What Your Car Says About You, Negative Equity Spike, Sam’s Club No-Checkout

Paul J Daly  0:00  
Okay. Good morning. We were just told this is episode 874 of this show. It's Monday, October 21 we're talking about what your car says about you, a spike in negative equity and no checkout lines at one particular non retail store. We'll tell you about it outlines.

Kyle Mountsier  0:19  
You don't even need fashion. What

Paul J Daly  0:22  
else have you done 874 times professionally? Besides, like,

Kyle Mountsier  0:27  
professionally,

Paul J Daly  0:28  
yeah, besides, like,

Kyle Mountsier  0:29  
check sold cars 874

Paul J Daly  0:33  
Okay, that's good, that's good, that's

Kyle Mountsier  0:35  
pretty strong. Well, I guess, okay, okay, I personally didn't sell 874 cars because I only sold cars for three years.

Paul J Daly  0:44  
But you caught you sold their cause to be sold, or helped to be sold, right? Yeah.

Kyle Mountsier  0:48  
So, man, 874 times, not, I don't, I don't know of I mean, media standpoint, it's

Paul J Daly  0:54  
tough because you can't like apples to apples. I'm thinking about, like, my other like, like, Okay, I

Kyle Mountsier  0:59  
fixed more than you,

Paul J Daly  1:01  
right? Yeah, right, but that's like, just part of a repetitive action. I don't know. I'm just trying to give us credit for credit where credit's due. Paul Nathan has hit. Nathan has been a big part of producing 874 episodes having it look this good, and we'll introduce him in a minute. But we got a new member of the team in the production side. Well, was gonna be part of the student. We just bring him in to the show. He's even on right now. He's throwing in the show, just how it works. And before you know it, there you are. We should, we should have thought about that a

Kyle Mountsier  1:33  
little bit. We should have thought about that video. Sneaky with it. I

Paul J Daly  1:36  
know, hey, we have, we have some good stuff going on this week. One is a webinar on Wednesday. So october 23 2pm Eastern, we're going to be with our friend Amal from full throttle. Ai. Get this how to use free TV to answer the question, what is free free TV?

Kyle Mountsier  1:56  
Tell me what it is, Paul and

Paul J Daly  1:58  
kind of like it sounds. And so you can go to asotu.com just That's right there at the top of the fold. Sign up for the webinar. Be there with us, live if you can, because it's fun. You can ask questions, and we always have a good time, or you'll get the recording. And this isn't some boring, 50 minute webinar. This is 2530 minutes. We're certainly going to keep it lively, very conversational. And one of the cool things about this one is, I don't even know what we're like. I don't know about the topic, so

Kyle Mountsier  2:23  
we're just going to be curious, along with everybody. Wait a second before we move on. You have to, if you're watching this, Nathan, you got to throw the graphic up again. I'm pretty confident that this is actually an AI generated image of, like, someone being held down by Google and like, Man strength thing out of it. But it's not really Google's logo because it was AI. It's really, really clever and interesting. Yeah, that Google's

Paul J Daly  2:49  
logo. Yeah, realize that that's great. It's worth it just for the AI logo or the AI integration the logo. Let's get into it. Let's get into it. So late morning, this is a fun one to start the week. America's love affair with cars is undeniable, shaping not just the roads, but the culture, economy and even the identity of the people who drive the cars. Business Insider did a deep dive into the obsession by analyzing 1.7 million listing on car gurus to reveal some surprising trends, trends. They have this crazy interactive map on there. It's great. You can type in your car. Look at this. Look at this. It if you're looking at the screen, it basically shows every state as a circle with a car logo in it. And like, the West Coast is Toyota, Midwest is all Ford, then it shifts to Chevy land. And then the East Coast is just a smattering of brands. It's pretty amazing.

Kyle Mountsier  3:43  
So you know, right where Subaru is? Yeah,

Paul J Daly  3:49  
it's all a but he drives a Tesla, which which bucks some other trends. You can also type in your car, and it'll tell you where your car is the most popular, which is so much fun. So basically, America has the most cars per capita in the world, and it defines, obviously, a lot of the culture data, showing choices reflect identity, financial status, even political leanings. For instance, the top five most democratic vehicles are Toyota, Prius, Audi, a four, Kia, Ev, six, accurate, TL, and the Jeep commander. Meanwhile, the top five most Republican vehicles are the Jeep Wrangler, Jeep Gladiator, Chevy Silverado, 1500 the f1 50 and the Honda Odyssey house. They also cover

Kyle Mountsier  4:32  
and anything about that, except for just read the list again, you'll get it right. You

Paul J Daly  4:38  
think of all the people you know, you're like, Okay, that makes the real question is, who be bought that one jeep? EV, right? Because Jeeps on both sides. So basically, they want to know the answer to that,

Kyle Mountsier  4:52  
like someone, some dealer, needs to come out and be like, we sold it. Yeah,

Paul J Daly  4:55  
yeah. Last week we cover story of EV registrations, and in q4 it was. Like the top ones. It's like, who's on the bottom? And it was Jeep with ONE ONE. And we're like, who didn't you know? Let us know. So basically, one other fun fact about this is that also shows that car color has changed over the years, with now over 80% of vehicles being black, white or gray.

Kyle Mountsier  5:17  
Wow, not that that's staggering. It's kind of unfortunate. But like, if you drive out on the road, you can see it Glenn

Paul J Daly  5:25  
Lundy and his new, his new 800% elite auto sales. He said, we're gonna, we're gonna, we're just going to carry black, white or silver cars. I was like, what? That's crazy, yeah. And then I started paying attention, like, on the highway, I was like, oh. And I'm like, oh, there's a blue one. Yeah, well, there's a red one. It's

Kyle Mountsier  5:42  
extremely smart, because 80% of car buyers that's what they want. So why not just get what people want? Yeah. So look,

Paul J Daly  5:50  
get go to the link in the show notes. Click through the interactive map. Find out where your car is most popular. I type, I drive a Land Cruiser. So it was like somewhere in like, the Midwest. That makes sense, I guess. So I was like, where is it really the most popular, like, I guess, but it's funny, because it's not like Toyota country at all out there. I think everywhere is kind of really go to country, yeah. Well, well, I

Kyle Mountsier  6:15  
guess if you look it's like a Chevy. I mean, there's a bunch of Chevy all of that, like, farmland and, like, you know, out in the middle of the country, like, Iraq, yeah, something like that.

Paul J Daly  6:26  
I know I was like, if we had more time, maybe we'll, like, do a little social post and, like, see what everybody in the soda drives. And like, Oh, that would be fun. A little map. I like, yeah, it is speaking. I was gonna say, have a little map, but it's not, I don't know. We're just gonna move speaking of data, I guess next story, a recent analysis by Edmonds reveals a sharp increase in negative equity among us car buyers, with more people finding themselves upside down in their car loans than ever before. In q3 24.2% of all vehicle trade ins are in negative negative equity Wow, up from 18.5% a year earlier, the average owed man, the average owed amount, is 6458 up from 5808 22% of consumers with negative equity are underwater by more than $10,000 almost seven and a half percent are underwater $15,000 and that the problem is kind of like spanning all vehicle types, SUVs, compact SUVs, large trucks are all like, the bigger the vehicle, the bigger the negative equity. And that makes sense. Here's a quote from Ivan Drury, their director of Edmunds, Director of insights. He said, it's easy to assume that only specific because consumers trading in higher ticket luxury vehicles are the ones underwater on their car loans. But the reality is, this is a problem right across the board.

Kyle Mountsier  7:48  
Well, I will not forget when we got on talking about ASOTU Con this year with Damon Lester, and he just called this out. Said, I'm starting to see the early warning signs of this in the showroom, and especially, I'm sure there are different parts of the country, different subsets of the economy, of socioeconomic status, that are dealing with this in a lot different way, depending on what the interest rates were on those cars three to five years ago when these were purchased. It's it's not it's not like we haven't seen this coming. It's just that we have to deal with it right now, when 25% of anyone coming in to trade in their vehicle are dealing with negative equity, understanding what vehicles have, the rebates, what vehicles have, have the appropriate incentives to be able to trade these people out. Because it's not like these people want to stay in their car forever, right? We're still Americans, we still want to trade our cars every 3.1 years, and we just have to deal with this and with tightening bank lending, right loan to value ratios, not being as as extended as they were. Just, you know, this is like, I think we've been talking about this a lot. Being aware of the consumers position at the initiation of the car sale is extremely important, so that we're not landing people on the wrong cars, because this is something that consumers are just dealing with every day. I've

Paul J Daly  9:09  
seen a couple of dealers deploying really nice strategies, I thought, a lot of empathy, a lot of like practical outpouring. When someone comes in with a negative equity situation and and they just find out about it for the first time, because, like, we think it makes clear sense. A lot of people don't realize it makes, you know what I mean, and don't check until they really get to the point of like, oh, let's trade out, because they've always been trading out or whatever. And they get to this point and they realize values have dropped and all this, um, dealers really coaching people through a plan to keep their vehicle for like, Hey, if you keep your vehicle till at this point, and giving them a marker in the sand, like hey, even if you need to keep it for another 13 months, at which point, you'll be able to get out of it even. Or, we think you'll be able to and then giving them some type of maintenance incentive or discount to kind of keep them in loops. Just, there's some, yeah, pretty creative strategies there. And I think that. That you know people, if they get disappointed, and you're the point of disappointment because you're the one that had delivered the news, right? You didn't do anything to deserve that, I guess. But giving them hope for a future point, saying here's a plan to get you to the point you want to be, and then being in the middle of the solution is a pretty good plan. Yeah.

Kyle Mountsier  10:17  
I also think that, especially for dealers that are actually the originating sale dealer on some of the second negative equity we've always dealt with this, but as a point of education, if, if they were, if they purchased the vehicle from you, and are now in a negative equity situation in that three, four year timeline, when they're wanting to trade in a lot of times, that can become a pretty contentious conversation. And knowing that on the front end and understanding how to empathetically approach that customer give them an education on exactly what's happening in the market with vehicles then and now, can kind of assuage some of those fears and concerns or those anxieties from the customer right up front.

Paul J Daly  10:57  
That's true. Speaking of assuaging anxieties at the customer, right? Oh

Unknown Speaker  11:01  
stop segway,

Paul J Daly  11:05  
aka checkout lines at warehouse clubs.

Kyle Mountsier  11:07  
Sam's Club is introducing a groundbreaking all digital shopping experience with its newest store in Grapevine, Texas, customers will scan and pay using their smartphones, eliminating checkout lines and highlighting the company's commitment to digital innovation, the new store features scan and go technology, allowing customers to scan items as they shop online. Only items from furniture to jewelry were displayed for easy purchasing via QR codes actually in the store. The store's e commerce area is four times larger, with 6000 square feet dedicated to curbside pickup and home delivery, featuring cooling plates for frozen and chilled items to streamline order fulfillment, even a pizza robot and automated food delivery system at a futuristic convenience Sam's Club CEO Chris Nicholas said it's kind of the physical manifestation of a journey we're trying to go on as a company. You

Paul J Daly  12:00  
know, I love the idea of not having to get in a checkout line at a warehouse club. I was a Sam's Club member a long time ago, but now I think they all closed in the Syracuse area. But now Costco is the way we go, and just warehouse checkout is the worst, really just I think it is because, like, not only like every nothing goes in a bag. It's just like, it's just a chaotic all

Kyle Mountsier  12:24  
out to scan it and then putting it all back in. Like, technically, you already made Yes, it

Paul J Daly  12:29  
was Ben stock. Brian Ben stock, who said he's like, let's think of the most inefficient process that we all engage he's like, you go, you pick up the item, you put it in the cart, and then you pick up the item again. You take it out of the cart, so you can pick it up and put it back in the cart. So you can go to your car and take it car and take it up and then take it out of the cart again. And like, he said that, and when he said, I was like, Oh my gosh. Like, every processor engineer is like, this is the worst thing ever. We got to handle that item seven times before even out of the store. Isn't that wild? So thinking about if it's on your phone and you just scan it, put it in your cart, the next time you touch it is when you take it out of your car to put it in your

Kyle Mountsier  13:01  
car. You know, you guys, I like, you don't have Kroger up there. Do you know, see, they have the scan and go, but it's like, it's basically the same, you know, trigger thing that they use as, oh, yeah, yeah. So it's, it's similar, but it doesn't require a phone, but it's broken half the time. So maybe the phone thing will work a little bit more for Sam's Club. Yeah, yeah. I like it. I mean, I, the beauty of it, for me is, like, Yeah, could you just go online and order all those things absolutely, but especially in a Sam's Club, like, the art of discovery or, like, that's why that thing is way bigger than I thought it was gonna be. Let me go for this slightly smaller one is actually it's, there's a there's a thing that you have to do, being in person. And so that ability to, kind of, like, cross between the online, offline shopping experiences is, is really cool. Yeah, they

Paul J Daly  13:48  
got it dialed in. Yeah, something about that that

Kyle Mountsier  13:51  
I think you could do in the dealership showroom. You know, online, offline experience, you

Paul J Daly  13:56  
might be on to something Kyle, you just might be on to something that's where you get all the innovative ideas on a Monday morning. We hope you have an amazing week. We hope we set you up right. Go care about some people. Go sell some cars. We'll see here tomorrow. You

Transcribed by https://otter.ai

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