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Old 1 December 2022, 03:26 AM   #1
acrds1
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Car Business

Anyone else here in the new/used car business?

I myself own/manage a small used car wholesale operation here in NJ.

Been a roller-coaster ride the past few years!

Who else on here is in the business?
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Old 1 December 2022, 03:53 AM   #2
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I am a former owner. I originally bought a building with a laundromat. There was a huge parking lot so I started with used cars. I did this for 7yrs before I got burnt out. My main occupation is custom home builder/remodeler. I wanted the laundromat as an absentee side hustle. The car business morphed from a hobby to a business. Having the space and zoning already in place made it easy. Towards the end I was doing 12-15 cars per month. Eventually I got burnt out chasing employees. I didn’t trust anyone enough to send to the auctions so I had to do that twice per week. It got to the point I was working more at the side hustle than I was at my construction company. I eventually sold everything to a younger husband and wife team. The car lot has since closed, but they expanded the laundromat and it seems to be doing well.
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Old 1 December 2022, 03:58 AM   #3
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Welcome!

You’re probably the second most successful forum member. I bought a 2002 Buick Century with 290k miles, 4 shades of maroon paint, with someone’s arm in the trunk for $29k
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Old 1 December 2022, 04:53 AM   #4
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Welcome!

You’re probably the second most successful forum member. I bought a 2002 Buick Century with 290k miles, 4 shades of maroon paint, with someone’s arm in the trunk for $29k
hahahaha

YES used car prices really got crazy since 2020.

I remember selling 2 year old Altima's about a year ago for msrp and that was wholesale value back then.

Everyone hates on the used car business for the past few years, but this madness was really to blame on the rental car companies buying up all the inventory at the auction. Avis, Enterprise and Hertz drove up the prices creating a market no one has ever seen.
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Old 1 December 2022, 04:57 AM   #5
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What goes up can go down. I bought a 2008 Honda Accord in a recession. I was the only customer in the dealership when I bought the car.
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Old 1 December 2022, 05:17 AM   #6
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What goes up can go down. I bought a 2008 Honda Accord in a recession. I was the only customer in the dealership when I bought the car.
This is very true! As of right now the entire used market is on a downward slide, some vehicles have lost 20% in the past 4/5 months. Things seem to be headed back to normal.
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Old 1 December 2022, 05:45 AM   #7
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I own a car club in jersey. A very different business. But in the same community.
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Old 1 December 2022, 05:46 AM   #8
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Not in the business at all, but been intersting to watch the last few years.

How has Carvana impacted your business? Curious to hear from an insider.

The Carvana recently opened in Michigan had their license pulled for some regulatory infractions- not sure if they resolved them or not, but I am sure the local car dealers made sure the city governments are all getting nice deals on their cars for the next few years.....
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Old 1 December 2022, 06:16 AM   #9
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Not in the business at all, but been intersting to watch the last few years.

How has Carvana impacted your business? Curious to hear from an insider.

The Carvana recently opened in Michigan had their license pulled for some regulatory infractions- not sure if they resolved them or not, but I am sure the local car dealers made sure the city governments are all getting nice deals on their cars for the next few years.....
If anything Carvana has made the regular customer more dealer savoy and for me that's a plus. Now more then ever before people check the carvana offer and use that as a bench mark as value. I'm always happy to explore any vehicle someone is looking to sell outright, its possibly the best way to acquire vehicles.


Carvana has been a fascinating thing to watch over the years. Early on back in 2018 the writing on the wall was pretty obvious to anyone in the business, overpaying for most inventory, terrible customer service, and worst of all a massive cash burn. I was actually so confident that they would fail I personally entered a short position which I can say my ass was handed to me (bad timing looking at the stock now) . Thinking back yes that was stupid but hey at least I'm fortunate enough to laugh about it now.

They most likely had their license in Michigan pulled for not producing titles which seems to be the common issue across the country with them. There bread and butter is selling high interest loans to first time customers that really don't know any better or cant get approved anywhere else. Carvana has never made a profit and I suspect there best days are behind them now. I think one of the major things that hurt their business was not being able to purchase any off lease vehicles in the height of the market. A lot of manufactures stopped third party buyouts when these lease had a ton of equity in them, it could have been tremendous for carvana. Honestly at the end of the day I'm envious of what they did, took a basic idea, sold it to investors, and cashed out at the top for billions....

Heres some history on the founder
https://en.wikipedia.org/wiki/Ernest_Garcia_II
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Old 1 December 2022, 06:17 AM   #10
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I own a car club in jersey. A very different business. But in the same community.
Yes GS motor club! What's up man?

Any track days lined up for next year? I did a few this year at NJMP

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Old 1 December 2022, 06:25 AM   #11
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Carvana?

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Old 1 December 2022, 06:36 AM   #12
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Carvana?

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I wish I still had my short in, although it may have aged me by 20 years
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Old 1 December 2022, 07:38 AM   #13
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Old 1 December 2022, 07:54 AM   #14
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General Manager of an Audi/VW dealership. 28 years in the business.


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You’ve caused so much pain for so many out of warranty you don’t even know.


Reported!!!!
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Old 1 December 2022, 07:59 AM   #15
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Originally Posted by acrds1 View Post
If anything Carvana has made the regular customer more dealer savoy and for me that's a plus. Now more then ever before people check the carvana offer and use that as a bench mark as value. I'm always happy to explore any vehicle someone is looking to sell outright, its possibly the best way to acquire vehicles.


Carvana has been a fascinating thing to watch over the years. Early on back in 2018 the writing on the wall was pretty obvious to anyone in the business, overpaying for most inventory, terrible customer service, and worst of all a massive cash burn. I was actually so confident that they would fail I personally entered a short position which I can say my ass was handed to me (bad timing looking at the stock now) . Thinking back yes that was stupid but hey at least I'm fortunate enough to laugh about it now.

They most likely had their license in Michigan pulled for not producing titles which seems to be the common issue across the country with them. There bread and butter is selling high interest loans to first time customers that really don't know any better or cant get approved anywhere else. Carvana has never made a profit and I suspect there best days are behind them now. I think one of the major things that hurt their business was not being able to purchase any off lease vehicles in the height of the market. A lot of manufactures stopped third party buyouts when these lease had a ton of equity in them, it could have been tremendous for carvana. Honestly at the end of the day I'm envious of what they did, took a basic idea, sold it to investors, and cashed out at the top for billions....

Heres some history on the founder
https://en.wikipedia.org/wiki/Ernest_Garcia_II
Awesome and thanks for sharing your view. I have never been a Carvana fan, and would agree it has been a flawed run for them.
They even put up one of their "vending machines" right before COVID, and I don't think it ever had too many cars in it. Not sure where they are at with the licensing issue, but believe you are correct it was title infractions and some other reporting or document delivery problems.
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Old 1 December 2022, 08:33 AM   #16
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General Manager of an Audi/VW dealership. 28 years in the business.


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Welcome! I've never worked in a new car store even though I interact almost daily appraising trades and or selling some used inventory to stores.

How's the new car inventory coming in so far? I know VWs were VERY tight about 6 months ago..
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Old 1 December 2022, 08:36 AM   #17
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Awesome and thanks for sharing your view. I have never been a Carvana fan, and would agree it has been a flawed run for them.
They even put up one of their "vending machines" right before COVID, and I don't think it ever had too many cars in it. Not sure where they are at with the licensing issue, but believe you are correct it was title infractions and some other reporting or document delivery problems.
Happy to see we share the same view.

I could go on and on about Carvana, this kind of business is just too fragmented to scale and become "amazon of cars".. You cannot buy 1 product over and over expecting the same result, vehicles are titled assets not cell phone cases.
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Old 1 December 2022, 10:17 AM   #18
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I wish I still had my short in, although it may have aged me by 20 years

Your short could have lost you a lot during the free fall if you were on a lunch break.
How they figured on turning net profit with total gross per unit of $3,500 and rising SG&A (up 20%) is beyond me.

With 50 unique titling, registering, and licensing processes, the back office would resemble Noah’s Ark but only 1 of each species.

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Old 1 December 2022, 11:05 AM   #19
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Used Cars... great movie!
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Old 1 December 2022, 04:33 PM   #20
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We’re in the BHPH business going on ten years. Last few being the best of them. COVID forced us to buy online and ship everything instead of just buying from the local auction. Tons more recon but in our market that’s just fine. It seems things vary greatly by region. Glad to see wholesale prices soften a bit but it’s also December, kinda like clockwork, they fall until tax time begins.
How do dealers get in touch with wholesalers? How long do your business relationships usually last before someone gets pissed over a bad deal or other mistake?
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Old 1 December 2022, 04:49 PM   #21
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What is BHPH?
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Old 1 December 2022, 04:52 PM   #22
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Leasing my second Audi A4, love it.

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Are new A3s available? Wife thinking about it.
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Old 1 December 2022, 09:07 PM   #23
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What is BHPH?
Buy here pay here .


... according to Google.
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Old 1 December 2022, 10:34 PM   #24
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Yes GS motor club! What's up man?

Any track days lined up for next year? I did a few this year at NJMP

You’ve heard of us!! Nice!!

Definitely doing track days next year. We work with a few clubs that specifically do track days.

Love NJMP. Definitely my preferred track.
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Old 2 December 2022, 05:13 AM   #25
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We’re in the BHPH business going on ten years. Last few being the best of them. COVID forced us to buy online and ship everything instead of just buying from the local auction. Tons more recon but in our market that’s just fine. It seems things vary greatly by region. Glad to see wholesale prices soften a bit but it’s also December, kinda like clockwork, they fall until tax time begins.
How do dealers get in touch with wholesalers? How long do your business relationships usually last before someone gets pissed over a bad deal or other mistake?
Here's a business that will always exist! I've been intrigued by this model but never had the nuts to go for it. Do you have GPS trackers in all your vehicles? How do you deal with repossession? Do you only do BHPH for all your cars or just an option for bad credit customers?
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Old 2 December 2022, 05:16 AM   #26
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You’ve heard of us!! Nice!!

Definitely doing track days next year. We work with a few clubs that specifically do track days.

Love NJMP. Definitely my preferred track.
I think I ran at Thompson CT with you, I was driving a red G5 Viper.

You may have been driving the AMG GTR at the time if I remember correctly.
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Old 2 December 2022, 05:51 AM   #27
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I think I ran at Thompson CT with you, I was driving a red G5 Viper.

You may have been driving the AMG GTR at the time if I remember correctly.
Wow!!!

This is awesome.

I remember the Viper.

We definitely need to catch up!
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Old 2 December 2022, 07:52 AM   #28
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And what’s even better… Shannon is getting me a new car at 40% OFF MSRP!!!
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Old 2 December 2022, 09:51 AM   #29
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Old 2 December 2022, 03:02 PM   #30
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And what’s even better… Shannon is getting me a new car at 40% OFF MSRP!!!

You joke but Shannon did actually get me several great deals when he use to work for another brand. Those days are over I suspect…for now haha
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