Okay, so we should be thinking what in our minds if we need to get a new vehicle?

We should be thinking 2026 leftovers, November and December.

We should double check on the automaker's websites for whatever the customer incentives are based on your zip code.

um find out if you can if there are any dealer incentives from the manufacturers for sales goals typically automote automakers set up sales objectives either monthly or quarterly for dealerships and there's big dollars to be earned for hitting those objectives and i'm pretty sure we'll be seeing those the end of this year And if you're a customer looking for a car, always make it a point when you contact the dealership.

If you're looking for a specific model and trim level and color, ask them for the oldest one.

They have an inventory that meets those needs because those are the ones that are most motivated to move.

Since you brought up the internet, which gives us lots of homework we can do before buying a car, what about drilling down further with AI?

Well, one of the things that we developed at CarEdge is we, and we started utilizing this for our customers in July of 2025, and we have made available to customers AI shopping agents that shop under a pseudonym for our customers and do all the work going back and forth via email and text with dealerships.

What's happening that California had to come in and sort of straighten this out? And, and, and then follow up to that, why the heck is this a big f- big, big deal for the dealer? Why can't they comply i- in droves? What's happening there?

Well, what's happening is the State of California passed a law, uh, and the governor signed it, and it goes into effect tomorrow, that, that requires a certain level of transparency in the pricing.

So if, if they advertise a price online, it has to be the total price excluding, uh, state tax and motor vehicle fees.

But the actual selling price that they advertise it online for has to be the price that they agree to sell it to.

And when I say that, that price has to match in the first communication that, that the dealership might have with the customer.

For instance, if a customer says, sends an, an email or a text that says, "Hey, I saw stock number such and such on your website and it's listed for X. Um, what will the total price be with tax and license?" The dealer can't communicate in, in that re- reply text or email a price higher than what the original selling price was, other than for the addition of the state mandated fees.

So that's number one.

Uh, what kind of pushback have you heard through the grapevine with the dealerships, those that are gonna cross their hands along their chest and just say, "You know what? We're gonna..." I mean, any dealership groups getting attorneys? Are they gonna try to fight it? Or are they just, uh, lay-me-downs or whatever you said earlier? [laughs] Are they just gonna conform?

Where did those cars go?

Those cars are...

As all used cars today are hard to find, hard to come by.

There is both a shortage of inexpensive new cars and a total shortage of used car inventory.

And the reason there's a shortage of used car inventory is simply because during the pandemic, When there was a chip shortage, there were 10 to 15 million new cars globally that were supposed to have been produced.

those vehicles never got sold never brought trade-ins um and and so there's just this huge shortage of cars right and we're suffering with that today so if somebody wants an inexpensive piece of crap um you might find something inexpensive and it definitely will be a piece of crap

How long is it before Amazon or Elon Musk does something like that?

Well, Amazon, to a degree, is not going to do it, but Amazon's owner, Jeff Bezos, is starting Slate Automotive, which is an entry-level EV pickup truck, as base as base can be.

That's what came to mind for me.

The other thing that I would suggest is...

Part and parcel of what the finance manager or person is supposed to do is to try and encourage you strongly to buy as many protection packages for your new vehicle.

After all, you want to protect that investment, don't you? And so they are going to offer you things such as a vehicle service contract, also known as an extended warranty.

They might offer you tire and wheel protection, dent ding repairs, they will present you with what is known in the business as a menu.

It's kind of like going to a Chinese restaurant.

There will be an option, like four or five different menu options for you, like the platinum package.

And then what year or mileage or make or model? Where are the sweet spots in the car industry that we should point people to where they're going to get the best bang for their buck in longevity, low cost over the lifetime of the car, those kinds of things?

upwards of $25

billion of lost investment on EVs.

So it is impacting their margins.

It's impacting their cash flow.

And so they find themselves trying their best to... produce just the right amount of inventory so that they don't have to incentivize it as much to sell it.

And I also think they realize that the amount of people who can actually afford to buy their product is less than it's ever been as far as a percentage of the population.

You know how the Bureau of Labor Statistics keeps track of unemployment, for instance? And one of the things that impacts where our unemployment rate goes is people who just take themselves out of the workforce.

What do you got to say to them?

What is really a sticker price? [laughs] What does it really mean, or what it should mean to our listeners?

Well, y- uh, y- there are some brands where the manufacturer's suggested retail price means more than others.

And, and what do I mean when I say that? If a brand is in short supply and high demand, Toyota, Lexus, Honda, for example, um, then the manufacturer's suggested retail price has a lot more meaning than if you're talking about, say, a, a Dodge Ram or a Ram pickup truck, where, um, instead of the, the, the dealer having a 30-day supply of vehicles, they have a 200-day supply of them.

Well, suddenly, the manufacturer's suggested retail price on that vehicle means a lot less.

The dealership's more motivated to get rid of something that's in high supply and low demand.

So MSRP is just that, a manufacturer's suggested retail price, the price that, that the manufacturer decided they think it should sell for.

It doesn't mean it has to.

Um, your, you know, the, the, uh, the business that you and your son Zach have set up at CarEdge, could you just walk through how that works? I know you've got a couple different tiers, um, because people have asked a little bit about that, so I'd love for you to share it with our, our, our listeners.

What else am I preparing for in that negotiation? What do I do?

Well, you have to be prepared.

And I know for a fact from having worked in the automobile industry and in the Phoenix area, you have to be prepared for deal or install accessories.

There's probably very few dealerships in the Phoenix area that don't automatically include like a desert protection package on their vehicles, which might be a paint protection package.

program or a interior protection program oh but we do it to all our cars it's already done you have to pay for it those are things that you need to be prepared to negotiate on the things that you didn't ask for to be installed things that you might not have wanted had they not been installed uh so that's something you need to be prepared to negotiate on and then Let's say you finally agree to the price and the payment that's quoted to you, and then you go to the finance office.

Well, the finance manager's job is to sell you as many additional protection packages for your vehicle as they possibly can, whether it be an extended vehicle service contract, whether it be tire and wheel protection or dent and ding protection.

And every one of those items is hugely marked up.

Americans,

Folks may be looking right now, can you discuss a little bit about what-What this inventory pressure that these dealers are facing as we speak, what does that all mean for the consumer, inventory pressures?

Well, uh, inventory is the key to pricing.

If you are a Toyota or a Lexus dealer, you have, uh, nationally, the lowest day supply of cars in inventory.

So what does that mean? It means based on the current daily sales rate, for instance, most Toyota dealerships would sell out of their inventory within 38 days based on the current daily sales rate.

Then you go to the other end of the spectrum and you could look at, say, a Ram dealer, that they might have 120 days supply of cars.

So if, if you're a consumer and you want a Toyota, and the reality is that most of the Toyotas are pre-sold, as a consumer, you don't have a lot of leverage.

The dealer has the leverage because there's great, great demand and limited supply.

... and go hide? [laughs]

Now, what do dealerships have to do, uh, with this sort of, uh, decree from our federal government?

Well, I, I...

What, what they, what they have to do, or what they should do, is what the good dealerships do, and that is that the price that it's advertised for online, whether it be on their own website or on cars.com or Cars Guru, whoever it is, whatever that advertised price is, that anybody can walk in and buy it for that price.

It can't be contingent upon, "Oh, well, you have to finance through us," or, "You have to have a trade-in," or, um, uh, "There's these additional fees." No, what the advertised price, the only thing that the advertised price in the future, um, it, it should be is it's plus tax and tags.

That's it.

It's not plus, oh, all of a sudden there's, there's, uh, window tint or there's the desert protection package or, oh, well, there was a, a rebate that you don't qualify for.

And I th- We already see some of the dealers are cleaning that up and, and doing a better job of it.

[laughs]