EP023: - Pearl of Wisdom: From the Floor to the Front Office -- John Gavin & Drew Pearlman

[00:00:00] Hey everybody, welcome to True Confessions of a Car Guy. My name is John Gavin. I decided to do this because I've been in the car business a little over 40 years. And as I've been going through all those 40 years, I'm not proud of this fact, but I've worked at 49 different dealers. Over those 40 plus years, I have seen some of the craziest stuff happen.

[00:00:28] Good, bad, the ugly, you name it. I've worked with some real characters. So I'm going to do a lot of the truth of what happened in the car business. And this isn't about making deals and how we made money on somebody. This is about when it was really fun to be in the car business.

[00:00:47] I mean, there's stuff that I can tell you that women keep their clothes off at a discount in a deal. Literally, they keep their clothes off and offered sex to get discounts. I mean, there's crazy shit that went on in the car business. Unbelievable that nobody else would believe. She puts a disclaimer up that says that we're only allowed to have so many curses at one session. Yeah, we're going to get into all that stuff. Now this is going to be the real true confessions on the car.

[00:01:12] I don't need you. I've never needed anybody. You can go fuck yourself and let's see how your store does in the next six months. I shit my pants. I gotta go. I gotta go. This is the guy on the sales floor. Yeah, man. I shit my pants. I gotta go. It's 831. He's on the sales floor. Croak and choke. Oh, croak and choke. That's right. I don't remember. Yes. Croak and choke. That's right. It was croak and choke. Because your car's on fire.

[00:01:42] Just like that. This guy went ancient. I had more balls than brains and he didn't. He had a little bit of brains and no balls. But if I would have stayed longer, it would have killed me. Because all we did was party. They threw keys on top of a roof. They took titles and burned them. They did all kinds of crazy stuff. We've created our own monster. Any problem that the car business has, we've created it. But we had a fun time getting there.

[00:02:10] You ought to print that on our show. Make that a fucking tidbit. And all you car guys and gals who are out there, if you've got stories like mine, you want to send them in to me, I'd be more than happy to read them or have you on the show. Send it to confessionsofacarguy at gmail.com and we'll all laugh. That really happened.

[00:02:48] Welcome everybody to another episode of True Confessions of a Car Guy. My name is Badgie. And alongside me in studio, we have a very special guest. But before we get to him, we got our host John Gavin here as well. Welcome John. How are you? I'm doing good man. Doing good. Getting ready to start another new month actually. New month starts tomorrow. Know how you did. It's what you've done for me lately. Exactly. Exactly.

[00:03:18] And then we have a very special guest joining us. His name is Drew Perlman. We met him on TikTok and he's been a great supporter of ours. We thank him for that. And we thank him for joining on the show. And as we were talking right before we got on air, there's a lot in common here. And we look forward to this conversation that we're going to, we're about to have. And I just wanted to introduce his company just so you guys are aware. And he helps everybody. We were just saying, if you're a Pearl Auto Advisor.

[00:03:47] So if you're looking to buy a car and you know, you need some guidance to manage your way through that. It's a good resource right there. And then also he helps car dealers because of his vast experience of about 30 years working on every level that there's pretty much imaginable in the industry. He helps dealers as well. So it's just some of the things that he'll help you with as well.

[00:04:14] So, Drew, thank you and welcome to True Confessions of a Car Guy. We're glad you're with us today. Thank you. I appreciate it. I appreciate you guys having me. Thank you so much, Badgie. Thank you so much, John. It's a pleasure to finally put a name to the face. Yeah, likewise, likewise. Well, it's actually Pearl Auto Advocates because it seems like you're an advocate for the customer, an advocate.

[00:04:37] I mean, I really stand behind the dealers a lot today, but this is, I think, the hardest the car business has ever been. Yeah. And I don't know, you know, I don't really know your background. I know you work for some really big groups. Yeah. I know, if you wouldn't mind, when did you start in the car business? So, I started when I was 14. My dad had a little car lot up on Route 1, so I always have that behind me.

[00:05:04] So, that's where I started the famous Route 1 where all the New Yorkers, and I'm in Philadelphia right now, outside of Philadelphia. So, New Yorkers used to come down on Route 1. It was an area called Levittown or Fairless Hills. It was a big strip of car dealers. Readman Toll was there. And back then, it was Readman. And they're just, you know, they had a racetrack back there. It was wild. And at 14, you know, my dad was like, all right, you know what? You're going to detail cars. You're going to wash cars. You're going to be at Port. You know, just, you know, all this stuff. Like, you know, I was BB gun practice.

[00:05:34] I mean, you named it. I did whatever they told me to do. Yeah. So, you started in the car business at 14. So, I'm guessing, so your dad owned a new car dealership or a used car dealership? So, a little independent. It's actually still there. My cousins actually own it now. So, it was my uncle and my dad in business together, which I will tell you is not always a recipe for success. Right.

[00:05:59] It definitely didn't do the best things from a family standpoint, but it's a life lesson that I learned. Yeah. Business and family are really tough. So, how many dealers have you actually worked for? I will say it's not been a lot. So, I've only really been at four dealerships because I've never, I'm not a guy who jumps from dealership to dealership. I really want to build. I'm a guy that likes to fix.

[00:06:27] And for me, it was always about the relationships and my teams. And a lot of times, it's really hard to leave your teams. Yeah. Well, let me tell you something about me. I've worked at 55 dealers. 55? 55? 55? Okay. 55. So, I'm a Chicago guy. I'm a Midwesterner. Right. I just happened to be working for a group that was out in Seneca, Pennsylvania. I was just there last weekend. They have a CDJR and a Chevy store, Patriot Auto Group.

[00:06:55] But anyhow, in Chicago, the New York, New Jersey market is very similar. I believe there's four tough markets that are very, very competitive. And that would be Chicago, New York, New Jersey, the border there, Texas, and Florida, I think, are them. You know, those four kind of, you better know what you're doing or it's scary.

[00:07:20] And in the Midwest, you got 8 million people in Chicago, but you got a lot of owners and, you know, the same owners. I'm sure in Philadelphia, you have the same owners kind of went from generation to generation to generation. Yeah. The turnover in Chicagoland was 305% only four years ago. Do you know what it's like in a, you know, what's it like in Philadelphia? Are dealers turning over or you're just an exception to that rule?

[00:07:49] As far as turning over management or turning over people in general? No. I mean, I think it's, you know, I think it's plagued this industry for a very long time. I mean, we see it now when you look at the national average is the 73% of your employees are going to turn over. It's like, you know, I see these guys out there that do, you know, sales training. Look at that and then you got guys that'll come in and gals and I'm not listening.

[00:08:14] And I got, I'm not throwing no shade at anybody, but dealers putting that kind of money and that kind of resources into sales training. Um, and then it's like, and then their, their dealerships are turning over at 73%. I personally think the training's got to start a lot higher up. Yeah. Right. It's got to start at the ownership and GM level and then have the accountability coming down. And that's a big thing for what I talk about. I talk about culture. I talk about, you know, your leadership and, and how everybody works together.

[00:08:42] And for me, for me, all of it is communication. Uh, it's, it's about setting that up from the beginning. Uh, something that I've always, you know, prided myself on is I go into a dealership and I don't, I go and I interview every single employee. I spend the first week to two weeks interviewing every single person for at least 15 minutes to a half hour, you know, 15 minutes for the person that just isn't going to give me anything. And then the half hour is the one that I want to invest in. And maybe that turns into an hour depending. Um, cause if there's a, it's a good conversation, I find something.

[00:09:10] And what I noticed a lot with that is it's not that sometimes you think you have bad people. I think it's just people in the wrong seat. And you realize that really quickly when you have a conversation that has nothing to do with the car business. We talk, we worry about goals. We worry about, you know, the numbers. You worry about all, you know, what they're doing or how they're selling cars. And we don't talk to them about, you know, you know, what's going on in their life and, and, and why, why there's certain things like if prime example was you came into my dealership, your job, you, you had to walk in my office.

[00:09:39] You had to say hi to me when you walked in. That's just how it was. And if I saw your face, I could tell right away. And, you know, listen, John, you can read people, you, you know, right away when somebody is having a bad day. Yeah. And, and he just, I'd say, I'd say, I'd say, sit down. Like, cause I do the pounds and I sit down, sit down for a second. And if they were just, if their heads checked out, I didn't want them there. You know, hopefully I could address the problem, but sometimes I had to send people home just because it was probably the best place for them at that moment.

[00:10:10] You're listening to true confessions of a car guy. Yeah. Well, one thing I, in the car business, I think, you know, I'm an uneducated guy. I'm strictly a car guy. That's why I'm, I'm, I'm, and just so you know, I, I swear a lot. So I'm dumb as well. Thank you. I'm good. I'm good at four things. I'm a good husband. I'm a good father. I'm a good grandfather. I'm a good car guy, everything else.

[00:10:35] I'm mediocre at best, but I find in the car business, that communication and lack of training is like the two biggest common denominators. I've worked at 55. So, you know, I've never walked into one that was even on the top 20, but I've never left them less than one, two or three. So I'm not bragging, not patting myself on back. I, I, like I said, I was a cop. Just a fact. And you're just talking.

[00:11:05] I'm good at what I do. So, but that in mind, I just had a talk with one of the owners, just though, you know, one of the ones I worked for as a consultant about, you know, these, these people are, you know, an owner looks at them like they're interchangeable. They just, I get, he's out and I'm going to grab another guy off the street. Well, think about how we, what we, I don't know, Philadelphia is like this. So check me if I'm wrong. But when you hire a guy, this is what we offer the car business.

[00:11:33] Unfortunately, we say, all right, here you go. Your hours, they're on the window, whatever that is, make sure you're there. If you're not, and you deliver a car, consider half your commission gun. Number two holidays. Don't worry about it. You'll be with us. You don't have to be having a party anymore. You'll be with us. You'll be with us. You're going to get some pizza, baby. Yeah. Salary. We don't have those, but we do is we're going to give you a couple hundred bucks that we're going to take back.

[00:12:03] But by the way, we're going to put a pack on the new cars and used cars that if you don't sell more than that, you get dicks or a mini. So just know that. And then, you know, there's four guys at the desk there. They're going to mother fuck you once a week. One's a druggie once a drunk. What's it? And I'm dissing them right now because that's our business. We're not educated. And that's what we offer these new people. So we don't get the guy out of it.

[00:12:29] I mean, I'm not for Harvard grad here, but we don't get the guy who who is an everyday business accounting firm or sales from. We get the guy who street smart, like you said, can read people. And if he's aggressive, you get stuck because now you make more money than you'll ever make in your life. And you can't leave because nobody else is going to pay you to operate trial case. Or even worse, they promote them. Yeah. Well, that always happens.

[00:12:59] Yeah. I had a kid, you know, big group leader. You probably read about it. A good friend of mine, Jim Duvas is under FTC. They want to sue him for they're trying to get $260 million out of the guy because he was the GM. So he's responsible for all hell that broke loose. But this is a kid that we met at a restaurant. He's a waiter. Bring him in. He becomes a KBB buyer and does an amazing job. 30, 40 cars a month. Yeah. Guess what?

[00:13:29] They promoted him to use car manager. He's a he he's back to KBB by but he hated the business so much he left. So like you said, they just leave. So we promote. We don't train. We don't we don't, you know, we don't realize where people belong the best. And it's you know, it's got to start at the top. I just I talk about it all the time. It's just, you know, everybody's got to have buy in. And it's got to but it's hard to find that person. Right. Or those people.

[00:14:00] You also have to train them to give to get them there. You have to, you know, I have to excite them and get them motivated and tell them how good they're doing. Because you know what? A GM and a GSM. They need that, too. They need that. The owners got to come to them be like, dude, you had a tough month, but it's OK. We're going to roll off and get it get it this month. And so they get mother fucked. And, you know, the the you know, the shit kicked out of them. And then they want to. And how are they going to how are they going to motivate? You know what they do is they kick the shit out of the GSM. Then the GSM kicks the shit out of everybody else.

[00:14:30] And everybody's and everybody's miserable. Yeah. That environment anywhere near, you know, successful. Like the things that I talk about a lot is the Ritz Carlton, the the Four Seasons, frickin Chick-fil-A. Shit, you're getting a five dollar sandwich. And the service is outstanding. Yeah. How do you not walk in and getting a fifty thousand dollar car, which is the average right now? Right. Yeah. You're buying that car. How are they not? You know, and I mean, like giving you a back massage or or, you know, painting your nails like it was my wife.

[00:14:59] And she she was going in, get a fifty thousand dollar car. My wife's never shopped for a car in her life. But if she walked into a car dealership and she was spending 50 G's, I guarantee you she wants the shoulder massage. She was done. Right. Agreed. Agreed. I got to wonder, since you're going in these stores and I totally believe in the culture change out of all those dealers. You know, you said, you know, there's a lot of responsibility because once you get there, you know, I've never fired anybody at any of those stores ever. Right.

[00:15:28] Because I don't believe and I do a little bit of what they call walk in my shoes. Everybody takes another job. You probably heard of it before you go sit in a service department, be a service because you don't you know, you got guys walking up motherfucking a service writer or the parts guy or F and I got it. They don't know what the hell he just went through because they never did it. So.

[00:15:49] But when you walk into these stores today as your consultant, you're going in and, you know, as a Cox PM, we were paid consultants. Basically, how do you change the culture today? And the reason I'm asking this is because just went to this dealership, Pennsylvania, your state. And the opportunity was what do you think the salesman would take three days off or a thousand dollar bonus? Guess what they all took?

[00:16:18] Three days off. When you you I'm guessing you're at least 50. So just just just about to hit it. We're getting it because you started 14. You've been doing 30s. I'm just doing math. You're doing it. But when when we started in the car business, it was you didn't you didn't miss a day. And if somebody offered you a G note or three days off, they can take the day sticking their ass because I'm gonna lose all my my customers and I need the G note.

[00:16:46] It's just how do you change the culture today when you walk in? What do you what's your best move with these people? So so I do think that, you know, a lot of it has to do with understanding your people and knowing what does drive them. Right. So you just said it. You just hit it right on the nail right on the head. You got a person that would rather take the three days off versus the thousand dollars. OK, well, why?

[00:17:09] And maybe that person, you know, maybe you should have salespeople that are not commissioned, some that maybe are salary and or put them in a role that makes the most sense for that person. Because, yes, you want that hustler. You want the grinder. But I also don't want my people getting burned out. I I don't you know, when I look at a structure and I walk in a store and we start talking, you brought something up is how do you start it?

[00:17:33] The first conversation happens with the owner and the GM and talking about, you know, looking at their processes and just sitting down with them for a good couple hours and just just hammering out some things. Because at the end of the day, if we don't align and I and he can't see the forest through the trees and he wants to do it the shady way, I'm not going to be able to help them. Right. Right. I can't help a store that wants to do things wrong. The elevator. And yeah. Yeah. Like and I don't mean when I mean wrong, I mean severely wrong.

[00:18:01] I'm talking about doing the stuff that practices, you know, the bait and switch and just the shmarmy BS. Oh, you know, we're going to do a four square, blah, blah, blah. We're going to not, you know, we're we're going to kick the trade. But it's all those things nowadays. There's so many dealerships across this country that still want to do a four square that still want to do the more. You know, it's that day has come and gone. But the managers you still has. And listen, a lot of people would look at me and go, oh, he's a legacy manager.

[00:18:28] He's going to do it the old way because I was brought up that way doesn't mean it's it's I've learned. I yeah, I yeah, I've grown to understand. Yeah, I know. Listen, I knew it was wrong back then. No, no. I mean, don't miss it. It's not wrong just because it's old doesn't mean it's wrong. I mean, there's a lot of good stuff you bring. Yes, there's technology everywhere we look. I mean, I'm going to ask you about a I but some of the old ways. I mean, we still had to make a friend and pick out a car now today.

[00:18:58] Oh, yeah, they already know they come in. Where's P one, two, three, a where we were walking around going. Where are you going on your first trip? How many kids you got? Yeah, you still got to do that. I mean, you still got to build a relationship. But yeah, it's just the shamarmy tactics. Oh, you know, oh, where are your keys? My my used car managers got him. Oh, where's he? Oh, yeah, a lunch.

[00:19:22] Well, when you know, I've been saying for like I said, I retired from Cox 2023 and they're 10 years almost nine nine plus. And I think the last six, I said, whoever is the most transparent in this business is going to win. I think that's the key to this business. And I believe it's come to fruition is if you're transparent.

[00:19:45] The problem is now we've got used car prices, you know, when you're going to the sale and I don't know, I'm guessing you understand the metrics when I say the average Toyota is bringing it to sale 110, 114 percent cars that general or 105. They're still the wholesalers are caught up to retail. So they're advertising, like you said, 97, 98. Then they come in and you get all kinds of packages.

[00:20:12] We now we've gone from that customer coming in. And we used to be just the finance office would have them with the croak joke, the warranty, etc. Now this happens in service. Everybody now you got ads there. Now you go in the finance. You still got now you got on the sales floor. There was always aftermarket.

[00:20:33] But now it's like in and I guess when you look at the dealer and you're running into this right there, they got a deal with they used to have 200 cars to do what they still have the same nut. Now they got to do it with 100. So how are they coming to you about what do they want you to do for them when you get there besides for sale? Yes.

[00:20:55] So so kind of getting back to, you know, what we were just talking about is, you know, you have you have dealerships that are still thinking that the way they're doing it's OK. Right. And they're just not going to change. And that's when I was saying, like, if I don't align, I'm going to walk out. It's just not going to make sense because I'm not going to be able to change their processes. And if they don't want to change it, there's there's really no investment for me.

[00:21:23] But if if a dealership came to me and said, OK, I you know, right now we've got 100 cars in inventory. If it's if it's a franchise dealership and if they're not taking advantage of their service drive, that's that's the biggest area of opportunity right now. Well, because right now we're to we talk about acquisitions all the time and we're going to the auction. Like you were saying, buying stuff at one hundred and ten, one hundred fifteen percent. And then you've got companies like Cargurus. I'm sorry to throw shade at the moment. Yeah.

[00:21:48] But they've perpetuated the issue of let's let's price these cars below market and they get a great, great badge out of Cargurus. Right. And now you get to that dealership and they're the fakest of all fakes. And you've got to add all these things into it. But meanwhile, they've created that customer going to them, creating the bad experience based on the recommendation that their site says. So it's that that part really bothers me.

[00:22:14] And until the FTC really starts really banging down on that, you know, that's something that I look at, too, is I go in and I do a deep dive into everything. And, you know, I print you out a whole breakdown of exactly where your pain points are digitally. So I'm going to tell you if your meta tags aren't reading. I'm going to tell you if some things aren't connecting, if your social media isn't being pushed where it's being read by A.I. So you get recommended by A.I.

[00:22:41] What's happening right now is everybody's selling an A.I. tool. Yeah. And I know you said we'll get to that in a second. But the problem isn't getting an A.I. tool. The problem is, is making sure your data is clean so Google and meta can read it properly. And so it can be parsed. And the A.I.s that are going to be your search engine, right, your chats, your clods, all of those can go and search for that. Search for your dealership or search for dealerships in your area. And you become a recommended dealer versus your other dealerships out there.

[00:23:11] When you have all those things digitally aligned, it's huge. But to get back to the dealership that says I need I need more cars. You're going to work your service drive. And I'm going to put a service drive process in place. But before I do that, I'm going to meet with your service manager, your sales managers, your F&I managers. And before that, I'm going to meet with the GM and the owner to tell them here's what we need to do as far as from a communication standpoint. I'm going to have weekly meetings with these four people, whoever you're putting in charge of these operations.

[00:23:40] And I'm going to go through process and make sure we're not getting any, you know, process erosion. Right. So the charge for me is nominal because what I'm doing is I'm keeping you on track. I'm making sure that those things don't erode and that you're getting two to four percent of your customer pay ROs into transactions. And it's simple blocking and tackling. But, you know, what happened? Listen, we both know when in most dealerships, what happens when, you know, you got this. You said it earlier.

[00:24:10] The salesperson goes down to service. Ah, you know, that guy's an asshole. Blah, blah, blah. Like this. Service and sales has done it since day one. Draw a line in the sand, right? You've seen it. Tell me some stories that you've had with service and sales. Well, I've been training service, you know, pretty successfully for a long time because to me, the key to success there is the bid.

[00:24:34] You know, you can talk to a customer all day, but the problem has always been you won't. Now you went to the desk and you got a number that 70 to 80 percent of market. You're trying to steal the car. And now this customer who's been your loyal customer for 10 years, the key is that bid because once they lowball that customer, now that customer gets that lowball, goes home. He goes home. Yeah.

[00:25:03] Carvana's CarMax goes, these fuckers. I've been going there for 10 years. He just tried to steal my car for $3,000. And so if they would get that part right and just bid the car, I mean, where I just left, I said, if you let a service customer out less than 100 percent bid, you're never going to see him again. You won't get the car because we can always go backwards, but we can't call him on the phone. So I'm a big, big proponent.

[00:25:29] You know, I work for a BMW store downtown Chicago, which, you know. Listen, you could have the guy in the drive plugging it into CarMax's tool and put the number in there and go 500 over. I mean, it only takes you. It takes 30 seconds. I can go up with my scan tool. Yeah. I help them. I help them build that out. So, like, I remember. I remember when we were going through the beta versions and stuff. Like, I love that stuff. Yeah. I was one of the first dealerships in the area to have it, like, in my store because that thing made me so much money during COVID. Oh, my God. Yeah.

[00:25:59] Yeah. And that's the other problem that's happened now. Now we had COVID, so we got so much negative equity walking in. You brought up a good point in one of your videos about is Toyota still the brand? Well, you know, I've been a Toyota guy. I work for Toyota. I love Toyota. But the degrees of separation of vehicles have changed so much. It used to be BMW was an 8. You know, Hyundai was a 3, right?

[00:26:27] Now you've got BMWs with an 8, 7 sometimes. But a Hyundai could be a 6 or a 7, too. And a Kia could be a 6 or a 7. So this customer loyalty is kind of shit out the window. Now they're just all looking for that best deal. But when they're coming in today, if they bought the car during COVID, you've got negative equity. And these guys are still trying to steal the car at the curb. They're still appraising way low. I mean, we see it every day. So I don't know how long that's going to last.

[00:26:57] And then you compound that with no inventory. Chevy doesn't have any cars. Toyota doesn't have any cars. CD Jabber can't seem to make one that doesn't have a recall. Now Toyota's got recalls. I mean, I don't know what the answer is. Yeah, I mean, I think the industry's in trouble. I mean, you get – we went so far left and then now we're trying to go so far right. And I'm not talking political because I'm not even – I don't get in any of that. It doesn't make it care less. It doesn't pay my bills. I just – it blows my mind.

[00:27:26] Like we went from, okay, we're going to go naturally aspirated engines and everybody loves them. And now we're doing turbos for everything, right? Because we had to be fuel efficient. And these turbos are garbage. I'm sorry. I don't care who makes a turbo. Listen, you and I are both old enough to remember the turbos, the old Mitsubishi turbos that would blow up at 40,000 and 50,000 miles. 84 Buick Riviera turbo, I think it was. 84. That fucker would catch fire when you were just sitting in the driveway waiting.

[00:27:55] But it was a beautiful car, very comfortable to drive. Yeah, no, I agree. Now we're back to the age of turbos, right? So you got to get a service contract if you're buying that car. And typically you're going to have the negative equity. So now you got gap insurance. So now you perpetuate that. So I'm just kind of bringing us back to where we were. Now you perpetuate that cycle of negative equity. And now, once again, if you look in the United States, 20% of your 84-month loans – I mean 20% of your loans are 84 months now.

[00:28:22] So now, after three or four years, they want to trade that car in, and it's going to go $7,000, $10,000. And then when does it stop? When they're 96- or 120-month loans? Right, exactly. And you've got the repo issue, which that's a whole other story. My TikTok blew up on that one. Okay. I didn't get to see that one. That was one of my best ones. But the reason being – yeah.

[00:28:50] So right now you've got like 1.2 in the pipeline currently. They're saying by the end of next year, you're going to be at $3 million. Okay? Not only that. Right now, in your 90-day delinquency out of every vehicle on the road is at 5%. So do the math on how many auto loans are on the United States. We did it.

[00:29:11] I did it on my live the other night, but it was 850,000 vehicles, right, that are right now currently in market that are now 5% of those are at 90-day delinquency. Do you think that customer is getting caught up? No. Never going to happen. Never going to happen. We've lived it too long. Yeah. They're not going to even take care of that car anymore. You're going to have negative equity plus a shitty car because once they stop paying, they stop doing everything.

[00:29:41] They don't want to come to a dealer. They're afraid they're going to take the car. Well, and that's why the retail companies don't want to pick it up because they know they're picking up a piece of shit. Yeah. It's not worth it because they – and think about it, right? Now, these banks, they don't want to get these cars. So they're trying to do payment plans. They're trying to push stuff out. So there's only so far you can push because they don't want to mess up the market, right? Yeah. That's my opinion. I think it's market manipulation. I think they're trying to make it a slow burn, but we'll see. Yeah. I kind of agree with you.

[00:30:10] There's a lot more going on in our industry than – and like I said, I'm dumb as fuck. So I think there's a lot more going on in this industry. But we're car dumb. It's a different type of dumb. Well, when you talk about a concierge experience, where I left, what they were doing, which I thought was wonderful, was customer says he's coming for a car. They get their name on the windshield. They pull the car. They have it right.

[00:30:38] Now, this is after three weeks of me flying out, getting a car to drive to the hotel with no gas in it. And I find – what the fuck do you guys do if a real customer gets on this car? So when you say a concierge experience, what does that kind of allude to? It alludes to not being an asshole. No. It's so true.

[00:31:01] It really alludes to setting up a process in a store just like you have these dealer – okay, let's break it down simple. If you do a search right now on Chad or any of these AIs and you're going to ask how many dealers people would prefer not to go in a dealership, it's 80%. 80% of the American car buyers would prefer not to go into a dealership.

[00:31:22] Why do you think these advocates like Tommy and Billy, the car kid who I absolutely love and have been always such a great person to me – I just had to give him a shout out because he's probably one of the coolest guys I've ever met. And just all these advocates, right? Why are all these advocates and brokers out there? Because the system's broken. People hate working with franchise dealers. We've already had the bad stigma. Then we went through COVID, so we really made ourselves look like assholes again, right? So now we are the big rejerks and now we've stolen from them.

[00:31:52] Now the industry's turned where the – it's not even our fault. The manufacturers, everything's more expensive. You have tariffs. So now a customer that's been out of market for five or six years – let's say it's a customer that's been out of the market for nine years. The market's gone up 28% in nine years. So a customer that had a $250 payment back then comes in your dealership and you tell them the payment's $550 and they go, you're trying to take advantage of me. No, it's just math. But they don't know that. You know what I mean?

[00:32:21] So to get back to the concierge because I can ramble forever. But the concierge would be like an advocate built into the dealership. You have somebody that takes control from a deal from beginning to end for service, sales, whatever it happens to be. You set it up at the dealership level. You have to figure that out what you want your concierge experience to be. For me, I would make sure there's a big value add to the customer where the cars would be delivered to the customer's home for service.

[00:32:46] The customer can get the car picked up if they need a detail or if they need an oil change, whatever it happens to be. They'll pay for that service. People will pay more for a touchless experience. They're already paying these advocates. Why aren't the dealership – and then what the worst part is is they let these advocates come in and sell their car. And now you don't even know if you're going to get that service business, which is what we need more than anything else. Yeah.

[00:33:12] We've kind of forgotten how all this started in the car business, how this whole thing was about service. You remember service was the fun money. That's where – now the service is what makes or breaks you. The survival money. Yeah. And we forgot about all that. And I don't know if it's ever going to fix itself. I mean the amount of ROs at most stores that I talk to are down 50%, 6% to 40%. You know, it's kind of crazy unless you're a Toyota store. I'm walking to Toyota.

[00:33:42] Toyota still wants to get in, et cetera. It's a Toyota store. I mean it's just Toyota. Yeah, same shit. That's the only one. Everybody else, boy. If anybody out there needs me to run multiple Toyota points, feel free. I'm in. I'm in. You can't lose. You can't lose. You were talking about Mitsubishi on one of your – you know, I have a theory on Mitsubishi. But you were talking about Mitsubishi and I did listen to that.

[00:34:09] I'm pretty sure what you were saying was that Mitsubishi decided to cut dealers. Was it in all states or was it across the country or how did it – Across the country. It was across the country. And it was – and I don't understand – I don't know if I understand it, right? We're in an industry, right, where we have to bring – we're a product-based industry. We have to have a better product. That's what brings customers to market.

[00:34:37] You're not going to build market share by creating scarcity of Mitsubishi stores. I mean, the only thing you're going to do is just make less used car dealerships out there because that's ultimately what most Mitsubishi franchises are. You know, they want the shingle and they want it so they can do financing and all that stuff. Yeah, they get a bank. So I don't know why Mitsubishi would start cutting it.

[00:35:01] And it was because of obviously low sales and maybe not, you know, showing the Mitsubishi brand. But until they rebrand themselves, I don't think you make those moves in my opinion. I think if you show a new product line and you get excited and you have new momentum, yeah, I think you can change. But I don't think you can change until you have momentum. Is Mitsubishi in the – because I live in South Carolina now, but I'm from Chicago, so I don't know – That's the plan.

[00:35:30] I want the Carolinas as well. I don't know anything about the – I know very little about the Northeast and the East period. I work for a guy, Marcus Limonis, the guy who owns Camping World. And we opened up in Florida three stores. We opened up in New York and Manhattan. So I've been around, but I don't know the market well enough to say anything. So my question is, with Mitsubishi in the Midwest, it's really like driven towards secondary credit.

[00:35:59] Is that – because I have a theory about this. Is that how it is by you and East Coast? So there was a company, an ad company, really good, really good at this. They decided – because I see it here happening when I'm in the shower. I hear that radio commercial 10 times. Oh, the Springfield, Mitsubishi. Well, this one's Carolina, but – But a dime down delivers? Yes, yes. And they talk – That annoying commercial? Every Mitsubishi dealer is on that program.

[00:36:27] And it's like – you know, I've seen really big Chevy stores. Gateway Chevy in Chicago was doing 300, 400 cars a month, but they went so secondary that it ended up turning them over. They were gone. They went out of business. Because you only live off that for so long. Because they're secondary for a reason. They ain't going to pay. It's like a blast for that oil until that next oil chain or brake job retires in an amount. It's like, hey, let's make value your pay here. Let's lose a lot of money. Exactly.

[00:36:55] But I guess that was my theory on Mitsubishi is that they kind of set themselves up with all these dealers buying it. I don't know whose idea it was to follow the leader of that. Well, I guess it works to an extent. It was the same guys back in the day that got the Kia stores. And you still see – and I'll get to that in a second. But you still have that mentality at a lot of Kia stores that their customers still that subprime because that's where they started.

[00:37:23] They were subprime guys maybe that had a Mitsubishi store and said, okay, well, Kia is the next evolution. Or that was their first step in the door. Yeah. And, you know, it's very, very similar. It's a similar makeup. However, Kia has done a lot better than Mitsubishi. What's the hours like in Philadelphia? If you work in a car business, what's the store open like in the East Coast? What do they run?

[00:37:45] You know, 9 to 8 during the week, 9 to 5 or 6 on a Saturday, no Sunday hours. Okay. It's similar. And I also didn't kill my people when it came to hours. I made sure they had quality of life. Yeah. I thought that was super important. I might have not given myself the quality of life that I should have been. Yeah. But I made sure my people had it. That's what I regret.

[00:38:13] I have, you know, a 36-year-old and a 35-year-old. And I didn't see really anything they ever did. And now that I have five grandkids, I got to see the first words, the first walk. We're live on something because my phone's going nuts. But the quality of life today, I see it as more important. You know, again, not bragging. I just wasn't that guy who went to lunch.

[00:38:41] I worked at Bell. Yeah. And that's just how it was. My wife was a dentist. The only way we knew, man. That's the only way it was. Just how it was. My wife was a dentist. So she worked Saturdays, too. So it wasn't uncommon. My son says to me one day when he's like 12, he goes, I feel sorry for Tommy's dad. And I said, why? He goes, well, he must not have a job. I was like, and I know Tommy's dad. I was like, well, he's got a job. What are you talking about?

[00:39:09] He goes, well, he was home Saturday when I was there. I was like, I had to explain. Not everybody works there because my wife and I, she has patients all day Saturday. And you know what a Saturday is like. It's making or breaking. So, yeah, that's the one thing I miss. I see it kind of coming back. I really thought that the car business was turning a leaf. And they were, I saw them go to nine to eight, like you just said, or 10 to eight. Chicago was nine to nine. Then I went to nine to 10.

[00:39:39] Saturdays till eight. It was just crazy. So I seen them start to do that. But then we went right back to packing everything. No salary. Insurance. I think people don't understand what PAC is. You know, it's funny. I always see people posting a pay plan out there. Is this a good pay plan? I have no idea. Yeah. Like, I can't answer that unless I know what's going on behind the scenes. Show me a financial statement and I'll tell you if it's a good pay plan. Right, right. Yeah, I just had a guy tell me.

[00:40:09] He goes, the guy got me. I was like, what do you mean? He goes, well, I signed a pay plan. I didn't realize I didn't get paid on the PACs. So, you know, one other place I worked there called the Pakistan. I understand. So, you know, these dealers, and I'm not crying poor for the dealer, but it's getting harder and harder. And at the end of the day, there's, they got limited inventory again. The wholesale hasn't caught up with retail when you go to the sale.

[00:40:38] So, I see these guys who are just buying cars at the sale and trying, you can't make money on them. It's just almost impossible. It's almost without that elevator of the rusty, dusty, musty. And it's just a tough way to go. But I really am, I like what you're doing. I think it's, do you get a lot of people that call you just individuals that call you and say, hey, help me with a car? Or is that just starting? How long have you been in business?

[00:41:04] So, as far as the advocate thing, what I'm doing is I'm branching that out a little bit differently. So, the advocate thing isn't what I'm going to be doing. I'm going into pushing it to advocates, right? So, I'm going to work as more of a vessel for it. Okay. Where, you know, so there will be another part coming. I'm actually changing the website now. One's just going to say Pearl Media and Consulting. And then there will be another one just for the advocate side as I'm building this out. Because the consulting side is obviously where I want to focus.

[00:41:33] I'm much better on the dealer side. I think I can be much more beneficial, you know, getting into a store and hopefully helping with the things that they need help with, like service drive, looking at their digital spend and figuring out not only if their digital spend is right, but, you know, is everything talking to each other? Or are we optimized to get it to the point where ChatGPT shows you being a good dealership? Well, I found, you know, and it started, you know, Cox is at AI for a long time.

[00:42:02] Cox has been in the AI business since 2003. I don't know if you ever heard of Zenzio. They're a service AI. So, he was on my show and he's been using AI for 18 years. So, he's been way ahead of the curve. But the one thing I noticed going into every single dealer when I, if I consult is I'll ask to see all the bills. And you would not believe how many times I see duplicate products doing the same thing against each other and just hurting the dealer.

[00:42:31] And the other one is. It was amazing when I was at the last place for a hot minute doing some consulting. I found a bill that was $3,700 a month that they weren't even using. I'm like, wait, wait a second. It was five years, five years. Yeah. I called the vendor for opcodes and she said, oh, they haven't been updated in five years. So, the program hasn't been used in five years and it's paying me $3,700 a month. Yeah. Okay. So, there's my salary. Yeah.

[00:42:59] That same owner, tell him we're going to spend $250 on lunch this week. He'll lose his fucking mind. Freezing. Yeah. We're going to take care of the sales people. We just blew $3,700. But the other thing is, half of the staff doesn't know how to use the tools they got. That's the other worst part of this. We all get sold this and we get sold that. Yeah. And AI this and AI that.

[00:43:24] If there's not an AI champion handling your AI, like if you, let's say you put Matador in your store or one of these AI programs, if you don't have somebody that's in charge of that, you're just buying another thing that everybody's going to say, oh, it doesn't work. That's a whole new, you got the sales department, parts department, service. You got the AI department now. It's a new department. Whether you like it or not, you better get involved. I mean. Somebody's got to manage it. Yeah.

[00:43:52] Like you said, anything that's put in dealerships, I think that's the biggest problem for vendors. That would be a great job that somebody could do and just consult and go to the dealerships and make sure you're like. Like the craziest part is like you'll get a vendor call you and they're going to sell you their new latest, greatest. Okay. Well, how many times are you going to come in my store and make sure the adoption rate's good and that, you know, I don't have process aversion. How many times are you going to be reaching out to me to make sure we're coaching, you're coaching me on it? Oh, no, no. We're just going to install it.

[00:44:21] And then you're going to get a sales part. You're going to get a product specialist. What's my product specialist going to be? Oh, they're going to sell me something. They're going to, oh, yeah. We're going to just try and sell you another package. Well, listen, you knew it from Cox. My auto trader rep just knew not to walk in. He's just like, listen, Drew. And I love him. Chris is awesome. I love him. We talk about hockey all the time. I text him. But like he would never, he knew. He's like, Drew, I'm not even going to pitch it to you. But here's what it is. If you want to look at it, look at it. Because he knew like, I'm like, just leave me alone.

[00:44:51] Well, the part of being with Cox and being any kind of sales for them. I mean, you think about it. They were smart. They've got every tool you need that links together. Not because I worked there. Not because I get a pension from them. But I think that if you, yeah, right. Who would ever thought in the car business? But I told my wife that today. I said, I'm going to get a pension pretty soon.

[00:45:19] But if you're with Cox, the good thing is, I mean, they all meld together. Like I noticed, and this isn't, I'm not throwing shade, as you would say, on e-leads or any other source. But, you know, you're working inside that Cox ecosystem. When you use them all properly, you really are, you're really significantly better than the next guy.

[00:45:42] So, as much as I don't want to pitch the products or say yes or no, that's the way to go today, I believe. You've got to stick with one company. They all interconnect. Now, I found a guy, when you get into the service thing, there's a place called Yoga Cars. So, it's Gaidario. So, Yoga Cars, what it does is it solicits your service department, every single customer.

[00:46:11] Every RO that gets open, he sends a text and he prints a check for a purchase of that vehicle right then and there. You can print as many of everyone or just pick and choose. And you set up what you want it to be. You want it to be Kelly Blue Book. You want it to be V Auto 95%. Right. That tool being used at Kia and Nissan stores.

[00:46:38] I had a couple young ladies buy 30 to 40 cars a month at a Nissan store and a Kia store using the tool. So, it's really, that's where it's all at. I believe there'll be no auctions five years from now. There's no reason. For what? There's no cars that are worth the shit. If it's there, it's there for a reason. Piece of shit. Leases, people are buying them out. But service drive is where it's at. So, it was really good talking to you. It really was. I'm glad you came out.

[00:47:07] If I can help you in any way. I mean, I've been around a long time. In Illinois, almost everybody knows me. I'm known as he's a really nice guy, but he can be a Jagoff. That's me. Yeah. Mine's he's a really nice guy, but he can be an asshole. Yeah. Or a little arrogant. My wife tells me I'm not happy. There you go. I said, I'm not happy. I'm just confident in what I do. There you go. I think I've hired 10,000 and fired 5,000. Somewhere in there.

[00:47:37] But I talk to a lot of owners. Cox said they'd give me that. But working at 55 dealers, every one of them, I still talk to them unless they're dead or they're out of the business. But I still talk to some more out of the business. And if I can ever help you with, you know, move in Pearl advocates anywhere, Pearl consulting, I'd be more than happy to help you. I would absolutely love that. Send, you know, send me some love. If there's anybody that you know that's just struggling in any of these areas. Yeah.

[00:48:06] I mean, it's a free consult. I give you a breakdown of where I see the areas of opportunity from the digital side. And then the other side is easy stuff. That I got to get inside and get blocking and tackling. Because if I'm not there, I can't answer it. How far do you travel? How far? Do you stay in Philadelphia, New York area? Or do you go anywhere? Wherever I'm needed. Okay. All right. I'm not afraid to get on a plane.

[00:48:31] It's funny you use the blocking and tackling term because Fabian was the vice president at Cox V Auto. And he used to say all the time, he goes, guys, just work on the blocking and tackling. That's all I need you to do. Never heard it before. It's never changed, man. It's never changed, though. Yeah, it's true. It's very true. We can get that down. But as dealers, we just forget that part. We just forgot about that part.

[00:49:01] We just got to remember we have people that need help. Yes. Lots of people that need help and need constant coaching, training, mentorship. You help your people. They're going to help you a million times over. Agreed. Agreed. Well, thanks again, Drew. I'm glad you came on. Thank you. Talk to you again. We'll have you on. Yeah. We want to thank you again for joining us. We'll definitely have to do this again.

[00:49:28] It was very insightful and very serious. Next time, maybe we can throw in some stories. I know you've got a lot of experience, a lot of crazy stuff that's happening. Oh, I've got some good stories. Yeah, that'll be our next one. Our next one is strictly the stories. Yeah, we'll definitely talk about it. Might need like a mute, like a beep button. No, it's okay. We don't care. No, yeah. We don't care. We don't care. You don't have to beep them.

[00:49:51] We'll let you pick one service, one sales, and one finance story, and then we'll compare notes. Sounds good. Again, we want to thank you, Drew, for joining us. And just to, once again, Pearl Auto Advisors. Advocates. Advocates, I'm sorry. If there's any way he can help you out, reach out to him. Here's the website again. Just go to the website.

[00:50:15] And with that, we just want to thank everybody for joining us today. And we look forward to seeing you guys soon in the next episode. Thanks again. Thanks for joining us, Drew. And we will see you again next time. I'll see you, Drew. Thank you. Thank you, guys. I appreciate you both. Thank you. Bye-bye. Bye-bye.

[00:50:46] Thanks for listening to True Confessions of a Car Guy. Download this podcast on all your favorite podcast platforms and follow us online at trueconfessionsofacarguy.com.