$1000 Car Payments, Is The Chrysler 200 Back, Does Music Help Or Hurt The Shopping Experience

Paul Daly: 0:27Well, first I know who the first commenter is today. But today it's a fun day.First of all, both our hats are backwards, which means we need business talking about $1,000car payments, the Chrysler 200and music in the showroom kind of show. It does feel like,although it feels like a Tuesday still for me. I don't know what day of the month No, no, we'll say was Monday. Today's Tuesday.Tomorrow's Friday, but just Yeah, fourth on Wednesday just doesn't work for me. Or Tuesday,whatever.

‍Kyle Mountsier: 1:00

Yeah, he's still good to meet you. Fourth of July

Paul Daly: 1:05

unbelief showed up this morning. And me, you and Nathan, our producer, we all have the hats on backwards all backwards. And it's like, it's like a nonverbal communication where you know, our brain is in a mode. When you have hats backwards. It's really strange.

Kyle Mountsier: 1:21

There's like if you if you know about wearing a flat Bill, you know, if you run fast with a flat bow forward,that thing's flying off every single time. Right Great way to put this. So it's like, if you turn it around, you can run faster and go. And that's just like, that's the mode if the backward tab. Great way to put padding. It's like, oh, here

Paul Daly: 1:42

the headwinds. We got it. No problem. Not a problem.give us Oh, man. What are you talking about today, man, the guest list for asotu con keeps every day.People are saying yes. Like the first 50 people that we asked like people are like, Yeah, I'll be there. Yeah, I'll be there.Yeah, I'll be there. Yeah, I'll be there. And we have public groups represented. We have major publications represented,we have major organizations represented, we got a really fun former employee of Tesla representative, we're gonna save all the fun announcements,because we're going to drop like our first 20 or so speakers. And so if you haven't gotten your ticket yet, now's a great time to get your tickets. I know, it seems like it's far away, right?It's at some days away. But this summer is going to be over before you know it, and the tickets are going to be sold out. So if you're in this crew,or you're listening to this at this point, please be there with us. Not to mention, we only have like 200 rooms in the primary hotel, and they're going to go as lightning fast. Yeah. Do you want to be in that hotel? I mean, the other hotels are fine.But, you know, coming down the escalator and seeing all your people in the morning. Sort of monies that Yeah, last year, we had half the attendance at asotu con. So this year, we're probably gonna be pushing 800.Last year, we had like, half of that less than half of that. And we sold out 195 rooms real quick in the main hotel. So if that's not,

Kyle Mountsier: 3:01

come on, God,all right. Well, some more Don't worry. You don't have to go to downtown Baltimore.

Paul Daly: 3:05

Nope. No, hit the airport, the airport south of the city. And then you land and you go further south. So closer to DC. It's easy. Five minutes.We want you to get there quick.Right now, none of this hour in traffic nonsense. Let's talk about some news today. Get into it. Come on, come on. All right,q2 of 2023 delivered an unprecedented news that 1/5 of all new car buyers. 20% now have monthly payments over $1,000 a month. How about that? Oh, man,it's in the wrong way must find the money in the wrong way. This is obviously, due to higher car prices, higher borrowing rates.This information. According to Edmunds, the average monthly car payment now has hit a halt all time high of $733. And it's inventory shortages. The average loan amount exceeds $40,000 for the fifth consecutive quarter.And here's the thing of the people of the 20% of people who have $1,000 plus month payment,the largest group of those 65%of those people signed up for an average loan term of 67 to 84months. So it's not even like they have $1,000 payment because they're like we're gonna pay the sucker off in 36 months, no 48months no, they have an average APR of between eight and 9.6%.And they're stretching it out,which means negative equity is on its way back, folks. It's coming. It is coming hard and fast. The average APR overall is7.1% this is the highest since the fourth quarter of get this2007

Kyle Mountsier: 4:39

I was anyone remembers

Paul Daly: 4:41

that was just Yeah.Oh boy.

Kyle Mountsier: 4:44

Here's a you know, it's wild. So like back in the day when not many vehicles approached $100,000 I was selling Nissan's and we always messed around. We're like, who would buy a Nissan GTR. It's basically like a mortgage payment. Right? right like this just normal 1/5 20% of people just making mortgage and rent payments on their car out there.I think that there's a couple interesting facts there is like,yes, it's higher car payments,but we're just seeing a greater amount of people that are high income earners have like high credit rating by continuing to buy vehicles. And so affordability is less of a factor there. But it's like the trickle down effect of an average payment still being 733is saying like, hey,affordability trickling down the line is getting harder and harder to map to for the majority of consumers. And growing interest rates, average APR is up high. It's just something to be on the lookout for. And I think like you said,the biggest thing to be on the lookout for is how to educate customers about their their potentially large negative equity over the next 18 to 24months. As they're coming into like the next buying cycle. You know, we're going to see this like what 3.2 year average on on typical buying cycles. We're coming right up to that where we up, we're about we're getting close to that three year timeline on the on the early pandemic stuff. And so you just you want to start to look out for these patterns of customers just starting to need to understand what their equity situation has an impact on their purchasing opportunity on the other side.

Paul Daly: 6:29

Man the next 12months is going to be a real regulating 20 months as This cycle continues as us as new car inventory starts to catch up as US cars values begin to change substantially. There's an article we didn't put it in today. You know, it was about used car prices are high and they're never going back down.It was like a New York Times article and Kevin Frey was like,Ah, let me put a little asterix on that. Let's remember that there were millions of cars that should have been and weren't produced during the pandemic,which might have something to do with us car values right now.New York Times What do you know about the car business?

Kyle Mountsier: 7:04

Ya know, it's it's a big factor like we were still recovering the rental car inventory gap. Still today is still getting recovered like it is not completely recovered. So while

Paul Daly: 7:17

speaking of rental cars segway was so good as the quarter two reports are rolling in still says the Lantis actually had a little blip on their report. And there was a what is that little blip? It turns out, it's the fact that they sold a total of one Chrysler two hundreds, yes, the Chrysler 200 is still being sold new and still being reported on still anthesis quarterly sales reports. So it was actually a2016 model year. So somebody walked in, and this was sold to a person, right? It's not like a rental car company. But like,Yeah, you don't want to go back and get some of these Chrysler two hundreds. A person went into a dealership, I guess the legend was like, that's the one for me.2016 Chrysler 200. So we don't know where it was sold or to whom, but the average MSRP I looked this up was $26,000 on on those cars, and that they're selling right now with 100,000miles on a Chrysler 200. They're still selling for like half of like 13, grand, 14 grand believable. What in the world?Why? How long is a Chrysler 200that had legendary transmissions issues? How long is that sucker lasting after 100,000 miles?There's no

Unknown: 8:34

way

Kyle Mountsier: 8:34

that's not even happening to have a $13,000 2016or older Chrysler 200 With over100,000 Miles that's not at a junkyard is kind of mind boggling to me. I'm gonna I'm gonna throw a hunch out there.I'm gonna throw a hunch out there. Somebody in 2016 was like, the pots guy needs, he needs a demo. And they're like,What are we going to get the parts guy? Let's give him the let's give him the Chrysler 200

Paul Daly: 9:02

helps give him the green Chrysler 200.

Kyle Mountsier: 9:04

Right. That dude, every parts dude that I've ever known is like just content with life. My man drove that thing. 100,000 miles from 2016to now the dealer's like,

Paul Daly: 9:18

we gotta get this off the boil

Kyle Mountsier: 9:19

a new unit,gotta get it off the books.We'll push there when I was telling you, I own it and you're connected to a part students demo.

Paul Daly: 9:29

If for some reason somebody out there can figure this out for us. We will have them on the show. They're coming on this show. Like if that's not a celebrity in the make,especially if it's a parts guy,Kyle, if it's a parts guy, like I'm sending you a gift card because that is just so on the nose. But as you're saying and I'm like yeah, that probably is exactly what happened. Because no one's gone into paid 26 or 24or $20,000 for a Chrysler 200Baby or maybe they just had it like stocked in the parts to put artment I feel like we're going to hang on to this one because we know we're gonna need a transmission. And they're slow so they just kept it. It's like their parts vehicle.

Kyle Mountsier: 10:07

It was it was a they were parting the whole thing out. Yeah, exactly.Exactly.

Paul Daly: 10:11

We have no good transition to the next store.Oh, that's music to my ears and then that one Speaking of music to our ears and stuff, yeah.

Kyle Mountsier: 10:22

So recent research reveals that in store music can actually boost weekday sales by over 10% seemed to uplift weary work workweek shoppers. However, the same melody might not have a similar impact on the weekend crowd and actually could even be distracting. Okay, The study analyzed over 150,000 shopping trips in a Swedish Okay, so we'll take a lot of shopping trips, but that's a lot of shopping trips in Sweden, I will say that that's the whole population, yes, in Stockholm and found that shoppers from Monday to Thursday tend to be mentally tired, and pleasant music actually enhances their mood making purchasing decisions more instinctive. However, on Fridays, shoppers are happier,less hurried, making them less affected by like a subconscious marketing through in store music. So we've seen We've seen studies like this in the past,where music actually changes the mood or the shopping behavior of, of people based on like the type of music or the volume that it's played at. So like research has shown over and over, that paying attention to the music and the vibes, and how it interacts with your guests can definitely impact shopping behavior. I've seen this firsthand, Paul, like, just in because we do a lot of video shoots and we've been in marketing for a long time, like you watch kind of like the mood in a showroom. When music is on to all the sudden the the producers like word music off and awkward and it looks around like am I talking to the

Paul Daly: 11:58

right working? Or what? Right? Is this the museum?I think the people who understand playlists, I think of DJs. I'm thinking of the book we've been going through we're going to actually start Minnesota book club legit, where we go through this book unreasonable hospitality. We're the, you know, the restaurant tour that had the best restaurant in the world, we'll get Dara talked about how the Music transitions throughout the evening, because people are in different modes throughout the experience and how it's subconsciously register. So without a doubt, this makes all the sense in the world. I'm trying to think of if I've ever been in a dealership that's been that intentional about their playlist. No, but I think about when there's when there's chaos,right? If you add like upbeat positive music to the chaos, it actually seems more chaotic.

Kyle Mountsier: 12:48

Well, that's the thing like on a Saturday if you think about just the energy and how many people are around like thinking about just oh my goodness, it's like full on rock jam. You're mentally stimulated like to a high level already.What is happening all around me,I can't even concentrate. I can't even focus. So thinking about that, like it

Paul Daly: 13:08

would be your choice for Saturday. It's almost like classical music. Yeah, like

Kyle Mountsier: 13:13

I think that might like pull it down a little bit too much. But like, some nice like, Americana jazz. Oh, I like this, like Nashville coming through here. Yeah, like just Yep. Like smooth, easy listening Americana type. You know,

Paul Daly: 13:29

I actually we just need to send out coutry to your store. And our coutry could just blow the horn in the corner a little bit. Just have people in the motor. But hey, I mean, it's a great opportunity, I think for dealers who are retailers to just get a little more intentional about what's playing on your store right now. If you're in your store right now just be like, what's playing?Look at people's faces feel the attitude and then when it gets you know, a different in a different state if it gets busier if it gets slower. I mean, most dealers I know are pretty good at controlling the music from their phone. Some are really bad at it. Like I can tell the story about Patrick we're in the store in the morning shooting the next more than guards episode with Patrick and we're like he's like oh you need the music off no problem like Patrick's like I'm gonna get this done kind of guy and he's on his phone for like, you know a minute or two and then the music goes off but also what goes off everything all the TVs all of this he just hit the full like Blade kill switch like we like powered down the Deathstar.And his IT guy came in and it was still like it was three hours later. He's like, Yeah,we're almost there. We're almost there's like this he always do stuff this he's like job security. Yeah, so Patrick

Kyle Mountsier: 14:35

is like we're gonna shut this thing. I think I think that this is like I think at minimum, you could do like an early morning, a mid morning and early afternoon and a late afternoon kind of playlist and here's the other part you know what that would help you employ your poor employees that hear the same 83 songs over and over and over? They might actually have some energized feel

Paul Daly: 14:57

Oh, right. You get them gonna feel pride or Sega obviously just lands the winner yacht rock. When we're saying like, what did we play? I could just hit. Well, I don't got to.Yes. That's the one. Alright,we're gonna keep saying like that's enough for us for today.You have worked Do you have a playlist to curate you have an asotu con ticket to buy and you have people to serve. I mean,that's a great list for today.Playlist asotu con ticket. Go love some people. We'll see you tomorrow.

‍