The Car Concierge Podcast - Buying a car shouldn't feel like a gamble

On The Car Concierge Podcast, the team at Car Deal Max pulls back the curtain on the car-buying process, sharing real stories...

Car Deal Max

Transcript

SPEAKER_01 0:00

Well I'm Chris. And I'm John. And uh we are Cardeal Max. We have a tagline for Cardeal Max where luxury and value are delivered. Also, Cardeal Max is kind of um metamorphosing into the CDM dealer hub where uh we source and you sell. And um how this started on my on my side is that as COVID happened and I started my business kind of went away, I had a friend that recognized that I helped a lot of people buy cars. He said, You should monetize this and become a business. And uh I've known John for about five years. We go to church together, and um about the time I was starting this car business, he was exiting a uh corporate job in the automobile industry, and I went to him and I said, I have nothing much to offer, but you want to start a car dealership together? And he said, sure. And uh we've been learning ever since.

SPEAKER_02 1:06

Yeah, and it's on my end of the world, like Chris said, I was in the industry for 25 years and got caught up in some overhauls at the company, and you know, was given a severance package to leave and left. And at that point I had to make a leap somewhere, and I knew I didn't want to do the corporate world anymore. So I've been advising independent dealers for years on how to sell cars. So it's kind of like, well, put my money where my mouth is and get out there and try to start this up, and that's what we did. And definitely there's different pressure than when you're in a corporate world, but at least the pressure's yours. You know, when you sell a car, you get the profits from it, and uh, you know, we can go our own way, like Chris talked about the CDM hub, where we'll go out and buy cars for other dealers to put on their lots, but we also concierge shop for people so you can put an order in online and we can find you most anything you want. We also allow people to sell their cars to us online. So, you know, we're trying to kind of play at a lot of different angles, and you know, so far everything's working okay, but you know, over time we might find some things work better than others and may abandon it, but for right now, we're having fun doing all of it.

SPEAKER_01 2:25

It's kind of a family business for John, his father-in-law's, and it worked for General Motors for a lot of years, and uh it's funny as he's watched us as we've grown and we've made good deals and made bad bad deals. You know, we've lost on probably two in ten deals where we buy a car and we buy it poorly, or we buy it and it looks good on paper, and we get it, and we don't get it in time, and we can't arbitrate it and whatnot. I was thinking about this on the ride here this morning. Kelly, uh Sana's daughter, bought one of the first cars from us. She bought an electric EV Model three, and um you talk about a lesson learned, and and one of our mottos is to do no harm, to help people. And um Sana's daughter bought a Model 3 Tesla that was fully self-driving, looked looked great on paper, ran really well. She took it out of the dealership, she was gone two or three days, and the air conditioning failed. We took the car and we had it fixed at um Tesla to our expense. There's not that kind of margin in an electric vehicle. When we did that, I think it showed the kind of character that's involved in the way we do business.

SPEAKER_02 3:52

Yeah, and I think, you know, that goes to the way the world is now with Google and all the reviews, and it takes one or two bad reviews and it can sink you. And, you know, we're not gonna go, you know, we're gonna do everything we can to make it right. And, you know, we had another electric car I bought a while back that said it came with a charger and didn't come with a charger. Went to the uh manufacturer and they wanted way too much money, and we could you can find it on Amazon. So, you know, we're there just to help, you know, help people through that whole process and uh whatever we promise, we want to deliver. And as long as we do that and you know, people stay happy, you can do all the advertising you want, you can do all the marketing you want, but it's still people talking to other people that is where you really need the positive reviews.

SPEAKER_01 4:40

It's funny, I have a couple friends, as as as John, that own enterprise car dealerships. And when you talk to a guy that owns an enterprise car dealership, uh in my experience anyway, they uh they they talk and act like they know almost everything. And that's because by and large, they have. They've put together advertising, they've put together sales, they've put together marketing, they have an accounting department, they do the reconditioning, they they literally from the time the car gets there to the time the car leaves with the customer, they have done almost everything possible to that car. And that's one of the biggest challenges that that John and I have faced is setting up our vendors and managing our vendors from a mechanic, whether it be a wholesale mechanic or a retail mechanic, and there's a difference to wheel reconditioning, to dent and ding, to body shop. So when we buy a car and there's let's say there's a wholesale spread on that car of two or three thousand dollars, buy a twenty-five thousand dollar car, it's worth twenty-eight thousand. That three thousand dollars is is a your profit, and b, you're gonna use it in reconditioning. And so you have to buy good cars, you have to recondition them well, you have to make sure the door dings are gone and the the the wholesale uh mechanic does his work and make sure that the brakes are 50% or better, and that you're you're not putting a bad product out into the marketplace. And so we've learned a lot and we've spent a lot of money learning, and that's important.

SPEAKER_02 6:29

Yeah, and not just the learning part is being independence and trying to get started is how do you compress the time from when you buy a car to when you sell a car? And so that's where we had to work through our process over this past year is you know, it goes to the mechanics first, and then it goes to our wholesale mechanic to do an overall check of the car. And then if it needs body work, it goes to the body guy and uh detail. You kind of got to follow that process because if you don't, you're gonna have bottlenecks everywhere. If you got too many cars at the body shop versus spreading them out and I'm putting them through the process, really trying to compress that time because every day that we don't sell the car, we have carrying costs. And so the quicker you can get that whole timeline down, the better. And that's really some of those mistakes. You know, we've had some cars that sat at uh mechanics for a couple months with nothing getting done. So, you know, you learn not to go to that mechanic anymore and you find someone else, but you're you gotta take every every transaction, every car is just learning. And part of that learning, too, is that we found out is important as when you do go to buy cars who to buy from and who not to buy from. Know the dealers that take care of their cars, and know the ones that aren't gonna put any reconditioning into their cars.

SPEAKER_01 7:47

You know, it's it's funny. We bought a uh a Ford Escape to put in the marketplace, and uh we bought it for uh five thousand dollars. And um everything that could possibly go wrong with purchasing this car from the auction did. They were supposed to get it to us. It was 40 miles away. I bought it in downtown Atlanta. It took 24 days to get the car from downtown Atlanta. In that 24 days, a car price changes every seven days, and it mostly doesn't go up. In this case, a $5,000 car went down $1,000, so now it's worth $4,000 21 days later. And when we got it, because of the rules, and and this is where it really I'm I'm a sales guy. John is technical and he's spot on with with the auction business because he came from that. But he knew the rules, and the rules were that the car was more than five years old, they didn't have to disclose that they changed the engine, they changed the engine. The people driving it through Mannheim graded it based on looks and the fact that they drove it through an alley and uh they drove it over some cameras and they took some pictures and it passed muster. We got it to our shop 24 days later and found out that the engine had been traded out by a dealer. They didn't have to disclose it. We had to turn around and send the car right back to the auction. We lost essentially half our money on that car. But we know better than to put that out into the marketplace, and we also know better that our reputation is very important to us in that we disclosed it to the auction that we brought it to. This car has a bad engine, it's the wrong engine, and we're gonna take our lumps where we take them, and that's what we did. And I think to do things right in the business world today is more important to us than to do things fast and at great expense to our customers. We'd rather give them a really good product and really quality workmanship and then know that they can trust us. Yeah.

SPEAKER_02 10:12

It really resonates a lot more when you have cus a lot of the customers that we have coming in, they're there because they got screwed by the last guy. You know, we've had people that were doing buy here, pay here that, you know, had to have cars repossessed. We've had uh people that were just sold bad cars. And, you know, working with them to try to figure out how upside down they are with the negative equity in it, and what can we do to get them, pull them out of that, to get them in a reliable car, it helps a lot. A lady called me or texted me Sunday night just this past week, and we had sold her a car Saturday. And just a simple thing. She couldn't figure out how to get to get the hood unhooked and closed again. So I drove by before she left for work on Monday morning and showed her how to do all of it. So, you know, we'd leave a personal touch, and I have no problem telling people if you got a question, call us. We'll help you out, we'll show you how to do something, you know. And if uh we've gotten better over time that in the beginning we weren't around long enough to have finance and warranty products. Now we have finance and warranty products. So, you know, especially if you're buying a lower-end car, you know, we always tell you get a three or thirty-six thousand-mile warranty, and that way you're covered bumper to bumper, and you can take it to any mechanic in town, and you're good. We try not to do any harm to anyone, and uh a lot of people are kind of iffy on warranties, but it's well worth it for the price you pay.

SPEAKER_01 11:43

Well, you you know it's funny, John just brought up buy here, pay here, and warranty and finance. So, in the in the world that we live in, right, we also know that we have to help people. And sometimes helping people is saying no. Sometimes helping people is guiding them through the right process. We do offer buy here, pay here services, and when we do that, we're carrying the paper. We're the ones that are financing this deal. It's not a bank, it's not anybody but John and I. And uh and it sounds bold, but we won't sell a car in the buy here, pay here marketplace with a three-year note unless they put a three-year warranty on it. It's simple. If you're paying for a car that you can't afford because you're in the buy here, pay here marketplace because you have bad credit and you made bad decisions, we're not gonna compound those decisions. We're gonna make you make good decisions. We're gonna carry the paper on the car, but you're gonna have a warranty. And if you're not gonna have a warranty, and if you're not gonna make a deposit 25% on the car, we're not gonna finance it. It's that simple. With 600 credit scores and up, and 600 doesn't sound like a lot. It's not. With 600 and up, we can do traditional financing. Some of our bank lenders make us take a deposit, which is okay. We're gonna do what's right for the client. And sometimes that is saying no.

SPEAKER_02 13:13

No, I agree. It's uh people come in with teenagers that want the Mustang with the V8 engine in it, and they want a charger and they want all this other stuff, and it's like you don't want to turn away business, but like, let's look at something more economical, something that's gonna be better on your insurance, something to get the kids started. And uh people, as much as they look like they don't want to take advice, they do. Because a lot of people still, even with all the information out there, we get a lot of people come in. They didn't do any research, they drove by. They drove by, they parked their car and they walked a lot. Right? So, you know, they can go online and see some retail prices at different stores, but you know, still everyone's like, oh, it's hard to do business because everyone knows all the information. Some people they they still don't look at the information, so that's what we're there to provide them with some expertise, to provide them uh with all of the information about the car. They get their free Carfax, you know, we'd uh make sure we're disclosing everything so no one walks away thinking they got something they didn't.

SPEAKER_01 14:18

Carfax is a good point. So we use a lot of data when we buy the car. We use uh auto check and we use Carfax. Carfax is good if the car was reported on. If it wasn't reported on, no good. Auto check scores the car against other cars in the marketplace. So let's say uh a car I was working on this morning, a um BMW 3 series, in the marketplace, the 2019 BMW 3 series will be in a range of 80 to 90 points. Well, if you buy a 70-point car, you're gonna get hurt. If you buy a 91-point car, you're gonna pay for it. So we use the auto check, then we check the data on the car facts, and if the car is showed that it's had an oil change every three to five thousand miles, and it's consistent and it matches up with the other data, then we make an offer on buying the car. Then we put a retail offer together and we put a retail price on the car. So in the concierge world, we um might buy a car and recondition it on our dime, put a retail price together, and then meet that retail price. So, one of the things that I thought we should mention, John, is um our location. We are a licensed bonded insured auto dealership. In the state of Georgia, that requires all sorts of rules. We have an office in Woodstock, which is on our website. Our Woodstock office is just that. It's an office where we hang our license and carry our bond. Our dealership is at 334 Canton Road, Cumming, Georgia, right downtown Cumming. We are inside the friendly auto gallery. We are 334B, they have 334A. There are two dealerships that are separate, but we're together. We have 50 cars to choose from on our lot. But as John said earlier, and and we uh we bought a $200,000 Escalade last week for a uh uh athlete's father. Okay, so we have a far reach and uh we uh have a good reputation so far, and we want to keep it that way. So we have 50 cars on this on the lot between the two dealerships, about 25 each, and we uh do different levels of reconditioning, each of us, and we have price points from 5,000 to 50,000, and uh we can help almost anybody.

SPEAKER_02 17:18

Yeah, and that's nice with the two dealerships together, is we have that diversity of inventory. So if you come in, we can usually find you something on the lot. It's gonna be in your price range, you can afford, we can finance you. And like with our concierge service, there's something that's you want, but it's not there, we can get the car. And you know, Chris and I spend hours between all the major uh wholesale websites that are out there. We look at different auctions, different companies from Mannheim to Odessa to dealer's auto auction. You know, we're just getting started with open lane. So, you know, we have access to a lot of inventory. And so we can typically find whatever it is that you need.

SPEAKER_01 18:00

You know, one of the things, John, that I think is we we kind of discussed it yesterday, but it's I think it's important I recognize, and I didn't really think about it until this morning. We are selling about five cars a month wholesale. We and we we're and we've got a couple of customers that are repeat customers, so they know we're making our cars frontline ready right, they know we're buying them right, and they're buying them from us. So we're putting them on a wholesale website. These big, big, big companies are saying, those guys are doing it right. We can buy cars from them, we can feel comfortable that we're buying a good car, and let's do it. So we I think we sold three yesterday, wholesale. So not only do we do retail, not only do we buy cars for customers that want special cars, like this Escalade $197,000 car we bought last week. Two weeks before that, we bought $127,000 Lincoln Navigator. Now we don't necessarily keep those in stock, right? We go to the franchise dealerships with relationships that John has, and we buy from them. And we have relationships with dealerships from Chevrolet to Ram trucks. We can buy anything that a customer wants, we can buy it right, we can maybe make the deal for them better than they can make themselves. Most people don't know this about the finance world. The finance world, you go into the dealership and you have a credit worthiness that's established by the dealership with the bank. They have nothing to do with it. The bank says, I'll give you credit, I'll give you four percent. That bank says to the dealer, I'll sell you that loan at 2%. You can sell it to the client for 4%. The dealer makes that spread. You don't know that. When I go to a dealer and I talk to them, I do. And so oftentimes I'll say to them, we gotta do a better interest rate than four percent, we gotta do it three percent. As an example. We don't always do that, but um, they make money on the warranty, they make money on the interest rate, they make money on the retail establishment of the car. We want to make all that money too, but our costs are better. So our deal we have a dealer fee, it's $4.99, but that includes us running around from the time we pick the car up to the time we service the car and get it frontline ready. Door dings, wheel rash, oil changes, inspections. That's John and I running around and doing all that work, making sure that the car's ready. So when we negotiate on your behalf as a concierge, we're gonna get the best deal possible because we're gonna push on all the areas that we know about.

SPEAKER_02 21:04

One thing we haven't talked about yet is you know, when we started out, we had a DMS, which is our dealer management system, right? That has all our inventory expenses and everything, but we didn't have much else. So now we're finally getting to where, you know, like I said earlier, we got with a warranty company, now we're at a finance company, we're getting our CRM up and running. So all this technology is finally flowing. And when I mean flowing, it's gonna be where Chris and I don't have to intervene. You know, an order comes in, automated email goes out or text message goes out. And then we can do a lot of that information and gathering before we ever have to talk to the buyer. That'll help a lot because we spend a lot of a lot of time on text messages, emails, and phone calls just trying to get the clients to come in. So, you know, it took a year took a year, but we've got everything kind of connected now. Still a little clunky here and there, but for the most part, it's all flowing through.

SPEAKER_01 22:05

I would say that um, you know, the the next steps for us in our retail establishment is uh we're gonna bring in a salesperson to work uh alongside of us to um make sure that we're meeting customers' needs on a regular basis, that we're following up in our in our CRM, which is uh a customer relationship management software that'll be um fully automated with a text message and an email campaign, but we'll also have a personal touch. That person can opt out anytime they want, but we have an online buyer's guide that we give for free. If they give us data, we will help people. I think that's the the real message that I want to leave with is I want to help people. John wants to help people do the right thing. And I think oftentimes when somebody walks into a big franchise dealership, they feel like they're a number or they feel like they're under attack. You know, 17 guys standing in the parking lot waiting for them to step out of their car to look at a car. We want them to feel comfortable in the process. We want to educate them through the process, but furthermore, we want them to come back. The average person buys 11 cars in their lifetime. If we can get them early in the cycle, we can get them to come back 11 times. That's what we want. That's a real win for us.

SPEAKER_02 23:33

Yeah. Well, and it's uh, you know, bring their kids back and bring their friends back and bring their cousins, whoever. As long as they have the good experience, you know, and we hear it all the time when people come in, hey, so-and-so was here a couple months ago, bought a car from you, and they said we needed to come to see you. And that's when you know you're doing the right thing and taking care of people.

SPEAKER_01 23:52

Really, we have uh a good story and that we're just starting to tell it, and we want to tell it more, and we uh we think that this is the right venue in the world of you know, podcasts. We we never expected to be sitting here doing a podcast, but really this is a good venue for us to uh make sure we get the word out. Our website has our phone numbers on it. John and I are cell phones, personal cell phones. Our email comes directly to us. We're the first people you see when you walk in the right side of the building. We're there every day, Monday through Saturday, about ten to six. We work by appointment. We have cars on Facebook Marketplace, we have cars on our website, we can do concierge purchases, but most importantly, I think it's a people business, and John and I care about people. I agree. Well said.