Unveil Auto Industry Secrets: Best Time to Buy a Car?

Unveil Auto Industry Secrets: Best Time to Buy a Car?

if you were to pull most
Americans um and they have 83% said they
didn’t feel as if they could afford to
buy a new car
83% okay that’s a huge number who says I
can’t afford to I can’t afford to play
in this sandbox
[Music]
anymore hi and welcome to Wealthy on I’m
James Connor and today my guest is Ray
shfa Ray and his son Zack run a YouTube
channel called car Edge and Ray is going
to give us the straight Goods on the US
Auto industry and whether or not now is
a good time to buy a
[Music]
car Ray thank you very much for joining
us today how are things in ventor City
New Jersey well it’s warm today and as I
like to say this is probably the
windiest place on Earth um but it’s
beautiful here at the Jersey sure if
you’ve ever been to Atlantic City then
you’ve almost been to vendor well I’m
going to have to check it out sometime
you you’re not really missing much but I
kind of like it here Ray I am looking
forward to this discussion we’ve had a
lot of our viewers ask to have an auto
expert on so you’re that guy and
typically we discuss the economy so I
want to get discuss what’s happening
within the Auto industry and across the
US and if there’s any readr to the
economy but before we do that why don’t
you just tell our viewers who you are
and what your background is well uh as
James said my name is Ray shf I spent uh
43 years in the retail automobile
business uh managing dealerships running
dealerships uh even working starting as
a Salesman and working my way up um four
and a half years ago my son and I
started a business called car Edge where
we figured we could help people navigate
the car buying experience using my
inside information to well um provide
people with the same information that
dealerships have and that started four
and a half years ago and has grown
dramatically uh we started on YouTube
and we also have a website called car
edge.com with the free
guides all kinds of tools Buy sell uh
tools anything that you need for for the
automotive business we’ve got it to help
you uh figure out how to buy your next
car and why don’t you just tell us what
you do on your YouTube channel and how
often you publish or release uh on well
we have two main channels on YouTube we
have the car Edge Channel where
literally we we uh release three videos
a week uh and that is uh I’m trying to
think the days that we actually do it I
believe it’s Wednesday Saturday and
Sunday and those videos typically are
anywhere from 8 minutes to 15 minutes
long where we delve into a particular
topic that uh that we can get fairly
deep into to really explain to people
what’s going on and then Monday through
Friday on the Ray and Zach Channel on
YouTube we do our daily news that you
can use show where we delve into the
news of the day to see what’s going on
in the automobile business and that
those shows normally run anywhere from
30 to 45 minutes man so those two
channels keep you extremely busy
uh yeah and I forgot to mention my son
makes me work on Saturday night because
we do a Saturday Night Live show on on
the car Edge Channel as well at 7
o’clock and that that normally runs from
700 pm to 800 PM every Saturday he he’s
just a slave driver he didn’t like the
fact that I retire after 43 years and
I’m curious how many people show up to
that live show on Saturday
night uh well typically those those
shows end up with a viewership of
somewhere around
150,000 um it’s it’s pretty crazy uh the
between the two channels the car Edge
Channel and the Ray and Zach Channel we
reach uh somewhere between six to 7
million views a month so Ray let’s get
into it I have a real LoveHate
relationship with dealerships I love
going into the dealership and checking
out the new cars but I hate the whole
negotiating process because every time I
buy a new car I feel like I’m getting
screwed over and there’s always like 10
or 20 additional charges that I can
never make sense of on the invoice and
then they’re always pitching you on new
services like tire insurance why don’t
you just take us through this whole
process and how can I better prepare
myself so I’m not getting screwed over
just so you know I have that same
LoveHate relationship with it um
it the way it’s designed is
customers are kind of kept in the dark
as to everything that’s involved in the
sale and as I like to say car dealership
Personnel are some of the most creative
people on the planet and what I mean by
that is they can create these um visions
of you being able to come in and buy
something at a particular price until
you actually get there and then that’s
not really the price and that’s normally
where the friction
begins that’s typically where the
customer goes damn I hate dealing with
these people these these are not like
nice human beings and and it’s only
because the car business has has made it
this way um dealership Personnel are
trained
to turn everybody into what’s known as a
payment buyer no they don’t want you to
know what you’re actually paying for the
car they want you to know and
concentrate on what your monthly payment
is and the the reason for that is if all
you’re concentrating on is the monthly
payment then they can manipulate the
price they can manipulate the amount of
time that you’re paying back that loan
um
so they can make more money when you’re
just looking at your monthly payment and
not what what we like to say the out
Theo price of the vehicle
what’s the selling price of the vehicle
including all fees and that’s the part
as a customer you really want to
concentrate on not the payment and how
can I better prepare myself though when
I go into a dealership how can I know
what the real prices or maybe how much
the margins is how much room do I have
to negotiate you you have to figure on
most Vehicles there’s somewhere between
5 and 10% of margin built into the
selling price plus there’s some what’s
known in the industry is under thee line
money and what I mean by that is you
know there’s an invoice price that the
dealer
pays and then there’s money that they
get from that invoice price for instance
there’s something called holdback and
holdback is usually one and a half to 2%
of the base MSRP that the dealer
collects after they’ve sold the vehicle
and then there’s advertising assistance
that the manufacturer pays the dealer
and that can run5 $6 $700 a car and
dealers don’t pay cash for their
vehicles they finance them just like
customers do and that’s called floor
planning your inventory well the
manufacturers give dealers floor plan
assistance that’s more money that’s
under the line and and floor plan
assistance can be another five six 7
$800 so there could be
$2,000 of money that dealerships are
getting that that are below the the
invoice amount that they actually paid
so what you just always want to
concentrate on is the selling price and
if you know there’s usually 5 to 10% if
the vehicle has an MS MSRP of
$50,000 well there’s probably close to
$5,000 worth of margin so work on
negotiating that $5,000 down to
something that’s more amendable to both
parties and then I guess the other
aspect is like you brought up a good
point about dealerships have to finance
their inventory so I guess they’re
always trying to move that inventory
right it’s no different than any other
business because the longer you you’re
sitting on that inventory the more it’s
costing you and maybe you can take us
through that how that process works how
many cars a typical dealership would
have and and maybe how many days worth
of of cars or inventory they would have
dealerships like to turn their inventory
about every 60 to 75 days um floor plan
assistance can cover the cost of
financing those Vehicles anywhere from
30 to 60 days depending on the
manufacturer so the quicker you turn it
the less expense there is in having that
vehicle sit there during the pandemic
when there was a shortage of
cars the floor plan assistance from the
manufacturer actually became a profit
Center for dealers because everybody was
selling their cars um well before they
had to make any interest payments on
them so whatever the manufacturer gave
him was a profit we have seen today
where what in many months might have
been a 15 or $20,000 profit to the
dealerships with inventory building back
up again that has gone from a 15 to
$220,000 profit Center to a
$100,000 a month or more expense
so if you go the best way to buy a car
the cheapest possible way is to pick out
the model you want go to the dealership
and say I’m interest interested in X
what’s the oldest one of those that you
have in stock because the older that
vehicle is in stock the more days it’s
spent on the lot the greater the
motivation is for the sales manager to
make that cargo away interesting okay so
another area that always frustrates the
hell out of me when I go to the
dealership is after sales service okay I
take it in you know whatever let’s just
say 1,000 1,000 miles and I got to take
it in and get it serviced and every time
I go in there they’re charging me
another thousand bucks it’s just and I’m
I’ve always been told this is another
big profit Center is this true yes uh
the service the ports and service
departments are really the largest
profit Center in the dealership there’s
there’s a term in the business called
service absorption and what service
absorption is is they want the service
department to produce enough profit that
it’ll cover a minimum of 70% of the
dealership’s total
expenses so that sales only has to cover
30% good stores that have real strong
service departments that service
absorption could be 80 90 in some cases
in excess of 100% so they produce enough
profit to cover every expense in the
store and
so whatever they sell new carwise or
used carwise is just pure profit so yes
uh service department is is a very
important aspect of the Auto industry
service advisors are trained just like
salespeople are to sell you items so
that uh they can produce more profit for
the service department and just between
you and me James that’s how many of the
service advisors get paid they they get
a commission they they get a piece of
what they produce every month
wow they didn’t know that so that’s why
they’re always trying to upsell you oh
of course yes I mean there you know it’s
not just salespeople that are selling
the cars it’s the service advisors or
the service
salese and Ray one of the things I’m
always um debating is whether or not I
should buy a car or lease a car how do I
determine what’s better for me well
somebody once said who who was much
smarter than me a guy by the name of
Getty had an oil company small oil
company of some kind he said you you buy
things that appreciate
value and you lease things that
depreciate in value um I can assure you
that well 99.9% of all the cars out
there depreciating value so I don’t know
what the point of trying to own a
depreciating asset is uh
but if you ask me I lease my
cars I’ve I don’t buy them because I I
look at them as a depreciating asset uh
but it depends on on the person and how
long you’re anticipating keeping the car
how many miles you’re planning on
driving the car um leasing doesn’t
necessarily make sense for all
people my wife God bless her when she
was alive she hated the fact that I
leased cars she would look at me she
goes but at the end of three years we we
own nothing yeah but we we’ve used this
car for three years and now we’re going
to use another brand new car for the
next three years but we we don’t have
anything to show for it other than the
use of the
vehicle so it depends what your comfort
level would be with leasing something as
opposed to owning it now realizing that
leasing it typically you can lease a
more expensive car for a lower payment
than you can financing that car it it
just depends on your comfort level with
the lease so that’s a good overview of
how the Auto industry works and how
dealerships make their money why don’t
we tie this all into the economy and
maybe you can just provide us with an
overview of what’s happening in the Auto
industry in
2024 and just as a reminder the the US
economy is growing very strong 3 to 4%
annualized the jobless rate is very low
it’s been below 4% now for 25
consecutive quarter so we got a very
strong
economy what’s happening within the auto
Auto industry are we seeing strong
sales well yes and no the the sales
numbers that get reported seem to seem
to indicate growth but when you dig a
little deeper into the numbers you
notice that the sales that have really
increased is the percentage of sales
that are Fleet Sales to rental car
companies to governmental fleets um to
large Fleet
buyers retail side of things has has
slowed or even stagnated to a certain
degree and there’s two things in my
opinion that that contribute to that um
affordability
ility if you were to if you were to pull
most
Americans um and they have 83% said they
didn’t feel as if they could afford to
buy a new car
83% okay that’s a huge number who says I
can’t afford to I can’t afford to play
in this sandbox anymore H and and that’s
because
manufacturers during covid with chip
shortages and everything else only
wanted to produce high-profit margin
vehicles high-priced vehicles and when
interest rates were next to nothing it
it made it easier for people to be able
to buy those now with inflation and
interest rates as high as they are
trying to keep a an affordable monthly
payment has become harder and harder for
most people so even though sales are up
there’s fewer people that are actually
in the market who feel as if they can
afford to be in the market here’s an
interesting stat at least in my
mind
17.3% of all people in the United States
who financed the car last
quarter had a payment of $1,000 or more
a monthly payment of $1,000 or more I
make a pretty decent living um I don’t
have a lot of expense but I sure as hell
couldn’t afford $1,000 a month for a car
payment and then when you throw on fuel
maintenance
Insurance exactly um you know insurance
has gone up about 25 30% gas hasn’t is
is going up again uh you know everywhere
you look it’s more and more expensive to
maintain your your vehicle and
depreciation of the vehicle uh so you
know I I just if if somebody has a carp
payment of $1,000 a
month and say they spend $200 a month in
gasoline now they’re up to $1,200 a
month and insurance is another $200 a
month and now you’re up to $1,400 a
month and then maintenance maybe that’s
$100 you’re at $1,500 a
month how much money do you have to make
to be able to afford to to spend $1,500
a month just for transportation
I mean that that to me seems out of
whack Ray when I’m curious interest
rates started going up in March of 2022
when did you notice this slowdown in
retail sales I was going to say probably
close to two years ago you could you
could see it happening in real time you
know every
month most manufacturers report their
sales and you could you could look and
and the headlines and and Automotive
news which is the major Automotive uh
publication you know sales up are up
this but then when you dig into the
article and you’d see that that for
instance in I think it was February 44%
of Nissan’s sales in the United States
were to Fleet
customers when you start seeing the the
percentage of sales that are Fleet
Sales you could start to extrapolate
that and and I know Zach and I talked
about this all the time that I I dubbed
it we we have an affordability issue
most people feel like they can’t afford
to participate
and I I just kept sensing as inventories
kept growing and interest rates kept
going up that sales were really somewhat
stagnant as compared to where you
thought they might have gone if interest
rates were still at 2 three 4% you know
the average new car interest rate in the
United States last month was probably
around
9% about 14% on pre-owned cars now
that’s not saying you can’t find
interest rates lower than that when
manufacturers offer specials but if you
don’t qualify for those specials your
monthly payment just we have done videos
about
how how much more the payment becomes
when the interest rate’s 9% compared to
4 and a half% or
4% the the payment might go up $150 $160
a month higher when you’re at that
higher interest rate and the other thing
that we’ve noticed is that people are
extending the the length of time that
they’re willing to finance it for when I
started
a long a long loan was 36 months the
average loan at that time was 24 months
you know if you wanted to really take
some extra time 36 months then it went
to 48 60 7 people financed for 84 and 96
months that’s that’s crazy um there
was we just did a a story the other day
about somebody that that got a a kid
[Music]
ev9 and their payment is
$1800 a
month okay and and the total that
they’re paying back in interest and
everything else over the life of the
loan that vehicle it’s a Kia mind you
turned out if they make every payment
it’ll cost them over
$152,000 for a Kia um so when you see
things like that you realize that that
there’s too many people that are being
priced out of the market there needs to
be lower priced entrylevel vehicles and
entry level in my mind is 20 to
$30,000 last
month Chevrolet the Chevrolet Tracks
which is a $25,000 and Below price point
vehicle actually outsold
all Cadillac so they sold more Chevy
traes last month than Cadillac sold
Cadillacs that that that it just
indicates that there’s a huge market for
inexpensive entrylevel
Vehicles so uh few things I want to ask
you here so first of all your point
about the Fleet
Sales Nissan 44% of their sales were to
fleets I guess that’s a oneoff is that
your point that’s a oneoff sale well it
it’s they couldn’t find retail buyers
they hell they they’re begging their
dealers to take inventory and when the
dealers won’t take the
inventory the manufactur has to figure
out ways to move it and it’s if they
can’t move it to their dealer body then
they then they go and approach their
Fleet customers and they’ll cut special
deals for their Fleet customers to take
cars so with this Slowdown that you’re
seeing with retail sales what’s it doing
to pricing on both new and used cars and
maybe you can also tell us about what’s
happened the inventory levels well
inventory levels have grown dramatically
um two years ago there were about
900,000 new
vehicles either on the ground or in
transit dealerships that were available
on a monthly basis preco that number was
3.4 to4 million Vehicles every month
today that those inventory levels have
built back up to about 2.8
million so you can see inventory growing
you can see dealers costs associated
with that inventory growing and and
we’ve seen sales
stagnate um what we’re also noticing is
and we just talked about this
yesterday the average transaction prices
have begun to go down two years ago the
average transaction price for a new
vehicle was was just under
$50,000 today it’s just over
$45,000 so they’ve gone down almost five
grand in the past two years excuse me I
think it was just over
$444,000 uh now the average transaction
price has gone down because a the
dealers have become more motivated to
lower the price of the vehicle they
don’t want it sitting on their lot the
manufacturers have increased their
incentive spend to get people to buy
vehicles prior to
covid uh about 11% of the cost of the
vehicle the transaction price was
actually covered by manufacturer
incentives 11% that number dipped down
to about 2% today it’s about 5
.8% so incentive spends from the
manufacturers have increased to help
lower the average transaction
crisis and then we’ve noticed that the
big profit center for the dealers which
has always been pickup trucks and
SUVs well the pickup truck Market has
been contracting in the first quarter
it’s down almost
5%
so it’s forcing
manufacturers to look at what it is that
they’re producing and they’re looking
now at figuring out ways to produce less
expensive vehicles at a lower price
point than the big profit Center
vehicles that they had been producing
that are now sitting one of the
interesting points that you mentioned
was that the inventory levels right now
are 2.8 million versus yes prior to the
pandemic it was over three million and
and I’m surprised to see that or hear
that because interest rates were a lot
lower right pre pandemic and now
interest rates were a lot higher I would
think the inventory levels would be a
lot higher now but they’re not but maybe
they’re going to get a lot higher in the
coming year Well my suspicion is is that
they will they the during the pandemic
you know every one of the manufacturers
said oh we’ve learned our lessons we’re
we’re only going to build what people
want we’re going to build to order We’re
Not Gon to build to stock and and at
that point they thought they’d want to
keep inventory levels somewhere between
2.2 and 2.4 million well let’s face it
one thing manufacturers usually do well
as well
manufacturer um
and they don’t know how to stop so they
just kept building vehicles and and they
kept shipping them to dealers and
inventories kept building back up and
they War they wouldn’t let it happen but
yet it’s happening and probably I don’t
know I would think by by June or July
we’ll see inventory levels of three
million or slightly
more some
manufacturers are are begging literally
begging their
dealers to take inventory not to pick on
Nissan again but they were begging they
were offering dealers extra money off on
the Vehicles if they took them and most
of the dealership were not
interested um the stellantis brand of
dealerships Chrysler Dodge Jeep Ram the
amount of inventory that has been turned
down by their dealers keeps growing
month over month so they’ve produced
vehicles and they’re they’re having a
difficult time getting their dealers to
actually take them um the only way
they’re going to get their dealers to
take them is to increase the incentives
whether it be customer incentives or
Dealer incentives that the dealers would
be able to use to lower the prices of
the vehicles to make them more appealing
to a larger audience so inventories are
going up across the nation and
incentives are going up what’s this
doing to pricing and I I guess that
might be a tough measurement given that
there’s such a wide range associated
with cars an interesting statistic in
the first quarter of 2023 31% of all new
vehicles that were sold were sold at
above
MSRP in 2023 the first quarter in the
first quarter of 2024 that number
dropped to
16%
so dealers are understanding that they
can’t ask for well let me rephrase that
they do ask for it they’re they’re just
not is they’re just not expecting to get
it when they ask for it now
as one of the things that Zach and I
have seen
and and at car Edge we we have car Edge
coaches that actually help people buy
cars and literally we probably work
hundreds if not close to a thousand
deals a month with customers so we see
what kind of discounts are available um
how how you can work a dealer to get a a
better deal depending on what region of
the country you’re in things like
that
and what we discussed with
customers in a lot of the videos you
know we’ll say prices are going down and
everybody the comments I always but yeah
but not in my neighborhood well just
because the advertised price isn’t lower
than what it had been doesn’t mean that
if you actually went into the dealership
and and threatened to take that vehicle
home that they wouldn’t work with you to
get you a lower price in order to
facilitate that happening so yes many
dealers still ask for additional dealer
markup Market adjustments whatever it is
and that’s just an Ask they’re hopeful
that that when you walk in you’ll go
okay well I guess I have to pay that the
savier buyer understands that you don’t
have to pay that you just have to
negotiate it off and then some
so it’s even though prices are still
high and and many of the advertised
prices are still high dealers are more
motivated than they have been due to the
cost of carrying inventory and
everything else
to to allow for a lower price price in
order to move the the metal as we say it
sounds I mean I don’t know I guess I’m
kind of astounded by the fact that to
buy a new car in the US you’re paying 9%
to buy a pre-owned car you’re paying 14%
I’m surprised on average I’m surprised
prices aren’t significantly lower like I
can’t believe they’re still moving
inventory um well they’re still moving
enough but not as fast as they had been
uh so that’s why we’re seeing prices
slowly coming down
if if the FED doesn’t cut interest rates
and you know the most recent talk has
been well perhaps we’ll have to raise
rates some more to fight
inflation well if if that’s what happens
then dealers and manufacturers are going
to continue to be pressured to lower
prices even further and more quickly I
would think and so so far our discussion
has been more focused on new cars but
what’s happening with used cars are is
that part of the market well you you
already said that if you finance a
pre-owned car you’re paying 14% so I
can’t imagine that side of the market is
very
robust um well average transaction
Prices for used cars have gone down as
well um but there is a shortage there’s
still a shortage of good quality younger
pre-owned cars one two three four year
old cars and the reason for that
shortage is during the pandemic when
there was that chip shortage globally
there were about 15 to 18 million
vehicles that were scheduled to have
been produced that were never produced
and since those cars weren’t
produced those were potentially lost
sales for instance if if 10 million of
those 15 to 18 million would have been
cars for the United States typically
about 60 to 70% of people who buy a car
trade in a car well if those 10 million
potential sales were lost there were six
to seven million trade-ins that were
lost so there’s just this natural
shortage of vehicles out there
and during covid we saw a phenomenon
that you very rarely see
and that was use car values
appreciated so if you had leased a
vehicle and typically when leases are up
the residual value that you as the
customer can buy it for if you wanted to
typically the residual value is higher
than what its true market value is
during covid
shortages residual values were actually
25 to 35% below what the market values
of that vehicle was so people didn’t
turn in their lease cars they bought
them because there was money to be made
by buying them they could buy it turn
around and sell it they could make
567,000
or they knew how how they had treated
the car and they knew they could buy it
for 30% below its market value so those
were additional cars that never made it
to the used car side of things so
there’s there’s this shortage of used
cars that will probably continue for the
remainer of the decade even though used
car values have come down about 15% from
their high water mark came down 15%
year-over-year just in March they’re
still well above where they had been uh
and and probably will continue to to
remain at a much higher level than the
historically should have been if that
makes any sense at all so you just
mentioned something else that I want to
ask you about and you you just mentioned
uh about trade
inss yes this is this is another area
where I feel like I’m getting screwed
over okay so I go in to buy a new car
and they say oh no don’t worry don’t
worry we’re gonna give you a great deal
here and uh maybe you know they give me
10% off MSRP but then on the trade end
that’s where they get me any do you have
any words of advice there when it comes
to trading
in well the words of advice when it
comes to trading in is one of the things
that we offer on the car Edge website is
the ability to get instant offers for
your
vehicle um from sources in your market
area so you can plug in the information
about your car uh miles transmission uh
year make and answer a few questions and
and get offers as to what dealers would
be willing to pay for that that’s
valuable information in the sense that
you can utilize that when you when you
go to a dealership and you try and trade
it in and they say well we’ll give you
25,000 for your car and you go yeah but
but CarMax said they would give me 30
and here’s the written offer or carvana
said they would give me
29,000 here’s the written
offer so the other thing you can do
is you can contact local dealers that
would possibly be interested in adding
your car to their used car department
and get them to bid on your car get an
offer from several get get several off
offers from several dealerships so that
if you decide you want to trade it in
wherever it is you’re buying a new car
you can say well yeah but your
competitor down the street was willing
to give me they’re willing to just write
me a check for the vehicle for $5,000
more than you’re trying to to get it for
I need you to find that
$5,000 so you just open it it’s almost
like opening up to bidding um let the
dealers compete I like that that’s great
advice well that that’s what people pay
us
for so Ray I want to get your opinion on
u a few of the big trends that are
happening right now in the Auto industry
and and there’s a lot of them EVS being
a big one autonomous driving also ride
sharing and I want to get your views on
how this is impacting the industry but
why don’t we just start with EVS in 2020
there was 3 million EVS sold globally
and by 2023 that increased the 15
million but everything I’ve been reading
here in the last few months it it looks
like EV sales are definitely slowing
down Tesla just came out with their q1
sales they produced
433,000 but they only sold 387,000 so a
big Miss there what’s your maybe you can
give us your view on what’s happening
with EVS I think globally there’s a huge
push for EVS I think in Europe the take
rate for Ev seems to be much higher than
it is here in North America um
and I I read the comments every day from
from our viewers and you know people I I
don’t know if it’s an American thing or
what but but us Americans we don’t want
to be told what we have to buy and I
think that’s the prevailing mentality
and so people hate the fact that they
feel feel like EVS are being forced on
them so the early adopters
adopted the others who were never
convinced are fighting it
off
Ford recently announced and when I say
recently last week announced that
they’re cutting back on EV production
and and more um investment into their EV
growth and they’re turning that money
and they’re going to use it towards
hybrids so that they can offer hybrids
in every model line by the end of the
decade well that’s that’s almost 180
degrees from where they were and so I I
think part of it is price most people
understand that EVS are more expensive
average transaction price-wise than any
other vehicles out there
uh many people don’t understand the the
charging of them the infrastructure
that’s necessary to allow for that
charging um it doesn’t seem to be as
readily available as I don’t know
finding a gas station on just about any
corner so there there seems to be a
hesitancy in at least in the United
States I I can’t speak for Canada um but
there seems to be a hesitancy um for the
vast majority of Americans to move
forward towards EVS will that change
probably at some point but at this point
uh many people are just saying no I’m
never doing it whether they will or
won’t we’ll find out yeah I would agree
with a lot of your comments it’s the
same thing in Canada the big I’ve taken
out uh I’ve done a few test drives with
Tesla’s beautiful car but there’s a few
issues and and the big one with me is
range right because I want to have 500
miles or 800 okay you got to have that
that’s what a lot of most cars have and
um and then the other big issue is
battery chemistry right because you and
I both live in cold climates and in in
cold temperatures these EVS lose 20 to
30% of their charging capabilities
righta so that’s a big issue if you’re
in Florida or Texas California it’s not
a big that’s not such a big deal but in
Toronto it is and um of course and then
to your point too the infrastructure
they still have a long way to go with
that and then and also the pricing you
know they’re much much more expensive
than than most gas powerered vehicles
and I I it’s I I have said that the
infrastructure has to get way ahead of
adoption if suddenly people saw charging
stations up and down the interstate
highways or in their local
neighborhoods it would become easier for
somebody to say I want to consider an EV
I live in a
condominium there’s nowhere for me to
charge my vehicle if I had an EV
so what do you do in inner cities where
there’s huge apartment buildings condo
complexes um even row homes where people
don’t have garages how how are those
people supposed to charge their vehicles
so if you want people to to move to that
you you have to make charging readily
available they have to
just it has to become as as easy to find
as a gas station and until that happens
I I think uh the adoption of more and
more EVS is going to continue to uh
stagnate to a degree I found I’m sure
you saw the story about Herz trying to
sell their Fleet of 20,000
yes kind of humorous because one of the
reasons why they were doing it because
the residual value dep like depreciation
just collapsed they couldn’t sell the
damn things because Tesla kept cutting
their prices so they could move their
inventory so I thought that was kind of
humorous yeah it’s you know every time
every time Tesla would cut their prices
it was it was killing Hertz because the
value of their Fleet just kept going
down um there’s there’s a very good
friend of our channels um eigor who’s a
former major dealer in in the Northeast
United
States and Igor is always keeping us up
to date as to what’s going on he was at
the auctions yesterday he said you would
not
believe how cheap EV prices are at the
moment I mean everybody’s afraid of them
because nobody knows what the floor is
um there was there was a story we did
the other day where Edmonds had bought a
new Fisker ocean EV and they had paid 60
some, for the
vehicle and they took it in I to CarMax
to see what it might be
worth
$221,000 was the written offer from they
over over a $40,000 loss in three months
and and my comment to Zach was I don’t
know if I was a higher up at Carmax I’d
probably be chastising the appraiser to
put for having put $21,000 into a Fisker
for a vehicle for for a company who’s
about to go bankrupt um so you you you
look at some of these things and and
it’s hard to extrapolate what values
really should be when they’re all
competing for a limited number of buyers
and all finding out when I say all all
the manufacturers are finding out man we
got to cut our prices I mean for had to
cut prices on the on the Mae on the
Lightnings um it’s the only way they
could move them because everything was
priced too high so yeah I I have no idea
what the floor is but I am certainly
glad I’m I’m I’m not running a store
these days so if I’m if I’m reading you
correctly when it comes to traditional
cars or gas cars prices have pulled back
a little bit but they have a long way to
go so if I was going to buy a new car I
would hold I would hold off but if I
want to buy an EV now might be a good
time if you especially if you want to
buy a pre-owned um you you should be
able to get some you should be able to
find some good values out there on EVS
now you know the thing that you have to
remember when you’re looking at an EV is
you need to check on the battery health
and and you know there’s me there are
members of our team that own
EVs and the amount of battery
degradation literally has been next to
nothing uh in the first couple years of
ownership for these these guys so but
there’s a a company out there called
recurrent that can do a battery check
for you I don’t know how they do it but
they do it and so you can get some ideas
to what the battery health is on a
pre-owned EV because that to me would be
the most important thing you need to
know if you’re looking at a pre-owned EV
no that that’s a very good point and uh
that’s great advice thank you because I
if it’s anything like my iPhone
yeah you know you go and spend a
thousand bucks on a new iPhone and then
like it starts losing its charging
ability like oh yes every year yeah no I
mean it because they do degrade over
time
there’s no way to prevent it so and
let’s face it at this point I mean
there’s varying numbers that you hear is
what it’s going to cost to replace
batteries I mean you see numbers 40
$50,000 you see some numbers that say oh
no it’s closer to 10 to1
15,000 I mean who knows but typically um
they say the life expectancy of these
batteries is is a couple hundred
thousand miles but you know a couple
hundred, miles if you only drive 3,000
miles a year that that takes a a real
long time so there I think there has to
be some time or mileage it can’t just be
mileage as to how fast they degrade and
now I’m curious you said uh uh typical
batter is good for you know at least a
couple of years but they I I I think
what you’ll find is the batteries are
probably good for 7 to 10 years years
and I believe most of the manufacturers
offer like a seven eight or 10 year
warranty on the
batteries on the battery pack itself now
I’m curious when you look at your
various businesses you have a good sense
of what’s Happening Across the Nation
just in terms of sales and and how the
consumer is feeling what’s your sense if
we were to
summarize everything you see and read
what’s your what’s your feeling how the
US economy is doing well you know
everything you read the economy is great
and uh
and but everybody says oh but I’m
hurting I you know I don’t know I I’m
not hurting you know it’s and and I
think in reality most people aren’t
hurting as bad as they might think they
are or might have been told that they
are um but we do
see that the number that that has scared
me was was that survey of people would
you can you buy a car and when 80 83% of
the population says they can’t that’s a
scary number uh you it just seems to me
that if you’re a
manufacturer you want to you want to be
able to have as many people as
possible in that sandbox not as few
people as possible you you don’t want
the market to continue to shrink as to
who you’re trying to sell cars to you
have to figure out ways to increase the
number of people that you can sell cars
to so I think as the
manufacturers look at those
statistics and and How Deeply that
ultimately can impact their
businesses I think that we will see a
shift in what is being built so that
they can bring more people back into the
market that’s just that’s my opinion
from what we’ve seen that was a great
discussion Ray as we wrap up is there
anything else you would like to offer up
to our viewers any other words of wisdom
when it comes to purchasing a vehicle
never concentrate on your payment always
concentrate on the out the door price
the discount on the vehicle and a
discussion about every fee there’s
there’s a saying we have there’s I
should have worn the sweatshirt today
that says on the front if it’s
if it’s uh taxable it’s negotiable so if
the fee is taxable it’s a negotiable
item just remember that if it’s a state
fee registration things like that that’s
not taxable but if it if it’s some um
Half Baked fee that they’re charging and
they charge tax on it that’s negotiable
fee so always work the out the door
price work them on whatever fee they’re
charging to make sure that you can
either get them taken off or have them
reduced and and just
concentrate if I were to have to write
you a check what would the size of that
check be what would the exact amount of
that check be and then once you’ve
established that prior to buying a car
get pre-approved for a car loan so you
know what your interest rate should beig
that would be my advice a that’s great
advice and I want to thank you for
spending time with us today and sharing
your insights on the car industry if
someone would like to learn more about
you and your various Services where can
they go just go to
www.car EDG c d ge.com That’s our
website and you can find all types of
free resources guides um videos anything
that you would need that could help help
you navigate that car buying experience
and your YouTube channel
uh the Ray and Zach Channel and the car
Edge channel are the two main channels
where you can find Zack and I uh
exposing nonsense on a weekly and daily
basis I might tune in this Saturday
night to the live show and ask a couple
of
questions we’ll let
you R once again thank you thank you
James I enjoyed it well I hope you
enjoyed that conversation with Ray shfa
of Courage I found it very informative
especially when he threw out uh many
insights including if it’s taxable it’s
negotiable I’ll keep that one in mind
but if you have any other ideas on who
else you would like to see on our
Channel please let us know in the
comments section below we’d love to hear
from you don’t forget to subscribe to
our Channel wealth.com and also hit that
notification button to be kept up to
date on future events once again thank
you for spending time with us today and
I look forward to seeing you again soon

Join James Connor on Wealthion as he sits down with Ray Shefska, a veteran of the auto industry and the face behind the popular @CarEdge YouTube channel.

In this episode, Ray gives crucial tips on navigating dealership negotiations, unveils hidden charges, and provides strategies to ensure you’re never overcharged again. Whether you’re a seasoned car buyer or a first-timer, Ray’s insights will equip you with the knowledge to make informed, financially savvy decisions. Don’t miss these expert revelations that could save you thousands on your next car purchase. Tune in now to turn the tables on car dealerships!

Timestamps:
00:00- Introduction to Ray Shefska and Topic
01:06 – Ray’s Background and CarEdge Overview
04:27 – Dealing with Dealerships: Avoid Getting Overcharged
06:28 – Understanding Car Pricing and Negotiations
10:24 – The Real Costs of Car Ownership Beyond the Price Tag
12:45 – To Buy or Lease? Breaking Down Best Options
15:01 – Auto Industry and Economic Trends 2024
18:20 – Insights into Car Pricing and Inventory Shifts
25:53 – How Fleet Sales Influence Market Trends
32:03 – Future of Used Car Market and Trade-In Tactics
38:26 – The Shift from EVs to Hybrids: Industry Trends
50:15 – Ray’s Final Tips

#podcast #car #automobile #evs #cardealership #consumer

———————
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