Will There Be A Spring Buying Fever for Car Dealers?

by | Mar 22, 2023 | Appraising, Dashboard Dialogues, Dealerslink News, Inventory Management, Merchandising, Vehicle Pricing | 0 comments

In Episode 16 of Dashboard Dialogues, industry expert Travis Wise and host Jake Silveira talk about what’s positive in the dealership industry, lessons learned from this year’s NADA conference, the importance of correct OEM data, and what the car industry can expect heading into this Spring.

Transcript

00:00:16:10 – 00:00:37:15

Jake Silveira

Thank you for joining us for another episode of Dashboard Dialogs. Today, we are joined again by Travis Wise of Dealerslink. We’ll be talking about OEM data enhancements and new features that the dealer’s link team has to offer. If you like our content, make sure to like and subscribe to be alerted to the best tricks of the trade of the auto industry.

 

00:00:38:10 – 00:00:52:22

Jake Silveira

Welcome to another episode of Dashboard Dialogs. Today, we’re meeting with Travis Wise. We’re going to be talking about the newest features and products that Dealerslink has to offer to the dealer community and our current customers. Travis, how are you doing today?

 

00:00:53:01 – 00:00:55:16

Travis Wise

I am excellent. Thank you for having me, by the way.

 

00:00:55:17 – 00:01:09:08

Jake Silveira

Absolutely. Absolutely. Glad to have you. Always a pleasure having you here. Sitting down and talking with us. Your wealth of knowledge is definitely invaluable to the organization and the industry. There’s a lot of people that feel that way.

 

00:01:09:20 – 00:01:11:04

Travis Wise

Thanks, man. I appreciate that.

 

00:01:11:18 – 00:01:31:03

Jake Silveira

So as we as we had mentioned in our intro here, we are going to be talking about some of the newest things that Dealerslinkhas to offer. Some of the products that we have brought to the market and things that we are overall doing to make our dealers lives easier. Before we get into that. We’re about 45 days out from an NADA at the end of January.

 

00:01:31:03 – 00:01:42:15

Jake Silveira

We’re now in the middle of March. How are things going for the industry? What did you notice most about post NADA Buzz and things of that nature?

 

00:01:43:25 – 00:02:11:05

Travis Wise

I think the Post, NADA Buzz. That’s a great question because it’s definitely stimulated the market in a lot of different ways. It’s everybody has questions about what the big change was, you know, coming out of the backside industry up industry, down. And then we all get together at NADA and we come off of that high. And I think the most relevant thing is just the advancement in technology.

 

00:02:11:05 – 00:02:34:23

Travis Wise

And if you’re a dealer right now and you went to NADA and you’re coming out of the back side of that, it’s everything from tip to tail advancement and technology that we’re looking at. And it’s from when the key is picked out of the box to how much digital thought tracking to the evaluation, to the test drive, to the digital marketing.

 

00:02:34:23 – 00:02:42:09

Travis Wise

It’s just everything is enhanced. You know, they’re finally really grasping technology and embracing it more.

 

00:02:42:13 – 00:03:07:01

Jake Silveira

Yeah, I think that’s probably going to be a continuing trend, obviously, as we go forth. COVID definitely kind of forced a lot of those moves and a lot of the adjustments and adaptations now that we’re, you know, two years past or post-COVID here. But we’re seeing a lot of that stuff that they’ve researched, and they’ve done their diligence to determine what’s going to work best for them.

 

00:03:07:01 – 00:03:24:18

Jake Silveira

And that’s what I think we saw a lot at. NADA was a lot of that buyers coming to specifically the booths. It wasn’t the regular, okay, we’re just doing our shopping. It’s okay. We know what we need. Do you offer it? And that was that was kind of the big thing that I noticed as well.

 

00:03:25:14 – 00:03:30:26

Travis Wise

Dealers were moving through the hall with agendas, right? Yeah. Yeah, they had an agenda.

 

00:03:30:26 – 00:03:31:14

Jake Silveira

Absolutely.

 

00:03:31:15 – 00:03:48:20

Travis Wise

And that’s not that’s not abnormal, but it’s pretty vigilant. They’re looking for opportunity of new solution. You know, it’s kind of like car insurance. You know, there’s enough competitive car insurance if you’re not shopping it every now and again, you’re really leaving yourself in the weeds. Serve some.

 

00:03:48:25 – 00:04:12:14

Jake Silveira

Absolutely. Absolutely. Well, as we continue on post and Ada going into the spring and summer season here for the auto industry Dealerslink has actually brought several new things to the market, specifically launched at NADA. Why don’t you go and give us a little bit? I know I tried to pull that out of you in the last episode and you shut me down pretty hard.

 

00:04:12:14 – 00:04:14:18

Jake Silveira

So I. I applaud you for your efforts there.

 

00:04:14:21 – 00:04:32:28

Travis Wise

What was it? We did it in NADA. It was so long ago. No, I think the biggest buzz that we had going at NADA that that brought us the most traction is the DMS profit. You know, DMS profit is really huge. I know a lot of people are like, well, what do you know about last year?

 

00:04:32:28 – 00:04:57:07

Travis Wise

You know, if we’re looking at our profits from last year, well, you can’t really go off of that. But you do need to know essentially what your top ten fastest moving, most profitable cars are, because everybody knows the fastest moving car may not be the most profitable car service. And the most profitable car might not move fast. You know, and it’s a simple view.

 

00:04:57:07 – 00:05:21:07

Travis Wise

If you know your top ten most valuable, fastest moving cars, you can run your store like a retail shop. You know, I worked at a retail shop, and we had ones twos, threes and fours. So you made them special order threes. You kept one two’s, you kept three, four or five and ones, you better have 20 of them on hand because they sell very quickly.

 

00:05:21:19 – 00:05:36:20

Travis Wise

So that’s kind of the whole premise of this. It’s like, why? Why aren’t we simply looking at our inventory inside the dealership? Most profitable, fastest moving? Where can I be the most effective regularly and play the odds correctly?

 

00:05:37:20 – 00:05:39:11

Jake Silveira

Tara Absolutely.

 

00:05:39:18 – 00:06:10:29

Travis Wise

Yeah, it’s just been, it’s been huge that that DMS profit the ability to build the OEMs in your cars. You know so we have Ford OEM data now. And we have Toyota OEM data. We’re the first to market with that. And I’m not talking about a VIN explosion from the OEM standard data standardized. What I’m talking about is if the thing is an extra CIGARET lighter in the trunk, this will let you know in that package and it’ll help you break those packages down.

 

00:06:11:14 – 00:06:33:27

Travis Wise

So that’s been a really big deal. You know, when we’re talking about profit, when we’re talking about OEM data, we’re talking about accurate, you know, syndication, the walk around in the car business is where the money is made with the customer. Okay. So I’m old school. You know, you make your money on that car when you buy it, right.

 

00:06:33:28 – 00:06:37:15

Travis Wise

You make your gross on that car when you do a proper walk around.

 

00:06:37:18 – 00:06:37:29

Jake Silveira

Right.

 

00:06:38:08 – 00:06:56:04

Travis Wise

In this day and age, proper walk around, starts online. Yeah. The customer starts to walk around themselves. So you better have your business tight in that OEM build data tightens it up. You know, your sales guys are not getting called out onto the lot.

 

00:06:56:13 – 00:06:56:24

Jake Silveira

 

 

00:06:57:06 – 00:07:24:05

Travis Wise

You know, this package said I had a sunroof, right? It doesn’t have a sunroof. We drove for hours to buy this car, right? Yeah. That’s something to really consider. Accuracy on the floor. Accuracy on pricing. Accuracy What? Your data with your photographs. It’s just it’s really going to be the difference in 2023, 2024. Focusing on the right cars to own for the right profit at the right pace.

 

00:07:24:13 – 00:07:50:07

Jake Silveira

Right. And that’s that brings me to, you know, some of the pending improvements to the OEM data, because currently I believe that is active on the in-stock inventory. What is coming is that is also going to then be available to them during the appraisal process. So dealers dealing with some of that off brand inventory they may not be familiar with, they see a Toyota Tundra come on the lot.

 

00:07:50:07 – 00:08:13:14

Jake Silveira

They see that it says, I saw a fire, but they don’t know if it comes with any other packages. The Ford is notorious for being very difficult with their packages, 202, 302, 3018. All this all these numbers and packages and things of that nature. And this really does streamline and simplify the process of the inventory control or the person that’s in charge of the merchandizing or the marketing of those vehicles.

 

00:08:14:05 – 00:08:24:25

Jake Silveira

Judge which ultimately will help them lead to better foot traffic, hopefully, which is better results for sales or at least the potential for better results of sales.

 

00:08:25:24 – 00:08:55:04

Travis Wise

Yeah, it’s, it’s going to stimulate more sales. Ford seems to be the most difficult for the simple fact I can go down and I can order a fix for lariat. Sport. So that’s a triple package truck. You know, it’s so when you cross all of those, boom! Now we have all these packages. Like, what do we actually have in front of right now?

 

00:08:55:04 – 00:09:20:08

Travis Wise

It’s not a standard lariat because it’s an EF four. Lariat? That’s the off-road super hooty with a console and skid plates and all these other things. So it’s, it’s a challenge. I think Ford’s probably one of the most challenging out there to appraise and market for that matter, simply for those things. I mean Nissan’s tough the OEM build data has been huge with Nissan and whatnot, simply because you just don’t know what it is.

 

00:09:20:21 – 00:09:21:15

Travis Wise

You know.

 

00:09:21:15 – 00:09:22:00

Jake Silveira

It’s true.

 

00:09:22:07 – 00:09:26:05

Travis Wise

Toyota and Honda, they kind of just make the car the way they make it. Like.

 

00:09:26:16 – 00:09:27:11

Jake Silveira

Sure, you.

 

00:09:27:11 – 00:09:42:02

Travis Wise

Want a Honda, Would you would you like it? Yes. Or an elixir because that’s the two ways you get them, right. So you don’t really need a ton of breakdown for that. But if you could buy Excel X Premium, well, we would really.

 

00:09:42:02 – 00:09:43:06

Jake Silveira

Probably need a little help with.

 

00:09:43:06 – 00:10:07:20

Travis Wise

That. I don’t know. He might be brilliant, but still, that’s just a that’s a weird vehicle. And sometimes they bring the same. Sometimes they bring more. I think for that matter, the really missed opportunity is, is people aren’t looking at these vehicles over the span of like three years. So now the vehicle, Jake, is so similar for two, three, four years in a row.

 

00:10:07:20 – 00:10:33:04

Travis Wise

Right. Jeeps are notorious for this. You know, there’s a little bit of change, but in reality, they’re all really similar. So, you know, we’re finding that tows are priced at the same price as an 18. You know, so if you can compare all of those years together and see that in a graph to overlay it, so you’re sitting there and you’re looking at buying an 18 and it seems like a great deal versus the books and the market and everything.

 

00:10:33:04 – 00:10:48:11

Travis Wise

Well, you go in there and look and you can get a 20 for the same price. Yeah. Might want to push on that 18. Right. Or you might want to hit a little harder on trade, you might want a little bit more angle on that vehicle. Sure. So. Right. And things are changing now.

 

00:10:48:12 – 00:11:14:21

Jake Silveira

Sure. Accurately valuing the vehicle definitely helps you, you know, in that situation. Yeah. If you know, there’s eight teens and twenties and they’re going for the same price, they have the same build now, you know, and you’ve got that power of information. And that’s really what it is. It’s giving the dealer the information, the tools, not going to replace their knowledge or their skill or their gut, which is kind of what we encourage them to still use is be a car guy.

 

00:11:15:09 – 00:11:26:07

Jake Silveira

Ultimately, it’s use your gut, use your knowledge. This is a tool. It’s no different than if you’re trying to build a house. You need tools to do so. You ultimately know how to do it, but you can’t Actually.

 

00:11:27:00 – 00:11:32:17

Travis Wise

You still need a tape measure. Yeah, you still need a saw. And there’s some things that are going to make the job a little easier.

 

00:11:32:17 – 00:11:33:07

Jake Silveira

Absolutely.

 

00:11:33:07 – 00:11:40:29

Travis Wise

You know, what is it? You don’t need alcohol to have fun and you don’t need running shoes to run. But they sure both really help.

 

00:11:41:21 – 00:11:44:05

Jake Silveira

And this is true. This is a true statement.

 

00:11:45:00 – 00:11:49:02

Travis Wise

Like same way with the tools. Yeah, same way with the tools is sure helps.

 

00:11:49:10 – 00:12:08:28

Jake Silveira

Yeah. So as we move into, you know, we’re nearing the end of the first quarter and Ada was, you know, right at the end of January. We’re past the buzz. Everybody’s kind of returned back to normal. We’re moving into spring time. Tax season is obviously upon us. What do you see in the next, you know, 60 to 90 days for the industry?

 

00:12:08:28 – 00:12:20:25

Jake Silveira

Do you think values are going to continue to stay steady and slightly increase like we’ve been seeing? Or do you think as we move to the summer months, we’re going to see a little bit more of a decrease and more of a correction that we were noticing?

 

00:12:22:13 – 00:12:45:28

Travis Wise

I really kind of believe the correction is done that it’s now that it’s happened and that’s why we kind of see a stabilization and then we kind of see the market, you know, raising little lowering little raising. I mean, when we did the J.D. Power pre-book. Yeah. And we looked at the pre book, I was really, really happy to see that there wasn’t a lot of plummeting.

 

00:12:46:06 – 00:13:03:24

Travis Wise

But there is a lot of zeros. There is a lot of green. And that’s going to happen every year. You know, we’re coming into spring. People are getting the fever. I mean, I’ve got the fever. I want to buy something, you know, I want to go have some fun. Little bit of retail therapy in the car business. Never heard anyone get real.

 

00:13:04:05 – 00:13:24:00

Travis Wise

We’re in this for some retail therapy, right? So I think that’s going to be across the board. I think we’re going to see a little bit more incentive from the OEM manufacturer because there’s some stuff starting to you know, we’re starting to get some inventory sitting out. I see interest rates. You know, they got to soften just a little bit somewhere.

 

00:13:24:00 – 00:13:31:08

Travis Wise

And I think that there’s just a lot of people that are ready to buy. It’s spring every year. Spring is a.

 

00:13:31:08 – 00:13:33:04

Jake Silveira

Bump. It’s a season of change. Right?

 

00:13:33:05 – 00:13:50:10

Travis Wise

It’s a season of change. I think regardless what the banking industry is doing, in spite balloons and all of this garbage that’s going on, I think people are still going to want a new car. I think we’re still going to want to get a used car that’s nicer than the one we have or just out of necessity. You know, mechanically it’s time.

 

00:13:50:10 – 00:13:53:03

Travis Wise

So, yeah, but people are going to hold on to their cars for longer.

 

00:13:53:14 – 00:13:54:19

Jake Silveira

Sure. Yeah. They have.

 

00:13:54:19 – 00:13:55:20

Travis Wise

No choice, especially.

 

00:13:55:20 – 00:14:04:29

Jake Silveira

The ones at least, you know, the ones that least could very well be a little bit more further up that creek and their paddles are falling apart slowly. And sometimes quickly.

 

00:14:05:13 – 00:14:30:19

Travis Wise

Yeah, Yeah. The group of people that bought in the last, you know, 36 months when money was free and prices were outrageous, the only way that they’re going to move from those now that the market’s settled and everything’s flattened out a they’re going to have to hold on to those for a long time. And that’s going to be really profitable for the banks in the long run.

 

00:14:30:19 – 00:14:31:09

Jake Silveira

Oh, sure.

 

00:14:31:09 – 00:14:48:13

Travis Wise

Yeah. That’s going to be great because they’re going to collect all the back side interest and everything on that. But that’s also a double edged sword because that’s going to make it tougher to sign new paper. Sure. So if you’re going to have a little collapse, you’re going to have a little higher interest rate than the people that don’t have to buy won’t.

 

00:14:48:16 – 00:14:48:27

Jake Silveira

Right.

 

00:14:49:18 – 00:14:59:08

Travis Wise

You know, if they can pay cash, they’ll pay cash. Otherwise they’ll wait. You know, if you’re up 20, if you’re upside down $20,000, which is pretty common out there right now.

 

00:14:59:08 – 00:14:59:28

Jake Silveira

Right now, Yes.

 

00:14:59:28 – 00:15:22:16

Travis Wise

Yes. Right now we’re seeing a lot of people that are upside down, $20,000 in a vehicle, you know, And it used to be like, oh, my gosh, you drive it off the lot, you know, and you’re going to lose that. And it’s like, well, okay, but a car was 20 grand, right? And if you’re going to buy it new and you’re going to lose half of that, you lost ten and you own it for 3 to 4 years, that correction comes in place and then you’re fine.

 

00:15:22:17 – 00:15:26:19

Travis Wise

Yep. Whereas now you buy the car for 60.

 

00:15:26:21 – 00:15:27:04

Jake Silveira

Mm.

 

00:15:28:02 – 00:15:57:02

Travis Wise

And you’re upside down 20 within 18 months. Yeah. Plus the margin. So what’s it really. 25 grand probably. So now to move them into another vehicle, you have to eat $25,000 worth of negative equity or the bank has to over allow it 150%. Well the only way for them to recourse in and come out of that is like either stop lending and close their doors and run the notes out to death.

 

00:15:57:03 – 00:16:21:07

Travis Wise

Right. Or they’re going to have to lend big. They’re going to have to buy deep there, have to put more money back in the market. Right. So I don’t know what the infrastructure, the banks and it’s an unforeseen segment in the industry that we’re all going to have to learn to adapt to. Yeah, yeah. And the best way is going to be with data and it’s a live market out there.

 

00:16:21:27 – 00:16:37:15

Travis Wise

It’s about a week. You know, I keep telling people this, it’s 7 to 10 days, right? You have a car, 7 to 10 days. You go back and you look at the market value on it and what happens in 7 to 10 days, You better be moving.

 

00:16:37:25 – 00:16:38:24

Jake Silveira

You’ve got to you got to pay ten.

 

00:16:38:26 – 00:16:41:04

Travis Wise

You got to move in. Shake. Yeah, yeah, absolutely.

 

00:16:41:13 – 00:16:41:21

Jake Silveira

Yeah.

 

00:16:42:12 – 00:16:43:11

Travis Wise

So long answer.

 

00:16:43:18 – 00:17:07:05

Jake Silveira

Yeah. No, I appreciate it. Appreciate the wisdom as always you know and kind of going after the purchases people who paid 6070 80,000 for a vehicle that traditionally a couple of years ago was 40 or 50. They’re definitely going to be hurting people who least I know there were before COVID right at the beginning of COVID, there was a ton of equity in these leased vehicles.

 

00:17:07:05 – 00:17:29:19

Jake Silveira

So returning it, there was a positive situation. They were getting ten or 15 grand back and now it’s, well, you leased the vehicle, you’re paying an ultra higher premium because of the money factor rates. Everything else is affected. So ultimately they’re in vehicles that they will return. Most likely unless they want to try to refinance at the higher residual with the higher interest, etc., etc..

 

00:17:29:19 – 00:17:37:23

Jake Silveira

And those are the people who I think we’re going to see be in a little bit more trouble than the ones who purchased who might have some longevity in that situation.

 

00:17:38:03 – 00:17:56:25

Travis Wise

Yeah, I agree with that. I think it’s ironic that they extended leases. You know, I seen people that were coming to the end of their 36 month lease and they’re like, look, we just we really don’t have anything to sell you. We don’t want you going down the street. So we’ve got a lease extension, right? Like, what the hell is a lease extension?

 

00:17:58:09 – 00:17:59:07

Travis Wise

They do that.

 

00:18:01:01 – 00:18:07:20

Jake Silveira

They do now. They do as we saw COVID kind of changed a lot of what they didn’t do and now what they do. So, yeah.

 

00:18:08:15 – 00:18:15:27

Travis Wise

I think we’re all in that boat. Yeah, we all have to extend to the new society. Absolutely what we can.

 

00:18:16:00 – 00:18:38:07

Jake Silveira

Absolutely. Well, as we as we close out, thank you again for your time and joining us here at Dashboard Dialogues, sharing your wisdom, having a conversation with us not only about the market but the newest things that Dealerslink doing. I know that dealer’s link in general is probably climbing the ladder very fast. We are meticulous, obviously, and we’re methodical in our approaches.

 

00:18:38:07 – 00:18:53:00

Jake Silveira

So the information, the data, the tools and features that we put out and we have available to our customers or prospective customers or anybody else that wants to try to, you know, look into our product. It really is the best in the market.

 

00:18:53:00 – 00:19:11:18

Travis Wise

So, yeah, I appreciate that. Thank you. And I and I had always I always love joining you on this one. You know, the difference in the industry I would say for Dealerslink is we’re literally focused on development. Sure. You know people are like, why don’t we hear more of you? Why don’t we see more of your commercials?

 

00:19:11:18 – 00:19:32:24

Travis Wise

Why don’t we see more of your marketing, your advertising? It’s like because we spend that on making the best in class product, period. So that’s really the focus of dealers, I think is, you know, Earl Nightingale said it back in the fifties. This day and age, you don’t have to compete, right? You just need to create, right?

 

00:19:33:10 – 00:19:41:29

Travis Wise

You create a better mousetrap. There’s nobody that can compete, right? So and that’s where we’re headed. That’s the that’s the task at hand.

 

00:19:43:11 – 00:19:45:28

Jake Silveira

All right. Well, thank you again for joining us. And it’s been pleasure.

 

00:19:46:06 – 00:19:47:16

Travis Wise

Appreciate you. Thanks for having me.

 

00:19:47:19 – 00:19:57:11

Jake Silveira

You thank you for joining us today for another great episode of Dashboard Dialogs. You can follow and listen to dashboard dialogs on YouTube.

 

00:19:57:12 – 00:19:59:05

Travis Wise

Apple Podcasts, Spotify.

 

00:19:59:05 – 00:20:08:07

Jake Silveira

And Google Podcasts. Also, remember to follow our socials on LinkedIn, YouTube, Twitter, Facebook, and Instagram.

 

 

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