Episode #1285: Today we unpack record negative equity making deals harder to pencil, service and parts lanes regaining momentum as dealers look for profit stability, and a surprising $56B productivity hit caused by generational friction and AI adoption inside modern sales teams.
A growing number of buyers are rolling serious negative equity into their next vehicle purchase, creating real challenges for dealers trying to structure deals as lingering pandemic-era pricing continues to ripple through the market.
- Edmunds reports the average negative equity on trade-ins reached a record $7,214 in Q4, more than $1,000 higher than pre-pandemic 2019 levels.
- 29% of new-vehicle buyers with a trade-in are underwater, up four percentage points from a year ago.
- Nearly 27% of underwater buyers carried at least $10,000 in negative equity, making deal structuring increasingly difficult for dealerships.
- Brian Maas of the California New Car Dealers Association summed it up: “At some point… even the most creative dealer can’t figure out a way to help their customer get into a new car.”
- Our very own Chris Reeves did a deep dive in this morning’s ASOTU daily email on how dealers can talk to customers about negative equity and real ownership cost.
After a surprising dip late last year, dealer sentiment around service lanes bounced back in Q1 according to Cox Automotive, even as new-vehicle sales expectations remain flat.
- The Cox Automotive Dealer Sentiment Index for fixed operations rose to 63 in Q1, up from 61 in Q4.
- While improved, the score still trails mid-2025 levels of 65 and 66, showing the service business hasn’t fully returned to peak optimism.
- Dealer expectations for future fixed ops opportunities jumped to 69, up five points from last quarter’s low.
- With Cox forecasting flat new-vehicle sales around 16 million in 2026, service lanes may become even more critical for dealer profitability.
A new report says generational tension inside sales teams isn’t just awkward—it’s expensive. A report from SalesLoft and Clari estimates generational conflict between Boomers, Gen X, and Gen Z is costing companies about $56 billion a year in lost productivity as AI adoption reshapes how teams work.
- Nearly 39% of Gen Z sales reps say they’d rather be managed by AI than a human, while some Boomers say they’d prefer AI over working with Gen Z colleagues.
- The tension is pushing talent out: 28% of Gen Z reps are job hunting to avoid Boomers, while 19% of Boomers are considering early retirement due to frustrations with Gen Z.
- Today’s show is brought to you by iPacket Value. From accurate MSRP valida
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