Experience the Ease of Automated Selling in Loan agreements

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hey everybody economic ninja here hope you're doing well uh we're going to talk about auto dealers and I just talked with a handful of uh people that own dealerships now that someone some that don't and some information very interesting information I'm getting and quite frankly it rolls down to this auto dealerships are in a lot of trouble so I've got a handful of stories and then I'm going to actually tell you my dream car list because that's how I'm looking at this I'm looking at what's going on in the Auto industry and how bad it is and that there is about to be some severe blood in the streets right now there's a lot of uh denial quite frankly between auto dealers and between uh banks that are are having to repossess these cars and they're not selling them I did a video a little while back about us um a dealer was telling me that these uh auctions the cars going up on the auction board they're literally driving across no bid no bid no bid they go off the ramp and they literally go back into storage lot and it's because banks are not wanting to write down that much of a loss take that much of a write down because they're in denial quite frankly and this happens all the time just because you work for a bank doesn't mean you know everything it is so true but in the comments section the story that you you've heard recently of somebody who works in finance it has no clue what's going on but what we're going to talk about is the actual dealerships now I've talked to a handful of dealers one of them being an old buddy of mine that has had a smaller dealership around you know 40 to 50 cars at any given time in my hometown I text them to try and get some some updated stories and he said I am out of the business and I am so glad so lucky I am because how gnarly it is right now and he didn't have a lot of employees he had a you know a full-time dealer uh detailer I once he had like five employees between doing everything you know Finance uh a detailer a sales person you know all of that and he is extremely excited that he got out because he could see the Carnage that's happening another person I talked to was a an incredible salesman for a Mercedes dealership my local Mercedes dealership he was killing it but he is super excited to get out and why because he was only making at the end 250 bucks per car uh nothing compared to what he was making because the sales amounts you know the the commission amounts were getting slashed even though you were seeing these crazy numbers being marked up on these cars and all of us were going there's no way I'm paying that right you'd think that these salesmen would be killing it he said no it's the absolute opposite as a matter of fact it just turned into becoming a drinking club and I think what's going on is these guys are in denial but like literally turning into the bottle because they're they just don't know what's going on and they're slower than average and so he was gone and he was super excited I'm like well that's two out of three and then I was talking to somebody else what was really interesting about this uh conversation was what is happening in the market for the dealers and their denial to what's called paper he uses this term paper and that's these loans right now they get bundled up these auto loans and they're trying to move these groups of auto loans around and sell them to you know a pension fund or some some big uh entity and they can't and they said there's a lot of paper and it's bundled up these auto loans that people don't want because they're afraid of the risk and it really as he was explaining this he didn't realize it but it made me literally brought me back to 2006 2007. with these bundled home loans that were bundled up and uh that you couldn't liquidate these Banks were having a hard time selling these because of the risk associated with it because the amount of defaults right and we've talked about that before the amount of repos right now are massive the massive across the country and it's getting out it's getting out to the mainstream media how how dark is this well as this happens and I'm going to tell you about something else is bad but again put down in the comment section hashtag your dream car because I want to let you know about my list and what I'm thinking about the opportunities I see but something else that he said I want you to do that before I do mine okay because it's not fair that you already know mine and you're saying I'd never get that so I want to see how many of you hashtag this in right now you don't get to cheat don't pause the video and go back and look at my list of dream cars and there's five of them okay I've one of these ever since I was young though um so that's a hint so another thing that he said that was very concerning and he said that uh right now these dealerships are completely in denial of the amount of loans they have out for their inventory so what are you talking about he said well you know we don't own all these cars we have a loan against them and the thing is is the type of loan we have is for a group of cars a group of vehicles and he started to explain it and he said we're paying not per car so when one car sells you know we're able to you know pay off that loan it goes away it would sort of blew me away because to be honest with you and that's why I teach this in my side hustle course how important especially if you guys are anyone thinking about starting a dealership start small like you should be building up 50 Grand in your in your bank account then go buy your first car to flip that's maybe at 10 000 bucks and then you got 40 000 sitting off the side for an emergency or anything like that but do it in cash and when you flip that one then maybe build it into two and then three but you've always got this massive cash position not only take advantage of big opportunities but that you're not leveraged right and you have lots of time to pay your carrying costs like sorry my sunscreens just started to wake up it just started to unfold um but you have money cash on the side to pay for your rent your utilities your employee costs you know those kind of costs your carrying costs um but they don't and this dealer said he goes we have you know we'll go out and get a big loan for a million dollars for just a ton of inventory and excuse me until we have enough money to pay that off it's sitting there right yeah we could pay payments on that kind of stuff he goes that that loan's still sitting there and the thing is is he was explaining essentially the greed of these dealerships these big dealerships as you know good times are out there they go hey we can sell 10 cars a day why not sell 20 well we don't have 20 bucks okay we'll go get a big loan and we'll go get 30 40 cars we'll have tons of inventory and that's what happens these companies they get too big for their britches kind of thing in these good times and they don't have a plan for the bad times and it sounds funny one of my courses I taught um is having a policy and procedures uh manual and one of those policies in there is a disaster list what happens if your sales drop by 50 in one month what do you do and have a checkoff list of literally what to do and how important it is but these companies don't have that so before they realize oh no this is a crash in the economy or a massive recession and we are going to have a hard time paying our bills before you know it it's too late and they're claiming bankruptcy or they're shutting their doors completely and this guy was telling me this about they're having a hard time moving around the the money right or sorry the uh the paper trying to sell these banks are having a hard time which also puts downward pressure on these uh Bank these dealers when they're trying to get new loans the bank's like look we're having a hard time selling off the uh the loan that we made to last time so we're less likely to loan to or we want higher rates and these dealers going well I I can't to service that loan right now and the economy is so rough there's nobody showing up to my dealership I'm down to one salesman where I used to have a fleet at you know 10 salesmen it's just the sales one salesman the sales manager doing all this stuff I can't do this so what's happening the dealerships are taking less money or sorry less inventory in because they can't sell it which means banks are going to be making less loans out there which again that's how money is created by making a loan right so more downward pressure on Bank earnings as well I mean this is a cascading tragedy in the works now with that being said the good side is you're gonna get your dream car and you're gonna need a great price because there's about to be a straight up panic and the Panic I'm getting ready for is the liquidations for the banks where they are literally having to get anything they can because they have shareholders freaking out because they're not taking in any money selling these repos and they're not taking in any money making new loans on cars either because the American public is broke they're broke as a joke right now and they don't even know it so here's my dream car list I want a Ferrari in 1996 Ferrari 355. the reason why I want that the root uh the hard top the coupe uh I've done videos about that story where I saved up for the real one and then I ended up buying the replica car because I needed the money also to buy a work truck right for my house looking business I still want a Lamborghini it's because ever since the Countach and I had a poster of it in my room as you know a child I've just wanted a Lambo totally both of those cars totally impractical I get it but I don't need to impress anybody anymore so I'm not really running out the door to get one but during the last crash I could have bought them for 35 000 each during the Great Recession I know it sounds crazy but they were very cheap now they're back up to a hundred thousand each they're gonna dip right back down and they'll do a video about it when I buy them 1969 Camaro SS hmm yes yes that is going to be an amazing car I also want a Shelby Cobra but I'm going to get a replica because these companies are actually out there hand building them the Resto mods I think are amazing the technology behind them are just insane so I'm actually talking about an actual Shelby Cobra the one with the one roll bar on the driver's side because you know who cares if you're rolling in your passengers there and then the last one I'm gonna I'm gonna say is the new Corvette C8 and that is because it's blowing my mind with what it's doing on the track and I just love that American muscle is coming back and it's legitimately taking on Ferrari I love that idea I want one of those I think they're just super cool and you can't get more horsepower for the dollar um I don't know if I'm gonna get the Z06 but for sure I'll have the LT two or three fully loaded that's my list I can't wait to see what you guys have in your list guys the market for cars is imploding right now before you just be patient wait for the opportunities I want to see people start dealerships as other dealerships that got too big for their britches fall I want you to be good dealerships treat people well don't sell them crap they don't need like paint protection and all that stupid stuff give them one price it's out the door minus tax let's crush it this will be awesome all right guys that being said the economic Ninja is out