I mean, I've been in here, I've seen people come and go and come and go and come and go. And they come in and you think, hey, yeah, you know, this isn't, you know, you think you've got it figured out right here, but you might want to look at it this way. And the people that push back and no, no, no, no, no. We figured out. No, that's. That's the way we've done it for 20 years. Well, we'll see at the next meeting, I don't think, because you might not be in business much longer or, you know, maybe, you know, what do you say to those people, Chuck, that think, hey, I've got nothing to learn? Or I think I know it all.

Yeah. I would tell you that, you know, I'm proud of your success that you've got to this point. But it's interesting is that whatever you've learned, it's dynamic. This business is dynamic. The world is changing, our consumers changing, technology is changing. You better keep up or stay ahead of that. You better have your capital in place. You better have your policies and procedures in place or you will lose. What is interesting, and Jeff, to your point is we've seen a few come into the groups. We're like not going to be at the second meeting, but a lot of them, it takes them 10 meetings, which is a long time or 20 meetings to die. Because buyer payer, it's hard to kill a buy here payer operator because you got cash coming in all the time. And truly to me, thank God, I always ask my retail dealer, so if you sold no cars for the next 90 days, what happens? And they go, I'm homeless. You know, buy here, pay here. We can afford to do that. That's the beauty of it. It's a wealth building business compared to a sales business.

Yeah, we don't get to drive Ferraris up front. That's it.

No, no. It's like everyone always says. And I get people who get in this business say like, all right, I've invested $2 million where is it? Well, it's driving around the streets of your town. I mean, it's not in your bank account. I sweat. I did payroll for 15 years, and I sweated it every Thursday. Yeah, because cash is tight in this business. It's going to get tighter. I mean, what I want people to understand is that there's a way to succeed without being Drive time or Carvana or America's Car Martin being these national or public companies out there. But you got to find your niche. You got to understand that things are changing. Buying is changing. I think the most interesting thing about buying that's come up recently is one of my partners In Michigan has seven stores. He buys about 300 cars a month, and he now has five kids on computers, buying online, and no buyers in the lanes anymore. And I will promise you someone's listening right now saying, that's impossible. But I can tell he's been doing this for 35 years. He goes, our reject rate is lower now than it's ever been.

I've got friends that same thing. They buy 200 cars a month, and I've got three people doing it, just sitting in the office, sitting. And that's, you know, that's what they do.

And you couldn't have told me that five years ago? I would have said, no way.

Is it because the options are better, the cars are better, or technology's better?

Technology's better?

All of the above. All the above.

But if you're buying a nicer car.

But you're saying, like, hey, but you gotta pay, you know, I'm buying a car in Arizona and I'm shipping it to Michigan. And I'm saying, I've got these transportation costs, but you have to take out. What other costs am I taking away from that?

It's so hard to find the right car. So sometimes you have to go out of your market.

You have to fish in a bigger pond.

That's what I've been doing.

So, yeah, I agree. We have a lot of new car dealers in our 20 groups who have buy here, pay here operations. Very, very few of them are getting into it anymore. But I've asked them from time to time, because when I first got in the business, we bought every car with a draft at a dealership. I didn't go to an auction, never didn't know what one was or what it was for. And they started keeping those cars because they recognized that, hey, there's some profit opportunities in these old trades that may not fit our normal inventory. And I said, so what would it take for you guys to release those cars in the future and they go, it's never gonna happen. It's never. We're done.

Dang it.

So just knowing that, Just knowing that when you go to a car auction and buy your cars, there's something wrong with that car.

Yeah, but that's okay.

That's okay. That's what we do. It's okay. But it. But you have to know that you can't be angry about it.

It used to be. You're in. Another thing to that is reconditioning costs have gone up. When we talk about there's something wrong with the car. You know, in the day when you could buy the car that was just freshly trade in, maybe there wasn't much wrong with it. But today, if that car's at the auction, it probably is something. And that's where we come in to recondition that car, make sure it's right for our customer.

Absolutely.

And 20 group, let's just get back to this. 20 group is so important. And for those of you that have never been to a 20 group, I just invite you to talk to Niada, come to want it and see what it's like. Because it's no better way to learn. We've been saying that. But there's no better way to learn.

No. And if you have questions, you can always go to our website, which is nida-education.com or nidatraining.com or 20 groups spelled out.com. it all takes you to the same place. But we have a. We have a little fact section in there because we, and of course me in particular, have been doing 20 groups since 2000. We assume everybody knows what they are and people are afraid to ask. Down there you can find out what they're all about. There's some great little shots of composites where we look at your financial results and we can find the hidden gems. One of the things that I'm most excited about is when I meet somebody like Luke or Jeff and we bring them into one of these meetings and we show them what their overhead per car is or what their inventory turn is. And I can show them ways to bring more money to the bottom line without having to sell more cars.

Everybody's good for that, right?

Yeah. I mean, I hope you are. I've never had anybody come to a 20 group and say, well, this didn't pay for me.

That's the key, I think right there. A lot of people look at it. Well, I don't have the time to be out of the lot. I don't want the extra expense to fly somewhere and blah blah, blah blah, it pays for itself.

I can look at just two or three things from 20 group and there's tens of thousands of dollars of change from that.

Yeah, money made, money saved from the ideas. I just think back to what you said earlier and I think you can't not know which, especially with Buy Here Pay here you can't not know which way your ship is going because in Buy Here Pay here man, you, you're going down the wrong path for a couple of months or a couple of years and it takes a long time to correct that ship because you've got 2436 month notes out there. And that's painful. That's a painful collection.

It's a painful lesson. It's a really expensive lesson. Yeah.

Oh yeah.

I mean it's way more than your 20 year dues in travel than figuring the, your underwriting went to crap over a few weeks period. And again, as we look forward, one of the things that we really strive hard with 20 group members to make sure they do keep steering their ship the right way and don't chase bad business because right now none of us are getting the, I lovingly call the cream of the crap customers. We're not getting the $5,000 incomes with a 600 credit scores because they're getting done at new car stores. And someone says well when's that going to end? And I've heard pundits and you know the, all the speakers industry talk about a subprime bubble. Well, you know, at five years I'm tired of it because I believe this may be the new norm and if it does, and as I said and if I'm wrong, it's just all the better. But we need to plan for it being forever.

Right? Right. And operate now like this is your base.

You know, I don't want to hear.

That we can't survive that long.

I want it to be easier. This is tough man. It is tough.

Let's talk about your role as, as NIADA education director and conventions and things like that. You know, 20 group is great and not everybody is going to take the time investment I don't think to really to do that. Sure. But you know, convention is a good way to get a good taste of it. And you know I had somebody or somebody the other day I think on the independent dealer Facebook asked well you know, is it gonna, is there gonna.

Be a lot of buy here pay.

Here stuff at this year's Convention and maybe people don't know, but NIA88 bought NABD a couple years back and just talk about what's going to be going on education wise.

You know what, the convention is great for everybody for several reasons. We're going to be June 17th through the 20th Venetian in Las Vegas this year. Our biggest expo hall ever, Our largest offering of seminars, workshops. We have Dave Anderson who if you've not heard Dave Anderson talk before, him alone would be worth the price of admission. We've got several good keynote speakers. It's a great place for me. I always said, well, where else would I want to go? If I'm going to buy products or services then I can see 10 DMS systems, 10 GPS providers out there all in one place. Talk to them on my time as I want to see them network with dealers and get a taste because granted, I mean I'm going to do a 50 minute session on capital in this industry. That's just the tip of the iceberg. Conventions. I think where it starts, you got to go to conventions. And ours is going to be the biggest and best this year in Vegas. We're also going to do a buy here, pay here specific convention in October, the NABD show which will be in Chicago. We have classes and all of our classes are listed online with a calendar of live events. We're now creating a subscription based product for those of you who are small. Maybe you can't travel, maybe you can't afford to have your collector, your sales manager get out of the dealerships. We certainly recognize that are going to have some online subscription based training. We are doing webinars right now. The first ones are rolling out right now. Our job and our duty besides taking care of you guys in Washington at National is to develop you and educate you and train you and try to make you the best you can be. So there are going to be a lot of opportunities now and even more in the future.

Awesome. Jeff, what do you have specific for Chuck? You know Chuck is a guy that we all know what, what specific question, what people should know about Chuck.

I think what's great about Chuck is he has got his finger on the whole industry. Because of your connections, because of your traveling, because of your 20 groups. You see it from the largest multi hundred million dollar portfolios to the tiny, tiny $100,000 portfolios. What are you seeing as the pain point for dealers? I know you mentioned a little bit inventory acquisition, a little bit about how this may be the new normal and your sub 500 customer may just be your guy from now on. Be prepared for that. You know, they may never come back again. What else are you seeing that dealers need to be prepared for? From the big to the small, direct to consumer retailing. Is that an issue?

Do we all need to be willing.

To have digital platforms?

AutoNation said they would never deliver cars at home and now they've rolled out an entire platform. America's car mart is going to do home deliveries.

Who just opened him up?

You're going to have, I mean, we now need to approve people, but kind of the way they do it in subprime and you've done subprime so, you know, it's like I'm gonna get a 10 minute approval online and it's a real approval and get people to buy. Our consumers are looking online. We used to talk about a website as a portal, a gateway to your dealership. And I would argue now that your website is your dealership. Sure. I mean you're gonna lose or make customers right there when they come to the lot. It's what frustrated me about my own salesman was I said, when I have somebody who that my BDC got to the lot, they're buyers, they're not kicking tires or looking. If they leave, it should be because we want them to leave. They don't have the down, they don't have the car, whatever it may be. Everybody else needs to be in a car today. And one of the things that it's like, you guys spend money, whether it's digital, whether it's more traditional media out there, spending your advertising dollars, your marketing dollars, you have to look at your leads like gold. Everybody who comes in there, I need every one of them. And I'm amazed even in my own 20 groups when I asked you, so how many leads did you get last month? And they say, I don't know.

Yeah, we got one in here that did that there.

I don't know. How many apps did you get? I don't know. I mean it's like, you know, this is business development and you're spending money. I love digital marketing and I love social media marketing, but we want to get better at it. Certainly it's cheaper than TV and radio. Certainly it's reaching the masses in a better way and a better target out there. But we still have to convert.

You know, it's something we talked about not long ago, Jeff, was how.

There.

Shouldn'T be a disconnect from your website to your dealership. It's got to be one float. And that I think that's really important. And people say, oh, it's about here, pay here. No, it's important customer. If you can get that customer qualified on your website and on the phone and they show up at your store, they're good, they're good. They're leaving with a car. My ups, this tax time has gone down, but my Internet leads have gone up.

Right?

And so you see it, you see it right there that most people are going to visit you online before they even walk in the door.

So we've got to be, we've got to be better prepared at that. Well, I think that, I don't want to interrupt you, Jeff, but I think that kind of ties to. We got to be good at everything. Okay. You know, it's hard to buy cars, but we got to buy the cars that we need that match our customers income. A lot of people think, well, I want to go out and buy trucks. I've got one of my largest dealers in America, been in business since 1969 in a large metro Texas market, has zero trucks on this lot. Because the trucks that they would buy that they felt comfortable doing for three and four years, the people can't afford them. So that's the first thing. It's like, look, I'm not going to put people in cars they can't afford. That makes does us no good. So you buy the cars they need, you buy the payments they're going to have based on the down. They're going to have overhead, the expenses that go into selling each car. You got to be dialed in and you know, gross profit. I don't even talk about gross profit anymore because it's all air. Charge offs are air. What I write out checks every month in my overhead to run my business. That's real money. We need to be dialed in on that. We need to be dialed in our collection. We may say I've shown most people in our composite. We said, hey, last month you approved 55 deals and you did 20. Don't talk to me about another lead. What happened to those 35?

How are you losing them?

How are you losing them? Those are the kinds of things, those are all efficiencies.

That reminds me of that guy I, you probably remember, I won't say his name, but he was in one of our, that our DCF9 group. And he had a very, very high gross profit. Huge gross profit, but very high repo rates, right?

Yep. Are you winning? You can make ten grand a car.

But did you click any of it?

You got to go to the End of the story.

How does the story end?

You know, you can't just look up front. Are you seeing. I know, Chuck. I know you're a technology guy, Chuck. Are you seeing any technology that you're excited about?

You know, one of the. Since I, you know, again, I'll do one more story. When I first got in this business, we had ledger cards and we had handwritten credit apps and contracts. So we've watched all those things go, you know, come into fruition. I got my first DMS in 1991. We could actually calculate interest. So we started having interest bearing loans because we could actually calculate it correctly, right? And they go, well, how bad? You charge off and you just grab his pile and go, it's not that bad. But. But the GPS and start Interrupt have made us more efficient with the number of collectors we need and how quickly we get our collateral back. Dmss for a long time became just electronic cards. They really weren't much more than that. And now we're in the age where in my dashboards, as I look at dmss out there that are available today and more coming in the future, I'm going to be able to, on my phone, wherever it may be, have an update of what's going on in our world at the dealership, at the auction, in collections, going to the bank, what are my deposits, where my cars in the pipeline. I think that's a really big part of it. And the second part is going to be that we are going to either have to be the people who sell cars online, which means getting people approved and picking a car, not just you got a backhanded turn down approval, get in here and then they turn them down later, but really get them approved online or you will not compete. And, and some of this stuff is purely the technology is there, it's been embraced by the consumers as our consumers get younger. Okay, I always talk about my wife. Why do you keep talking about millennials? You're the biggest king of Amazon there ever was. And you have Snapchat and you have Twitter and you have Instagram. I said, I know. But the reality of it is most of our customers, they live in that world, so we better be prepared for that, or my neighbor who's doing it will get those customers before I ever have a chance. I know you guys have probably seen this when I used to laugh and I used to teach classes about inquiries and I have a customer come to our store and they have like 11 inquiries in the last 36 hours, right? You started at Lexus, you're like, well, that was bold. They've come all the way down, you'll never know. Then they got down to us and go, okay, you're finally home. Today. If I go online, find a car I like, go online, get approved, shopping is essentially over.

It's done.

Yeah. So it's velocity. So everything today is going to be, we got to be efficient at it, but we got to be quick or we're not going to be the guys with that customer.

So let me ask you that question too, Chuck. That makes me think, are you seeing purchasing preference changes with not.

I don't want to.

When you say millennials, I say that's a mentality, it's a state of mind. You've got it, I know you have it. I'm the same way. I don't want to, I don't want to shop around. I don't want to go to a bunch of places. I look online and see where it's at. I go buy it. If I can't order it online and get it within a day or two. Right. Same thing. Are you seeing those changes from kids wear or the buying public where you say, hey, you know, leasing is more attractive, Renting subscription, I mean subscription based cars do we need on the horizon? Is that something that we need to be aware of?

You know, I would tell you that, well, we're all going to be this one. I don't have to be doing any prediction with a crystal ball. We're all going to be selling electric cars sooner than you think. Okay. And the reason is that's what they're going to be building.

What do you drive to?

Yeah, I have electric cars. So I will tell you that when Ford and GM and, and BMW and Audi and Nissan and Toyota start going down this path in electric cars, we're going to go to them. Now. I will tell you that electric cars and my owning one is it changes our mechanics, it changes our recon, it changes, you know, we don't know about battery life on a 10 year old vehicle. That's, you know, we know how they are at the beginning. There's far fewer parts to fix. I mean, there's some upsides of that, but I don't know if that itself shifts it the autonomous car someday probably will, if that ever happens. I mean, my GPS can't get me to my house, so I don't think it's as close as they keep telling me it is. But I will tell you that if, if you could have an electric vehicle in a fleet that needed no driver, then the Ubers and the Lyft type companies of the world could probably provide services to our customer at 17 cents per mile, versus $1.73amile. Our customers, and they're not different. We're selfish financially, if that makes good sense to them. And it's on demand. It's anything they want, boom, it's here. It drives me where I want to go. That's going to happen. I don't have the crystal ball about 2025 or 2035, but it's coming. It is coming. And again, I'm the father of a millennial, so I get to talk about it in that regards because she does have a subscription card. And I think she's nice because to an old guy, it's like, what are you doing, dad? It's one payment. Everything didn't care. But I wanted to switch it out. I just switch it out. But it's a totally different view of automobiles. And that's happening. It's happening from the type of cars. You see the manufacturer saying, no more sedans. We can't. You know what? I can put the same chassis as a Ford Taurus, and I can make it an SUV and I'll buy it, but I'm not buying a Taurus. So those things are shifting kids today. I mean, I saw something the other day that 70% of kids who are Generation Z, is that after millennials? I think it's Z Will not have a driver's license at age 25. 70%.

That's crazy.

Yeah. That scares me.

My. My. My cousin has no interest. He's about. He's 15, 14, has no interest in getting his license.

Yeah, A friend of mine, what in the world? Daughter's 17, wanting to go get a driver's lice.

I was like, what? And people will say like, well, Chuck, your daughter is different. Yeah, my daughter, on 16th birthday, got. Had a car, got her license and drove away. Kind of a never to be seen again. When we talk about these trends and with. I use millennials a lot because it's fun as a millennial, dad, but we talk about the shifting consumer. It won't be everybody. I do envision a world where just like horse owners, right? Everyone owned a horse in the 1800s because that's how you moved around. That's how it's made you mobile now rich people have horses. I believe someday that when those mustangs are sitting around those old cutlasses or those muscle cars, they'll be held by rich people on a Farm, because they're gonna, because they want to have those things and they have status out there, but for a whole generation and a generation beyond, it's just transportation to them. It's not a status symbol. The way we look at it now, that's changing. And I think buy your payer customers. Yes. At today's date, they still want to Impala over a Malibu. I mean, there's still some status to things, but it is shifting.

Yeah, yeah.

I mean, I know you guys have both sold cars. You're like, I can't believe they bought that. Yeah, sure, we brought in a Fiat. We brought in a couple cars. I'm going, oh, what do we buy that thing for? And they go, oh, that's old, by the way.

I'm not buying Fiat.

Anyway. Yeah.

You know, it's funny you say that because we went from selling, you know, years ago, these, during tax time, these large SUVs just, just moving, moving, moving. Well, now you can tell that that age is moving a little bit. And more people wanting the sedans or the smaller cars.

Yeah.

Or the crossovers.

Crossovers, yeah. Which is really a car. Sure. I mean, that's, that's the thing is like, it doesn't feel like, you know, that it's not a minivan, it's not, not a sedan, it's a crossover. They'll take it. And I'm like, those things are all okay. The biggest challenge I think we have is full size SUVs and real trucks are never going to be in our market. I mean, you've got a few in your world out there, but for most of us, these trucks start off at 70,000, $80,000. You know, when's it going to be 5,000?

Yeah.

Exactly. So some of those things are going to happen, you know, by default. And I think for those who have been used to going to their local auction and buying cars, you better get a little more global. And having the cars and then capital, obviously we're not going to need less. There's nothing out there that says that cash and deal or the amount of money that you're putting in the street at the time of sale is going down. When I first started doing 20 groups, it was $1,800, $6,800. That's an average.

So I want to ask you this question. This has been my own observation. This might be the wrong place to state it, but I see auction volumes going up. Right. And I'm just looking at my local Mannheim rarely go to anymore, but it's going up off leases are going up. Right. We've had an all time low sales in what, 2010, new cars were at a all time low and in 2015 they were back up to all time highs. Right. So three years later, four years later, those are coming off lease, off rental. So if we have a combination of both off leases increasing, maybe a slowdown in the sales area because of the market, people are not buying cars as much. Maybe they're using their Ubers, they're doing this. And if you had a slight tick down in the recession and the repo rate went up, I look at that and I say that's a perfect storm for a flood of used cars. Right. Does that math add up?

It does and it doesn't. That's one of the challenges out there. When you listen to economists or you read articles in the magazines out there and they take a particular slant like, like the number of cars that were coming off lease in the last two years. Okay. So that did flood the markets a little bit with cars. Of course they, I joke that they were the cars that nobody wanted. Sure, right. They were, I call them, they were airport rental cars, which are hard to sell. But at the same time, what we're doing in the new car and the subprime areas today is we're putting people out for 72 and 84 months. So the churn, the number of people buying and new car who are paying for their cars has dramatically decreased. So yeah, this year I think they're going to say we're going to be off a couple million in new car sales. But what happens there is new car sales or new car prices went up by one of the highest numbers they've ever gone up this last year. And so what that does is it makes used cars more attractive at every level. So again, we have less of a chance. So there's always lots of things going on at the same time and hard to figure out which ones can going to dominate the others.

Yeah, yeah. The pecking order, everything gets pushed down. And along with that I see in the new car groups that I follow, they all push leasing.

Yeah.

Is that, is that the customer's mentality or. We all lease our phones, Right. I can't even buy my stupid phone anymore.

I think it's to keep the payments down.

So everything is payment. I mean, the world is whether in our town, I'm not sure if it's different than anybody else's town. You know, our Mercedes and BMW, these dealers, they very rarely will post a price. It's a monthly Lease payment, which a lot of these people won't even qualify for. But our world has become how. And there's. And there's some. There's an argument for it. How much does it cost me to drive? If I can get that down to a monthly number, it's like a rent payment or groceries or anything else out there. So they're driving that. The problem is that the cars that they continue to build, you know, Camrys are $40,000 and Honda Accords are $40,000. And, you know, I have a college educated wife, and she goes, how could that payment be $700 a month? I go, well, let's walk through it. And you say the car was 42. You put 7,000 down, it's $35,000 without interest. You divide that by 50 months, it's 700.

Yeah.

It's math.

Yeah.

Right. So the only way they're afford $700. Exactly. So the only way they're able to get them in the cars where they don't have affordability is to lease them the car for a shorter time at a lesser payment. And in many cases, some of these manufacturers, they take it on the chin three years later because they're resources, they miss residuals. So I think what it does say to your point, though, Jeff, is that do consumers care about car ownership? Now? I, for a short time a few years ago, ran and was a partner in a lease here pay here operation. We lease 300 cars a month. And I can tell you, even at buy here pay here credit score levels, I would lose one or two a month when they know it was a lease. And we told them from the beginning it's a lease. And they're like, look, I need a car today. You know, that's the name of my company. So part of it was it just, you know, ownership is kind of a intangible kind of a thing.

Right.

They're not really. I mean. And you're talking about 48, 54 months down the road. Having a piece of paper is not a meaningful thing when you've got to get your kids to school and you get a job.

Yeah, right.

And I think that's changing.

I think that's probably about all the time we got it.

Yeah. I think we've taken up a lot of Chuck's time here, haven't we? Someone looking at that clicker. Well, Chuck, any parting words for us, words of wisdom you would like to leave with our audience?

Yeah, I would just tell you that I'm not doom and gloom about this business. Short term. And for me, short term is 10 to 15 years out there. But I will just leave you with this is you got to be your best in all areas of your business or you will be left behind.

That's great. That's awesome.

Excellent.

Thank you.

Thank you.