The Auto Industry is in FULL PANIC MODE

0:00 It's noonish here in Ventner City, New Jersey and 700 PM in Mikos, Greece, and this is Car Edge Live for Monday, June 9th with your hosts, me, Ray. I think I'm on the wrong Am I on the wrong side of the screen? And and the young man in Greece himself, Mr. Zack Papadopoulos. How are you today, Zack? I'm doing great. I'm here in Meeknos, Greece. I'll give a quick little I mean yeah buddy yeah for sure and it's cloudy and overcast and 63 degrees but you know other than that feeling super lucky here for a wedding later this week incredible experience to share with my dear friend Steve and also co-orker which is

0:47 fantastic but dad first things first today's show is brought to you by car edge.com if we can help you out with anything folks check it out caredge.com and get excited this show folks most of the speaking burden on my dad because my Wi-Fi may be a little bit shaky. Let's kick things off, Dad. There is a full-blown crisis going on in the auto industry right now, and it's not even me coming up with the headline. Auto companies in full panic over rare earth's bottleneck. What is going on here? Um well, you know, I I did some background on this and um you know, there was a time when rare earth elements were available in a lot of from a lot of different countries uh in the United States produced quite a bit of

1:34 them at one point in time. Well, Pops, what are rare earths to begin with? Why don't we start there? Well, there there are 17 elements um and um oh god, what are they? somethingoids and something I don't know and and they're they're they're elements that first of all you couldn't pronounce them if your life depended on it. Um and second of all if you want to go get them apparently you have to go to China to get them. Um what do they do? What do they do? Well, they're necessary in electronic devices, computers, cell phones, EV uh motors, um other types of motors. There are combustion engine motors as well. Yeah. There aircraft,

2:19 everything. It is you ain't building the stuff that makes the world go without these rare earth elements and rare earth magnets. And you know, I I mean, I remember being in grade school and they shown us magnets and when you you turn them around and one pushes the other away or you turn them and they and they cling to each other and it's like, you know, who ever thought that this is this is going to be really something that the entire world depends on and can pretty much be controlled by one nation. Um, and that one nation is China. um they produce 90%

3:04 90% of the world's rare earth elements that are needed to make the rare earth magnets. If they decide they ain't shipping them to you, you're hardressed to scramble to find them from somewhere else. It's not like there's a multitude of suppliers of of these elements. It's got the automobile industry in a full panic. It's got It's got every I mean the We need this stuff to build the engines in our aircraft in our in our uh we're keeping it cars. We're keeping it cars. We're keeping it cars. And I hate to do this to you, but I got to come over the top a little bit. We just need to frame this up, which is that these rare earth materials, Dad. Let's just focus on

3:50 this. Yes. They're vital components to the production of both combustion engine and electrical vehicles. There you go. Okay. So, just at the end of the day, for the purposes of this show, for what we're talking about, are there material impacts because of these uh uh this trade challenge? Absolutely. But for this show and for what we talk about, doesn't matter if it's an EV, doesn't matter if it's an ice vehicle, doesn't matter if it's hybrid, these rare earth elements are necessary to produce components that ultimately are vital for these vehicles. This is at the same exact time that we have a 70% drop in vehicle shipments globally. Actually, these vehicles being moved around. So, it's a very interesting time for the auto industry. And the reason that you have a full panic here from these auto companies, auto companies being the

4:36 right term, it's manufacturers as well as suppliers. Yes. Because they know that if we lose this one piece, which to your point earlier in the show, Dad, China accounts for 97% of the world's production of these uh uh materials. You can see it right there. If we lose 97% of the production, this whole industry is screwed for a long period of time. So there is, it's not us coming up with the headlines. There's a full panic going on in the auto industry because of this right now. Oh, absolutely. It is this this could be more significant than the pandemic. more significant than the chip shortage, the microchip shortage that was a byproduct of the pandemic when automobile manufacturers cancelled

5:21 their chip orders, their microchip orders from the microchip manufacturers because they weren't sure how long their plants were going to be shut down. So, they canled their orders. um when they realized they weren't going to be shut down as long as they thought they might be and they wanted to reup their orders. Well, the chip manufacturer said, "We already gave those production spots to different orders. We can't just now cancel those and turn around and start building the chips you need for automobiles." So, we had that huge challenge. This could be bigger than that. Okay? Because this impacts everybody. It impacts suppliers. It impacts the automobile manufacturers themselves. Um it impacts uh trade,

6:09 global trade. So this this could be hu we lost during the pandemic and with the with the microchip shortage, we lost somewhere between 10 and 15 million vehicles that were scheduled to be built that were not built. And we are feeling the impacts of that today because there are fewer cars available, used cars, because there were 10 or 15 million that weren't built that could have been sold. Um, and that has forced prices to go up. If the rare earth elements become the the next sad chapter in automotive, prices will go up again. uh supplies will be minimal at best. Um if

6:58 we thought there was an issue during the microchip shortage, this will be even worse. This will impact every manufacturer worldwide when it comes to automotive. And there are a few manufacturers who are already taking steps to try and make without these components. Automakers including General Motors and BMW and a major supplier such as ZF and Berg Warner. to major suppliers, excuse me, are working on motors with low to zero rare earth content, but few have managed to scale production enough to cut costs. The EU has launched initiatives, including the critical raw materials act to boost European rare earth sources, but it has not moved fast enough, and that's coming from uh you know, think think uh well, a person that gets paid a lot of money to think and use big speak. Um, I mean like

7:43 the the story just goes on and on, Dad, which is this is going to be a material impact on the auto industry and it doesn't matter if you're BMW, Ford, doesn't matter who you are. This is a non-discriminatory. It doesn't matter. It's going to impact your business. And I think the importance on this show is to then talk about this is something for the car edge community to be out in front of. We talk and try and prognosticate on car prices all the time. Well, hey guys, if production is going to get shut down because they don't have rare earth materials, could be a good indicator for what's going to happen to car prices as supply plummets, you know, and demand demand is obviously weakening a little bit with prices so high. But still, I mean, if supply plummets in the way that we think it might, and that other story that we're going to talk about, 70% fewer vehicles actually being imported, I mean, you've got you got a pretty bad recipe getting

8:29 set up here. Um, well, it's it's it's not a recipe that's going to be in a best-seller cookbook, I'll tell you that. Um, and and it it is it is a recipe that impacts every manufacturer except, I'm guessing, those who manufacture in China. Okay. because uh they're not going to turn themselves down when it comes to being able to uh to get their hands on these the rare earth magnets and and elements that they need. So it is the rest of the world and when and when it comes to automobile manufacturing that is entirely dependent upon a handful of

9:15 bureaucrats in China who who determine who gets a license to export these rare earth materials. It it it's it's it's really kind of crazy. the the uh ministry that oversees this in China uh it was 30 people with three that could sign off on on on any of it. Uh they've doubled the staff to 60. But there's hundreds of of suppliers trying to get licensed to be able to get their hands on these materials. This could take God knows how long. And it and you know I'm just guessing. But how much does it cost

10:02 to bribe an official in a ministry in China to get your license moved up? I mean I I don't know how many it would take, but I'm guessing it would be a lot. Um and and it is this doesn't bode well whether you're whe whether you're an automobile manufacturer in in uh India or South America or North America or Europe. You are entirely dependent upon getting these materials from basically one country. And if they turn off the spot, um, what's that old saying? You're S O

10:48 L. We're going to switch gears here, but before we do, the last line in this story, the co-founder, Andy Leland of a supply chain specialist company, SC Insights, said any of those elements could be used as leverage by China. Quote, this is just a warning shot, he said. All right, Dad. Let's turn our attention to that other story which is tariff impacts begin as vehicle shipping volume drops by more than 70%. Maritime shipping volume of automobiles has declined 72% in May compared with the same month last year. Think about that for a second. They had many vehicles make their way into the United States of America via cargo ship. And the volume of vehicles making their way to America via cargo ship declined 72, not 7.2. 2

11:37 72.3% yearoveryear. When I saw this, I said, "Holy cow. Holy cow. What about what about the port workers that are responsible for this?" Do you think just I'm I'm just spitballing here, but if if if the yard where these vehicles are unloaded, the port where they're unloaded, um if the volume drops by 72.3%. Do you think the work staff stays at the same level it was at before that happened? I'm guessing probably not. Let's keep this about cars, Dad. It is, but it's but but there you

12:23 we want to make it about cars, but we often forget about the ancillary impact of of all these actions. So, it's it's we know there's an affordability crisis when it comes to cars. If the people that unload these cars are suddenly out of work, you have less people that might have the ability to be able to buy a car. Hence you you have 72.3% less cars coming in. Um yeah I think that's the primary. So I I appreciate you wanted to talk about the secondary and maybe tertiary the ancillary runs but the primary here Dad is 72% fewer vehicles made it into the United States. So I think the beginning story here is a supply side story which is there's 72% fewer imported vehicles.

13:10 And then maybe the secondary story is if there are going to be downstream layoffs as a as an you know an effect of this then sure maybe those people are now out of the market to buy a car. like a 10x or 20 or 100x bigger story to me is a 72% decline in inventory coming into the United States. But that that's imported inventory coming from from mostly Japan. Okay. Um that doesn't it's not like mostly Japan brands have a lot of inventory to begin with. Well, they're they're rapidly running out of it, but of of especially their pre-tariff inventory. Uh but that doesn't mean that that they haven't shifted some of that production away from Japan and to their to their manufacturing and assembly facilities here in the States. Um so it

13:57 we're not going to see necessarily a 72.3% decline in available inventory. We will see some decline in available inventory, but it's not going to be 70%. um you know they they will figure out how to build more of those vehicles in the United States or or maybe uh Mexico or or Canada. Um, but it is it it it's a huge issue because it will impact onhand inventory. And as we know, as onhand inventory declines, incentives from the manufacturers to move the remaining

14:42 inventory that they have usually declines as well because they're not as motivated to sell out completely because they can't replace anything. It it it will bring back uh a similar situation to what we saw during the microchip shortage where people had that fear of missing out and suddenly said, "I don't care what I have to pay to get a car." Something they should have never said. And the the dealers helped them with that, saying, "Not a problem at all. We're going to ask you to pay way too much." And human nature is you probably will. And we could see a return to that which if we

15:27 do means people are going to be paying way too much for cars again. They're going to be I don't know if we think 84 and 96-month loans are becoming more and more popular. Well then the 108month and 120month loans won't be too far behind because things will just get way out of hand for obviously the vast majority of people out there. I do think the too long didn't read for those of you who just want to cut to the chase is this from Jorge. Great car prices are going up again. That is what every indicator shows right now. And it was only like two weeks ago, Dad, that you and I came on here and talked about how we actually saw some signs that new car pricing could get better, used car pricing could get better. But I think now that these new revelations both in terms of the

16:12 rare earths component and also obviously what we're seeing here with the latest shipping data which the shipping data goes so far as to impact parts and accessories as well. The tracking that we have this information auto parts and accessories have seen almost a 15% decline yearoveryear as well. So um and this includes the volume of bodies including cabs for specific motor vehicles saw an 18% increase. No those went up 18%. Yeah. So, it's interesting. There's like some bright spots here, but it's not in fully produced vehicles and in parts and accessories. So, long story short, there's a lot of indicators here that suggest new car prices are going up. And typically, what happens when new car prices go up? There's supply, excuse me, there's demand increase for used cars, which drives the price of used cars up. Back-to-back stories here that I think

16:58 are really as a one-two punch putting a lot of pressure on the auto industry. And of obviously to your point, Dad, there are all those secondary, tertiary, you know, downstream impacts that these decisions have. And and we know there are a lot of people who can't afford a vehicle. And we just did some research back on the carage website that talked about how $50,000 new cars are right around the corner. Um, well, and I I didn't check automotive news today, but I believe it was on Saturday that the average advertised asking price for new cars in the United States was in excess on on Saturday. It was in excess of $50,000. So, but 49798 that is pretty damn close pretty damn close to

17:44 $50,000 as an average market price. That's crazy. You know, we we uh showed a a deal of the day last week for a Toyota Sienna, and you know, we're the customer we're able to get the customer $2,700 off. And all anybody concentrated on was the fact that with tax and license, the whole thing was like 4748,000 and the monthly payment was astronomical. So if the average marketing marketed price is 50 grand, the monthly aotment you're going to have to make in order to be able to

18:30 uh pay for that is going to be much much much higher than what most people would be comfortable with. I can tell you from when I did this for the longest period of time, you know, we used to when when when when I was with Acura, you know, and and and the cars were at that time between 30,000 and maybe $50,000 and and the number of people that would come in and, you know, they they'd want a they'd won a $35,000 car um and they didn't want to put down a lot of money and they wanted a payment at no more than say, I don't know, $300 a month for 60 months. Well, if there was no interest and it was just $300 a

19:18 month for 60 months, that's 18 grand. Well, where's the other at 17 18 $19,000 coming from? So, if the comfortable payment range, you know, for most people was 3 to 350. Trust me when I tell you the comfortable payment range for people today isn't 750 and higher. Okay? They would they they they would anticipate going in and saying, "Gee, you know, I think I can afford $500 a month for that Sienna and then they find out it's $900 a month." That negatively impacts what people can do. And if the prices go up even further, it makes it

20:05 even more difficult. And and you know, I don't know what the solution is. I I I you know, I can't sit here and go, "Oh, well, we need to do this, this, this." Um, but it it it it seems to me that if you want to be a mass market brand, you have to figure out how you can you can appeal to the mass in the mass market brand as opposed to the few. right now. Yeah. And I was just going to say that it certainly seems like based on the stories we led with today, these are more indicators of price challenges for consumers and and at this point just price challenges for the whole auto industry. Thus the reason why I didn't even have to come up with today's, you know, uh uh title. It was in the automotive news headline for me. Full

20:50 panic. I'll pull that back up on the screen. Okay. I didn't have to come up with this automotive news right there in full panic over the bottleneck that's going to drive prices up. The decline in in imported vehicles that's going to drive prices up. Dad, here's another indicator of how bad things are getting in the auto industry and potentially what's in store for maybe more auto parts suppliers as well as automakers. Nissan and Stalantis supplier Marieli considers filing for Chapter 11 bankruptcy in US report says. Think about this for a moment. We have a parts supplier. Yes. And they are filing potentially going to file for bankruptcy. Yes. Think about this. What brands do they represent? The two that we've been saying for the longest time are struggling the most. Yes. Right. And and and you know what's really funny? Um

21:37 Marelli is a combination of of two um part suppliers that were in great financial difficulty. One was Calic, which was part of Nissan. Uh they did their air conditioners and stuff and uh I forget the other. It was part of Fiat and and a private equity firm came in and said, "Okay, well, we'll buy them both and put them together and let's see what happens." And for a period of time, it was pretty successful. And now it's not. They're drowning in debt. They need to they need uh to renegotiate their debt structure. Uh they need to find more cash on hand. Um and and these are

22:23 you know this was a combination of two really weak part suppliers becoming well one really big weak part supplier. Um and now they're struggling even more. It it doesn't bode well for Nissan or Stalantis um because they can't I I mean obviously Marieli is going to remain in business through bankruptcy. They employ 45,000 people nationwide. They're a massive company. It's probably worldwide, I would think. Yeah. Yeah. And and so they'll they'll be able to continue through bankruptcy, but you know, could there be interruptions? Could could could there be price increases that that well neither Nissan

23:10 nor uh Stalantis can really afford at the M? Who knows? Did you see former uh Stalantis CEO Carlos Tiveres came out and said his prediction for the future of the auto industry is more mergers and so I think these restructuring moments are opportunities for mergers both at the supplier level. You just mentioned it. This was just a merger of two failed parts suppliers before, right? You know, are they going to get merged with someone else? And then does that start to happen at the automaker level? And that's where I would not be surprised at all. We saw talks between Nissan and Honda fall apart earlier or last year, excuse me, and supposedly Toyota was contemplating coming in there, but those talks fell apart as well. I think the future, and this is my opinion as well as the opinion of Carlos Tiveres, who was the former CEO of Stantis. There's going to be consolidation and mergers in the auto industry and potentially fewer

23:55 choices for consumers. I I can't see how there isn't. Okay. Um, yeah, there there's too many brands that are struggling. That doesn't mean they can't survive, but they but the way they survive might not be in the way that we know them today. I I mean, one of the reasons that I think Nissan struggles and I think Mercedes struggles to a degree and even BMW to a degree is that they feel a need to have a vehicle in every niche. category and it's like I I don't know. Do we really need to produce 27 different vehicle types? I mean, look at look at what's going on at

24:40 Stalantis. Jeep has one of the most convoluted and complex lineups in the auto industry. The ways you can customize those vehicles, they're struggling mightily. We did see obviously the new CEO of Ram come in, Tim Kinesescus, and bring back the V8. So, maybe we'll see consolidation at the brand level of like we're just going to get simpler product lines. We're going to go back to our roots. I want to pull up one thing from Eigor though. Sure. He had sent us some messages. Nine supplying factories in the EU have closed recently as well. So this is international. This is happening globally. Yeah. And and and you know I was having a conversation um with somebody here at the condo yesterday. Um and he was talking to me about Yeah. My sister was talking to a friend of hers that lives in Peach Tree, Georgia outside of Atlanta. And and the

25:25 the the lady said to my sister, he says, "Is there someone in your in in your building that's that's on YouTube?" And Michael said to me, he says, "My god," he says, "you're you're known all over." I said, "People know us in in the UK, in Greece, in in Australia. The world's a small place when it comes to the internet. might not be so small outside of the internet, but all of this ties in together. It is a global um automotive marketplace and whatever impacts Europe impacts the United States eventually. Whatever impacts China impacts the United States. It all is interconnected at this point. And so, uh yes, somewhere

26:13 along the line there will be mergers. Somewhere along the line, some of the manufacturers are going to say, you know, maybe we only need to have four models or five models. Maybe, maybe. I mean, maybe one day. Dad, look at Tesla. They only have what is it? They've got the three. They've got the Y. Do they still have the S and the X? Like, maybe, but not mass-produced. And so yeah, I mean it's it's like, you know, when you think about BMW, do you really need a 1 series, a 2 series, 3 series, a 4 series, 5 series, 6 series, 7 series, and an 8 series? Oh, and then let's talk about, you know, our SUVs. I mean, how do you need to have a car that starts like a Matchbox car and works its way up to a giant ass limousine? Do you

26:59 do you really need to have a footprint in every one of those little itty bitty markets? And I think when you look at Nissan, a company that's really struggling, do they really need to offer as many models as they do? They should just, in my opinion, they should narrow it down to their core that sells and figure out how to sell even more of those and create even more interest in those. So, that's what's cool about this moment. And I'm going to say cool because I think it's an opportunity for the auto industry to reset. The three stories we've covered today are an automotive supplier that supplies Nissan and Stantis potentially filing for Chapter 11 bankruptcy. We've got impacts on imported vehicles, a shipping volume

27:44 decrease of vehicles by 70% to the United States for the month of May year-over-year. And we have auto companies quote in full panic over Rare Earth's bottleneck. If there was ever a time for change in the auto industry and think about it pre- pandemic, pre pre uh uh chip shortage that you know that was status quo for the auto industry like everything was normal and then post chip shortage obviously we saw a whole different market whole different way of operating. We could be on the precipice here of a whole different way of operating again. Our initial hypothesis here is that it's going to be net negative for consumers because it'll negatively impact supply for the foreseeable future. But maybe this is a moment in time where manufacturers look like, you know, look to the words that you're sharing and, you know, it's going to take years for for the model shift uh model makeshift to change. But it could

28:29 be, Dad, five years from now, you do see manufacturers like Nissan only producing five vehicles. It it it just it it seems to me in in my simple brain, and let's face it, a brain doesn't get simpler than mine, but it just seems to me that that you you you cater to your primary market. And if your primary market is the rogue and the pathfinder and and I don't even know what else they have in the Sentra and the and but you forget like the kicks and the and the rocks and whatever I don't know whatever the hell they call all the different vehicles. It's it it's like let's just concentrate on the markets that sell well and make us money

29:16 and get out of dabbling in all the other little vehicles. Um there will be ultimately niche vehicle manufacturers for whatever Nissan decides not to build in the future or whatever Stalantis decides not to build in the future or any of the other major major manufacturers whatever they decide not to build in the future. It it one of the problems that we have especially here in the United States is we're the richest country on earth. So we are afforded more opportunities for things to buy than anywhere else on the planet. We have we have more options available to us. We have more vehicle choice. We have more

30:03 choice than anybody really needs to have. I you know it when the Model T first came out it was pretty simple. What shade of black would you like and oh and this is the way it's built. This is the only way and people were happy with it. You know we we've grown to where we we now have way too many options and way too many choices. And perhaps we can learn and the manufacturers can learn that in reality as a as a people we don't need that many choices. You and I both know why that happens and why that exists. It's because it's more profitable to make more high content vehicles. Let's not go too far down that path. Dad, we're going to come to the chat here in just a moment, but before we do, for those of you that are unfamiliar back on

30:49 caredge.com, you can click right here on dealer invoice pricing. And you can get your hands on dealer invoice pricing for any new vehicle. If you click on skip the dealership, you'll be taken to our car buying services and caredge.com/save if you're in the market for auto insurance. And quite frankly, everyone should be getting competitive quotes on auto insurance and home insurance and renters insurance, all that fun stuff every so often, like every quarter or six months. Check those all out back on caredge.com as well as everything free under research. Click on that right there. Dad, let's come to the chat here. Yes, pull it up really quickly. Earlier in the show, Joe said, "Thank you, Joe." Thank you, Joe. Ray Brandon says whole wholesale prices plummeted this week and the latest data from Cox Automotive also shows wholesale prices for used cars declined last week

31:36 which is a good story something we want to hear more of but I don't necessarily think that can be sustained if everything we think is going to happen on the new car side happens over the next couple of weeks and months. Uh and we also have uh was some commentary from Igor who was at the sale on Friday. this this the sale that he favors on Friday and he saw certain segments where prices were going up again. So it is you know one of the things that the two things can be true at the same time. Uh the vehicles that that Brandon is buying um maybe the prices are plummeting. um the the 2, three, and foury old low mileage, high quality used cars in certain segments, those prices

32:24 could be going up and are going up in some cases. So, it's not universal. Um but if there is this shortage of vehicles in the future, it will become universal again because when when we lost the production of new cars that were scheduled to be built, that is when we saw used car values both on a wholesale and a retail level skyrocket. I mean just off the charts. It was nobody had ever seen anything like it before. And that's because new car inventories were averaging about 900,000 new car availability every month when it had

33:11 been 3 and a.5 million. So when when that shortage happened, prices spiked. If the rare earth elements, rare earth magnets, rare earth minerals situation continues to where all that stuff is constrained where it can significantly impact production by causing manufacturers to produce millions of less less vehicles than they had intended. that is going to inversely or conversely impact the price of used cars. They're going to go up again. I I hope I hope I am wrong. But as we like to say, you know, a reading between the

33:57 tea leaves, um it would just it would just seem to indicate that if the rare earth's panic for those materials is is real, um then that's the path we're headed towards. So, yep. You know, we we could see a a brief downturn for the next couple weeks, then we might see a spike up again. I I don't know. It'll be interesting to see what happens. All I know is we will be staying on top of it. Dad, we had a question come in from Save by Zero. Is there any way on Car Edge to find the prices that specific models and trims actually sold for? We do have a resource for that. It's car edge verified deals. If you go to car edge.com, click on research right there and then click on see what others paid,

34:43 that'll take you to our resource of verified prices, whether it was a deal that was community submitted. So you can see here, this is a deal done in Minnesota for a new 2025 GMCCR 1500 and you can see the full breakdown of information there. Or I can get rid of community submitted and we can just look at the concierge deal. So, these are the deals that our team completes day in and day out on behalf of our concierge and negotiation expert services. And holy cow, there's 70 pages of just concierge deals that you can look at there. So, again, we do have a resource for verified car deals that's back on car edge.com and then click on research, say, see what others paid and that pops right up. Dad, can we continue on in the show to a few other segments you game for that? Sure. Yeah. Yeah. Yeah. I got I got you. The good news for you is I

35:29 got nowhere to be and uh and it's nighttime where you are or soon to it's beautiful there. Um what what may I what's the weather like? Uh 75 degrees windy but beautiful. It's like loyal humidity. Let's go. Dad favorite uh favorite adlib of the show. Pretty please. Uh really? You have got to be kidding me. All right, y'all. I'm posting more over on X. Please follow me at Shepska and at mycar edge. This is why people hate buying cars from car dealers. 2025 Jeep Grand Cherokee with the spray and bedliner add-on for $799. The Jeep Grand Cherokee isn't a truck. Make it make sense. Not to mention the dealer also added on tint and nitro for $8.99, Lux Care for

36:15 $13.99, and a dock fee for a very simple $899. But then there's also an admin fee for $249.50. Make it make sense, Dad. How do we have a spray-in bedlininer for $799 on a Jeep Grand Cherokee L? Oh, that that that would seem difficult. That that that that would seem almost as reasonable as the uh as as as the maintenance programs that some dealerships dealerships charge um on EVs so that their customers will be entitled to their free oil changes. Um Oh, EVs don't have oil for oil changes. Um Yeah, this is why this is why people hate buying cars from dealers, you know,

37:02 because because dealers do it. I'm just going to I'll put it out there as plainly as I can. Dealers do it to themselves. Okay? I I I catch guff all the time from dealers who say, "Ray, you never say anything nice about us." Okay? You tell me why I should. When we see stuff like this, and we see stuff like this on a daily basis, multiple times on a daily basis, how how do you expect me to say nice things about how most dealerships operate? How do you have a spray-in bed liner in a vehicle that doesn't even have a bed? Okay, it is it it makes no sense. How do you charge $1,995 in maintenance uh so people can get their free oil changes in their

37:50 EV? There's just certain things that that dealerships do that that I am sure if you said to, "Oh, no. We're we're well loved because we do everything above board." And and then if you were to point this crap out to them, you go, "This is above board. The spray-in bedlininer for a Jeep Cherokee. Um, the Lux Care for $13.99. Um, and the premium tint and nitro fill. You know, the nitrogen's like 78% of of air is nitrogen. And yes, if you're running Formula 1, if you're running on the Grand Prix circuit, if you're running NASCAR, you want nitrogen in your tires because it gives a better seal and the and and and

38:38 the tires won't lose pressure as quickly. For the everyday person driving a car, it does nothing. Nothing. It is just It is as bad as the dock fee. You get nothing for it. Um, you know, and in many dealerships, they probably just take the black uh valve cover caps off and replace them with the green ones to indicate that there's nitrogen in the tires. Th This is This is why it is so hard for me not to bash dealers. There's right You make a business decision every morning when you run a dealership. And that business decision is, do I want to be honest, fair, and transparent, or do I just want

39:25 to do things the way everybody seems to have been doing them forever, which is the lie, cheat, and steal? I would hope that when you wake up in the morning, you go, I don't feel like lying, cheating, and stealing today. Let me try honest, fair, and transparent. My thinking here is that this is maybe just laziness, but I don't know. When you look at the whole package, when you look at the whole package, obviously they're doing all sorts of add-ons. Not to mention the fact that the doc fee when added with the admin fee is well over in excess of 1,100 bucks. That's absolutely But here's here's the really good news, Zach. Okay, you can look at this and and and you know, forgetting all the BS, which is hard to do. um you're looking at somebody um they're

40:10 looking to finance if they put nothing down 53,800 almost $54,000. So with $3,000 down they're looking to finance 51 grand and it's 72 months you're comfortable monthly payment excluding insurance. Okay. And maintenance and depreciated. $921 a month. $921 a month. How many people out there can afford that? How do you How do you afford $1,000 a month for your car? I don't know, $2,500 a month for your housing. How How do people live? I mean, just as a friendly reminder. As a

40:56 friendly reminder, we have a guide that's all about the 10% rule on vehicle affordability. So, go check that out before you make your next vehicle purchase. Dad, want to come back here to the chat and then we actually need to continue this segment on. But before we do, earlier in the show from Matthew, Ray, will they still make the apple cider after BK? What does BK stand for there? Uh, he's talking about the Marinelli um apple sparkling apple cider or sparkling uh Yeah. Yeah. You know, your mother and I used to drink that. We used to keep bottles of that in the fridge. And from Rich here, thank you, Rich. Appreciate the out the door price never makes it out the door. Yeah, unfortunately that happens all the time. Hey, we've got a question here, Dad, from Sean that I think is important. We'll pull the the uh uh worksheet back

41:42 up. What is this $578 in non-t tax fee? Another doc fee. No, those would be the state registration, title tags, things like that. Yes, they're non-t taxed. Those are not dealer added fees. Those are you could ask them for a breakdown and they would show you those are the registration title tags etc. Yes, that's and we know that because they're non- tax. That's why if it's taxable it's negotiable. Yeah. You can't you can't tax uh registration fees, title fees. Those are non-t taxable fees. Ready for the next one? Okie dokie. California car buyers face a 600% higher fee under a bill the Senate just passed. California is a haven for car shoppers in the sense that the dealer dock fee is capped at $85. Yes. Well, Dad, the

42:29 California Senate just voted on a bill on a on legislation that would increase the dealer dock fee up to $500 on vehicle purchases. Where was it here? It was uh they could do 1% of the vehicle's value or up to $500. So, that's what's potentially coming for California car shoppers, you know, and and justice, keep me honest here, but I'm pretty sure California car shoppers pay way too much in all other fees to begin with. So to have the dock fee go from $85 to a maximum of $500, um you're you're just saying to a dealer, we're we're going to allow you

43:16 to make an extra $415 per vehicle sold, new or used. Um and the customer gets nothing for that. Nothing. Okay? Because the dock fee is it it's just it's a mystery fee that dealers came up with say we need we need we need to figure out ways to to make extra profit. So we'll have a dock fee. We you know we saw in that last deal it was to $899 fee plus an admin fee. So, I mean, there's all kinds of So, the the the the Senate in California is saying the dealers probably because the dealer association lobbyed pretty hard for this

44:02 bill. Uh, we're going to allow you the opportunity to get an extra $415 profit per car sold. Oh, and here's and don't forget to donate to my campaign. And here's that section I was looking for. Yet on Tuesday, just one senator voted against Senate Bill 791 that would raise the fees car dealers can charge to process documents. So that's what the dock fee is for, guys. It's a justification to process documents. Yet, it's going up 600%. Up $450 from the current cap of $85 for a new or used vehicle. The proposal would allow dealers to charge as much as 1% of a vehicle's purchase price up to $500. And obviously, you can see there the average listing price for a vehicle's a new vehicle is above $48,000. That's a big deal. California is massive, massive state and they had been with the lowest

44:48 cap at $85 in the country. We'll let you know if this bill passes fully in the state of California, but that's a huge deal. 600% increase in the dock fee is nontrivial. Well, you know, it it's yachts are more expensive, I guess, out there and so I think doc fees exist because of information symmetry. the more information consumers got to level the playing field and get better car deals, then the dealership had to find other places to make money. And the reason I bring this up, Dad, is because even the OEMs are in on this game, that's why the the invoice is no longer just the invoice. It's the invoice plus the holdback plus the floor plan, plus the advertising assistance. Like the the playing field got leveled a little bit and it feels like the dock fee is one of those areas of the car deal where the

45:35 dealership is still going to preserve making money because the consumer is better at getting a better deal. Well, absolutely. And and yeah the the what the manufacturers have done which is similar to the dock fee for the dealer is the manufacturers keep uh adjusting the uh process and destination charges um where those have become an extra profit center for many of the manufacturers. Yeah. I mean, there are multiple vehicles, full-size trucks that have uh destination fees that show up on the on the Monrron label on the window sticker in excess of $2,000. Yes. So, you're a a Ram dealer, you know, within a hundred miles of final production of a vehicle, you're still paying $2,000 just like the customer is on the MSRP. So, that's the

46:20 game that they play there. And then obviously the dealership plays the dock fee game. So, anyway, wanted to share that as a really, you got to be kidding me. Can we talk about some good news, Dad? The deal of the day. Yeah, I'd like that. Yes. Let's do the deal of the day. Deal of the day comes by way of Jerry on the Car Edge team. $7,000 plus discount off of MSRP on a brand new 2025 Hyundai Palisade calligraphy. What an awesome deal secured with Car Edge concierge. And that this was for a deaf customer. And it's incredible that here at Car Edge, we're able to support individuals of all shapes, sizes. If you have a disability, does not matter to us. We want to support you. And you can see here MSRP on the vehicle, $53,334, discount of $6,19, and then an additional $1,000 manufacturer rebate. You're getting over

47:07 seven grand off. Wow. Nicely done, Jerry. Wow. That is that is so cool. That that that is nice to see. So that's what 10% would have been 5,300. So, that's what about 11% off of MSRP plus the $1,000 rebate. That's pretty damn good. Um, and and and I I know the comments are going to be, "Oh, well, that's no deal. It's you're still paying way too much for the car." Okay, whatever. Whatever. Whatever. You know what? You go into the dealership, you pay him $7,000 more. Okay. if that'll make you feel better. Um, that great job, Jerry. God bless you for that. That is a that is a hell of an

47:54 effort on your part to make that happen for anybody. Another note over on X. I shared this with you in our family group chat, Dad, and I'll share it here with our community. So, I'm in Mikos, Greece right now, so that's why my Wi-Fi is a little spotty and all that fun stuff. And while I was out at lunch this afternoon, a gentleman named Max recognized me, Dad, and thanked us for our YouTube videos, which have helped him in the car buying process. He was also surrounded by his family and kids, and I think his kids were really embarrassed. Uh, so that was very cute because I know I certainly would have been embarrassed if my dad did that. But thank you to everyone who supports me and my dad. I was literally at like this beach eating lunch, Dad, and a man in Mkos, Greece comes over and thanks us for the work that we do. What a cool moment. Uh oh. Yeah. As as I said to you, you're pretty effing famous.

48:43 Wild, man. I mean, that that was unexpected to say the least. Yes. Yes. You can't you can't go anywhere with you. I I could I could see you like up in the mountains somewhere and you come across like a wild bear or something and the bear takes a look and goes, "I know you. You're Zach from Carage. I'm gonna leave you alone. You do a lot of good for people. I think it would go the same do the same for you. I don't think he'd be on the mountain is the only difference. But u Yeah, he'd have he'd have to find me at the beach. That bear. Just such a cool moment. No, that that really is it. It is. That is another indication of just how small the world is with the internet. Now, you take the internet away and it's still a pretty damn big

49:29 place. The world feels pretty big when I'm here in Mikos. that there's uh just a whole I mean I've never seen a landscape quite like this before. It's it's really pretty remarkable. Yeah. Well, I am so glad you're there and uh hopefully you're having a good time and Steve and Rachel are excited and uh absolutely. Let's go hear from Chris. Thank you, Chris. What's the consensus on the new slate trucks? I don't know much about the slate trucks to be honest. What's the consensus? Is I I don't know. We saw some pictures. We saw that Jeff Bezos is going to invest money uh allegedly. Um and that's it. That's all we know at the moment. It's going to be 20 grand or 27 grand. And then with the uh w with the um government

50:16 uh what's the word I'm looking for? Subsidies. Subsidy. Uh it'll it'll net down to like 20 grand. Of course, by the time they actually produce the truck, there won't be any government subsidies, and it won't matter because it won't be a $27,000 truck at that point either. Um, you know, because don't forget, ladies and gentlemen, the Ford Lightning was going to be $39,000. It's nowhere near. The Cyber Truck was going to be $39,000. It's nowhere near. So, whatever they said when they showed pictures of this, ain't none of that happening at those price points. That's all I'm going to say in my opinion. We've got here, Dad, a friendly reminder that car edge.com exists to serve you.

51:04 Whether you're wanting to shop uh whether you're going to shop a new vehicle, a used vehicle, do some re vehicle research. Track your vehicle's value, see what it's currently worth, save some money on auto insurance. We have the warranty piece as well. those dealer invoice prices, skipping the dealership with our car buying services, insurance. Please y'all check out car edge.com. And I bring this up in part because just last week, yes, an interesting company named Toma, Dad, raised $17 million, and you actually sent this to me announcing our $17 million series A funding led by Andre Horowitz, which is like a really big venture capital firm. Yes. They are building AI agents for car dealers. Now, I'm not saying here at Car Edge we're building AI agents for car buyers. Not by any stretch. But we got to make sure we continue to build some some car buying tools because if y'all are going

51:50 to be going to battle against AI agents now, you know, we got to be one step ahead of them. So, there's a lot of money being poured into making car dealerships more effective, more more profitable. We're obviously here at Car Edge to serve you, our community, and all these consumers who trust us. So, please check out and support and share Car Edge as we see these major announcements. $17 million. That's a lot of money, man. A lot of money for car dealership AI agents. Who knows what that means? But, you know, we got to be on the other side of that making sure that consumers are in good shape as they navigate the car buying process. Yeah, we we got we got to figure out how you how you get into their uh into that AI agent's operating system and shut them down. No, not shut them down. just an an

52:35 interesting observation from last week that okay, you know, this industry is going to become I don't know even more tech enabled and I think that and less and less dependent less dependent on real human beings. Pros and cons for consumers. We want to make sure we're we're staying in lock step with that for consumers from Michael. Thank you, Michael. Really appreciate it. Before you know it, Zach will be saying to people, "Don't you know who I am?" Joking. I hope I never have that big of an ego. I will say meeting Max, I like everyone we've ever met in real life, ask them their name, ask them where they live, ask them how we helped, if we helped, if they have feedback. So, I love it's I mean, how humbling and what a privilege to meet the people that we've been engaging with virtually for five years. It's so cool. And where

53:20 where is Max from? I didn't ask him. I didn't ask him actually. Uh he was sharing with me where he had just come from, which was uh he was in Italy if I'm not mistaken. So, I didn't actually get where he was from. I got where he was coming from which was earlier in his vacation. Yeah. Yeah. No, it is it it's a it's an absolute privilege when when somebody recognizes you and they you like like Michael says to me, she says, "Yeah, I I see Ray every day. He's he's a pretty normal fella." Um you know, it's we try to help as best we can. Uh some days we do it better than others. Um but we're real human beings that are just here to help. We get a we get a kick out of helping people. Nothing wrong with that. So, our ask to help us

54:06 out is please share this video, subscribe to the channel, check out the website caredge.com, and turn a friend on to our com uh to our humble business. We would appreciate that. And yes, one final view. I mean, that's that's not bad. You know, now you're just showing off. How's beach is beautiful. Beach is beautiful. Yeah. Yeah. Yeah. I went for a run this morning though, Dad. That was a mistake. You want to see? Yeah. Why was it a mistake? It's hilly, man. It's freaking hilly here. I was just getting you ready for your Iron Man in Austria. This is true. Um, so I ran this morning, so I'll share some of the, you know, this is where I was running. It was very

54:51 beautiful. Oh my. Yeah. I mean, it was gorgeous. I took this I could I could walk slowly along there. That would be nice. The issue is there you go me. That's literally where I ran. Super gorgeous. The issue is that I actually don't think you could walk here. Really? So this Yeah, this run Dad was eight miles. Yeah. But I gained over a thousand feet of elevation. Wow. It was hard. Yeah, I would think it would be. There was this one mile. Where was it? Here. Yeah, there was one mile. I gained 281 feet of elevation in one mile. Uh, wasn't like when you went down that hill and you you went down 266 feet. That was so much easier. Yeah. I mean, it was hard, man. It was hard. Like, I

55:38 actually am not sure you could walk up some of these hills. They were that like Yeah. Wow. Okay. Well, I'll I'll stay away. We could get you to the flat parts is all I'm saying. They got a flat part. They got some flat parts. Okay, y'all. We'll be back tomorrow. um 12:00 p.m. Eastern time, 7:00 p.m. whatever time zone I'm in currently. And I'll be here all week until Friday. Friday I'm going to need some coverage because that's actually the day of the wedding. And I do not think I can sneak away during the wedding to do it do it during the wedding. Let's do, you know, let's show them saying I do. Um I'll see if there's Why don't we Why don't we broadcast the wedding live? I'll ask I'll ask Steve and Rachel if they want that if they consent to it. I think the answer will be no. I hope the answer is

56:24 no. Yeah, but if it's great, you know, I will happily write off my airfare if they'll let me do that, but you know, I don't think they will. So, I'm pretty sure pretty sure we're not going to be able to, but I'll ask. I'll ask. Okay, not a problem. Well, then I'll see you tomorrow. You have a great evening, young man. And say hi to all my friends over there that I don't have. And I look forward to doing this again with you tomorrow. Can't wait to Much love. Yep. Same here.