The Challenges of the Ever-Changing Data of the Car Market, From the Eyes of a Financial Manager.
The car market has had its fair share of ups and downs over the course of the last few years. Within this interview, we deep dive into what it’s like buying and selling a new car, as well as a used one from a consumer standpoint and from finance managers. Today we shed some light on the mystery that is the car market, Tune in to get the inside scoop from someone who deals with the statistics of cars on a daily basis.
TRANSCRIPT
DJ 0:09 Buying a car in today’s market is extremely hard and challenging. Whether the car is reliable, or if the car is going to keep its value, or depreciate in value, or even, we should buy a brand new car or use car. My name is DJ, DIG student of Florida International University. And I’m joined with a very special guest who’s going to answer all of those questions for us today. Thank you for taking time out of your busy schedule to meet with us today. Missy mana
Mrs. Imana 0:37 is my pleasure and honor to be here with you, DJ.
DJ 0:42 All right, so to kick this interview off, not only is she an esteemed financial manager, but she’s a proud owner of a car dealership as well. So how would you say the new car market compared to the used car market in terms of customer behavior?
Mrs. Imana 1:08 I guess the biggest difference is that, you know, you go into a new car dealership, you have to have really good credit to qualify pretty, pretty good to qualify for a new car, and a good downpayment. You know if your credit isn’t so challenging, but with the US car business are opened up to all credit types, even today, I have a customer with a 400 Beacon score.
DJ 1:36 For those who may not know, a beacon score is another name for equity for an Equifax version of a FICO credit score. FICO credit scores are the most widely used among lenders for credit approval decisions are no problem,
Mrs Imana 1:48 I was able to get her approved for beautiful Adi, you know, so if she goes into a new car dealership, they probably wouldn’t even be here is the front door. But I guess some new car dealerships have like used car programs and stuff that they they have now to work with different credit levels. But most of the time, they don’t get them. They don’t specialize in those, you know, type credit. So I guess that’s where they come looking to me. And it’s been working now.
DJ 2:24 All right, perfect. And I know you said they don’t specialize in some of those programs. But what type of tools? Or what type of procedures do you use to get people approved? who may not have such good credit or high standards to meet for those new cars?
Mrs. Imana 2:42 Well, we’re been pretty lucky as a used car dealer to have some good relationships with lenders who who know the used car market and know the type of buyers that come so like a bank, that lady that I told you about today, I submitted her to a bank that they don’t look at your beacon score, they look at the overall profile. So she has like average deposits of $13,000 for the last three months, so to them that showed that this is a person who’s working who’s making money, who they feel can can afford to pay the car. So they look at the all these different factors, you know, the length of time she’s been self employed for the last 11 years or so. So different qualification so the new car market they know their type of people for the banks that qualify them and same thing with the used car market the banks that specialize in people with bad credit or not so great credit. They know what they they’re looking for. So everybody has a place
DJ 3:57 All right, perfect. And when purchasing your cars for customers, what data do you take into account? Or what information do you tend to use when going about purchasing a vehicle for customers?
Mrs. Imana 4:12 Okay, so I was just about to go online right now to search for cars for tomorrow’s auction. So it’s become a very tricky so I first I looked at the auto check, which is the same like the Carfax so it tells me like the the information in regards to like how many owners who give me information like how many times it was taken to the dealer service, what work was done, who would tell me if it was sold at the auction recently and returned. So that’s my first place to go. And then I also looked at the JD Powers values
DJ 4:58 for those who may not Oh, JD Powers is a company in providing vehicle data information and valuations to both consumer and commercial markets. It enables car shoppers to confidently make the right buying decisions for themselves through comparing car prices, values and consumer vehicle ratings.
Mrs. Imana 5:19 So I can see based on that value, like how much I’m expected to get from a bank if I was to finance it to a customer, somebody with bad credit, you know, they can give me up to maybe 80% of the value. And I compare that value against the auction value, which is the MMR so that I can have an idea how much to bid on the car. Based on how much I feel an average the bank will give me as a check, based on an average down payment, to, you know, try to figure out is this going to be a good deal for me or not. And also considering the auction fees and everything that I pay the transportation fees, depending on which state I’m getting it from, how much work is going to need? So all these different things I have to take into account? That answer your question.
DJ 6:16 Yep, that gave me a lot of information and a lot of insight on what it is going into purchasing a car for your customers. It sounds like you’ve put a lot of thought and a lot of also care into purchasing these cars. I’d also like to ask you, do you think there’s been like a sudden change in the car market recently, any type of trends you’ve noticed any decreases or increases in of any sort.
Mrs. Imana 6:45 The biggest trend right now that I’m going crazy about is that the new car dealers are competing against me to buy us cars, because of the chip shortage. So there are new manufacturers, with the whole COVID COVID pandemic, they stopped producing so many new cars. And so the new car dealers that used to purchase a lot of new cars, and was always stocked with new cars, all of a sudden, there were no, not too many new cars. So they started instead of taking the the trade ins that they would get from their customer who came to purchase new cars, they started keeping those cards to sell on their lots. And then on top of that, they will come to the auction and compete with the used car dealers for the used cars. I find myself as a smart small dealership competing with these big dealerships, but the same used cars. So it’s a trend that’s driving me crazy at the moment. But what can we do? We just have to learn to go with the flow, whatever life brings. You go along with it and you do your best. And I said I add in the god factor that anything is possible with him. I said I go to the auction with his favor behind me that he’s gonna give me the favor to buy cars are good prices to bring our light to sell by His grace.
DJ 8:27 All right, it sounds like you do have your work cut out for you. Going into all those big dealerships like Hollywood Kia, and more of them like that. We’ve reached the end of our interview, Miss Imana. I’d like to thank you for joining us today. Before we do wrap up today’s session, I’d like to ask you, do you have any tips or any advice for maybe not as experienced financial managers or car dealership owners any word of advice to them?
Mrs. Imana8:58 Get into another business. Right now the car market is just is such a crazy thing. And you know, I told you the whole process of buying cars. Because it’s such a mess right now that if you don’t buy properly, you could end up selling the car at a big loss. Because a lot of people what they’re doing now like I’ve learned the hard way to myself in that. You don’t want to overpay for the cars. You want to just make sure you know the value of it. And make sure before you go to the auction. You really check out the vehicle properly like the auction we buy from his Manheim and they have a grade from zero to five. So I’ve learned to trust those grades. And to really go through their reports. I didn’t mention that one before. But they have a car report. I gives the condition of the vehicle. So really taking your time doing your homework beforehand, making sure you know the value making sure you know the product you buy and have your standards as far as the grades you’re looking for. And just pay attention to your gut, your intuition and what God is telling you, I buy with God. And I know that may sound crazy, but if it feels if I feel strongly about a car, I will go full heartedly with it, to bid on it. And if I don’t, then I stay away. So that would be the best advice. Just a pause, slow down, make sure you do your homework, pray, got involved, and just do your best because it’s a great market and you could make money, but at the same time, you can lose a lot of money if you buy the wrong inventory.
DJ 10:57 All right, you’ve heard it here, folks. Thank you so much again, Missy mana for joining us on today’s podcast. I’d like to also thank you for taking the time out of your busy schedule to be able to inform us about some of the daily challenges that financial managers and car dealerships go through. But thank you so much.
Transcribed by Otter ai
