How The Niello Company Is Winning With Used Cars and Transparent Pricing

As shrinking margins and affordability pressures reshape automotive retail, dealerships are finding new ways to drive profitability beyond new-vehicle sales. In this episode, Dennis Gingrich, Sales and Finance Director at The Niello Company, shares how his dealership group is adapting through used vehicle growth, transparent pricing, stronger F&I performance, and service lane acquisitions.

Gingrich explains why changing consumer behavior and AI-powered research are forcing dealers to rethink their sales strategies. He also discusses how one-price selling, eliminating documentation fees, and treating the service department as a vehicle acquisition channel have helped The Niello Company achieve record F&I results while improving the customer experience.

Key discussion points:

• Why The Niello Company is prioritizing used vehicles over new-car volume
• How AI is changing the way customers research and shop for vehicles
• The benefits of one-price selling and eliminating documentation fees
• Why the service lane has become a critical source of used vehicle inventory
• How affordability and EV demand are reshaping dealership strategy
• The role of transparent pricing in building customer trust and supporting FTC compliance

Gingrich shares practical strategies for helping dealerships remain competitive as consumer expectations and the automotive retail landscape continue to evolve.

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Transcript

Welcome And Year-End Reset

Speaker 0:01

You're watching Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick 0:05

Hey everyone, Jim Fitzpatrick. Thanks so much for joining me on another edition of Inside Automotive right here at CBT News. As we close out another dynamic year in retail automotive, we're taking a moment to reflect on some of the successes, takeaways, and challenges. Joining us is Dennis Gingrich, the sales and finance director at Nilo Company, to share insights on what opportunities were out there for 2024 and what he feels about in terms of 2025. It's going to be a big year ahead. So, Dennis, thank you so much for joining me on the show.

Dennis Gingrich 0:35

Yeah, thanks for having me. Always a pleasure to chat with you.

2024 Return To Basics

Jim Fitzpatrick 0:38

Sure. So uh so looking back at 2024, I can't believe that I just said that because these years are flying by. But what's been the biggest uh you know personal takeaway for you uh in retail automotive?

Dennis Gingrich 0:51

You know, I think this year overall has just been, you know, as I look across the industry, talk to people, and really specifically here at our, you know, our location here in Sacramento, our 10 locations, is just really a return to fundamentals, you know, things that have always been, you know, important or bedrock of running a successful operation is really going back and doubling down uh on, you know, inventory turn, lead response time, you know, having a great customer experience. You know, I think 2024 was we were getting uh a little bit away from what's the newest mousetrap that we were looking for to deal with COVID, to just getting back to we're in sales again.

Jim Fitzpatrick 1:29

Yeah, yeah, that's for

Competing On Value Without Big Gross

Jim Fitzpatrick 1:31

sure. Um many dealers have said that you know, we're back to this uh race to the bottom, so to speak, on gross profit. Um, I'm sure you felt a little bit of that in in the store, right?

Dennis Gingrich 1:42

Yeah, we're we're definitely, you know, we're we're not uh getting that COVID money, which you know, in hindsight, it was fun at the time, but it certainly uh wasn't great for the development of our of our people. And you know, I think we're just back to competing on uh value, uh a good experience. And you know, obviously, you know, pretty much everybody makes a good car nowadays. So it's just who can give that good experience and get the customers in and so we can win some business.

Jim Fitzpatrick 2:07

Sure.

Negative Equity And Getting Loans Approved

Jim Fitzpatrick 2:08

Um many dealers that I've spoken with uh in the last six months have said that they're um trying to work these deals out as they come in, and the and the person owes a whole lot of money on that trade-in that they bought three years ago. And of course, that used car isn't worth today, you know, what it was bringing, or these used cars weren't worth today, what they were bringing just a couple of years ago. So there's these big, you know, deficiencies to deal with. Um A, did you find that to be the case? And B, what how do you work through that?

Dennis Gingrich 2:39

Yeah, well, I mean, we've definitely had our challenges with, you know, with negative equity being a thing. I know our stores see it. I see contracts, you know, as I'm doing deal jacket reviews and so forth, where you see some pretty large uh negative equity. I think broadly speaking, just given the segment that we operate in and that luxury segment, uh I think our customers are maybe a little bit more equipped to find ways out of that, you know, having maybe some larger down payments and in credit, you know, compared to maybe, you know, maybe a domestic store or you know, maybe a more mainstream car. But you know, it's definitely something we see. You know, there's deals we don't make uh because of that, you know, just because we can't get the lending. But you know, I know it's definitely a thing. Individuals that I talk with in the industry that, you know, work at other brands, you know, it's definitely a challenge. And it's just, I think the key to that, if you, you know, if you're a dealer, you know, regardless of the brand you represent, I think it's incumbent upon talking to your people about making sure that you're you're submitting these deals out to the lenders and giving the lender an opportunity to make a decision how much they're gonna lend to see if you can make a deal.

Jim Fitzpatrick 3:47

Yeah.

Dennis Gingrich 3:47

Um, lenders that you know, we've read stuff that you know they're tightening up, but I think, you know, maybe with um some enthusiasm about the future with the new administration, you know, I think they're gonna feel that it's gonna loosen up. And uh, you know, I think it's another cycle. We've I've seen this movie before, it's just ebbs and flows, and you just got to go back to again fundamentals, submit the deal to the lenders and and see what they they can they can do for you.

Jim Fitzpatrick 4:12

Sure, sure.

Tariffs And The Affordability Squeeze

Jim Fitzpatrick 4:13

Um, since you mentioned the new administration, there's some concerns out there that uh while Trump is very pro-business and rates are continuing to come down uh and things are looking pretty good, low unemployment rates, and even gas prices are starting to drop across the country. Um, however, he's you know, he keeps using that that tariff word. It scares a lot of uh dealers, obviously it scares consumers too, but dealers and OEMs alike. What what's your take on that? Do you think that could put us in a real bind in the next year if he if battles go through?

Dennis Gingrich 4:47

It certainly could cause some challenges. I mean, right now, you know, affordability, affordability. We look at you know, more and more people are leasing cars to, you know, to find an affordable payment. You know, if you had some tariffs come in there, I think that could add to the add to the challenge. You know, my opinion is is I think um, you know, and I'm not super big into politics, but I think, you know, I think a lot of it might be a little bit of posturing. You know, if you just look broadly across, you know, the news and different stuff, you you know, we're already seeing other countries on different issues kind of maybe change the way they interact with the with the United States on, you know, on the global stage. So for me, it just might be a shot across the bow. And, you know, it maybe there's something there, maybe there's not. But uh, you know, I do know this. I'm not gonna control it at the Nilo company. You know, I just got to make sure our team's ready to deal with it and find solutions to get people in cars at payments they can afford.

Jim Fitzpatrick 5:37

Yeah, yeah, for sure, for sure. Um,

AI And The Three Minute Lead Rule

Jim Fitzpatrick 5:40

in terms of uh some of the technology, um, were there certain areas of technology that you felt as though it changed things for you over the last year? I mean, obviously we're hearing a lot about AI, and I know that plays a big role today, but was there anything that you believe uh really made a big improvement?

Dennis Gingrich 5:56

You know, I I would say AI is really uh really a big deal right now. I know internally we're looking at making some changes going into the new year. Um, you know, I really believe right now this is the the age of instant gratification. You know, you see people post stuff on social media, they're immediately looking for a like. You get on Amazon. I know, you know, I would get upset when my Amazon package couldn't make it tomorrow. First world problems, right? But uh I think people are looking for answers and information, you know, immediately. Um, so I think finding um, you know, AI solutions that really enhance our employees' work experience, right? Take them out of some of the minutiae, the busy work, the stuff they truly don't like doing, and finding a good um uh, I guess, pliable AI solution that has some customizations that can meet the Nilo company, how we want to be represented to our customers, right? And flexibility in getting people uh information. I was on a call yesterday, as a matter of fact, and it was talking about lead response time, which has always been important. And um, you know, the the survey they share that if people aren't getting answers within three minutes, they're moving on, right? And I think getting a human being to do that all the time, you know, it's a challenge. Could it be done maybe in a vacuum? Yeah, but we don't work in a vacuum, you know. So I think stuff like that, that's focus. And you know, when you look at internally, about 80% of our sales happen within three days of receiving a lead. So we just got to be on it quick, have the right information with a good message and communicate really effective if we're gonna continue to be successful in our market.

Jim Fitzpatrick 7:40

Yeah, for sure, for sure. Um, EV

EV Demand In A Strong California Market

Jim Fitzpatrick 7:42

continues, the EV adoption continues to grow, although not at the rate we would all like it to. But how do you see this trend shaping the market going into 2025? Are people coming in and asking more about your EVs?

Dennis Gingrich 7:56

You know, uh we're in Sacramento, California. I think we're one of the best market EV sales in you know in the country. Yeah. So um, you know, right now we've got some um some recall issues with Volkswagen and the ID4, which made up a you know a significant portion of our new Volkswagen sales. Sure. But broadly speaking, we look at our you know, our BMW brands, we're doing a good drop, good job with the EV, uh, Volvo. We continue to do well. I think it's gonna continue to go up. I just don't think we're gonna see that uh, you know, that that exponential increase like we've seen. And you know, I know internally we've made, you know, brought some tools onto our website that we put in the hands of our salespeople and our customers so they can really wrap their head around uh what driving an EV looks like. And on a personal note, you know, I I drive a big um RAM diesel truck, which is I don't even need that much truck. But I drove a an EV, I drove a Porsche Tycon. I know people, oh, it's a Porsche, but I drove that for the better part of a month and a half. And I would argue for most people, an EV is, I mean, it's the car to have. It was so convenient. I didn't need some fancy charger. I drive it, I plug it in, I got everything I used yesterday back, yep, and I'm ready to go. So I think it's up to us as dealers to educate our customers, make sure we're educated and get them to drive the car, not just the customers, but our employees, so they can really know the field.

Jim Fitzpatrick 9:23

That's

Why Staff Must Drive EVs

Jim Fitzpatrick 9:24

right. Because that, you know, um recently there was a study and it said that less, this was going back a few months, but less than 5% of uh today's automotive professionals drive an EV. And that is a problem because they're they're on the front line of working with those customers, either call, click, or come into your showrooms. And if the sales department's not sold on an EV, chances are they're gonna stay away from it in many cases because they don't understand it or they don't have the answers that the customers might ask, or they themselves aren't sold on it. And uh, and that can be a real problem in the industry. I think you're right. More, more, more dealer groups need to make sure that their salespeople are, if they don't buy one, that they're at least driving them on a regular basis, right?

Dennis Gingrich 10:05

Yeah, well, and I think, you know, anecdotally, our Acura store, give a give a shout out to our general manager, Jimmy, over there. He does a he runs a great operation, but uh he was when we got that new ZDX through Acura, he all but mandated that every employee takes one of those home for a couple nights and really get familiar with the car, the look, the feel, how it drives.

Jim Fitzpatrick 10:27

Great idea.

Dennis Gingrich 10:28

Lo and behold, we were on the podium for number one ZDX uh sales in the entire country. And there are bigger markets than Sacramento. So that's great. If you are working in Sacramento, don't take that advice. You know, everybody else can do it if you're not a market.

Jim Fitzpatrick 10:43

That's right. That's right. All you Sacramento subscribers to CBT, forget what you just heard. So

Scout Direct Sales And Franchise Pushback

Jim Fitzpatrick 10:49

now listen, you mentioned Volkswagen, and um, and obviously there's uh many of your uh Volkswagen dealers out there, your uh and your colleagues are all up in arms about Scout as they come into the uh industry and they want to be the next Tesla and sell directly to consumers. What's your take on that as a Volkswagen dealer?

Dennis Gingrich 11:10

Well, obviously I don't, you know, we don't like it. Uh, you know, I know um, you know, I'm sure the CNCDA, they're you know, they're great. They're looking after the the dealer body, and I know they're you know they're gonna be working on that. But you know, I mean the franchise model has been around forever. I think broadly speaking, the model has served everybody well. Um, you know, I do think, you know, from a you know, those that would advocate for not having a franchise model are we're probably at a bad experience with a dealer somewhere, and you know, just because you have one bad experience with one person doesn't mean you throw the baby out with the bathwater. Right. You know, and I do think dealers need to continue to work uh, you know, going forward, it you know, it providing a great transparent experience to kind of minimize the the call for the you know direct to consumer because I do know this when I have a challenge with a customer that stems from a product issue, I'm dealing with it. Yeah, right. And I don't think the OEMs are equipped to deal with it. I don't think broadly speaking they want to deal with it. And if and if they're going that direction, you know, may be careful what you wish for because it's not always uh sun and switches uh dealing with that kind of stuff.

2025 Outlook Online Sales Leasing

Jim Fitzpatrick 12:24

Man, there's there's no question about it. What's your take on 2025? Good year, tough year?

Dennis Gingrich 12:28

Yeah, I think 2025 is gonna be great. I think you know, now that the election is behind us, uh, which is great, I don't really care what side of the aisle you're on. I think you know October was a a challenging month, and I just think there was a lot of noise out in the world that I think detected people from living their lives and doing what they need to do. And you know, November shaped up really good, December's looking great. But I think 2025 is is really gonna be a good year. Um, you know, consumer confidence, all the things you mentioned at the top of the call between uh unemployment rates and you know, all that stuff, I think it's gonna be good. And um, you know, I think as I look about it, what we're doing internally to prepare to make sure we have the best 2025 is just working on our processes. We do want to meet the customer where they want to be. I know that's an old cliche, but we actually have individuals that are dedicated to facilitating a hundred percent online transaction. And if they want to get off that bus and come into store, we'll welcome it. And you know, we'll we'll float between those two tracks. Uh so we've got people dedicated to that. You know, I think leasing is gonna continue to make a comeback next year as people look for affordable payments. So we'll be working with our FI managers to make sure their lease presentation is buttoned up. But um, and I'm also just looking forward, I think we're gonna have some more common sense regulatory stuff for the auto industry with this new administration. So I'm fired up about 2025. It's gonna be a good year as long as we stay rooted in fundamentals and taking care of the customers. Uh, we'll all have nice paychecks.

Jim Fitzpatrick 14:01

There you go, folks. Who doesn't want a nice paycheck, right? I can't find them. That's right. I'm not looking for them either, Jim. Dennis Gingrich, sales and finance director of the Nilo Company. I know everybody is familiar out there with that company. You guys are doing great work out there and uh taking good care of not just your customers, but your associates. And everybody seems to be, you know, rowing in the same direction and loving uh their job there. So you've done great work. So, Dennis, thank you so much for joining us on the show. And as I said, love to follow up with you to see how the uh first quarter is moving along.

Dennis Gingrich 14:35

Awesome. Sounds great, man. Thanks for doing what you do for our industry. I think it's great. Great, thank you so much.

Speaker 14:40

Thanks for watching Inside Automotive with Jim Fitzpatrick.