Archive for May, 2020

Back From the Dark Side

Thursday, May 28th, 2020

Back in April of last year I joked that I had “gone to the dark side” in buying half of a Dodge/Jeep dealership in Sealy TX. Well, the dark side was not for me!

My partners and I did not see eye to eye from the start. We’ll just say they are more “traditional” car guys, and I am not. About three months after closing on the deal I told them I wanted out of the partnership. I looked at buying them out but ultimately we just put the store on the market late last year. We had two deals fall through on it but lowered the price and had a lot of activity early in the year. Then the pandemic hit. All of our suitors vanished, so we closed the store down at the end of March.

As you can imagine, it’s been a hectic few months, even without Covid-19. It was a spanking financially, but the dust is settling and it’s REALLY nice to be home at Brazelton Auto!!!

I learned a TON in the process and was very proud of the team we built out there. One of the most important realizations was just how good we have it here at Brazelton Auto! I talk about the people and processes here all the time, but the Brazelton business model is far superior in my mind;

  • Very limited inventory (and therefore inventory costs) while still having access to thousands of vehicles.
  • A completely different client relationship. At the dealership I’m a bad guy; here I’m a trusted advisor.
  • No deceptive marketing or pricing.
  • No manufacturer telling us what to do or not do!
  • Saturdays off. Hard to go hunting when you have to work weekends!

So while my dealership experience was painful in many regards, I’ve come out on the other side really focused on taking Brazelton Auto to the next level. Be on the lookout for greater client focus, more service offerings, and even a little marketing budget (look for us on Facebook and Instagram). Around here we call it Brazelton 2.0.

Help us spread the word! If you have thoughts on what you’d like to see added or changed at Brazelton Auto, please let me know (lewis@brazeltonauto.com). Your suggestions, and your business, are always greatly appreciated!

-Lewis

Coronavirus Car Deals

Friday, May 1st, 2020

With a pandemic and economic shutdown, you should be able to get the deal of the century on cars now, right? Not so much surprisingly. Let’s look at both new and used vehicles.

NEW

Certainly the marketing is telling you there’s never been a better time to buy a new car, but they also told you that last year and will tell you again this summer and fall. Generally, we have not seen much movement in new car pricing. We have seen improvements in some lease and loan terms, but many of those come with strings (ie 0% on 2019 models only or you give up a nice rebate). Why are prices holding up during this economic mess? Mainly because the factories are all shut down. Detroit has announced they will start reopening plants in the later half of May. It will take at least a month from then before new shipments arrive at the dealerships. So the inventory a dealer has today is all he’s going to get until around July. On popular models, we’re already having trouble finding particular vehicles for clients. Does this mean it’s a bad time to buy a car? No, not at all. The deals are slightly improved from earlier in the year; they’re just not the steal a lot of people are expecting. I don’t anticipate material changes in the market until mid-summer when new production starts hitting the lots. Keep in mind also I’m talking in generalities here. There are some models that have materially bigger rebates in the last month or two. Suburbans and Tahoes come to mind, but that’s more of a function of the coming new body style than the pandemic. Speaking of that, the newly designed Suburban/Tahoe that was supposed to be here this summer is pushed back. No official timeline yet but we’re expecting 4th quarter now.

USED

We have seen more pricing movement on used vehicles than new. Used cars have moved materially, but haven’t fallen off the table. According to the April 27th issue of Automotive News, used wholesale prices are down 10-12% in just a few weeks. Highline vehicles have dropped the most, particularly sedans (which have been the softest part of the market for some time now). Interestingly, used retail prices are only down 1%. Apparently a lot of dealers are not ready to face the new reality, but they’ll have to shortly. Our biggest issue with used vehicles is the flow of transactions has slowed tremendously. Of course retail sales are down which means wholesale transactions are down. Many auctions have temporarily closed and volumes were down over 75% (although they’re picking back up now). This means finding the particular vehicle that fits our client’s request has been a difficult process. However, we expect volumes to pick up materially over the next few weeks. In summary, there are some good deals out there, but not as good or as widespread as the hype would have you believe (shocking, I know).

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