In this short clip, Patrick Bet-David, Adam Sosnick, Vincent Oshana and Tom Ellsworth react to nationwide car dealership woes.
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So I saw this video if you can pull up This video by the way that I sent you And on Wall Street Journal this video Shows a guy who owns a dealership what It looked like just a few months ago Versus today watch how he describes this Turn on there you go go ahead And you look Everything you see is new that's 10 rows Each with about 15 cars it's probably 150 175 cars it's what you'd expect to See at a car dealership like Adam Lee's But let's rewind eight months I walked out here in a while this is They don't have any cars wow last year New car sales fell to their lowest level In over a decade as Shoppers saw more Asphalt than cars on dealer Lots there Is no cars to sell a year ago today Dealers like Adam Lee finally have more Cars to sell But Rising interest rates Are making those cars harder to afford Okay you can pause it right here so There's a couple things when I saw this Video and a couple charts that I wanted To share with you so first of all we all Know a year ago I'm trying to buy a car For my family for my you can't get a car You can't get chips the prices are Ridiculous then you see some of these Numbers go to the next chart that They're showing based on Auto Sales okay So this is inventory okay AI inventory For about two years America for the
First time ever we're talking to since Decades our inventory was less than a Million prior to covet look at 2020 if You look at 2020 you see that number Three million prior to 2020 the American Dealerships dealerships in America for Decades were always above 3 million we Always had three million cars in Inventory for decades it dropped to less Than a million you see that number right There 788 which was July of 2022 it's Come up to 1.172 million it still hasn't Come out we got a lot of room to come up To uh what do you call it the average of 3 million plus can you go to the next Chart which was kind of interesting to Think about this is the number of day Supplies automakers have jeep has enough Supply for 125 days Jeep Can you zoom in a little closely to see Who's second third if we can see it okay Number two is that Buick Buick Buick Volvo Chrysler well Buick should have Enough supply for years uh Volvo Chrysler Dodge Jaguar Ram Infinity okay Go to the Bottom now go to the bottom All the way at the bottom is Toyota can You go to the next slide so we know what Toyota's days are so that's 152 Toyota Only has 27.7 days of Supply wow which Means Toyota Kia Honda Lexus is selling Even Land Rover BMW selling so Porsche Is selling that's a Mercedes is selling Faster than Buick so go to the next
Slide go to the next slide that we have Here average new vehicle transaction Price go three years ago 32 000 the Average car today Vinnie is forty seven Thousand dollars honestly Tom how the Hell are people making these car Payments by the way here's how I want You to look at this this is the thought That was scary for me can you go do me a Favor pull up a a calculator just pull Up a calculator uh uh uh a car auto Payment calculator to type in auto car Payment calculator I see where you're Going I'd also like to know how many Months the average number of months People are on those car loans they used To be 65 years I'm wondering if they're Going longer because the car's more Expensive why don't we do this together Let's just do this together go to auto Loan calculator zoom in a little bit put 32 000 price 32 000 stay on six months Go to what were the rates uh three years Ago in 2019. one percent two percent What do you want to put a time you could Get three let's just use three average Credit three percent okay put three Percent down payment let's put zero We're putting zero down payment yeah Okay and then pick State I don't know go To Florida let's just do Florida to Florida okay uh or matter of fact go to California go to California go to California okay go to California
Whatever is fine calculate Calculate What's the payment 575 where do you see It 575 is a payment okay so that's what That's at the average price of a car Three years ago which was 32k okay and We're using three percent interest rate Payment is 575. no money down which is No money down fine now go to take that Take that 32 000 make it forty seven Thousand Leave the time what do you want to put It at seven percent or six and a half Let's just use six and a half go to six And a half everything stays the same Calculate 9 19. so let me get this straight it's Like two cars you went from 575 to 919 The income hasn't increased no your Income hasn't what is the number on that 575 on 919 if we do the math is that an Increase of a 70 percent Jesus 919 minus 575 345 divided by 575. that's 60 Increase in car payments in three years Vinnie oh my God in three years we're Not in four years we're not talking About an increase by the way meanwhile All those money that they spent to People they've spent Okay so so when people are like well America's gonna be fine real estate's Gonna be fine economy is going to be Fine really the only way this is going To be fine is what's the average income
In America in 2019 pull up average Income in America in 2019 what is the Median income whatever you want to not Household individual individual income In 2019 individual income is probably Closer to 40 Grand 68. fine no problem Let's use household ghost household Income in 2019 at 68 what's household Income today what's household income in 2023 What is a show 60 wait how much 74.75 okay so let's do the math here Here's why I want you to know problem is Coming because the American family is Going to feel this so that's an increase Of seven thousand dollars seven thousand Dollars so their income has increased Ten percent but the average car payment Has increased 60 percent you explain to Me how American families are going to Make up that 50 like this there's only a Couple things that happens layoffs or a Big ass increases of fifty percent Companies cannot pay 50 increase today So what's going to happen next Selling of cars prices of cars are going To go down okay you're going to see People who are trying to sell their Homes it's going to go down this is Bigger than people think as much as we Talk about home prices What do you think people buy more of Cars or homes cars the first way to Judge if people can afford to buy houses
If they can't afford to buy what a car Yeah so if they can't afford to buy a Car today how in the hell are they going To buy a house today and then what is The seller going to do doesn't the Seller need more qualified buyers guess What qualified buyers are decreasing Qualified buyers are decreasing so this Is a very interesting season we're going To go into the next six 12 months if you Own your car today uh uh good for you if You're about to go buy a car today brace For impact you're going to see it in the Payments if you haven't already if you Haven't already Tom you're doing some Math or so I'm curious to know what You're thinking I did average length of A car loan 2019 59.5 months six years right 60. average Length today 69.7 months almost 70. ladies and Gentlemen 72 is one more year so the how Is Americans dealing with it If Rob could go back there and plug in 72 months Just plug in 72 on the 47. and I'm all Happy is Adam because Adam does not have A car this whole time Now take a look it's still seven nine do Me a favor matter of fact let's play This game go to 84 which is seven years Go to 84. by the way the longer you go The higher the increase the rates but It's fine go to 84 it's worse
697 go to 96. Jesus to get to the same Payment go to 108. oh my God we're gonna Play this game go to 108 what was the Number 575 you're officially at it Instead of 60 payments of 575. two Fourth today's car you have to make an Additional 48 payments yeah but how much Is the cost gone up how much more Interest are you paying that's the Number that doesn't matter the average Family doesn't think about interest they Think what they can afford on a monthly Payment yeah but that's the exact Opposite well you should be it's not About what you should be Adam we're not Sitting here talking about what people Should be doing the average family Sitting there saying I need a freaking SUV I need something I can only afford 575. they don't care about interest Rates when I bought my first Mitsubishi Eclipse when I was in the Army you know What my interest rate was F Mac if You're listening Fu 33 yeah 33 FM Of Kentucky Clarksville if you're out There I don't know if you're still in Business they gave this 18 year old kid A Mitsubishi Eclipse 33 percent of my Interest rate I paid it Jesus forget it Was a 5300 loan but it took me I'm still Paying I'm still paying it yesterday That's right one of the tires is missing You know we push it every morning when We come here you can't say that people
Can't care about the interest rates I Didn't tell you that no Adam you okay You care I care yes we care yes people Care more about the payment than the Interest rate and that's why they're Idiots that's why most people are living Paycheck paycheck and they can't afford I didn't tell you whether they're idiots Or not they listen to this contest could They want to change yeah they listen to Songs because they want to change the People that are listening to you they're Saying I agree with you I want to learn From you but the average person today Who is the majority is only looking at Payment and guess how they're going to Be financing you know what John can you By any chance make it 108 months can you Buy any chance make it 96 the sales Person doesn't say Well Mr Jones do you Really realize how much more interest You're going to pick the sales person Like I don't care what we make it sell It so I can make my commission yeah so This car salesman we all know that the Big money in cars just as you're seeing This is not on buying the car it's the Financing that's how they can go from Making two three five grand to 20 grand Off of Customer because if a customer is Like I just want to be at a 400 payment It's like all right well get ready to Make those 400 payments for the next 30 Years buddy so if you like this clip and
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