Texas Hearts Tesla, Loan To Value On The Rise, Service Tech Celebration

Paul Daly: 0:26Hey welcome to the longest day of the year also known as the first day of summer also known as the day Kyle's back in his seat and we're gonna talk about a few motive things as well

‍Unknown: 0:43

they stopped they better watch out

Paul Daly: 0:46

has been like charging the batteries for the last four to I don't know how many days kind of charging the batteries but you're like kind of tied into the batteries

Kyle Mountsier: 0:54

except for when you got when you got full throttle family days every day with like extended family and wedding should go into and last night he extended

Paul Daly: 1:02

families changed the dynamic

Unknown: 1:04

that's what it was really good. I had a great weekend. This is what's cool.And I wrote up the lead in in the daily email is if you I don't care what business you're in what side of the business there's a point that comes that when you get a team together when you're when your crew like your team is just firing and lacking and working together and it's just like a nice little jazz set right? It doesn't if you step out for a minute like the jazz like the bass player just picks up where the drums left off. That's a great analogy and that's just that like this weekend like I had no fears no is like Alright team is so do community The Whole Nine Yards everybody's rockin and rollin things are moving this summer is just gonna be unbelievable with more than cars and a soda con and the whole nine yards like kicking off summer today is a big deal y'all and it is a big

Paul Daly: 2:03

big deal and special thanks to Jordan Cox for filling in for Kyle it's the big shoes to fill but he did a great job Monday Tuesday. Yeah,

Unknown: 2:11

he did. He did a great job he had his he had his his little pre made shirt on so we got we got it we were getting him a little regular shirt shipped. Yeah, I said

Paul Daly: 2:21

this is like shirt was pretty cool.

Unknown: 2:24

Oh, hey, hey, what to say howdy to all of our friends at n i ADA out at the Wynn resort in Las Vegas man i We've I've never been off the you've ever been have you? I know we got to put on the calendar next year. I know it's just those they know how to throw down man they sure you man they are live has been on like the retail side but the independent dealers they don't mess around. That's the difference. Did you see I think I saw some pictures with like Sugar Ray Sugar Ray Leonard.

Paul Daly: 2:54

I saw they gotta have sugar. I gotta have a Sugar Ray.Oh, man. Alright, let's get in some news because we have some fun things and kind of like included like six stories within three today because there's a lot going on around some topics.But first step Tesla's racking up the charging winds lately as more automakers adopt Tesla,their standard charging standard as their main standard. And now Texas is the first state to mandate that state backed charging stations, US Tesla's tech rivian also has adopted test Tesla standard yesterday and Hyundai is considering adopting the Tesla standard after Ford and GM announced that so there's a lot going on at a very fast pace. It's all cool.You have the money trigger. Why is that Texas behind Tesla hit that kid that

Unknown: 3:43

that's the answer why?Because it got a bagel place where they're building things right there, then your Tesla happy for it really

Paul Daly: 3:53

is a symbiotic thing for Texas, Texas. But, you know,Tesla Standard has to be included now as well as the CCS universal charging standard. If these new charging stations in Tesla want any of Texas's money,which they all do, you know,here's a quote from the Texas Department of Transportation,they said that decision by Ford GM and now rivian to adopt the NAC S, which is the Tesla's Standard Change requirements for phase one of their rollout. So like they had a phase one, it was all locked and loaded. And then they said hold up once all these other automakers are adopting the standard. Now, if you're going to be a part of phase one, you have to also include the Tesla standard. A federal dollars don't require the Tesla standard currently,they're just that that universal CCS charger. However, there are a lot of states starting to stack up giving people bonus money if they introduced the Tesla standard. Like we mentioned, Hyundai said they are going to seriously consider adopting the Tesla standard as well as its depressingly well.Oh, well. They have point they had to play in their play and measured right but I mean, they say we want to make sure it's in the best interest of consumers,there's no way it can't be if that's the standard, or

Unknown: 5:03

at this point, it's just like dominoes, right? It's like, it's like, Alright, here's USB, you know, and it's just,there it goes. That's basically what it is. It's like, alright,this is, this is how we charge this is like that. And there had to be this had to happen. I think everybody, including the federal government was trying not to hook, you know, on the coattails of Tesla, but they're just too big as far as market share is concerned at this point. And their charging network is too expensive for people not to lean in on that charging standard. It every other. I mean, you just look at like gas pumps, right? gas pumps have a standard now they weren't created? Well, I don't know.Actually, we should look at the history of a gas pump. It might have been created originally by an automaker, because you had just have to put it like you have tried to

Paul Daly: 5:50

think like, what else would you have to? Like? I mean,they're, they were, I don't know what's interesting, great question,

Unknown: 5:58

right? Like, what other charging networks are not similar, right? I mean, you got the like, 50 dongle thing for all of the 18 different phone types are charging things, which that could be simplified as well, right? We tried to do a USB and Micro.

Paul Daly: 6:12

They kept getting smaller, more efficient, faster.And so Exactly. So that's a lot harder. This is straight power,this straight power.

Unknown: 6:19

Yeah. So I think that it's gonna have to happen. And I'm telling you what Tesla, that stock price is like, it's just soaring every day, every single one of these announcements is another like there's another 2%.There's another 5% There's another bump up. So kudos to that Tesla for being out front.And everybody just jumping on board. Here's Can I Can I just like, can I ask a question of everyone, please, on whoever is responsible for naming the North American charging standard? Can someone figure out a word that starts with S to go on the front of this? So we can call this the snacks standard? Can someone please do that?

Paul Daly: 6:58

Ah, yeah, there's just one humble request,

Unknown: 7:01

a humble request from a guy doing a podcast. Okay, just request.

Paul Daly: 7:07

Like you just mentioned, Tesla stock is up 50%In the last 30 days, and we've said this a lot on the show before, like, Tesla is not a car company. They're an energy company. And this is kind of just like another step in the game of that. So excited to see some unification around all this though. It's really good. It's really good. Let me say I'm trying to think of a Segway and I just can't. So as used vehicle values decline in interest rates are high loan to value ratios are significantly on the rise according to a recent study by trans us union, and JD Power that was released yesterday. So basically, use car loan to value ratios have been increasing,averaging 125% in q1 of 2023,compared to 110% in 2022, and104%, two years earlier, so just two years ago, loan to value ratios were pretty close to even now they're at 125%. The analysis suggests that borrowers with more vehicle equity are more likely to protect it by making their payments on time with those while those with fast depreciating vehicles are more likely to become delinquent. And on top of that, subprime borrowers are 25% more likely to go 60 days plus delinquent than their non subprime cohorts. I'm sure this is a big topic of conversation at NACA this week.

Kyle Mountsier: 8:29

It's a massive conversation, because you just look at well, one on independent dealers looking at Buy Here Pay Here is and the amount of people not able to pay their bills. And when you look at people in inequitable situations and their vehicles, they start to have those question marks on whether or not it's worth it anymore.And to see an average LTV ratio of over 120%. I mean, I remember when lenders just literally wouldn't go over 120%. And now we're seeing these high average loan to value ratios. You know,this has been kind of a concern that's happened over the last couple of years. Initially, when vehicle prices soared, we started to see we started to see a lot of equity still in the market. And so you would see high down payments, high equitable trades. But as vehicle prices are decreasing, the outstanding loan to value ratios are higher and higher, because caps were at the top, you know,banks were lending right at the top of their equity position at115 120. Even credit unions up to one 40%. And then as the vehicle the vehicles decrease in value quicker than the typical payment process happens, all of a sudden you have this gap and loan to value ratio, you're gonna start to see it harder for people to trade in harder for people to afford the next loan payment because they're having to, you know, put inequity on top of the next loan and lower down payments because there's less money in savings nationwide. So really, some thing to keep an eye out. You know, I think the consumer price index and the purchasing power in the market, especially for Prime buyers is going to keep us out of like a disaster situation like we had in 2008. Right. But it's still, it's still, it's still something, especially for people that are doing a lot of subprime lending, and managing those portfolios with the banks to pay attention to.

Paul Daly: 10:22

This is one of those situations where I really start to value. A lot of the dealers that we see out there going to bat for their customers, making sure they have a payment they can afford, and doing the extra work upfront, especially with high interest rates, making sure that the customer is set to be successful in the vehicle because nobody wins if a customer fails on their payments, right? I mean, it trickles down and everybody loses.

Kyle Mountsier: 10:45

Yeah, matlacha talks about this all the time,and they have Westar came out with a streamline. And it's a lot it's just about like educating the customer front selecting the right vehicle,making sure that the vehicle matches the payments matches the buyer and the lender, so that you don't ever get a customer into a situation where they have to fall delinquent or they can't make their payments. Because that customer is going to be much more loyal to you over lifetime because they're going to be able to come back and trade that vehicle. So just thinking about the long game in the way that you're giving customers access to the vehicles that you have is a really,really important process right now that every salesperson should be thinking about with every customer. I love that. I love that. Man.

Paul Daly: 11:25

We're not doing good in the second

Unknown: 11:26

Oh no, I just had I have a lot of things to say but nothing to say about switching things.

Paul Daly: 11:31

Speaking of switching things, I don't know. Jordan,Jordan Cox, the last few days literally came into the show,like pre show is like look, I have some segways in mind already like so he was thinking sideways from the beginning. So we're a little rusty. He's like I have one job today. Let's make sure segways go way,

Unknown: 11:53

way taking a page out of a sports arena life the Richmond for the Auto Group.They have three stores in Virginia has starting honoring their auto technicians like legends. They've actually been doing this for a couple years now. But they have personalized banners featuring text names,specialties and accomplishments hung over service base. So VP of bizdev, Kayla Cody, who will be at a soda con this yes, he will.In the technician world, they feel a little bit visible,invisible because we celebrate sales all the time. This definitely showed them we are paying attention to you. Yes,you're important you drive our business. So if you're watching the video, you can see there's a couple of photos up there. Of these. They legit look like massive like

Paul Daly: 12:37

all arena hockey arena, do they do this in soccer?

Unknown: 12:41

No, not so because you're out doing you've got like, you've got the name. And you've got when they became certified their actual signature, whether, you know if they're a senior master tech, or if they're, or if they're just a master tech, it's got like, the awards and accomplishments that they have up there. And it's like, Yo, that's it, I love it.Because you immediately know who's in that Bay, who the technician is you can introduce yourself, if you're on the variable ops or on the on the back of that, you know how side like you get introduced the technicians immediately when you walk in. And it's a sense of pride, like, you know, like you think about that when when, when a ballplayer goes into the locker room, and they got their name slapped up there and their jersey up there, it's that same type of feeling. It's,

Paul Daly: 13:27

it's a bigger field that's, they're used to that,like this is a bigger feeling than another thing. I think it really does help bring the team together even because yeah, you obviously have new people coming in and out and you have lube Tech's coming in and out, right,like higher level Trent Tech's are going to change, you know,less frequently, but to be able to walk in and know like, those are the experienced ones. These are the newer ones. That's what that person like. I don't know,it's like, this is one of those examples where we say it doesn't have to cost a lot of money. Not just has to be thoughtful. And humans respond to thoughtfulness. Funny thing about that, right? It does Oh,there was a there was a quote in unreasonable hospitality. And we talked about it once a reasonable hospitality is a book by Wilga Daraa. We've all been reading it and leaning into it,like legendary restaurant tour entrepreneur, and he said,luxury, it was something about like, because something is luxury. Doesn't mean it has to be expensive. All right. We're gonna find that quote, because we're watching it right now.That yeah,

Unknown: 14:29

I don't want to try it again.

Paul Daly: 14:30

But I'm not No, no,no, we're not.

Unknown: 14:32

Really the idea is like, feeling luxury isn't isn't about how much you pay, but it's about more about the experience,right? Yeah. And this is just like, how's this? How's it any technician? They're gonna go work in another shop and walk in every day and not have a banner over there. Over there. booth over there. You know, that's right. That's just loving people in the love cars, right? That's

Paul Daly: 14:56

what it is. That's what it is. Well, good, because it's summer we have more data Like to love people more than we love cars than any other day this year. So go make good use of it. Do something thoughtful,do something intentional, or whatever you do. Do it with purpose.

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