#306 - How I Built This w/ Dave Guttenberg

You are listening to the Independent Dealer podcast with hosts Luke Godwin and Jeff Watson. Yeah, Good morning. My name is Dave Guttenberg. I'm the owner of Automotive Imports in Denver, Colorado. We specialize in European cars, primarily BMW and Audi and we also have a full service center. We have 13 bays and we specialize in Audi and BMW and European repair. Our typical car is going to be a 3 to 4 year old off lease vehicle.

Wow.

Yeah, I mean he's, he's glutton for punishment with BMW and Audi. But you, but the service side is really good there. Jeff, why did we not visit Dave and we were out in Denver a couple of weeks ago, a couple months right here.

We should have stopped by. It's so funny to me, like if I thought about doing automotive the most difficult, painful, hard, like keep you up at night, rip out your purse and take all your money. I would probably do your business model. Like if I have to pick one. And I don't mean that to be, you know, rude or anything, but yeah, man, that has got to be like off lease European I guess. Is there anything harder?

You know, I don't know. I think beauty's in the eye of the beholder. Right. So when you do something and I think if you specialize in something it makes working on those and selling those very easy. Right. So obviously we use all the tools. I, I run my store like a new car store in the sense like we are a heavy user of, of all the Cox products I use, you know, V auto dealer.com is our website.

We use Xtime and all that good stuff.

Exactly. So you know, for us when we're doing that, you know, you're starting to get economies of scale at that point and I think it makes it easier to stock, it makes it easier to service and, and having expectations of knowing what you're getting into and then creating that unit in operation. Right. So it's not about selling the car today. It's about making that ownership experience reasonable for that customer or they will not come back and buy a European car. Plain and simple.

Yeah, it's, it's so funny that we're going to go down this later on, but it's, it's the school of Jo L. Dave and I sat in many 20 groups with him and talking about what does that customer mean for the lifetime of your dealership? Right. How much can you get them to spend with you and stay with you? And that model leans, leans towards that.

Well, if they're buying a BMW X5, they're definitely spending a lot with you.

They are, and especially if you sell them a warranty and things like this. But it's a business model that works because it works for, for many dealers around the country. There's a lot of people out there that want to buy BMWs, and they can't necessarily afford a new BMW. So it's, it's a good market. Dave, let's, let's go back to the beginning because I noticed when I was looking, you know, it at your biography, you went to Northwood and so you must have known you want to be a car dealer from very own early on. Is that the case?

Yeah, kind of a funny little story. So, you know, ever since I was little, I just absolutely loved cars. And I grew up in a neighborhood where literally everybody was either an attorney, a doctor, professional athlete, or a car dealer. My grades precluded me from one of those activities or two of them. I'm 5 4, so my height precluded me from the other one. Although I love ice hockey, right. So my neighbor had a Porsche 911. I said, you know, what do you do for a living? He said, I own a car dealership. I said, perfect. And that sort of set my path, right? And then, you know, as I got got older and you know, I kept saying, I'm gonna own a dealership someday, I'm gonna own a dealership. He said, you know, you really need to go to Northwood University. And that's, you know, where I really started off, you know, my career. For me.

And for those that are listening that don't know what Northwood is, explain it to us so that we know.

So Northwood is a four year private college in Michigan. And their, they have, you know, all sorts of curriculum, but their emphasis is on automotive marketing. So it's a four year business degree. And then you'll have classes in, you know, it could be fixed ops, it could be variable ops, it could be used car department. You know, my accounting class at a general accounting class, and then I had one that was specifically to automotive. I think I took my AFIB certification. While I was there. I competed in a GMAC simulation. The program was absolutely excellent. I just, I can't endorse it enough.

And how'd you find out about Northwood? I mean, just, just by your neighbor, correct?

Yeah, I mean he was a car dealer and he had been in the business for a long time. And, and actually there was two people, two different dealers that told me this is where you need to go.

And was your neighbor? Is he A franchise store or independent as well.

The franchise dealer, Correct. And I actually started out working in the franchise store. Now my passion was always for used cars, but I started out in the new car store and.

And what did you, what did you do there at a new scar store?

A new car? Yeah, a little bit of everything. So I actually started out in F and I, I was so bad at F and I. Let me, I take that back. Actually, I started sales, then I moved to F and I. I was so bad in F and I. And they liked me so much, they promoted me to the new car manager. From new car manager, I actually became the used car manager. And this is a Volkswagen store in, in Denver, Colorado. Now at that point in time, you know, we weren't selling a whole lot of used cars. This is 2008. You know, V auto is relatively new to the market. And when we started, you know, I begged them and said, hey, let's use this, let's use this. We started using it and we went to second in the nation for certified pre owned Volkswagens.

That's interesting. Yeah, I guess that's where your love affair with Volkswagen or Audi comes from, is from starting there.

Yeah. You know, I mean the Volkswagen is obviously nice product. And again, just being able to see how you can, you know, once you create that momentum, right. And the velocity and the turn and how important that is. And then again utilizing, you know, these, these tools that are out there, I mean, you can get there.

Yeah, I can't even imagine how you would get into that. It seems like you go into that new car space and you just get stuck right like that. The money starts getting really good, you start seeing success. At what point did you get out? How did you pull yourself out of the new car world?

I always liked to use cars though. And here's my biggest thing. When you have a new car store, there's so many limitations, right. And they're put on you by the manufacturer. Do you need a new building? You need this in. For me, the one thing that I always thought was just so peculiar is you go into a new car store. I was at the BMW dealership the other day. Okay. I mean, the most beautiful cars you could imagine, right? And it is the most sterile environment that you could be in. Right. I'm like, nobody looks like they're having fun at all.

And they're not.

And so I said, okay. You know, and not only that, but you look at the, like the physical layout of these new car stores and they're like designed to just Sort of evoke anger from customers. You know, you have the tower and all these things, right? So I kept saying to myself, if I were going to do this, how would I build that? How would it look? How does that customer model look? And I think when you have something that's fun and exciting, right, you have to. You kind of have to evoke that same emotion. So, Art, we joke that, you know, we're just a bunch of car nerds, okay? But when you come into my store, you will come in and you will find, first of all, I have about seven or eight arcade games, like full size racing arcade games. Okay? And then next to that, there's a DeLorean. Okay. There's an Acura NSX. There's an old Porsche. So when people come in there, there's a CJ5. We have a kid's playhouse. And it's like, sort of emulated off the movie cars, so it has like license plates on the roof. It evokes a different emotion. And you can really see that dynamic sort of sh. The customer, right? Because they're coming in and they, they hate you, right? Sort of like a dental appointment. And then they're like, oh, this place is actually really cool. Okay. And then I intentionally built my service center so that there's walls, but there's plexiglass in between it. And it's real open. So somebody's working on a fuel system. You're going to smell it, right? You can hear it. And so that way, you know, it's very visceral for the customers and they, they really enjoy it. And you can just see the sort of relief in them. And they're like, oh, this is so much different than what we had before. So I like to kind of create the model and the emphasis where, you know, you have something fun and exciting and, and it's different than that new car experience, right? Because you, you. You're not going to get that online, right? And you're not going to get that going to the new car store.

That's awesome. I, I love, I love that aspect. I, I do remember I grew up in. On the showroom floor of a, Of a new car store. And remember how, you know, back. Back in the 80s, every. Every salesman wore a suit every day, right? And it was, it was. I mean, it was a cage match, right? And, and people didn't. And in that time, people had to be there. You know, they had to come to the store. There was no Internet. They. They looked at the paper and they decided, okay, this person has the best deal. So we're going to come into that store and it was an all day affair. That's awesome that you're, that you're able to create that. And so you knew you loved used cars and you wanted to go that direction. What was, what was the final tipping point that said, you know what, I'm going out on my own?

I think a new car store had become available. And, you know, I was pretty young. I was 27, 28 years old. But, you know, I guess ignorance is bliss, right? But I really felt like I was ready for a new car store at that point. And they had, ultimately the group I was with had passed on it. And, you know, I said, okay, this is my time to, to move on and I'm gonna start this. And I had had this business model, you know, sort of tucked away for a long time. I had been working on it since I was in college.

So I want to know financially, how do you make that leap? Did you have to bring in partners? Had you, you know, made enough money during your career or was this kind of sign on the dotted line and kind of leverage your whole future?

Sure. So I did have a partner initially. And then I, you know, all of the money that I had made while I was working at the new car store, unfortunately, I had a very ill child. My wife and I were in our early 20s, and I spent almost all of it. I mean, we lived a pretty frugal lifestyle. So, you know, we pretty much leveraged everything that we had. To say that I started on a shoestring budget would indicate that there was some sort of budget. Right, But. Right. And so a couple things happened, you know, as I started, Right. And then it, the rate of acceleration was super fast. So, you know, we started with almost no money, which is great, right, because that teaches you how to really work with what you have. And then I think, you know, some of the pitfalls that you run into as you get more money. Right. How are you managing it? Are you managing it appropriately? And I can tell you, over the years, while I didn't indulge in myself necessarily, there were certainly times that as I had more money, I mismanaged that money. Did I carry too much inventory? Was I lackadaisical on wholesale cars? So, you know, there's good and bad with that. I eventually was able to buy my business partner out. It's, you know, those are typically a good deal for one person, so it's good not to have a partner anymore. I'm lucky. I have a phenomenal General manager. And I think as I'm going forward, I'm trying to figure ways, whether it's through reinsurance, to give him a way where he feels like he owns part of it and he gets the right to some of those things. But still there ultimately kind of has to be one decision maker.

Yeah. It seems to me like going into taking that leap of faith and leveraging yourself financially, having the background of being a car guy, but also being through a business school. I think so many dealers come into this because they're car guys, but they really have no idea how to handle their financial statements, you know, look at cash flow and all those types of things. So they just, they just manage their business off what's in the checking account and if the money's there, they spend it, right?

Yeah.

I mean, imagine that had to have helped.

Yeah. And again, you know, you, you can learn it, right? And you, you can see it. And I was very good at reading financial statements. But at the same time, you know, again, when you start getting in your business, right, and you're selling cars and that's your focus, right? You, are you really spending the time, you know, to look at all your chart of accounts, are you doing things, you know, the correct way? And I can certainly say that, you know, I made some mistakes. I, I actually even to this day last year I went and took, I took an Niada 20 accounting class, you know, and I was a outgunned. I was with a bunch of controllers. I went back and kind of did some homework that night. And then the second day of the class, I felt pretty comfortable again. But no, it certainly does help, right? Because you know, a profit, right, does not equal cash flow. And I think in particular in this business, you know, as our cost of goods grow, it is more important than ever. How are you managing that cash flow, right? And how are you preparing for the amount of cars that you are going to trade for? What is that cost of goods look like, right? Or do you have a sufficient amount of cash to do that? Or do you need to floor some of your trades where maybe you weren't otherwise flooring those cars before? And how are you turning them, right, depending on your terms with your, with your floor plan company, right. As these cars age, I think it's very easy for people to forget. Well, you know, if you have a 10 or 20% curtailment in the car, you have recon, you have transport, you've got a lot of money right up.

In these, hey guys, it is time to get signed up with tax max. Yes. Everybody needs more down payments. It's not just buy here, pay here, guys. It's retail also. So if you're doing high end exotic or V auto model, more cash down helps.

Yes, it does. And they make it easy this year too. Jeff. One, you go to their website and use our code vip. And secondly, after you're signed up and it takes nothing for them to teach you how to do it, all they do is send a link to the customer and they do it right there. Or the customer can click the link on your website.

Right?

Yeah. It's a really cool what they call a file and drive. So it puts a little banner on your website or wherever you want it, and the customer can do all the filing on their own. So it's really, really nice to just kind of take that out of your salesman's hands a little bit. They can kind of help the customer along, but the customer is able to kind of self service in getting their tax filed, which is awesome. I'd love to ask you that. Over the last six to 12 months, it does seem like that kind of high to mid range exotic, you know, European car has taken a pretty good beating in values. Is that what you've seen and how have you been able to navigate that? Is, is it all turn time or whatever?

I think the next question to add on to. I'm sorry, Dave, to ask you like four in a row, but the interest, the, the upheaval and interest or the interest rate climb is also made that even worse. Can you kind of go across the board with, with that whole thing and how you, how you manage that?

Yeah, so, you know, I, I think like everybody else, right. I think there will be a month on your financial statement or two months, right, where you just got like a glass of water thrown in your face. Okay. And, and I experienced that. And I think that part of it is right, is, is the complacency. Okay, so can we sell less cars because the margins are higher and is that more comfortable? Right. And then were we, were we getting out of the things that were sound business practices? Were we making the price changes when we needed to? Were we acknowledging that, you know, we're, we're not in this car, Right. Can we lose $1,000 today versus three, four or $5,000, you know, 90 days, 120 days from. And so I definitely did get, you know, a little bit of that experience where we had, we had some stuff that had aged on us that was just so abnormal for us. In particularly the EV cars were you know, wildly volatile as there was, you know, susceptible to price changes, you know, a new car side, rebates, tax credits. But on the European side now in general, we run about a 15 time year turn. Wow. So it's pretty infrequent that we were seeing price changes, market changes, I should say, that hurt us that much. Now the nice thing is on the European side, for the most part we're. I'm seeing a pre Covid normalization in terms of depreciation. I'm seeing three, you know, three year old cars, you know, with a 50% depreciation. I used to actually do a lot of used car leasing, which was a huge market for us. And again, that was all based off finding cars that had the highest residuals and we could sell them. And, and that was a great segment. So I was very cognizant of what residual values looked like and what the, you know, depreciation from new was.

And then you go ahead.

I'm sorry, Luke, you had a question.

About, about rates and how does, how did, how did interest rates with your floor plan make that loss even worse over the last 12 months when you, when you had to write them down or when you had to take that loss?

Yeah. Well, so, you know, it's interesting because the way the financial statements broken out, right. We have floor plan expense as its own account. Right. But you know, I don't know if you really looked at it and you said, okay, well why don't we expense it to the cars as, as cost of goods. Right. Because that's, that was really what it is it. I think it would hurt even worse, Right. Because you're just seeing a big number and you're saying, okay, well, was my floor plan expense $15,000? Is it 25,000? I have a friend in my dealer group who has a huge inventory. I mean it is enormous and his cost of goods are really high. And I went to his facility and it's a. He is a incredible operator. We should all be so lucky to be as good as him. But he had some cars that were sitting around and I think that they could get them through recon faster. And I did the math and I said, you know, you're spending $3,000 a day in floor plan interest. I probably get those cars up a little bit sooner. So I think that, you know, more so now than ever. And again, I think that we're going to see some conflicting things. You have, you have stuff like profit time. And I assume you guys are pretty familiar with it.

Enlightened Us, you said profit time.

Yeah, it's a V, it's a add on to V Auto.

Okay. I know nothing about it, so.

Okay, yeah, it's an add on and basically their, their model essentially has been to, you know, there's certain cars to hang on to longer than others. And that's sort of the reader's digestion 30,000 foot aerial view. But I think now in particular more than ever that that couldn't be more wrong. And I think that, you know, your first money is your right money. And I think that, you know, for me I'm going into these things and I mean you cannot, you know, you can't price a car at 100% that's got a 90 day market supply. It's just, it is not going to work.

So, you know, we've talked about the auto a good bit here. You brought it up a good bit here. Before COVID I think that was the predominant model in, in retail stores. And I would, I think, I don't know this for sure because I'm not a retail dealer, but I assume that that model was thrown out from in 21 and 22. Is that the case? Are you now back to pre Covid the auto model or how does that work?

I mean for me I am. And I think that that was, you know, I, oh, I think my practices got loose. I mean I always stuck to it. But I think, you know, if you are buying a used car, right. I think there's two things that you need to understand is what is the probability of market volatility on that car? Right? So if I have a car, if I'm appraising a car and I see nationwide that there's 900 of these cars, I mean the probability of there being a market change is huge on that car, right. Versus something where, you know, maybe the car is seven or eight years old. Right. And you have a mileage car and you have, you know, one of maybe 20 or 30 examples nationwide, I don't think you can get hurt on that car. But on the newer stuff, you know, four year old, I'd say four year old and newer cars, I think it is wildly important that, you know, people are using either V auto. You know, there's, there's, and there's some competing products and I really tried all of them to kind of see, you know, what I thought was the best and I'd continue to try anything else that came out. But understanding, you know, what is the market day supply of them and also understanding that tool well enough to Play with it. I will tell people use the mileage bands on the auto in particularly if you can put a mileage band in there. So let's say the car is a 2019 and it has under 35,000 miles. How does that impact the market? Or consequently if you have a Toyota that is low mileage like a 4Runner, I can tell you the market doesn't care because whether perception is reality or not, that buyer is fine with a higher mileage one. Right. So I think you're going to find some interesting things in there. I had a Grand Cherokee where I had the lowest mileage one in the market. That car turn had a 30 day turn rate versus 90 with the average market miles. And then that only got exponentially higher as you went over, you know, the market average for miles. So I'd encourage people to look at that. And then the other thing that you know, I wish I had some software development capabilities. I think understanding if we go and buy a car from the auction. Right. The only reason you got that car is because you agreed to pay more than somebody else. Right. So what does that car do for you? And I think looking at things is a little bit more of a holistic score. So a what is the probability that you are going to sell the warranty on that car? So I have taken my dealer track data, exported it and I'm looking at three years of data. What is my average warranty penetration on X? Okay. And if I'm not selling a warranty on that car or I'm at like a 20% rate, I'm just not going to sell that car. Okay. Because it's not going to do anything for me. Also what is the probability that you are going to get a trade in? What is the dollar amount of that acv? Right. So if I want a nice twenty thousand dollar car, European car, you know, is that car hard to buy at the auction? Absolutely. You know, especially recon into it. So if I stock a forty thousand dollar car, am I going to get that twenty thousand dollars car? Right. So I think that we have to start looking at these P cars as sort of a means to an end versus necessarily. Okay, well can I buy a car and, and can I have a three or four thousand dollar margin on a P car at the auction? That's pretty tough guys.

We talk about buckeye a lot. We talk about reinsurance and you'll hear Dave talking about that this week about how can you figure out which cars that you can buy that you can sell more product on. And Buckeye will help you do that, help you sell those, those Gap policies, help you sell those vehicle service contracts because that will make you more money in the long run.

Yeah. Regardless if you're retail buy here, pay here, it is about selling more of the ancillary back end type products, whatever they are, Buckeye, they're the guys that get you set up. Yeah. You're saying there's, so you're saying there's vehicles out there you can identify by either make and model that maybe that customer is more likely to buy the warranty on that vehicle based on year mileage, whatever. Or if I'm buying, you know, say a Range Rover or something, that's the kind of person that's going to have a very nice, well taken care of trade in that they're not price sensitive on and they're going to let me rip the trade because the Land Rover owner could just care less.

Sure, absolutely. I mean you nailed it. And again you are going to identify what you are good at. Right. So I can look at like I've actually sorted it by mileage bands. Right. So if I have a car that has X amount of miles, what's our warranty penetration? And maybe it's a pricing thing. Right. You know, that warranty ends up being four or $5,000. That's outside of what the customer wants. Right. Or can afford. So that's what we're really focusing on right now internally. Because the model that I have is that our salespeople do everything cradle to grave so that, you know, as that salesperson sort of changes in shape and design and capability. Right. Instead of saying, oh well, we just need to get better at selling warranties. Right. Well, why don't we just focus on the ones that we know we can do? I think that's probably the path of least resistance a little bit easier and, and probably quicker to finding a better return.

Dave, how are you crunching this data? Because what you're talking about is, I mean it's amazing, right. And I never even would have thought about it. But then you start talking, then I understand. Well, the person buying the, the lower mileage Toyota is not going to buy a service contract that's, it's useless. It's not even worth trying to sell it to them. How are you crunching the data to know what, what makes sense?

Sure. So there's a lot of data available and again, I think that depends on the individual store. Right. And so where are you as an individual dealership investing your money? I can tell you that. So for our dms, you know, again, whether it's right or wrong, I use Dealer Track because I'm sort of like if you guys have Apple products, you're sort of in the Apple family, right? I am in the Dealer Track family. I'm sure there are other DMS is. I would be surprised if your DMS couldn't do it. But I get that data right from Dealer Track and then I export it into a CSV file. I mean, you know, there are so many things out there now that you can use to quickly analyze data. It's just insane. I use Google sheets but you know, you can create formulas. There's so much stuff that you can do.

Have you started introducing AI into this or do you see a possibility where AI is going to really help you get this data nailed down?

Yeah, so you know, I'm starting to play with it. Obviously you know, for me it's sort of in its infancy stages, but yes, absolutely. I mean, you know, we're using it on almost everything that we can, but yes, and again I think we actually had just the other day where a scenario where a third party vendors leads. So 60 leads actually went into spam into our CRM. So we did not get 60 leads. The general manager was smart enough to sort that, got the leads from the third party provider, then use ChatGPT to generate an email and then put it into a CSV file and then created all the emails and then basically sent an email out to every customer within like an hour.

That's pretty cool.

David, I want to ask you this question about the V Auto philosophy because I know there's probably a lot of guy dealers listening that, that absolutely hate the Cox hemisphere, you know, Ecosphere and think that it's just like a, it's just a game to keep you guys selling and paying fees and paying curtailments and buying more cars and paying more fees and it's just this big race to the bottom. I've. For me I don't comprehend it because I've never, I lose money on any car I buy that's over 50 grand. Like for. I just, I don't comprehend selling a car and making money if it's not buy or pay your car. Do you, do you feel like, like what would be your answer to that folks that say well you know, this V Auto thing is just a race to the bottom. It's just, you know, everyone's trying to be 90 of market so we're all just pricing each other down to zero gross profit.

Sure. So there's a couple ways I think you can answer. One is whether, whether it's V Auto or not, everywhere a consumer goes, there's third party pricing information available, right? So it is in their face. Whether you're on Car Gurus or you're on cars.com or autotrader. Right? So that is. Is number one. So I think a disposition when you buy that car, you are not going to change the market on the car. Okay? So I think you have to be realistic in terms of where, where are those cars coming off the Internet, Right. We don't know exactly what they transacted at, but I look at recent data. So the cars that came off, what did those cars sell at? Right. Or what was the last listed price? The other thing is, is that's not. You don't need to be 90% of the market. Absolutely do not need to be 90% of the market. Right. So if you are doing your due diligence, right, and you are buying the right cars, can you be 100 of the market? Should. Can you be 103% of the market? 100 405. Absolutely right. That is on a car that has a 20 to 30 day market supply, okay? In my opinion, right now, when you have a car with 120 day market supply, you better be 90% of the market, right? You have a car that has a volatile market, that's where the V Auto is going to help you. Now, I do not like, I'm going to say it right now, I do not like profit time, okay? That is, you know, a big thing. And for all the auto users out there, you know, they've seen the demos on it and, and you know, I've poked what I believe to be a lot of holes in that. But again, and it doesn't have to be Vito, I mean, there's all sorts of other tools that give you a market day supply and give you a pricing spectrum tool. So, you know, to your point, can you make money on a $50,000 car? Well, you better. Or you should just start buying $20,000 cars, right?

Yeah, yeah.

Or $2,000 cars in my case. But, but to your point, I think the philosophy is like when you say market day supply, supply like that to me is almost the only indicator that matters is how many cars are out there and how in demand is this vehicle. Because even as a buy here, pay here dealer, I know there are certain cars, the second I put them on the lot, they will be sold by Friday. Right. Whatever it is. And if I could stock my entire lot Full of, you know, whatever 150,000 mile Toyota Tacomas. I would sell them like hotcakes. Right. It is. The problem I have though is everybody else knows that as well. And, and for years everyone knows that that, you know, car is a 20 day car. Why just drive the price up even more?

Well, I think, I think this is where Dave has, has taken it a step further and he goes, okay, I know, I know there's going to be certain dealers that only want to sell X because the day supplies is why. But Dave goes, you know what, I'm good at this car and I'm good at looking at my data and know what, what I can do on top of that. So just using V Auto is not going to make you a good dealer. It's finding the niche that you understand. And using that data makes you an even better dealer. Right, Dave?

Absolutely. You know another thing again, and this is just what I use the tool for, really more so than anything, is if I like manipulate my set of data, right. How does that change something for me? So I'll give you an example. You know, as much as I love cars, like I mean you could ask me, you know, BMW or Porsche, I could tell you anything you want to know. Right. But I do look at them like glass and metal when I'm selling them. Okay. So when I'm looking at a car, if I get like an obscure color, okay. You know, what I do is in V Auto I'll expand the set as large as I can. Right. So if it's an X3, I'll put every motor that you can get in that car. Right. And I can even in VR you can even go plus and minus years too. Right. So I'll get as much data as I can. I'll see what inventory turn looks like based on color of a car.

And, and that's very important when you talk about Porsches and really high end cars because that color and that one option that you thought didn't matter one bit.

Yeah.

Makes, makes a world of difference.

Yeah. So I think again there are opportunities. So is it getting harder to use the tool just as, you know, compared to 2008? Absolutely. But I think whatever tool you are using in conjunction with your own historical data of your store, I think you can use that and I think you can still find pockets where you can outperform the market and you can find market niches that, that nobody else is exploring. And the other thing that I think also is really big and again, shame on me because I haven't Tapped into this, but I am seeing is are you guys familiar with Accutrade?

Yeah.

Great, great product. Really is a good product. More I more so use that for a wholesale figure than. Than a retail one. But interestingly enough when you go in there you can actually see like pricing history on a car. So it's whole life history, what somebody paid for it new and, and then as it continues on. Um, but I bought a car the other day from Rivian in the lane, you know and I paid more than, than I wanted to and I haven't sold the car yet. It's only been a week but you know, to be determined. Right. I could see in the description that that owner actually tried to sell that car private party prior to them trading it into Rivian. Right. So as we see more new car manufacturers going to a sort of just in time inventory and ordered vehicles for customers, I think that's going to really give the independent dealers a huge opportunity to find these cars before they go to Mannheim, right before they're sold wholesale. And then that's really where the uptick is going to be for us in my opinion. I mean it's going to create a huge opportunity.

So are, are you, do you have any plans for buying off the street? Are you doing that now or is it something.

Yeah, we do buy off the street and again so you know V Auto has a report that you can see private party listings. So I look at that pretty frequently. You know, ironically enough I actually have a set search where I look at cars on ebay. Right. In only in my local market. I can tell you I've got some great cars off of ebay. You know where they were. One of them in particular, you know there was a Range Rover. The car was, was in, in Aspen. The license plate said Aspen 1 on it. Right. Fluent area. I think I bought the car. I think, I think we made almost 8 or $9000 profit like after pack in like less than a week on that car and it needed almost no recon. So again there are some pockets of good opportunities. Again we like trading for some of the cars that are in my service drive. Right. Because most of them are cars that we sold. You know, some of them aren't and we know we have service history on those cars. Most of them have a warranty so you know, keeps recon costs down. But know the private party acquisitions I think are tremendous.

Yeah, it seems like the gentleman selling their cars on ebay are probably like 60 year old boomers that are. It's the only platform they of technology they know or remember.

I bought some off of there and I ripped them too. So I, I agree.

Dave. Hey, real quick, one last time, guys. Be sure to look for Primal End when it comes to your capital needs. Obviously, having a high end dealership and flooring three or four, five, six million dollars in cars, that line of credit is really, really important on who you're using for your flooring. Those carrying costs, the curtailments, they, if, if you don't have it set up right, they can sync your dealership for sure.

Floor plans cost a high interest rate. Most people don't realize that. So having extra cash in your business to maybe not floor as many cars can sure help you in the long run. So call Primal in. They will help you get the cash you need to make your business operate right.

Hey, so in closing, any words of wisdom, advice for dealers that are, that are maybe, maybe young guys that are coming out of college, or even us old guys that are just trying to reinvent ourselves and get a little bit better? What kind of advice would you have for us?

Yeah, I'm actually doing the same thing every year. And I think right now, you know, the rate of change is so fast. Right. So I think we saw a pretty stagnant or, you know, the industry probably from, you know, the 50s until almost the early 2000s, look virtually the same. Right. And then I think with the inception of the Internet. Right. That certainly changed it. And then I think with COVID and everything else, we're seeing another, another really fast change. So I think it is important to continue to, to reinvent yourself. And I'm doing it myself too. The biggest mistake that I made was, honestly, you know, I think being too arrogant. And I thought that I, I knew what I was doing. Right. And I didn't realize how many really good dealer operators are out there. And the best thing that you can do is, is join. You know, start with your, your local association. You know, ours is the Colorado Independent Dealers Association. I'm a director there. Then you should join a 20 group. It is the best money you can spend. Because here's the thing, you know, if you don't have the ability to communicate with people that are having a similar problem to you, I mean, you're not going to have any direction. And that was my biggest mistake, was that I didn't join earlier. I would be so much further ahead had I done that. I am in a retail group through NIADA that also has first stores that have service departments. I mean, they get you with like quality stores. And then I'm also in a service specific one that is solely for service now, which is brand new. So I would tell people, don't be afraid to join those. You have nothing to lose. And it's not cheap. But I assure you, what you're going to come back with, it is just tremendous. I mean, I leave and my notebook is just completely full. It's like going to college all over again.

I want to point this out, Dave. What. What percentage of your working hours is spent working on your business as opposed to working in your business? Because we talk about that a lot, and you sound like the kind of guy that is working on your business a lot.

Yeah. Unfortunately, not enough.

Same here.

Wow.

I'll tell you, I have. I have a problem where, like, I will do anything. So, I mean, I know nothing about service, but I actually can, like, program BMWs and Audis, and I took that under and I actually, in the last, you know, five years, I've really learned service incredibly well. So I think that for me, and I got posed a really great question, so my 20 group actually came out to my store and did a site visit, which was awesome because, you know, it's like letting everybody see the kitchen. Right? Yeah. Right. So for me, I think I was posed the question, where do I add the most value to my store? And I realized I have such a great fixed ops department that they don't need me, you know, so I really belong over on the variable side. And what I am working towards is I am working towards, you know, I have a really great staff, but making sure that they know what to do and that if not that they can just ask the questions or have a systematic process of getting to. It could be wrong. Right. But just getting somewhere so that I can spend more time working on my business. And that's really what I've been trying to do as well. And I think it's hard because I think, you know, as we add more personnel. Right. You're adding more fixed expense. So I think it's hard for everybody to want to do that, but I think it's a necessity. Mm.

David, that's a good one to close on. Give us that.

Yeah.

That question one more time about adding a fixed expense.

No. Yeah. What was the question the 20 group posed to you was, oh, where is.

My talent is best suited? You know, where. Where should I really be? And, you know, the. The reality was, like, I should be on the variable op side.

Yeah, that's so true. I think we always have to ask ourselves, where do I add the most value to my store. It's very easy for us to get caught up in the weeds and, you know, some of the nuts and bolts and even personal interests, but where do we really add the most value?

I tell you that, Jeff, this is one of the best. I've learned more from this episode, I think, than probably any of we've ever done.

Yeah, this could go on for a long time, Dave.

Yeah, Dave, thanks for being here.

Appreciate it.

I actually, I listen to you guys, so it was a real honor to. To get DASH to be on here. You know, I'm excited to get to Sharon again. I'm telling you, there's. If you learned a lot from me, there are so many better other operators out there. And again, my biggest thing was my arrogance and not getting involved in it and do it and do it soon.

Yeah, totally agree. I totally agree.

Thanks for getting the air back on, Dave. Appreciate it.

We're gonna have you back home.

Great. Thank you, guys. Have a great rest of your day. Dealers helping dealers. Please leave us a review and subscribe the independent dealer podcast.