40 Under 40 Props, Record new car payments, 18x Value for F1 Licensing

July 11, 2022
We’re kicking off a week of troublemaking by giving props to the Auto News 40 Under 40 list. We’re also covering the rise to record new car loan payments, as well as trying to learn a thing or two about how F1 has become a household name through telling great stories.
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Congrats to the Automotive News 40 under 40 young dealership leaders

  • “This year’s stars have led digital retailing transformations, found new ways to stock vehicles during an inventory crisis and chipped away at recruiting challenges.”
  • Some resident OG Troublemakers:
  • Ashley Cavazos, Director of Digital Performance, Walser Automotive Group
  • Mike Cavanaugh, VP Operations, Driveway
  • Jennifer Scarbrough, GM, Swope Hyundai-Genesis of Elizabethtown
  • Ben St. Ours, Managing Partner, CMAs Valley Honda
  • Jeff Ramsey, Variable Operations Director, Ourisman Automotive Group


Average loan payment for a new car has reached an all time high

  • June Monthly payments on new car loans averaged an all-time high of $686, according to Edmunds. Data began in 2005. Up 4% from January and 13% YoY
  • Record 12.7% of buyers now have a monthly payment of over $1000 (in 2019 it was less than 5%
  • In addition, avg down pmt up 27% to $6,333
  • Repayment terms are also being extended w more and more beyond 7 years
  • Used Car payments also near a record, currently up 12% YoY at $554
  • Take Away: Take note of the most struggling middle and do everything you can to empathize and help


How F1 became such an unstoppable brand

  • In 2012 the sport lost almost 25% of it’s worldwide viewership and sold 1.6 Billion worth of shares at a 9B valuation
  • It 2016 F1 needed another cash injection and sold the entire company to Liberty Media for only $8B
  • Liberty launched a targeted US campaign including the 2019 docuseries “F1: Drive to Survive” which featured all 20 drivers across 10 teams and it was a hit
  • Avg viewership per race went from 557k in 2018 to 1.4M in 2022 (up 47% from 2021)
  • Using it’s current deal w ESPN, value has increased 18x in its licencing value (5 - 90M)
  • Content marketing and branding are the core strategy. NOT paid media.
  • Other sports following suit of original content
  • Take away: Stories make people care

SPEAKERS

Kyle Mountsier, Paul, Paul Daly


Paul Daly  00:25

Holy crap, it's Monday already. I don't even know what happened to that weekend. Fun stuff to announce this week, I can hardly sleep actually couldn't sleep. But first we're gonna talk about the 40 under 40, record new car payments in 18x. Value at 10x 10x value is So last year.


Kyle Mountsier  00:46

So last year, why are you talking about multi look? Okay, well, we'll get to the story. But like all the multiples are going like this, except for people who understand one thing and we may may or may not talk about a lot, but it starts with the B and ends with and so it rhymes


Paul Daly  01:05

with Rand that we are like we jumped into the livestream this morning, just full energy, I could not sleep last night like I'm just back in that mode now where like, I slept fine on Friday night slept fine on Saturday night. But like coming into Monday, and coming into everything, like I tried my best to refresh over the weekend. But coming into today, it's just like, I just knew there's so much this week that well, you


Kyle Mountsier  01:30

know, what I love is so last week in the soda world. And then I saw one of our teammates posted on LinkedIn. It's like, when we don't get a Monday in a soda world, we feel like we get gypped because I'm short we someone cut us off at the knees hit us on a short week, and we didn't get the energy of a Monday. So this week, we got a Monday and look you're gonna use it to is always just like ready and raring to go on a Monday. And that is definitely the way I'm feeling today for sure. We were


Paul Daly  01:59

on we were on a client call. Because Kyle and I we have a little consulting thing going on called contagious on and we were on a client call. And we were doing something in the call on like on the screen adjusting, you know, a presentation. And and the client was like, wow, you're fast. And God was like, the only way we can ever do everything is to be fast. Fast is called survival Yes, only option for us to be fast. We're gonna try to slow it down a minute here just for you on the show to talk about some important things. But we're so excited that a soda tickets are live, people are buying a soda tickets, which is always exciting. I didn't check sales this morning. But this week has been a week we've been waiting for for a long time. Because everything we've done, all the selling all that stuff has been done without a single collaborator or speaker announcement. That's it, like coming to a thing, it's going to be great, trust us, it's going to be awesome. And people are like we're there. And then you're like, well, who's gonna be there?


Kyle Mountsier  02:53

Look, I mean, obviously from from the beginning, when you first started the live streams, and then all the way through the last couple of years, it's no secret that we're always desiring to bring the best partners, the best collaborators, the best thinkers, to the table, and we're gonna bring you some of the ones that have been a part of the asoto community for a long time. Some that are new entrants into the community, and then we're hoping to just bring some new faces, whether it be from inside or outside of auto retail, to make sure that you're getting the freshest insights and and learning from from some of the top people. So you know, what we're really excited actually about today. And you'll see more about this across media is we just want to announce and thank our presenting collaborator. And real quick, before we announce that explain what we mean when we say collaborator,


Paul Daly  03:48

yes. So a lot of events have a sponsor. And that means I paid money. So you would talk about me, we said, You know what, we're rebranding the name sponsor, because we don't like what it implies. So we're calling our sponsors, collaborators, because going into every one of these sponsorship, now collaborator relationships, we said, we need something from you not just money to put the event on, but we need your thinking, we need your service mentality. And how can we activate at asoto con, to serve the dealer body, we need to work together to do that. So that's why we're talking collaborators and not sponsors this time.


Kyle Mountsier  04:24

Exactly. Well, today we are announcing and so thankful for the collaboration of the cars.com family of brands they have they have come to the table and said, Hey, look, we believe in what we're doing. We trust you with our brand, and we trust you to put on an event that serves the industry in a way that I mean, you and I both you know are good friends with Alex Vetter. And when I look back at what he did, and the way he led cars.com and even the industry in the early pandemic, to partner alongside nada and a net same ad and go to the go to bat for dealers as essential businesses, right? Raise awareness be in DC, that that's that's it, that's an industry level participation that cars.com is saying, Hey, we're not just a, we're not just a third party listing site like we are for dealers. And so for them to be coming and bringing that level of intentionality to a soda con and to the dealer network and to the industry partner network, that's going to be there is just huge. So thank you, thank you to cars.com dealer inspire AQI, trade credit, IQ, the family of brands they're for, for coming to the table and collaborating with us to put on a sitcom.


Paul Daly  05:43

Yes, so as a presenting collaborator, right, like they're very much a part of everything that's going to happen at the show. So show them a little love. If you have a rap or you have a relationship there, send them a little text message right? If you know Alex have his cell phone number, send them a little text message be like, Thank you for thank you for collaborating with us. Otakon I'll see you there and then go get your tickets. Like I always say like you find out who your friends are, when things go bad. You find out who your friends are, when it's not easy, and you're not being successful, or there's uncertainty, that's when you figure out who steps up. And you know, you're talking about what the cars team and Alex did during the pandemic, right, no one knew what was going on. And no one knew what the financial future was. And even then being a publicly traded company, extra layer of scrutiny, right, your level of financial weight, and they were like, You know what, we're gonna go fight for the dealer. So close, close, close, close, troublemakers. And we have so many more to come, but we wanted to give them some love on day number one. We're also working on a few other things. One is a brand new podcast called Auto collabs. Soon To Be Announced more soon to be recorded. We haven't recorded it yet. But we got all kinds of plans. We have a name and some album art. So we're ready to go. Also want to mention Fridays, all things us covered last Friday, amazing conversation that we don't want you to miss it was the question was does good culture sell more cars? Right? Because a lot of people will look at culture as soft skills. Right? So the question is like, Well, does it actually sell more cars? Let's get to the brass tacks. Let's talk about it. We have a ton of operators savvy, savvy dealers that have put culture first that shared some of what it has done for their organization and how they deploy. So you can go listen to that. Back in the All Things used cars room, you can link to it, I think if you search it on our site,


Kyle Mountsier  07:24

yeah. So if you go to asotu.com it will be the first article that comes up or right in the daily pushback email. So you can find that both on our website you can read about it as well as link right back to the room if you'd like to listen to the hour in full and you can listen to it at like sped up time so it won't take a whole hour if you haven't listened to it yet.


Paul Daly  07:46

Very good. Speaking of people really making change. Segue All right. I opened my email this morning. I didn't realize today was the day but Automotive News released their annual 40 under 40 list today and we got some troublemakers on that list that says Oh gee. Yeah, we did. We did have some on the list last year I will say but automotive news from the article says this year stars have led digital retailing transformations found new ways to stock vehicles during an inventory crisis and chipped away at recruiting challenges. Here. We're gonna give a special shout out. Very apologies if we miss you if you're part of the email list of the community. Ashley from Walzer What's up Mike cabinet? I didn't know he was under 40


Kyle Mountsier  08:33

I know he snuck in though. I think it's like 30 at night.


Paul Daly  08:37

He it's because his like posture and demeanor just carry so much authority. Yes. That like man, you're not in your 30s Yeah. Definitely. I


Kyle Mountsier  08:47

learned making some serious trouble over there at at driveway for sure.


Paul Daly  08:51

No doubt. And can we talk about him for a minute? Now we'll wait. We'll wait. We'll wait. But Jennifer Scarborough from Swope, Hyundai Genesis, Ben Sedaris Managing Partner, Simi Valley, Honda, we were just at that store not too long ago and Jeff Ramsey varial, ops director at Ousman. Yeah, look trouble,


Kyle Mountsier  09:11

serious trouble. Let me just say like, Ashley Cavazos directing digital performance, the things that they are doing at Walser, from a customer engagement perspective, across the digital performance, so from CRM to digital retailing and all that, and her leading that effort is incredible. You know, what's happening at driveway and Mike Kavanaugh being and playing a major factor in what's going on there. Jennifer Scarborough, taking a small hyundai genesis store in Elizabeth town and being so dynamic with both the culture but also the growth of that store. I mean, if you ever go through Elizabeth town, like you know that there's not this isn't that the


Paul Daly  09:53

St. Elizabeth town from the movie? It is Oh, man. Okay, okay. Okay,


Kyle Mountsier  09:59

so that's Kentucky. And and then Ben sane hours, just like I think about him as this like well rounded person that is doing things from a culture perspective he's. And then also like this guy's running marathons and Ultras, and he's a runner out there. And then you've got Jeff Ramsay and this guy started just a few years ago as the only person in the marketing department at Jones Johnson and has now grown that team. And they have exploded across social media and driven so much attention on that brand. And now he's moved into the variable Operations Director at at oarsmen just a couple of weeks ago, so kudos to him. But just all around raw, out and out troublemakers, really putting down some really cool stuff across the industry. So kudos to you all, kudos to the rest of the other 35 that are on that list. And it was really cool. Just, I was reading through just some of the things that that those people had done, man, awesome.


Paul Daly  11:01

We need to we need to get them in this community because they get they understand what's going on? Yes, exactly. They just need to find the others. Well, they found 40 of their peers or 39 of their peers on the list. And as usual, man, thanks to automotive news for putting the list together. Thank you for them for just getting in the dirt with us every single day. If you know one of them, hit them up, get them get them in this community. We need them here. You need them here. All right. Another another story saw on the Wall Street Journal is that average loan payments for new cars. Average mortgage loan payment for new cars is at an all time high of 12%. The average $686 per month according to Edmunds, who started collecting data in 2005. That's up 4% From just January 13%, year over year. And if you remember, right, it was up a lot more from even the previous year in 2020. There's a record here's here's something that got me, you start thinking of a four figure car payment. So over $1,000 for your car payment. Now 12.7% of new car buyers have a payment over $1,000 and get this just in 2019. It was under 5%.


Kyle Mountsier  12:11

So you're telling me that 12% of Americans are making mortgage payments on their car.


Paul Daly  12:22

That's wild. Well, 12% of new car buyers,


Kyle Mountsier  12:25

right? That's Yes. Fair. Yeah. New car buyers. Okay. Okay. I'll take Well, here's here's what's interesting. Well, one, I think, you know, when you look at that, that that increase, right, it's well, percent up year over year on used car payments. Well, yeah. And new car payments,


Paul Daly  12:45

right. Oh, right. Yeah, used car payments are also up 12%. Yeah. So


Kyle Mountsier  12:48

when you look at that, you're you're thinking like, the 12% Bump, like how many people are getting 12% raises? Right? That's just it is, there's definitely I'm starting to see a lot more conversations around affordability and how it might impact dealers, right? And what's the ceiling? What's the curve here? where's the where's the plateau? Kind of interesting conversation. But the really interesting point, and as I was reading, I'm glad you put this in the show notes that the average downpayment is also up 27%,


Paul Daly  13:24

that's another alarm bell off in my head, right? Because


Kyle Mountsier  13:27

everybody's also talking about the equity position that people are going to be in in 234 years. And the reality is, is that we keep on talking about this, and actually Jonathan smoke in his in his reports, I saying like, hey, look, the recession may not be right around the corner as we feel it is because there is so much disposable income still in the pockets of so many Americans. And when you think about where does disposable income go? It goes to down payments and cash cash payments for cars. And we're seeing higher volume of cash payments for cars, I'm talking to many dealers that are going from that 70% closer to 60%, finance deals, and then a raisin 20% downpayment, we may not see the equity issues that we that we might perceive in higher pricing. However, there's this dichotomy of this higher price point of monthly payments. So there's just there's so much that I think just awareness is is really, really important, especially for mid to low tier credit. Right?


Paul Daly  14:24

Yeah. And that's really where the squeezes right. So you look at the they said the average new car buyer, right, they have great credit. So they've you know, they've had situations in life that have you know, they've been able to control or write, they just haven't gotten the knocks that have like, Look, you give a major medical issue, right, and your credit can be ruined, right, you can be the most responsible person in the world with your credit and that can wipe you out. So basically, you take the combination of high car prices, the payments are higher than ever. People are putting more money down than ever and still the payments are higher than ever and people are extending loan terms. More than ever, sometimes as much as seven years and the payments are still higher than ever. So if you think if you're just be be low, like great credit tier, that is where the squeezes coming up with probably the most when it comes to the new car market. And so it's like, like, That typically happens, right? The middle class begins to get squeezed in times of inflation, it gets to be been squeezed in a time of like, high high pricing, and, you know, market in market uncertainty. And so like, we've been talking, we've been beating the awareness drum forever. And like, Look, if you're in the stores, you know this already, right, you're seeing it your f&i Like everybody knows it's happening. And so paying attention to it, and just really leaning in on how can we talk about things to our consumers? How can we express things through our showroom process through our BDC process, right, that are already lead off, first step is empathetic toward this first step,


Kyle Mountsier  15:56

there is no reason why you should not be doing customer level interviews all the time right now to to express empathy through the conversation to your community, right? Like, if people are doing business with you, they trust you at some level, and probably at least 80% of them trust you at a pretty high level right now because they're willing to do business with you. So practicing empathy is really understanding what their mentality was through their shopping behavior, and then relaying that empathy to the community that may not have done business with you before. And I think that there's a real, there's a real great brand play and a real great way to connect with your current customers and your future customers in a way that says, hey, look, we understand where you're at, we're listening to our current customers. That's why people are purchasing with us. And this is why you should as well instead of just talking to them, talk with them. And you're going to you're going to build community a lot quicker that point right now, and this is like a prime time for that. The speaking


Paul Daly  16:56

of building community.


Kyle Mountsier  17:04

We as I was saying it I was like pausing, looking, you look at the segue, but it's kind


Paul Daly  17:08

of like, it's kind of like a volleyball game, right? Serve comes over. And one of us is like, Oh, I see what you did. There. So we've talked about this, this sport for quite a few times. And we're going to keep talking about it because more and more information, and studies keep coming out to explain why it's so good. We're talking about today about how f1 the racing sport became an unstoppable brand. So let's walk you back through a little history. There's a great article on front office sports that just kind of spread it out a little bit. And we think this is so relevant to the position that retail Automotive is in and how critical it is to the I'm not exaggerating, to the survival of franchised retail auto. As we know it, this is critical to the survival, we're not exaggerating. So in f1, in 2012, the sport lost almost 25% of its worldwide audience. And so how to sell shares to actually get cash injection of to it. So at the time was valued at $9 billion worldwide. In 2016. They needed another cash injection. So they actually sold the entire sport to Liberty Media for only 8 billion. So the valuation in 2012 was 9 billion, right? They sold it at a significant discount just a few years later. And then Liberty said, we're going to do a targeted campaign that's featured built around content, and brand and we're going to target the US they're going to feature all the teams and all the drivers in the little show called f1 drive to survive on Netflix, you may have heard of it. So fast forward, fast forward, their average viewership went from 557,000 to about half a million people per race in 2018 to 1.4 million in 2022. And they did it through content marketing, and paid media, they just signed a deal with ESPN, which triggered an 18x increase in their licensing value from $5 million a season to $90 million this season. All because they understood content. Were throwing pens, storytelling, I wanted to just throw the whole thing out there so you can see it and then we can just interact on that for a second. Okay, so


Kyle Mountsier  19:26

we're going 40 minutes on the pot. No, I'm just kidding.


Paul Daly  19:31

All the coffee back up, we're gonna need


Kyle Mountsier  19:33

is immediate company said what are we going to do about this valuation? We're gonna put a Netflix series on which looks like Ed and entertainment, but really, it's the most massive triggered brand play in content marketing that we have seen in the market in a very long time. And for a Netflix series to drive the value in the US economy. To see ESPN 18x Their current market value for viewership and for and for the placement of the actual races. It


Paul Daly  20:12

like if the answer wasn't just buy more banner ads Kyle


Kyle Mountsier  20:17

it's a Yeah, because they didn't they like this is every single company brand anything should be doing this at some level. Right? We I just said it like to have the conversations create community. And this is just it is textbook lesson you should study it, you should watch the series you should understand the way they went about creating stories, crafting people into the narrative, right? It wasn't just about racing now. It's actually about the stories of the drivers and the managers and the people within within the business of the business drama


Paul Daly  20:51

and the disappointments and the victories listen to


Kyle Mountsier  20:55

like reason, like I started watching it, thanks to Tim Cox in any pocket car now they encouraged me to watch it, and just watching it the attachment to brand that you have. When you watch a race, you feel like you know the person that's inside the car now,


Paul Daly  21:09

it's Unbeliev crazy. It's such a crazy emotion, honestly, to think of like, you know, the person that's in that car, you know, what's been going through his head through the week, you know, the fight he just had with the other guy, you know that he's insecure about this, right? That's the drama that life is around. The reason we bring this up. The reason we still keep talking about it is because we know there is a perception issue with franchised retail auto dealers in the general public. And we know so much of it is unmerited and unwarranted because of some bad actors and outdated bad practices that are happening. And we know that the rest of the retail public is not willing to step up to bat or most of the retail public is not willing to step up to bat for retail auto dealers. They're just not right EVs are coming in, that creates a great opportunity. OEMs are trying to rearrange their business to capitalize on the Evie revolution, but also like to just give the retail consumer what they want. Right. So we feel like we need to show people why they should care about auto dealerships, right. All the great things that happen day in and day out all the stories, all the drama, all the wins, all the losses, all of the struggle to truly build great businesses in great communities that serve people and mentor people and give people the opportunity to go from zero to successful, right. We just see that all day long, everyday long. And we need to show people why so we're watching f1 Kyle, and I've been saying this for a couple years now. Yes, saying we need to do something like this f1 gave us like some, I don't know, they gave us some substance to what the thinking was, but a Netflix series or something. We're cooking this one in the back. If you're thinking in this direction, let us know because obviously this needs a lot of money. And he's a lot of commitment.


Paul  22:56

Man, I guess we're just putting it out there right now just out there. But I'm telling you, like f1 proves that it's true content brand marketing, just that whole proves to the F hold f1 thing it's because a couple of years ago like who cares about f1 race and it's something they do in Europe right and now it's like what they just had Miami Austin right? These are the some of the most attended, you know, sporting events anywhere all of a sudden. Yep. Why? Because of storytelling.


Kyle Mountsier  23:23

Hey, go, Oh, I'm pumped. Ready?


Paul Daly  23:28

Ready to get into a speaking of storytelling. You have a story to tell today. You have some people to serve. You have some meaningful work to do. We're gonna get back to planning a show to kind of make sure a show two is giving you content every day. The moves that story for go get some