“How’s your family?”
This is the essence of Todd Caputo, our guest today on Auto Collabs. Todd is the definition of loyal and caring. And on top of that, he’s a really skilled operator. He sold his 4 dealerships, but before that, his dealerships retailed 6000-6500 vehicles annually of which 5500 were used car sales. Paul J Daly and Todd spend time talking about what Todd is up to now, and some of the trends he’s tracking for the future.
What we cover in this episode:
4:04 Todd talks about navigating the pandemic and being set up to pivot quickly, but ultimately how a meeting with Sonic Automotive led him to sell.
12:05 The condition of cars that Todd is seeing at auction are worrisome. He has several suggestions about how to improve condition and sellability.
17:25 There are 2 schools of thought when it comes to appraising vehicles. One is to spit out an exact value and the other is to give a range of value. Todd thinks that regardless of which option you use, there should be a way for customers to upload their own pictures of their car.
23:17 Our interview with Todd wraps up by looking to the future, and specifically, EVs. Todd owns 3 Teslas, and knows the challenge of servicing these vehicles. He talks about how dealers can prepare to be a part of the service network as more and more vehicles go electric.
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Paul Daly, Todd Caputo, Kyle, Michael Cirillo
Paul Daly 00:00
All right, there are very few people that will tell it tell you like it is
this is Auto Collabs
Paul Daly 00:12
in a way that Todd Caputo will tell you like it is. I worked for him actually, as a vendor, my first company Image Auto. And I just remember he comes in, he's got this way of like just dead staring you. But he's actually listening and waiting, like to give you a meaningful response. But you're just like, the eye contact. And the intensity is just quintessential of the type of person that Todd is. And that that's like, goes all the way across the spectrum of savvy business person to caring individual.
Yeah, like that breakthrough without a doubt. So actually, the second text I ever got from Todd Caputo, the first time Paul recommended me kind of meet Todd and we got on the phone real quick. He had kind of set up a time for us to meet we got on the phone. And the second text I get from him after the one about like, Hey, when are we going to meet was like a few weeks later. And he texted this, Hey, Kyle, how's your family? And I was like, Man, that is like, someone that I am looking up to follow in his lead and and and to listen to his footsteps and watch what he's doing. Because that level of empathy is what I definitely wanted to aspire to.
Michael Cirillo 01:25
Oh, yeah. Well, when I meet him, and he started sending me text messages he's got he's gonna be so awesome. I have nothing but I am so excited. Just the way you guys have positioned. Todd, I'm so excited for us to dig in and learn from him and learn from his industry experience, if I understand correctly, he's been on both the franchise and independent side. Is that right?
Paul Daly 01:46
Yeah. So well, he actually his his, his dealer group, which he sold the Sonic Automotive about two years ago, became Echo Park locations. The used car outlets, because he had he had basically five independent locations of used car outlet. And then he had a Chevy store. So okay, he's kind of really played in all the spaces. He's also been an early investor in tech companies that you know, and love and probably use their products. He really is. He's one of those sleepers that I think from the outside you might think, Oh, he's just a car guy. Right? But the more texture and the more depth you get, you realize like holy crap, I need to listen to what this guy is saying. Well,
so you have an opportunity to listen to what this guy is saying. We hope you enjoy this interview with Todd Caputo.
Paul Daly 02:37
Todd, you get to actually do this interview in person which is so much more than we're able to do it's
Todd Caputo 02:42
always good to see you at your amazing facility have you done a great job Paul, the place is beautiful man. It's
Paul Daly 02:48
it's fun to just be be a part of the motion in number I saw before it was any of you guys out in the raw, you saw it in the raw in the same form that my wife looked at, it was like, you want to do what you want to buy what so I appreciate that you're a man nice to beautiful, you're a man with some vision. So I think this is a stage in your life and career. When you've built your own thing, right? Your dad started the dealership, and then you took it over from him. We'll talk about that in a minute. And then your stores sold, you sold the Echo Park or Sonic Automotive. And then you got to spend two years inside a publicly traded Auto Group, which is the opposite really, of where you had spent your time for sure. And so now you have a new perspective, right, and you've brought it out, you've relocated and you kind of are moving around between a couple of locations. You're starting to work with dealers, and actually a consulting mentality. But you're also you know, you've been investor in a lot of tech companies that have hit so I think a lot of people don't understand. I've seen it from knowing you for a number of years. And I always call you asleep or I was like, oh, it's computer was asleep for like you don't you don't even see him coming. So why don't we talk a little bit about like, what, what the last three years of your life have been, like start like, from sale through Sonic and then kind of what you're focused on now.
Todd Caputo 04:04
Oh, my God, I don't know where to start. So the first thing I'll tell you, Paul, and you know me very well, I would tell you that I'm blessed. extremely blessed, blessed with a wonderful family. And blessed with the fact that I was able to you know, sell my business and exit when I did I miss it. But the last three years have gone by for me like in a flash. Yeah, that didn't happen so quickly, because COVID just kind of hit us like all the sudden like I remember being at NADA right. Yeah. And it was right before COVID hit and we were kinda like nobody was wearing masks yet. And we had to like no one's ever wore a mask. Nobody was yeah, there was no mask was like something people did. Another company has little bottles of sanitizer, though, that I remember. We walked around nada, we shook somebody's hand. We walked away and sanitized. A little bit more sanitizer on your hand and then all of a sudden, you know, five, six weeks later, New York. I mean, we were shut down. Yeah. And, you know, thank God that I had done all the things that I've done in my business the last few years to pivot to really do omni channel the right way. And really brand myself the right way, become one price become single point of contact, I saw how all those things that I kind of knew in my gut,
Paul Daly 05:18
that I had to do know those were just good for like a retailer. Today, we're
Todd Caputo 05:21
good for business regardless, but they were great, especially for the first probably nine months at COVID. Because in New York, we were really restricted as how we could sell and service cars. Yeah, and we could only do it online for a while and remotely, and we were geared for it, you were able to do it. So we were able to sell a lot of cars with not nearly as many people and buying cars, let's not forget that and buy cars, we're still a function. So you know, having the opportunity to meet up with with Jeff Dyck and David Smith and the team from Sonic and have them, buy my businesses take my people in not just my used car store, but my Chevy store as well. And treat me and everybody the way that they did was amazing. And then I worked as a director for delivery center operations for, you know, a year and a half. And I, Jeff asked me to open up these delivery centers for him all across the country. Were basically they were in markets where they didn't have a physical location where there were cars, right? They were just small locations where people bought cars online and over the phone and took delivery there. So it really it suited me, well, that job. But the culture was very much the same, because of the fact that you know, it's Sonic, the one of the reasons why I liked the company, and I sold to them was because of the fact that, you know, there were definitely layers of people. But it wasn't hard to get to the top and there wasn't a lot of layers, if that makes sense. Pretty free flow. And communication is like if you wanted to reach out to Jeff Dyk or to David Smith, or to Tim Kaine, or anybody, you know, on the seventh floor, which is what we call it, it's Sonic right? It was a matter of a text message or a phone call or an email, and somebody always got right back to you. Yeah. And I thought to myself, wow, you know, to be a part of a company and to sell to a business where it's so flat at the top really made me feel good about my decision was that was how you run your business to exactly like anybody that worked for me at the time that I worked with could get a hold of me 24/7 365. Same with my customers, right? They wanted my phone number, they had my personal number, then my personal email address, and I always got back to people, it was the same thing. It's Sonic. What I'll tell you was different, though, is, you know, I guess the speed that gets things done. And the things happen? Well,
Paul Daly 07:35
I think you're the kind of person that you know, have you ever seen that movie Zootopia with a sloth is at the DMV? Right? I bet you're the kind of person that often feels like the rest of the world is moving at the sloth speed.
Todd Caputo 07:47
Yeah, I like to move at a pretty quick pace. And not to say that decisions didn't get made. But they did. But you know, it's so different, it's complex. There's layers and layers of people in one decision.
Paul Daly 08:01
It's a public, right public, there's all kinds of complexity there
Todd Caputo 08:05
for sure. And there's so many people that one simple decision that you would think when your own small business, well, we'll just going to get this done. We don't need, you know, several meetings with all these people to discuss it, we can just just get it done. Try it. Let's do it. Let's try it. Let's do it. Well, it doesn't work that way. And I struggled with that for a long time. Because when you own your own business like you do, right, yeah, you make your own decisions, you surround yourself with really smart people, I was surrounded myself with brilliant people smarter than me, I'd be the first one to admit it. And we would all gather around the room. And I would come up with ideas or we'll come up with ideas. And ultimately, I ended up making the decision as quick as or as slow as I wanted to. And it was hard to do that in that environment. But I had a blast. Yeah, I learned so much. So
Paul Daly 08:47
how long? How long has it been since you've stepped out from your position there?
Todd Caputo 08:50
Um, Memorial Day was my last day. So it's, it's Oh,
Paul Daly 08:54
you look relaxed?
Todd Caputo 08:55
I do I feel relaxed and relaxed. And I was there. But you know, I feel like me again. Yeah. Because I'm back working for myself, which is really, really good. And I get to be in in showrooms, right, small stores where it's really, because you're doing, you're doing some concern, some consulting now. And you know, I was at a Chevy store in Holland, Michigan a few weeks ago, and I walked in there and it reminded me of my old Chevy spot like home. It did. You know, I was with one of the guys one of the owners, the owner's son, Dominique, and we were walking through the, through the service department, and he had three or four or 5 different people coming at him with different questions. And he's kind of like, answering this guy's question answering a phone call texting somebody back dealing with Colorado customer, right. Yeah. So like, I'm like, wow, you know, I remember it all kind of came back to me. Yeah. And it felt really good to not only be back in a family on smaller store, helping them out, but to be in a Chevy store, obviously, because I've been a Chevy dealer was a Chevy dealership, say for, you know, for 28 years and it was great.
Paul Daly 09:53
So, so like, I want to talk about what you're seeing with your perspective on the industry because it comes from real grass routes to go and then like real high up on a public. Yeah, right. And you kind of see that. But before we go there, I would love to talk about your involvement in issue interest in the technology space in automotive, because you've made several really great picks over the years, in companies where you saw the potential. I don't know if you're, if those are public, or if you mind talking about the two that I'm thinking of, I don't know if you know how to do that. I don't
Todd Caputo 10:22
know. I don't but Well, I'm sure we'll probably get there. Right. So, you know, when it came to technology, I was always very open minded. When it came to technology. In my businesses, I always thought that it was wise to, to be knowledgeable about all the different technologies in the auto space and outside the auto space as well. You know, you can still do business traditionally, in the car business, especially now and probably get by just fine. But, you know, back in the day, I was building photo booths. 15 20 years ago, no one even thought about it, right? You know, buying cars off the street. We were doing it forever. You know, let's
Paul Daly 11:01
talk about buying cars, right? Yeah, that's kind of where my mind is going. Yeah, the used car business is
Todd Caputo 11:06
still but I still am buying cars. I know you do. Yeah. So I personally, you're buying cars. But let's talk well, no, no, I'm buying cars for dealers, too. Right. So I met. So I'm seeing I have to tell you what I see that I think is important for people. You know, I'm attending physical auctions, still, because I'm buying cars for a few of the dealers that I can sell for, at the physical auctions and online. Because I love doing it. Like when I had my stores, like I bought cars, and everybody else did the rest because they were great at what they did. And you know, buying cars, I love buying cars. And I was really, really good at it. Right? Yeah, not saying that humbly. Yeah, but I was very good at it. And it was a gift that I have. So you're still doing it because you like doing it because I do. But what I'll tell you is this, I think that dealers are getting really, really sloppy. And I'll tell you why I say that. Because when I go to a physical sale, and I see a dealer running 30 40 50 or 100 cars that are quote, unquote, over age, and I look at the condition of these cars, I see why they've aged up, I spend a lot of time on online auctions as well, especially ACV. ACV has the best condition reports in industry hands down in the most detailed, the most accurate, the best. And I look at the condition of these lower mileage, late model cars. And these are coming off of dealers front lines, and I'm in, I'm in shock. And I feel like a lot of dealers, not all of them, but a lot of them have gotten very, very sloppy over the last year, because new car dealers have been making a lot of money, selling new cars for sticker or better, forcing consumers to maybe take an f&i product or 2 or to finance it just so they can actually get the car because they can't get it which you know, I don't necessarily think is the right thing to do. And I think it's going to come back to haunt people. But I think they've gotten very sloppy with merchandising their cars, physically on their lots, and online as well. And I think now the market starting to turn a little bit and I think some of these bad habits are going to come to roost and they're going to show as basically losses on dealers and dealers financial statements.
Paul Daly 13:04
So when you say the condition they're coming, you say dealers aren't putting the time and energy into reconditioning the vehicles. And they're saying like, hey, we don't know why but these aren't selling. So we're gonna start rotating our inventory, we're
Todd Caputo 13:15
just gonna, we're just gonna lower the price, right, we're just gonna get on vAuto, or we're gonna get a first look. And we're just gonna lower the price of these cars. Well, there's a reason why a car doesn't sell. And this is what I always stressed when I own my own businesses, and I stress it with with the dealers that I work with. Now, there's a reason the car doesn't smell or good car doesn't sell. It might smell, which is just I was gonna say, right, get outside and look at your cars, drive your cars, walk around your cars, what do they look like? What do they smell like? How do they drive? What does the consumer see? Get online and look at your inventory? Was the consumer see on your website? Do you look in vAuto? Or first look at reports that show your inventory and where it syndicates, right. Like I lived in vAuto when I owned my stores. And one of the things I looked at when I before I priced a car was whether or not that it was the pictures were actually showing up on third parties. Just because you use HomeNet or vAuto, or another company to syndicate your inventory. I got news for you. It's software doesn't mean it's gonna be there. It doesn't mean it's going to be there. And all of a sudden, if you think Well, geez, I'm the lowest price on CarGurus. Well, maybe your mental pictures. Yeah, or maybe the pictures or the phone picture. Maybe there's one picture or two pictures and you have 40 of them uploaded, there's a problem with the software. You have to have someone that inspects that stuff on a daily basis and have processes set up to make sure so, you know, digital merchandising and physical merchandising of cars is really, really important. And I don't understand why. You know, we feel this need to just go out and start slashing prices on cars. Every car has a story, right? Why is it not selling?
Paul Daly 14:56
So your surgeries I mean, what you're saying right now goes against Some of the conventional wisdom that I'm hearing in this day and age of people saying like, people are buying anything, right? They're just they're, they're looking at the price and looking at the model and you can sell it kind of sight unseen. And that people aren't paying as much attention to that which I think is driving the this CID or commoditization,
Todd Caputo 15:19
I disagree. And I'll tell you why. Right. It's it sounds
Paul Daly 15:21
like you do. And obviously, you're saying like, what you're seeing is proof that you're right,
Todd Caputo 15:26
I think six months ago, or even a year ago, when inventory especially used cars was really, really short. Yep. It maybe didn't matter. To some dealers, it always mattered to me, because you got to take pride in what you're selling, right? Like
Paul Daly 15:38
it was it, it's part of what you want now,
Todd Caputo 15:40
look at if I'm a consumer, and I'm going to go buy a 20,000 mile two year old car, and it costs the same as a brand new one. Yep, that car better be perfect, better feel new, it better feel new, a better smell knew it better drive new. Yeah, and it better look new. Yeah. And I'll take it one step further. If I'm a consumer, and I'm buying an 80,000 mile car or 100,000 mile car, for a monthly payment of what used to be a 20 or 30,000 mile car, then the car should be reconditioned properly as well may not have to be perfect cosmetically, people can accept that. But mechanically, I can tell you right now, a consumer is going to demand that the car is is is mechanically reconditioned properly with 89 to 100,000 miles on it, it has to be because that car is overpriced, too. Right? That used car is 30% more than it was with 80,000 miles on it. And it's almost 40% More than it was with 20,000 miles on it. So as a dealer, and an operator, you have to really make sure that your cars are reconditioned properly. And if you don't want to get sloppy if you're gonna have a problem, especially going in the fall or the winter.
Paul Daly 16:52
So that's one side of the equation that you used car business, the other side is buying cars. So much conversation, so much more focus in the last 24 months in buying cars off the curb than ever, right, you were kind of on this train early, which is why you're set up for the pandemic. But now a lot of people are talking about it, it kind of has turned into some sense in the measurement of how successful you're going to be in the used car business, and how well you can buy cars off the curb? Well, who do you see? Like? What's the mentality that's winning? Who is doing it best? And why are they winning?
Todd Caputo 17:25
So you know, there's, there's two schools of thought with this. There's a school of thought that you can have a widget or a form on your website that a consumer fills out. And it gives them an instant value on the car every single time. And it's an algorithm. And it but I don't necessarily believe in that. And I'll tell you why. Whether you're a public like a Carvana, or Carmax, or Sonic or whoever. Because every car is different, every used car is different. I'm a firm believer in show a consumer a range of what it's worth, you know, that car is worth between 15 to $16,000 or $17,000, depending on condition. And then here's some market data to to go along with it kind of like what Trade Pending does. Yeah, Trade Pending has a really good job with that. They give consumer data. Now whether or not consumers totally understand that I don't know. Sometimes I don't understand it either with some of the things they put on the screen, but at least
Paul Daly 18:26
it there's something that substantiates the validity, there's
Todd Caputo 18:29
validity there. And there's a breakdown of what it's worth retail, what it's going to cost to, you know, a dealer to recondition it and the justification of the price. But for someone to get a firm offer on a car, I believe. And if you want to get someone who really wants to sell their car, and isn't just fishing for a number, the ability to use a tool for the consumer to actually upload photos of the car. And I'll give you an example of sometimes how these algorithms get broken. If you choose aftermarket wheels, if you choose to the car has damage. If you choose, you know that the car has maybe been in an accident, or there's some kind of defect, it throws all the algorithms off. There's no question about it, it just does. You need the human eye to look at the stuff if you really want to buy every car off.
Paul Daly 19:16
Once you get to that point want to check one of those things, right, then there's a whole other layer of human interaction that 100%
Todd Caputo 19:23
So you have to have a human or you're gonna price it wrong, you're gonna you're gonna get a wrong number. You're gonna put the wrong number on the car. Yeah, you're gonna put too much on it, and you'll be under and you'll be under or you're gonna upset a consumer and you'll lose deals and you're gonna lose deals. So I believe that the best tools and there's several of them out there that vendors have. I have my favorites, right. Yep. That
Paul Daly 19:44
you can say your favorites. This is Auto Collabs. All right. We're gonna
Todd Caputo 19:46
Roadster's tool is hands down I believe one of the best Yep. I've was an investor in Roadster and I'm not just saying that because I was an investor. Yeah, they already sold that does it? Yeah, right. Like their tool is hands down and I believe the best worked extremely well for us. Especially during COVID, to appraise trades remotely, and to buy cars off the street. But when you get a consumer who's actually engaged enough to take photos of their car very, very simply with their phone, and very simple process, you'll be surprised how good the photos they take. Actually,
Paul Daly 20:15
I've heard that time and time again, David Long was saying that, Oh, yeah, when consumers send photos through, he's like, they're going to be really good. Like people are used to taking photos now.
Todd Caputo 20:24
Well, they take pictures of what's actually wrong with their car, right? Which is actually really a good thing. But I'll tell you why. Put yourself in the consumers shoes. I want to sell my car. And an algorithm gave me $20,000. And it didn't allow me to send pictures in and I show up at the dealership. I think I'm gonna get a check for 20 grand, Mr. Used Car Manager walks out with his iPhone. Yeah, right with his vAuto. Or his AccuTrade or whatever? Oh, something's wrong with that car here. Something's wrong with that car here. We're gonna give you 18 7 $18,750. Right? Wait a minute, I thought I was gonna get 20 grand all of a sudden, not only that, I'm also busy, right? I always looked at the pictures that people send in of their cars, because you learn a lot about a consumer from their car that they're driving. Yeah, I'll give you an example. You see two car seats in the back of a car? Yeah. You see sporting gear, people don't have time to go to four different car dealerships. And you know what they get annoyed? Yeah, so we live, it's 2022. If you can upload eight or nine pictures, and a person can look at them. So somebody can get a range of what the car might be worth, and then a firm offer 15 or 20 minutes later, or even an hour later. Yeah, I got news for you, they'll wait before they gotta get no one hour, put their kids in the car, and go drive to a dealership and then sit there and wait. Because you know, damn, well, when they walk into the store, no one's gonna wait on them immediately, they're gonna sit at the store and wait till they drink coffee, they gotta wait, their kids are running around the showroom. People don't have time, they don't want to deal with that. So the dealers that I work with, I'm advocating for them that they use a tool where consumers can upload photos if they choose to, or if they want to, I think it's super important. And there's money to be made buying cars, obviously, for retail for your lot. But for wholesale as well. You know, it could be a $500 car, a $50,000 car or a $500,000 car, it doesn't matter, you have to pay the same amount attention to no matter what it is. Because if you don't, somebody else will and you're gonna lose, you're gonna lose an opportunity to buy a car to make money with retail or wholesale.
Paul Daly 22:25
So you have the used car side of the business, the acquisition side of the business. My last question for you today is, is really just kind of zooming the lens out for a second. You see, and you pay attention to the news and what's going on. So you see everything that's happening with the change in this consumer mentality toward the automotive industry. I've been saying that cars have become part of pop culture, again, in a really serious way with EVs. And this whole energy, no pun intended around battery operated vehicles, and OEMs starting to position how they want to position and legislation doing what it's going to do. The online abilities of dealers changing and shifting and what's going on in Europe. When you zoom out, and you look at the whole thing. What is your thought on what dealers should be focusing on in this next 12 to 24 months?
Todd Caputo 23:17
So there's a couple of ways to look at this. I think that it's really nice to think that every car is going to be electric in five years. I don't think it's reality. I think that if you're Mary Barra, or another CEO of a large automaker, I think you're definitely going to get for electric but I wouldn't be thrown out ICE cars altogether. There's no way it's impossible. There's not enough infrastructure in this country, in on highways, let alone neighborhoods to sustain everybody plug it in their car. Yeah, it's great. Like, look, I own three Tesla's right. You know, this. I really, on three, I don't a lot of cars. I own a lot of cars, right? I got to few Teslas and I love them. Right? They're good cars. Yeah. But I can tell you from being a consumer, the buying experience with Tesla is relatively simple. It's relatively painless. But the service side of it is challenging. I've had to serve as a matter of fact, before I came up to New York, I had to take my son's Tesla to the Tesla store because there was a crack in the, in the roof of the car and the glass, something sharp hit it and it cracked the glass. And I had an insurance claim I had to get it taken care of. It took weeks for me to get into Tesla. To get it done. I had to wait there for a long period of time. I've had Tesla come to my house before for other repairs. And they're backed up. Yeah, you know, I live in Charlotte now, right? There's one location for Tesla. So I think there's opportunities for franchise dealers to be able to service electric cars. Not necessarily at their store, but maybe at other locations as well. It'd be interesting to see if any of the independent used car or the independet service companies like your Mienekes, your Tire Kings Yeah, you're GoodYears. Yeah. Whether or not they actually really get into the hands they have they're gonna have to
Paul Daly 25:11
require some tires alone right tires alone and they start thinking of battery. Whatever's I don't know what goes wrong with an EV.
Todd Caputo 25:19
So what goes wrong with EV?
Paul Daly 25:22
We don't know yet.
Todd Caputo 25:23
I can tell you from owning some Yeah, it's mainly cosmetic. Yep. You know, my wife carved up the wheels on her model three a couple times. So had to have the rims fixed. You know, you might get a recall but this it's it's all over the your software that leads you to the question just asked me right. If you're a dealer, yeah. You better be prepared for a shift in your fixed operations. And what you're going to be required from the factory, you're going to need space to put batteries, you're gonna be forklifts and with batteries around, you're gonna need really, really smart technicians and how to work on these cars, and fix these cars, you're gonna need a lot of bandwidth coming into your store, you're gonna need a lot of electricity coming into your store, it's gonna be a big investment. And I think that's why, like, that's one of the reasons why I sold right. Like I saw a lot of this common Chittenango, New York, okay, beautiful place, you know what that store was? Yeah, there's going to be have to be a lot of money invested in fixed operations, and places like that, and to be able to sell and service EVs. And there will be a downturn in fixed operations. There's no question about it. So I think if you're not someone who's really good at marketing for service, which, you know, I don't think a lot of car dealers are great at that. That's why independent.
Paul Daly 26:32
So because it's kind of built, it's like a built in revenue stream that correct makes you a little lazy and take it for granted.
Todd Caputo 26:39
Right. It's warranty work. Yeah, it's internal work. Yeah. But we weren't great at grabbing. The oil changes and tires and brakes and staying open later hours, and Saturdays and Sundays being able to compete people.
Paul Daly 26:52
I think people typically think it's inconvenient to get service work done. And they do
Todd Caputo 26:56
they think it's inconvenient, number one, and number two, they think it's expensive. So if I still own a store, I would tell you right now, I would I would guarantee you that you're gonna see your your warranty work go down. This is way longer term, right? Yeah. When we're selling more EVs, you're just gonna have less work in your shop. And you're gonna be able to depend on getting the public to come in that own cars that are powered by gas, that still need tires, they still need brakes, I still need fluids, I still need filters, and be able to fix those cars fast and inexpensively.
Paul Daly 27:29
So coming back to 12 months, 12 month plan for dealers will take from 24 to 12. If you're a dealer, what things are you focusing on
Todd Caputo 27:38
in the next 12 months, 12 months, I'd be really, really cautious about my used car inventory. And I will keep it really, really tight. I don't think the market is going to collapse. I don't think it's going to just dive off a cliff yet, but I still think there will be a slow decline. Yep. I but I don't think it's going to be drastic.
Paul Daly 27:53
So focus on used car inventory acquisition, and pricing
Todd Caputo 27:57
and merchandising, yes, merchandising first, right? If the merchandise things, everything else fall into place properly? Like, are you going to ask more for a car than other people? If your car is nicer? Absolutely, we'll know it. They'll know it by looking at it online. And they'll know when they show up at school salutely And having the right inventory to you know, I wouldn't stock normal run of the mill cars, especially if they're used I'd be buying oddball cars and cars that people can afford and really look at affordability. I read an article yesterday was saying, you know, there's people with income over $100,000. And the majority of my think was like 38%. As we know article on CNBC, 30% of people with income over $100,000 are still living paycheck to paycheck, interest rates have gone up, I think they're going to continue to go up. I don't think we're going to collapse into some big awful a recession because unemployment I think is going to stay low. There's such a huge demand for labor. I'd be focusing really on tuning in your operations, mystery shop your store, right? Like, you know, we you cannot afford to be sloppy, there is going to be more new car supply. Dealers won't be getting sticker or better for everything for a long period of time, there are going to be rebates coming again, there will be an OEM that all of a sudden decides to flood the market with product. I don't care what anybody says. We can all guess it's gonna be I've got my guess, right. We know we all got a napkin and slide. We all know where they were in the past, right? And they've changed their name four times begins with an S now. But they always seem to be the ones to drop their drawers first. Right? Like it will happen and then all of a sudden there's gonna be $1,000 rebates on trucks. Yeah, it will happen. The race begins a race to the bottom is going to begin again. And then all of the order takers are all the sudden going to have a wake up call. And that's what I believe we have right now is a lot of order takers. A lot of people that have made a lot of money, justifiably so. Yep. Right. People work in a car dealership all day long. If they work for it, they work for they earned it they made a lot of money. Car dealers deserve to net a very good percentage of the revenue that you generate, because there's a ton of risk. There's a lot of money tied up in real estate, a lot of money tied up in inventory, but the days of netting 6 7 8 percent to sales in some cases. In my opinion, a few are going to be Over with very soon, so I would save your
Paul Daly 30:02
money. All right, well, Todd, I can't wait to hang in person with at ASOTU CON, I can't wait to be able to introduce you to a bunch of people I know meet a bunch of the people that you know. Yeah. Thanks for coming by and doing it in person. Thanks a lot.
You know, I think that probably Todd Caputo was the first one to actually coined the phrase, just do it, he was actually pre-Nike. And no, you know, I think that was my one of my favorite parts of this interview, even though it was a small portion was this idea of, hey, we just have to go get that done. And that speed was so important. So whether it's him picking up his phone, and being available to his customers, or his people, or just making these small business decisions, and not taking the time that a lot of times we go through all of these steps in business, and it's like, oh, no, we got to have a meeting, about a meeting about a meeting, and then maybe we'll get something done about the next meeting, right? And he's like, No, actually, business, half of business is just doing something and figuring out whether it's going to succeed or fail right off the bat. And I think that we've, you know, I've seen that and just looking back at his, the way that he's done business and the way that his stores like becoming the first, the first person to say like, Hey, forget the Group website, I don't care about that money over here, because I want to serve my customers better, I'm going to make a decision to go over here, create a website that actually our customers want to go to, right. And that's, that's a person that can make decisions with intentionality. And I really appreciate that about his personality and his activity.
Paul Daly 31:44
There's also this other layer. That is just, I don't want to use the word loyalty in a trite way. Because there's a level of loyalty I've seen behind the scenes to Todd, that is a very, very rare thing. We all have some relationships, or hopefully, we have the benefit of a few relationships in life, where we realize that person has our back, like I could call them at any moment. And if I needed something, again, I don't want to make light of it. Because you know, people I see you if you ever need anything call me know, this is like for real. Like he would be there it goes back to Kyle's comment at the beginning of this podcast, right? How's your family, right? There's a level of loyalty and attentiveness to the person in the relationship that is, you know, really, really second to none.
Michael Cirillo 32:32
You know, that comes from what I believe as a sense of responsibility. If you look at the meaning of responsibility, it's really the root is to respond. And so like Kyle, what you were saying about him not being like, hey, is there anything I can do for you, which is typically how we would you know, behave he's, he's proactively observing how to respond. Hey, I'm giving you something to give back to me so that I can respond. I think that is so awesome. I can't wait to meet up with him at ASOTU CON. If you haven't got your tickets yet. You definitely got to do that head over to ASOTUcon.com. On behalf of Kyle Mountsier Paul Daly and myself, Michael Cirillo, thanks so much for joining us on Auto Collabs
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