Car Dealership Guy

[NEWS] ‘Eco-friendly’ car sales are skyrocketing in unexpected places: Take Arkansas. Electric vehicle (EV) and hybrid sales share soared from 0.9% in 2019 to 8.9% in 2024 (up 875%). Others, like Louisiana (up 299.1%), aren’t far behind. But that’s only for electric AND hybrid sales. When parceling out EVs only, the numbers are solid except in… Previous EV “hotspots” like California now rank near the bottom for fully electric adoption growth. Same goes for Hawaii and Oregon. Both saw unusually high EV market shares in 2019… Now, sales are rising at less than half the national average. But even as EVs hit a “plateau” in these states, hybrids are stepping in and will likely continue driving sales in most markets. Read today’s top automotive stories, presented by Overfuel: https://lnkd.in/dJ-GS73j (Data source: iSeeCars)

Read the lead.

Making the leap from manager to owner: — You’ll hear “no” 20, 30, even 40 times. — Deals will fall apart repeatedly. But Kyle Coleman from Coleman Automotive Group faced all that and still made it happen. Here’s his secret:

[NEWS] TikTok is turning viral videos into real-world car sales: According to new data, 66% of TikTok’s auto fans plan to buy a car in the next two years, and #Car videos have seen a 25% rise in views YoY. Brands like Toyota have already tapped into this growth, launching creative campaigns to reach new audiences, like #LexusGirl. But dealers are also getting in on the action – Creators like Lincoln salesman RussFlipsWhips have over 500K followers and Mohawk Chevrolet continues to go viral for their “The Office” parodies. And with 21% of future drivers are still undecided on which brand to choose… There’s plenty of room for auto retailers to capture new customers. Big picture: TikTok isn’t just around to entertain – the platform is in the business of selling products. And the brands and dealers who engage now are the ones steering the next generation of buyers. Read today’s top automotive stories, presented by Overfuel: https://lnkd.in/dTcRDsYq (Data sources: TikTok)

[NEWS] Vehicle financing was slightly easier to access in Sept.: Yet — there are signs of trouble ahead… The Dealertrack Credit Availability Index showed a 0.4% improvement in credit availability, breaking a five-month tightening streak. Lower auto loan rates and more subprime approvals drove the improvement. But the concern is the growing reliance on subprime loans, even as delinquencies in this segment hover around near record levels. On top of that, long-term loans (72+ months) are rising – This means more buyers are taking on bigger financial commitments – running the risk of negative equity, which is up 1.7% YoY. Bottom line: While credit access is loosening… for now, the trends toward riskier loans could spell trouble ahead for both buyers and lenders. Read today’s top automotive stories, presented by Overfuel: https://lnkd.in/gdk44M8V (Data sources: Cox Automotive)

Some dealers are built different: In less than 7 months, Kyle Coleman acquired multiple franchises on his own and became the third-biggest Stellantis dealer in his region. I recently spoke to Kyle on the Car Dealership Guy podcast, about his unique journey, what it takes to turn around underperforming stores, and his future acquisition plans. Top lessons learned from Kyle: Earning investor support. — Starting the dealership acquisition process without prior ownership experience can be daunting. — There’s not a lack of investment money — there’s a lack of talent to invest in. — Those with proven track records in the auto industry can get support from investors regardless of their age. Dealership valuations. — Valuing stores post-COVID is challenging due to record profits in recent years. — Buyers will usually pay a lower multiple in rural markets – the tradeoff is that the location’s market efficiency usually isn’t as high. — But proper leadership can make meaningful improvements. Outperforming the competition. — Kyle sells more Stellantis vehicles than any other franchise, despite the brand’s struggles. — Old-school thinking on car prices is leading many dealers to price vehicles at MSRP when the market no longer supports this kind of strategy. — Dealers should instead focus on driving profits in F&I and fixed-ops. Investing in people = success — Employee retention is as simple as it is essential: pay as much as possible. — The car business is challenging and the mental toll can be intense. Good salaries and benefits are required to keep good workers happy. — High compensation also allows employees to equate the store’s successes with their own. Private equity plans. — Funding acquisitions through private equity can be painfully slow since dealers don’t maintain full control over their growth. — By founding their own private equity firms, dealers can start new funds for each acquisition while maintaining a majority stake. — This can lead to faster expansions, if dealers can obtain the capital needed to fuel growth. The full episode is live! Stream it now — YouTube: https://lnkd.in/eZ2Qxsf9 Apple: https://lnkd.in/emC9awan Spotify: https://lnkd.in/eX6igzhy

Subprime delinquencies are nearing all-time highs 📈 The 60+ day subprime delinquency rate (aka 3 payments past due) just reached 6.12% -- only 0.2% lower than February's all-time high for auto asset-backed securities. The next 6-12 months will be a monumental test of consumer health. (Data source: Fitch Ratings)

[NEWS] Dealership mergers and acquisitions (M&A) are gaining steam: While buy-sell activity has slowed compared to the last couple of years, around 500 stores are still expected to change hands in 2024. Here are some of the big moves driving M&A action in Sept. and Oct.: Beyer Automotive Group offloads 8 Virginia dealerships. — Open Road Capital took 5 stores in the Washington, DC area, while Jim Keffer and Jon Alcorn nabbed the Winchester locations. Toyota dealerships are hot nationwide. — Victory Automotive Group purchased Weiss Toyota of South County, one of the top-selling Toyota dealerships in the St. Louis area. Ed Morse expands in the Arizona market. — The group acquired 7 franchised dealerships and a used vehicle store from Lawley Automotive Group in Arizona. AutoNation divests two Ford stores. — As part of a broader effort to refine its portfolio, AutoNation offloaded one store in Georgia and the other in Minnesota. Gus Machado Ford dealership sells. — Majority owner Victor Benitez took full ownership of the store for a cool $19.3M. Read today’s top automotive stories, presented by CDG Recruiting, a Car Dealership Guy Company: https://lnkd.in/emRi4zvb (Data source: Haig Partners / Dave Cantin Group / The Real Deal)

[NEWS] A perfect storm brewing in the car insurance market: The average premium (for full coverage) in June was $2,543—up 26% YoY. And in some states like New Jersey, increases were well over 40%. The reasons? Insurance companies are trying to recoup their losses from 2022-2023 while dealing with rising repair costs, pandemic-driven supply chain issues, and a growing shortage of auto mechanics. Plus – an uptick in uninsured drivers adding fuel to the fire. And now, damage from Hurricanes Helene and Milton could make things more complicated... Though the real impact on premiums might not hit immediately as insurance companies play catch up. While we don’t know what the true costs of these storms will be — If we look back to after Hurricane Ian in 2022, repair costs went through the roof. Parts were so hard to come by that wait times for repairs stretched for months. And insurers had to bring in special catastrophe teams just to keep up with all the claims, which only added to their expenses. Bottom line: As hurricanes and rising costs collide, the ripple effects on the insurance market are bound to hit everyone in the foreseeable future. Read today’s top automotive stories, presented by CDG Recruiting, a Car Dealership Guy Company: https://lnkd.in/ejunWUn4 (Data sources: Bankrate / CCC Intelligent Solutions / Bryant University)

Super simple use case for AI in car dealerships: Booking test-drives. Dealerships have started using AI to manage incoming calls/texts... And according to Podium, they’re seeing a 25% increase in test drives booked over human BDC teams. This presents a big opportunity for consumers and dealers: For consumers: quicker responses at any time of day. For dealerships: higher internet conversion rates, and increased sales as they shift staff from answering phones to doing deals on the sales floor. Try out Podium’s AI BDC here: https://lnkd.in/gdXa9mE3 (Data via CDG parter: Podium #podiumpartner)