January 31, 2025 • 50 mins
Cox Automotive analyst Erin Keating joins the show to explain why car prices have gotten so high. Plus, Lamborghini coffee and Matt talks diving in Indonesia.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. I'm Matt Miller and
I'm Hannah Elliott, and this is hot Pursuit.
Speaker 2 (00:20):
All right, we have a guest that you, I think
recently have interviewed. Yes, for your day.
Speaker 1 (00:25):
Job, for my day job writing about automotive things. Aaron Keating,
who is the executive analyst for Cox's Automotive, is going
to join us. And she's so informative and articulate about
what is really happening on the underside of the automotive market.
I thought she should come on and help us understand
(00:46):
what's going on with these high prices.
Speaker 2 (00:49):
Yeah, I'm pretty excited to talk to her. She knows
a ton about the industry because she has so much
experience and so many different.
Speaker 1 (00:55):
Used to work it out.
Speaker 2 (00:56):
Ye positions, Yep. My first car was an auty by
the way, the first car that I bought myself, Right,
My first car was my mom's baby blue Volvo two
forty station wagon. I put thousands of miles on it
without ever changing the oil, and then at like two
fifty the motor just seized.
Speaker 1 (01:18):
You know, I did that with the accurate legend. When
I was in college, I didn't really know, you have
to like check the oil.
Speaker 2 (01:24):
Yeah, I didn't really get that at the time.
Speaker 1 (01:26):
I didn't get that. No one told me. No one
told me. And yeah, the same thing happened to me
with my white accurate Legend with a phone in it. Unfortunately.
Speaker 2 (01:35):
Wow, cool car though, with the phone in it.
Speaker 1 (01:37):
Yeah, it was my uncle's. He was a corporate lawyer.
He was like the only car guy in my family.
He was cool. He's still alive.
Speaker 2 (01:45):
I fondly remember the first days of car phones. My dad,
also a corporate lawyer, got one and it was in
like a briefcase. Yeah, and I thought it was like.
Speaker 1 (01:58):
The curly cord.
Speaker 2 (01:59):
Yeah, yes, yeah.
Speaker 1 (02:00):
I thought it was extremely cool.
Speaker 2 (02:03):
It was pretty cool. I never had anyone to call,
but I was always like I could call someone.
Speaker 1 (02:07):
If I wanted to in case of emergency.
Speaker 2 (02:10):
But yeah, that volvo into a lot of grateful dead
shows and co and then didn't go to anymore. But no,
my first car ever. When I first started working for Bloomberg,
by the way, twenty five years ago this.
Speaker 1 (02:23):
Month, wild congratulations, I.
Speaker 2 (02:28):
Took my first paycheck and some money that I'd saved
up in college for a down payment on an Audi
A four station wagon because I'm not an idiot with
a two point five liter TDI motor that I mean,
it had one hundred and eighty horse power, but still
I could pretty easily get it up to two hundred
(02:51):
kilometers an hour on the Autobahn because I was in
Frankfurt and it was like my Schemobile for the perfect
next five years. It was such a great car.
Speaker 1 (03:02):
That's a really good choice, like very makes a lot
of sense, very practical but also cool.
Speaker 2 (03:08):
Yeah, a stick shift obviously, you know, three pedals. It
had like suede strips in the seats to hold you
in place, kind of sporty.
Speaker 1 (03:20):
You know what color was it?
Speaker 2 (03:22):
Dolphin gray? I they didn't really have many choices. Yeah,
you know it was like three different shades of gray
and then a bluish gray like what is this?
Speaker 1 (03:32):
This is pre married Matt obviously.
Speaker 2 (03:34):
Yeah, yeah, no it.
Speaker 3 (03:36):
Yeah.
Speaker 2 (03:37):
It was my first time, like you know, really living
in my own apartment away from home, a real job
after the record store, you know, and uh like a
grown up.
Speaker 1 (03:51):
Yeah, I remember those days that I had, and it's
just such a fun feeling for me, it sounds like
for you it was.
Speaker 2 (03:59):
That's such a it was amazing. My first cell phone,
you know, like with a monthly contract. Wow, and text
messaging was like the newest thing. No one could believe it.
I remember using the first BlackBerry that I ever had
in that car.
Speaker 1 (04:16):
Is that a company BlackBerry?
Speaker 2 (04:17):
It was actually BlackBerry gave me a model to test
out before they started really selling them. And my friends
couldn't believe that you could send and receive emails with
this cell phone. It was just amazing. That was before
three g. Let's talk about new cars with our guest,
(04:44):
Aaron Keating. She is out in San Diego at a
Toyota event driving the Forerunner, the new for Runner. What
a hot car, What a hot truck.
Speaker 1 (04:54):
Man. If you had that in high school when I
was in high school.
Speaker 2 (04:56):
Oh yes, you were cool. I had a buddy who
had one in college. It was sweet.
Speaker 3 (05:01):
Yeah.
Speaker 2 (05:02):
Aaron Keating from Cox Automotive.
Speaker 1 (05:04):
I have to say, the whole idea for this conversation
with Aaron Keating, who is the executive analyst for Cox Automotive,
I hope I got that right. Erin and of course
Cox Automotive owns Kelly Bluebook, but Erin also has quite
a long career in the automotive industry, and she has
(05:25):
worked for automakers, with automakers and now she's an analyst.
And what I was getting to is I called her
last week because I really wanted to understand pricing. We've
just seen all of the new average transaction pricing numbers
come in for twenty twenty four and it was so
insightful to talk to her about that. I said, you
should come on the podcast and enlighten us both. So Erin,
(05:48):
We're so happy to have you, of course, thank.
Speaker 2 (05:53):
You, thanks for joining. Yeah, you know, it's funny. I've
been focused on pricing as well because with the threat
of twenty five percent tariffs against Canada and Mexico, I
saw an estimate that new car prices could rise by
another three thousand I think that was Wolf Research that
(06:14):
put that out, and so I looked back at Bloomberg
Intelligence data, which I guess you must have the similar
similar data, and saw that the average new car prices
have gone up from I think it was thirty three thousand,
five hundred in twenty fifteen to forty eight thousand, eight
(06:35):
hundred in twenty twenty four, so a forty six percent
increase already. And then the threat of another six percent
on top of that seems crazy.
Speaker 3 (06:44):
We'll be crippling. And we think that's a fairly low number.
Could be depending on which models we're talking about and
how many you know. Again, I think Hannah and I
were talking about the fact that tariffs, you know, will
be impacted also just on how many times the cars
or the component trees going back and forth across the borders.
You know, we don't yet know how they're going to
solve for that challenge. If a part is going from
(07:08):
here over to Canada or down in Mexico and getting
put into a component, and then the component as a
unit is being sent back over here or being assembled there,
you know, if that's where it will add to the
cost theoretically, you know, you'd hope that they'd think through
that logistically, but how do they track the sheer logistics
needs in the supply chain to manage that complexity.
Speaker 4 (07:31):
I don't have a ton of confidence.
Speaker 2 (07:32):
And let's talk about pricing though in general, because it's
been a big issue, you know, especially during the pandemic.
They just took off not just new cars but used cars.
Is it just me or do automotive products just take
up a larger share of our income now than they
did ten twenty years ago.
Speaker 3 (07:54):
No, they for sure do, and there's a lot of
reasons that they do. And there's the cost of ownership.
Even though a lot of people Kelly Bluebook and other groups,
you know, look at total cost of ownership, it's a
little bit tough for consumers to understand because most consumers
will look at their monthly payment. That's what's really helping
them make their decision. But that monthly payment, which includes
insurance and things like that, those prices are also blowing up.
(08:16):
So it's not just even that the car itself is
more expensive and taking up a bigger share of your wallet.
Ancillary expenses that you have around that have also been rising.
So it's not your imagination. It is happening.
Speaker 1 (08:29):
And I know we spoke about the reasons for this.
I mean, this is not some arbitrary thing that automakers
are deciding we would like to make more money there,
We're going to up our prices. Can you just run
down it's going to be a repeat of what you
told me, But there are so many complicated factors. Can
you run down for our listeners what goes into the
pricing structure of why car is priced a certain way.
Speaker 3 (08:53):
Absolutely, and you know you mentioned Matt about COVID and
how the cost went up. Yes, there was a supply
and demand challenge within the market that did help increase prices.
So some of that, some of that pricing did go
up based on a supply and demand pure economics. But
over the course of the years, I think what a
lot of consumers don't necessarily understand or want to face
(09:14):
about themselves as consumers, especially in the US, is that
we're very picky in the US. I think I was
working with one of my guys in Kelly Doulbook recently
to see we have over six hundred and thirty variants
of vehicles in this country, six hundred and thirty so forever.
I mean, you know, I'm here right now at the
Forerunner launch and they have nine different levels of the
(09:35):
Forerunner itself coming out just for the twenty twenty five edition,
nine different variants and within that remember colors, interior, exterior,
trim packages. These things get really expensive to have to
come up with the right production planning to get the
right amount of each type of vehicle that every American wants,
and they want it just so and so the complexity
(09:57):
that we've demanded as consumers in US certainly put the
pressure on manufacturers to build to our specifications, so to speak,
and that's done and planned, you know, as we know
two to three years out from the product cycle. So
those complexities start to pile on pricing, which is why
you see a lot of companies trying to go towards
(10:17):
you know, platforms that could be agnostic across a couple
of different models and so forth. So the complexity, I
think is a really big one that we just don't
give enough credit to and the consumers, you know, to
be a little harsh, don't take enough responsibility for why
the cost has.
Speaker 4 (10:32):
Been driven up by a lot of that.
Speaker 3 (10:35):
Certainly, compliance and regulation complicates the cost structure of things.
Speaker 4 (10:39):
You know.
Speaker 3 (10:39):
We know that even the most recent regulations that are
coming through around the breaking being able to you know,
your card needs to build a break over sixty miles
an hour. Every new feature that we are putting into
the complexity of the US market specifically, I've talked a
lot about this with people who are looking at the
Chinese market and saying, you know, the Chinese can somehow
build cheaper cars just remember that a lot of the
(11:00):
markets are selling those cars into don't have the regulation
that we have for safety purposes and so forth in
the America, in North America, and so therefore the home
alligation requirements can become more expensive.
Speaker 4 (11:13):
So that's another reason.
Speaker 3 (11:15):
But we were also moving towards this transition with the
power trade, and right now electric vehicles are not profitable
for most auto manufacturers.
Speaker 2 (11:23):
You know what, I hate electronic parking brakes. I miss
a handbrake in a lot of vehicles, and I think
many fans of cars, like people who really love vehicles,
miss the handbrake and don't like the button the electronic handbrake.
Is that a regulatory thing?
Speaker 4 (11:40):
That's a good question, Matt.
Speaker 3 (11:42):
I can't imagine it is, because there's still plenty of
vehicles that have the push brake for your foot.
Speaker 4 (11:46):
You know, the pedal brake.
Speaker 2 (11:48):
That's true.
Speaker 3 (11:48):
Yeah, So I'm not sure that the handbrake would have
been thrown in there, but we want it, I would imagine,
and I can't say this is for sure, but I
would imagine we got rid of the handbrake because we
wanted more space for bigger cup holders, and we wanted space,
you know, women started asking can we have a space
for my purse to.
Speaker 4 (12:07):
Go in between that center console.
Speaker 3 (12:09):
You know, there's there's different trade offs that a lot
of manufacturers had to make based on again our very
pickiness of the types of things that we want in
our peoples. And you know it's not all that. But
to your point, for those of us that are enthusiasts,
we miss them all.
Speaker 1 (12:25):
You know what I think is has been And tell
me if I'm wrong, Aaron, But my impression of some
of these programs, like the Black Badge program and the
Night series program Rolls. Royce has their Black Badge, Mercedes
has a Night series that kind of group together some
sort of special customization and in a way that makes
(12:46):
the buyers feel that they are special and they can
reflect their own personality in the cars. Is that the
way that automakers are balancing being able to give customers
something that feels special and customized, but also trying to
manage efficiencies and the way that they implement some of
these special touches for lack of a better word.
Speaker 3 (13:07):
Sure, I mean, you're talking of course about brands that
are very high luxury and so you know, their profit
margins are a little bit bigger and allow them to
do a little bit more customization or create more specialness.
Speaker 4 (13:19):
In their products.
Speaker 3 (13:20):
But we're seeing that also carried down down market into
more affordable lineups as well. So for sure, I think
it's a matter of helping customers to feel more special
especially in the luxury market.
Speaker 4 (13:33):
The more you go down market, it's.
Speaker 3 (13:34):
Likely that people are believing that the younger generation wants
that type of specialization. And you know now that you
can yeah, customize your environment anywhere you are, I think
that they're and I'm not sure it's true. I'm not
sure that the next generation needs that type of specialness,
(13:57):
but I think we've all convinced ourselves, given the proliber
of all of our connected devices, that we need those
types of things everywhere. And you know, maybe if we
didn't give them to people in vehicles, we'd still be
dealing with cars that were a little bit more affordable,
and probably everyone would still love like.
Speaker 1 (14:13):
Windows that you have to crank to roll up rather
than right exactly.
Speaker 3 (14:18):
I've got my nineteen eighty three BMW three eighteen.
Speaker 4 (14:21):
N and it's got its stitch shift and roll.
Speaker 3 (14:23):
Down windows and non power steering, and I am teaching
my children to embrace you know, this is what a
car used to feel like.
Speaker 2 (14:30):
That's awesome. I think part of that is a padding
margins because I noticed recently Harley Davidson now charges if
you want black finishes instead of chrome on you know,
your forks and your exhaust and so forth, they charge
you one three hundred fifty dollars extra. That's not because
it costs them more in Milwaukee to put black finishes
(14:51):
than it does chrome finishes. It's because they know everybody
wants the black finish and it's an opportunity for them
to raise your price. Yeah.
Speaker 4 (14:57):
Absolutely, for sure. I think you're dead on there.
Speaker 3 (15:00):
I mean, the manufacturers have to look for ways in
which to keep the profitability at a reenable level for
them to be able to continue to move into the
next generation again of power trains and so on and technology.
That for sure, if there's an area where you think
that there's consumer demand for a specific specialization that you can,
you know, charge a premium price for that, of course,
will always help them with their margin market numbers.
Speaker 1 (15:23):
One thing that you mentioned we spoke about that I
thought was so interesting is how you really emphasize that
the more expensive cars are gaining ground. I think you
said that cars that cost at least eighty thousand dollars
increased thirty seven percent in December compared to the previous year,
and the average price of a vehicle in that segment
(15:46):
was over one hundred thousand dollars. So that to me
says and I think you touched on this, people either
want the most expensive all of the options, or they
want a very very basic minimum move and not not
sure this middle ground. Is that what you're seeing?
Speaker 3 (16:05):
Yes, and yes for luxury, for sure, we're seeing that
all the bells and whistles are now just an expectation,
and so typically people will go for the higher trims.
I think it certainly continues to speak to the vibrication
of our market. Also, you know, we've seen this trending
for the last couple of years, and so the rich
keep getting richer and it is becoming less less affordable
(16:28):
for lower to mid income. But we did see, you know,
inflation did drop a little bit for the lower quintile.
Speaker 4 (16:34):
I think last year we.
Speaker 3 (16:35):
Got to a gap of over twenty percent gap where
the lowest income quintiles we're feeling inflation at as high
of a twenty two percent rate versus the highest income quintiles,
who were you know, floating there around the three percent.
So it really does depend on what part of the
market you're in, the income quintile you're in, with how
(16:57):
inflation actually feels to your budget. So those lower trim
cars are going to always be more attracted to individuals
that really just need a mode of transportation as opposed
to looking for a car that they're you know.
Speaker 4 (17:10):
Loving and living.
Speaker 3 (17:11):
Luckily for them these days, even the lowest trim of
most models are really superior cars and great.
Speaker 4 (17:18):
Great modes of transportation.
Speaker 3 (17:19):
You know, you're really hard pressed to find a car
that's just a complete you know, like their bones, not
worthy of having. But that's I mean, part of the
reason you see interest in China is because you know,
they reportedly can build a car.
Speaker 4 (17:33):
For fourteen thousand dollars and again one seconds some alligator.
For the US, it will be different, but there's.
Speaker 2 (17:39):
Also a very healthy US market. And you know, I
hate to keep bring up Harley Davidson, but I've been
kind of obsessed lately, and to be fair, you know,
they sell forty five thousand dollars bike. So we're talking
about the same price level, but I've heard that they're
reducing their models offering and taking out some of the
mid tier price options because they just say, look, if
(18:02):
you can't afford to step up to the big boys,
we want you to buy used.
Speaker 4 (18:06):
And yeah, is that?
Speaker 2 (18:08):
I mean? I for a long time, I know Portia
has been a big supporter of their used market. It
makes a lot of sise to me. Does that Do
you hear that from executives as well?
Speaker 3 (18:16):
You know, I haven't heard that specifically from executives, but
it makes perfect sense.
Speaker 4 (18:21):
You know.
Speaker 3 (18:21):
The only challenge, of course now that we're going to
have in the next year or two is that we're
actually running.
Speaker 4 (18:25):
Fuel on fumes here.
Speaker 3 (18:27):
With used cars, because we did miss that gap of
about ten million units during the supply chain snarl and
the COVID crisis, and so interestingly enough, we are going
to face a little bit of a crunch and used
cars and use cars may in fact get more expensive
because of the supply demand issue there. But definitely we've
(18:47):
seen a lot of manufacturers hold on to their CPO programs,
and more than that, a lot of them, as you've seen,
are starting to put even older vehicles into their CPO programs.
It used to be held, you know, CPO used to
be relatively held for the one to three year old vehicles,
and now I think bomb that goes up to ten
years to keep a.
Speaker 4 (19:03):
Car in the Certify pre owned.
Speaker 3 (19:05):
Yeah, a couple of manufacturers are doing that, so one
hundred percent. It is always good for dealers and automakers
to have a healthy used market, for sure.
Speaker 2 (19:20):
Let's talk about the new vehicles. As we enter a
new year. You're out there looking at the new four Runners,
So yep, what do you like? What's exciting?
Speaker 4 (19:31):
Well, I will.
Speaker 3 (19:32):
Say, having just driven this Forerunner, it is amazing. I
forgot how much I love them. I've had two of
them in the past, and honestly, talking about budget, I
drove the SR five today, the lowest of the trims,
and it was fantastic. So I'm excited about that. I'm
excited about them coming out. This is I think the
sixth generation, and so they don't they don't come out
with them too often totally revamped and it's still the
(19:54):
same old good fore Runners.
Speaker 4 (19:55):
So I'm excited about that.
Speaker 2 (19:57):
The back windows still does the back windows still go down.
Speaker 3 (20:00):
Not only does it still go down, that but they
told me it's on for a permanent it will always
be a power back window.
Speaker 2 (20:06):
Yes, I love that fantastic. I love that truck. I
mean it's I think it's sort of underrated. You know,
people don't mention it a lot when you're talking about
you know, SUVs, and one of the issues has been
that it's chronically underpowered, like they always offer it with
that yeah three hundred horsepower V six and I think
it's yeah, now it's a four right.
Speaker 4 (20:27):
Yeah, they're going up to I think the top line.
Speaker 3 (20:31):
I should remember this because they literally just gave us
the walk around. But the top line I think.
Speaker 4 (20:36):
Is yeah, over four hundred, but it's it's real powerful.
Speaker 3 (20:39):
I mean, admittedly I was driving the I was taking
the Forerunner into ego mode and it still was, you know,
zooming along. And also, you know, you guys might do this.
I don't know too many carnerds that do this, but
I consistently drive my automatic and manual.
Speaker 2 (20:55):
Oh you do.
Speaker 4 (20:56):
I have taught my kids.
Speaker 3 (20:57):
Yeah, and I've taught my kids how to drive sure
automatics and manual because they not only do you need
to know how to like if you need to get
out of a situation. Quickly you can go down into
a lower gear. But also if you lose your brakes,
you need to know how to.
Speaker 4 (21:10):
Get in a lower gear. And so I love you.
As in the manual mode on automatics, I like.
Speaker 2 (21:16):
It too, and I like to shift with the stick,
not with paddles, so exactly the shifter down next to
my right.
Speaker 1 (21:25):
On those yet, Aaron.
Speaker 3 (21:27):
I think the SR five they said is in the
low forties. Okay, yeah, but yeah, so that's exciting.
Speaker 4 (21:34):
You know.
Speaker 3 (21:34):
I always love seeing a good old vehicle that's been around,
you know, and talking about keeping their used car rates around,
you know, I mean the foreigners especially to hold their
value for so long.
Speaker 1 (21:43):
So it's a sweet, sweet use truck.
Speaker 4 (21:46):
Yeah exactly. But you know, I'm not an.
Speaker 3 (21:49):
Electric vehicle adopter just yet, but I am interested to
see some of the new models that are coming out
this year. So that's kind of nice to see that
the power train is continuing to come into a variety
of manufacturers, given Tesla a little bit of a run
for their money.
Speaker 4 (22:05):
So I'm excited about that for this year. Let's see
what else is coming out this year? Are your favorites?
Speaker 2 (22:11):
I mean, well, I mean if I talk about the SUVs.
I'm thinking about it a lot because I'm I'm currently
driving a GMC Yukon to Nally Ultimate.
Speaker 4 (22:21):
Okay, jeez, yeah, do I love it?
Speaker 2 (22:23):
I mean I was telling Hannah coming home from the
airport the other day, my heart just connected with that
six point two liters V eight and I kept sending
myself voice memos trying to put into words what I
was feeling. It was just pure bliss. And the ten
speed transmission, I couldn't even feel it changing gears. It
(22:47):
was just giving me exactly what I wanted when I wanted.
And I love it so much. And it's obviously huge.
It's a body on frame truck. There are not many
of those left. You got the Ford Expedition and Nissan
Armada and that's pretty much it.
Speaker 4 (23:02):
And it's the only one.
Speaker 2 (23:04):
But this is the only one of the V eight, right,
They've all done away with their V eights. And the
only problem I have with it is the thing has
It's so luxurious, right, but it has twenty four inch wheels,
which is just so stupid because you want to be
able to drive over curbs and you're gonna pop a
tire as soon as you get anywhere near a bump
(23:25):
in that thing because the tires are so low profile,
it doesn't make any sense. But I love the VIA.
Speaker 1 (23:29):
Yeah yeah, did it fit in your garage?
Speaker 2 (23:33):
I didn't attempt to put it in my garage. The
GLS fits in our garage Mercedes GLS, which is not
quite as big, but yeah, I mean it's just for me.
It's another level the body on frame trucks, because you
feel like you can really abuse them in an urban
environment and you can't with the Mercedes GLS. This suspension
on that is shot after a couple of years.
Speaker 4 (23:54):
Yeah, yeah, yeah.
Speaker 3 (23:56):
I'm in the phase now where I have a seventeen
and a fourteen year old, so I'm kind of going,
do I want another SUV?
Speaker 4 (24:01):
I don't really need it anymore. I kind of want
a sports car.
Speaker 1 (24:04):
Yes, yes, come over to the dark side.
Speaker 4 (24:07):
Yeah, the dark side.
Speaker 3 (24:09):
You know, I love a wagon. I love a wagon.
I'm not gonna lie. There are there are six of
course is my dream. But you know, until I can
get one of those, uh you know, for a baby,
those are just my favorite.
Speaker 4 (24:22):
But but yeah, so I do love a wagon. I
think we should really normalize.
Speaker 1 (24:26):
Those locer there's such a mystery because everybody who works
in cars loves a wagon, every block, for every YouTube
content creator in fluid, yeah, everyone and auto make me
say they can't sell them.
Speaker 2 (24:40):
I don't get it.
Speaker 4 (24:41):
Yeah, I don't get it either.
Speaker 2 (24:43):
If I'm buying an M three, I want it in
a wagon, right right? Who would ever choose the sedan
when you can get the wagon?
Speaker 4 (24:52):
Agree?
Speaker 1 (24:54):
Why would you ever buy a minivan? Just get a wagon?
Speaker 3 (24:56):
Yeah?
Speaker 4 (24:58):
Right, exactly, I know.
Speaker 3 (24:59):
But you know, I've I've heard from many van lovers,
especially men who love them.
Speaker 4 (25:03):
It's like the captaincies. They're all, They're all that's.
Speaker 1 (25:05):
What it's about inside them.
Speaker 2 (25:08):
Any van also.
Speaker 1 (25:09):
Actually met had an experience with a minivan in recent Yeah,
I just and you did. Like it was the seat, it's.
Speaker 2 (25:16):
A seating position, and yeah, you can kind of move
around more inside them than you can in a station wagon.
It's not the same as a car, but they're.
Speaker 4 (25:27):
Yeah, I get it.
Speaker 3 (25:28):
I mean, you couldn't pay me to drive one, but
I get it. I can see the appeal. But O,
thank you. So yeah, So I'm in the car buying
mode right now. So it's kind of interesting in the
position that I'm in knowing the cost, the affordability like
we're talking about and how expensive these things get and
and interest rates and everything, and trying to navigate like, oh,
what is it that I want to do? I might
(25:48):
even go back to leasing. I know that's crazy.
Speaker 4 (25:51):
It's a word.
Speaker 3 (25:53):
I think for a lot of people, it's a bad
word because you know, we've convinced ourselves that it's it's
a way more expensive way to purchase a car. But again,
that monthly payment, right, but the monthly payments what most
people are shocking by. And you can just simply now
that leasing's coming back, you can simply get a more
expensive car for less money per month. And with the
pace of change of technology, Yes, to me, it just
(26:15):
seems to make a lot of sense, right, Yeah.
Speaker 2 (26:17):
Absolutely, if you've got a battery, if you're like Hanna
and I were talking with in our last podcast with
Alex Royd about battery degradation, and I don't know the
exact figures, and maybe my fears are a little bit overblown,
but I just think I want someone else to own
that problem. So if I'm getting a hybrid or god forbid,
a fully electric vehicle, and there are some out there
(26:38):
that I do like I like the key of EV nine, for.
Speaker 4 (26:40):
Example, fantastic.
Speaker 2 (26:43):
I would lease that, you know, because then yeah, at
the end of the lease, I can get whatever the newest,
better thing is. And also I don't have to worry
about the possibility that the battery lost fifty percent of Yeah, yeah.
Speaker 3 (26:56):
I mean, you know, we have an we have an
EV Battery Solutions group with Cocks Automotive, and I will
give you some assurances that what we've seen from a
degradation perspective, it's so low that the batteries really are
integrating very much. So it's really not something to be
worried about. Neither is range, of course, but a lot
of people still, you know, I think most people's anxiety now,
I like to say, is charge or anxiety.
Speaker 4 (27:17):
It can't be ranged.
Speaker 3 (27:19):
We can go just about as far on an EV
as we can on an ice vehicle, and the degradation
really is proving not to be that big of an issue.
But more importantly, I think the leasing makes sense also
because it's just such a new technology. Still, We're going
to see such advances that you're going to want to
be able to switch out quickly, you know, and we've
kind of exhausted the advances that we're making in combustion
(27:41):
power trains, so we need to recognize that. You know,
for me, at least, leasing an EV makes sense because
of that, because in three years it might just be
a very different car.
Speaker 2 (27:52):
By the way, on that note, Aaron, we've Hannah and
I have been emailing back and forth with a listener
who is wondering about buying a slightly used luxury EV.
So you know, everyone wants to get like a twenty
twenty range Rover, right because then you don't take the
initial hit somebody else eats the depreciation. But the worry is,
(28:15):
as soon as they're out of warranty, is it going
to become a money pit? And I think it's a
valid concern for not just a Range Rover, which obviously
they're notorious for that, but also for you know, a
Mercedes GLS, a BMW X seven, any.
Speaker 1 (28:32):
Of these big SUVs.
Speaker 2 (28:33):
Yeah they have they have the expensive air suspension and
if something goes wrong with that, you're out five grand,
you know, And they're all of these electronic systems are worrying.
What do you think about a gently used a luxury suv?
What would you.
Speaker 4 (28:49):
Choose as far As an ev or just any.
Speaker 2 (28:53):
No, any any luxury SUV, you know, any luxury trust
but we meant SUV.
Speaker 4 (28:59):
I meant yeah SV. Oh that's a good question. I mean, yeah, Range.
Speaker 3 (29:04):
Rover, I wouldn't mind. I wouldn't mind one of those
for sure. And I agree with you. It's nice to
have someone else capture the depreciations that you don't have to.
Speaker 4 (29:14):
Gosh, that's you're asking me to pick my favorite baby.
I don't know.
Speaker 1 (29:17):
I think the question about the range Rover specifically, too,
is they do have a certain reputation for being very
reliable from that era and just for always being in
the shop. And I'm curious is that a earnest earned reputation.
Speaker 4 (29:36):
That is a good question.
Speaker 3 (29:37):
I don't know that I have any data in my
back pocket to tell you.
Speaker 4 (29:40):
I haven't looked at.
Speaker 3 (29:41):
The range Rover recently all that much, because it is
a fairly low volume model for what we look at
at Cox Automotive. But uh, you know, I think most
cars these days are a heck of a lot stronger
and better.
Speaker 4 (29:53):
Built than we.
Speaker 3 (29:55):
You know, then we function our memory of how vehicles
used to be. I mean, even if you think about
the fact that when the minute you mention a luxury,
especially perhaps a German luxury, you know, everyone's like, oh,
I'd love to have one, but the expense of fixing it,
you know. And it's like, are we saying that because
we've been conditioned to remember that it was always so
expensive to bias?
Speaker 1 (30:16):
I think it is. I think it's people who don't
actually own and know, and they just repeat right, what
the popular wisdom is, which is not actually accurate.
Speaker 3 (30:26):
Right exactly exactly, you know, And the warranties are lasting
so much longer, and there are plenty of you know,
I mean not to give a little boost to the
F and I office, but there are plenty of you know,
products that you can purchase if you're so.
Speaker 4 (30:38):
Worried about the quality of the vehicle, that aren't.
Speaker 3 (30:40):
Terribly expensive and would ensure you against any of that
kind of stuff happening. And again, with regulation and recalls
and things like that, a lot of times the manufacturers.
Speaker 4 (30:48):
Can be put on the.
Speaker 3 (30:49):
Spot to have to pay for the specific repairs or
recalls that happen. So I don't know, I don't know
that it's a bad idea. Used is always going to
be a good choice.
Speaker 2 (30:58):
I think it's funny because because all right, I giggle
a little because Doug DeMuro bought the previous generation range Rover,
the L I think three twenty two, and he got
a bumper to bumper warranty from CarMax back in the day, remember,
and like then everything went wrong with his truck and
CarMax ended up paying out like fifty or sixty grand.
(31:20):
I like the just to point out that I like
the I think it's the L four h five generation
of range Rover, which is the just until twenty twenty one,
because it's the last generation with the supercharged five Leader
that that Jaguar Landrover is famous for. And the new
ones look a little too spacey for me. And they
(31:42):
have a turbocharged four point four Leader BMW motor, which
just isn't in the spirit of it.
Speaker 1 (31:49):
Yeah, yeah, I don't have a problem I mean with
the German motor in a British vehicle, to be quite honest,
I feel like that would be an upgrade, right, Eric,
what do you think?
Speaker 4 (32:02):
I don't know that I have a problem with that either.
I mean, if you you know I'm a big racing fan.
Speaker 3 (32:07):
If you look over to F one and the pinnacle
of racing to see, you know, which you know a
lot of people who don't know about racing, they don't
recognize that.
Speaker 4 (32:15):
Oh well, the.
Speaker 3 (32:15):
Ferraris what's powering the haus you know, or the Mercedes
is what's powering the Williams. And yeah, you know there's
I don't have a problem with people leveraging better power
units if that's what you if that's what you need
to make the car where it needs to go.
Speaker 2 (32:30):
Well, remember when BMW bought Earls Royce, they swapped out
the six and three quarter lead motor and and and
even Bentley for a while had like the rnage red
label and green label. Remember they put a BMW motor
in those and.
Speaker 1 (32:47):
The Anage is as you know, I think highly desirable.
Speaker 2 (32:52):
Me too, but I would rather have one with the
six point seventy five liter V eight than the BMW
power plant.
Speaker 4 (32:59):
You guys know you're stuff impressed. Hey, flying above my head?
Speaker 2 (33:03):
Well, well you mentioned racing, and I was on the
radio show with Tom Keen earlier this week. He put
me on the spot and asked me what I thought
Lewis Hamilton was going to do with with Ferrari. I
have no clue because I watched Motor GP.
Speaker 1 (33:17):
I'm loving all of the images they've released this week
of Lewis and a double breasted, amazing suit at the
home of Ferrari looking like a boss.
Speaker 3 (33:27):
I mean, yeah, I think he's gonna I think he's
going to do well. I think he's going to go
out on top.
Speaker 4 (33:34):
Why not?
Speaker 1 (33:35):
It seems so fitting as this top of his career
to cap it to me, it just seems very fitting
and to be honest, and I'm not going to air
anyone out specifically, but I had, you know, on certain
Ferrari press launches, I've like, you know, asked the guys
handling the cars, Hey, what do you think of Hamilton joining?
(33:55):
And they, like, honestly, some of them were turning up
their nose a little bit, saying he's old, it's a
PR stunt whatever, But hey, car doesn't know how old
you are.
Speaker 3 (34:04):
He's still precisely and were they watching the twenty twenty
fourth season?
Speaker 4 (34:09):
Are you kidding me? Like, Alonzo's even older and.
Speaker 3 (34:12):
He's still driving like a bat out of hell with
amazing racecrafts.
Speaker 4 (34:15):
Shut up, people, come on back, give the guy a
t's my world champion.
Speaker 2 (34:20):
I'm not sure he's a child too. He's only like
forty years old.
Speaker 4 (34:24):
Yeah right, I know that's crazy.
Speaker 2 (34:27):
Yeah, that's a kid.
Speaker 4 (34:29):
I mean it is a kid. For those of us
over our fifties, you know, that's a kid.
Speaker 1 (34:34):
I have a question for you, Matt. Yes, would you
drink Lamborghini coffee?
Speaker 2 (34:40):
Yeah?
Speaker 1 (34:40):
Sure, Lavataza and Lamborghini have just come out with a
Lamborghini themed coffee blend.
Speaker 2 (34:46):
Definitely, I would get my motor running.
Speaker 1 (34:49):
I'm kind of like, I don't know if I'm imagining.
Speaker 2 (34:52):
Like motor oil.
Speaker 1 (34:54):
Yeah exactly, I don't know if the coffee and Lamborghini.
Speaker 2 (34:57):
Is I want it to taste a little bit like
I feel like a garage.
Speaker 1 (35:01):
I feel like it's going to I mean, it'd be
kind of a cool gift.
Speaker 2 (35:04):
Are you a coffee drinker? I have?
Speaker 1 (35:07):
I have a coffee a day. I have one in
the morning.
Speaker 3 (35:09):
Yeah.
Speaker 2 (35:09):
See, I never drink no, I will. I will only well,
let's say I don't like the way it makes me
feel for the most part, but I will have a latte,
you know, something weak with a lot of milk.
Speaker 1 (35:25):
When I say coffee, I really do mean most of
the time a latte. I'm using coffee colloquially.
Speaker 2 (35:31):
I have gone to I used to go to, like
when Italy was hosting the G twenty. I would go
there in my other job and got hooked on drinking
the Espress there. I love an Espress, but it just
really got me wired. Oh yeah, I know.
Speaker 1 (35:49):
I know I can feel.
Speaker 2 (35:50):
I show that I can.
Speaker 1 (35:51):
Yeah, there's all fuel you for quite a.
Speaker 2 (35:53):
While, you know, I stay away from that, but I
would definitely try one if it was from because Lamborghini
is one of my all time favorite brands. I asked,
I love Lamborghini.
Speaker 1 (36:03):
Yeah, maybe someone needs to send you a pouch of it.
Speaker 2 (36:07):
Well, I would pay for it myself as a journalistic integrity.
Speaker 1 (36:11):
No, I meant me. Yeah, that was That was a
memo to myself. And speaking of memo, I would like
to hear you play your voice memos that you took
for yourself.
Speaker 2 (36:24):
Okay, So I so I didn't Actually they weren't voice memos.
What I did is I said, hey, Siri, write me
a note. So you know Apple iPhones have notes, yes,
and I will. I mean, I was just okay, this
car is an absolute pleasure to drive. The six point
(36:46):
two liters V just provides effortless power combined with this transmission,
you honestly don't even notice it shifting, and it gives
you everything you need when you need it. Obviously, it's
not a sports car. It's a very large truck, and
there are very few other vehicles that are this big
on the road. This only compares really with the Vord
Expedition on our model. Blah blah. I was kind of
like writing myself notes, yes, but it really the vibes,
(37:11):
the warmth of the engine. I kept thinking about what
Alex Roy said about how it kind of matches your heartbeat.
It just can't be replicated by a V six. All
of these manufacturers, most notably well for me as a
fan of the Ford Motor Company. You know they've gone
away from their six point two liters V eight. They
(37:33):
used to have that in the Raptor. Now they have
the eco boost in it, and it just it can
never be as good they I'm sure they're doing it
to be better for the planet, and I applaud that,
or to meet regulations, and I understand that, but it's
just not something that I would want to spend my
money on, even in the high output form like the
(37:57):
the Bronco raptor. It's a great moment, like the power
delivery is awesome, and it also you're never lacking, but
it doesn't give you the same feeling of luxury, you.
Speaker 1 (38:11):
Know, no, no, But but I'm okay with that, honestly.
I mean, I'm all about the right tool for the job.
And you can't expect luxury from a non luxury vehicle.
And that's not a value judgment. That's just a horse
of a different.
Speaker 2 (38:25):
Color, Yeah for sure. But so if when I'm driving
home on an empty highway in the middle of the night,
you know, listening to a little dead and Cornell, I
just want that V eight there. You know, I'm not flying,
I'm not in a race, but I just want that.
Speaker 1 (38:43):
You're a simple man power come.
Speaker 2 (38:45):
On and that fullness, you know, just to make my
chest feel good.
Speaker 1 (38:52):
I have no comeback to that other than I wish
that for you. I do really wish that for you.
Met It's so great, sounds like a great happy place
for you.
Speaker 2 (39:01):
Yeah. And this truck, by the way, it is I
keep trying to think of. On the one hand, there's
a lot of other stuff you could buy for less,
because how much does it cost over one hundred thousand dollars,
of course, And I guess you know, there are many
things that are more expensive if you buy a range Rover,
(39:22):
for example, you're gonna pay more if you buy a
fully loaded you know, Cayenne Turbo or even the GTS
that you drove. I would guess it was more option
to the way it was. But then there are a
lot of you know, a bmw X five. It's not
the same thing, right, it's so much smaller, but it
is an suv and it's luxury. You can get it
(39:44):
for less a Mercedes GLS or you know, even up there,
it's it's less.
Speaker 1 (39:52):
Prices are so weird these days.
Speaker 2 (39:54):
It is weird. But these these body on frame trucks
that are SUVs, they're essentially pick up trucks that are
you know, covered in the back. They're so expensive. I know,
even the starting price is eighty thousand for the Yukon,
maybe seventy for the Tahoe. I just don't know when
(40:15):
did we get this?
Speaker 1 (40:16):
Do you guess? The automaker with the highest average price
per vehicle in twenty twenty four, and this is coming
from Erin from Erin data.
Speaker 2 (40:25):
Let's see highest average price per vehicle.
Speaker 1 (40:27):
Not including exotics like Lamborghini.
Speaker 2 (40:29):
Ferrari, not including Rolls Royce.
Speaker 1 (40:31):
Not including Rolls Royce, not including Bugatti.
Speaker 2 (40:35):
Uh well, if it's if Porsche is allowed, I would
choose Porsche.
Speaker 1 (40:39):
Yes, yeah, you're right, ding ding ding. Apparently their their
average transaction price per vehicle is one hundred and fifteen
four hundred and seven dollars. Do you want to know
the second highest?
Speaker 2 (40:52):
By the way, I can figure a carera tee and
I don't get close to that low, So I understand
totally right. Even even for the careerra tea, I'm always
ending up at like one, which is crazy.
Speaker 1 (41:06):
She's just crazy because the t is supposed to be
sort of the thinking man's n affordable one exactly that
you don't have to get all of the other stuff
that you don't actually need. Yeah, I know that is wild.
Speaker 2 (41:17):
What did you What was your other question?
Speaker 1 (41:19):
Do you want to know the second?
Speaker 4 (41:20):
Oh?
Speaker 2 (41:21):
The second highest?
Speaker 1 (41:23):
Ummm it's I was surprised by this one, actually, but
we've mentioned it on this show. We've mentioned this brand.
Speaker 2 (41:30):
Is it Mercedes? No, BMW, Nope? What is it out?
Speaker 1 (41:36):
Land Rover? It's land Rover. Oh, isn't that interesting?
Speaker 2 (41:39):
That's crazy.
Speaker 4 (41:41):
I know.
Speaker 1 (41:41):
Land Rover is also over one hundred thousand dollars averaged
per vehicle. It's at one hundred and two thousand, seven
and three dollars.
Speaker 2 (41:49):
I guess that's because they don't have many lower prices.
Speaker 1 (41:53):
I think that is. It's all SUVs. They're all big,
they're all heavy, they all have a bunch.
Speaker 2 (41:57):
Of there's no mix. Like even Porsche. You can get
at the box Star or that cam.
Speaker 1 (42:01):
In and BMW. You know, you can get some true
a lot and that pulls their number down.
Speaker 2 (42:06):
You can get a ton of lower price BMW's. And
that's the same for Mercedes. Yeah. For a land Rover
you can only get basically after the discovery you get
like a range Rover Sport and a range Rover.
Speaker 3 (42:17):
Yeah.
Speaker 2 (42:17):
Oh yeah, Defender, I always.
Speaker 4 (42:18):
Forget it.
Speaker 1 (42:21):
Completely. Yeah, I know, isn't that wild? I mean, this
is why I in my own personal life, I I
was today, I drove a three thousand dollars Rolls Royce.
Speaker 2 (42:33):
To work, three thousand dollars.
Speaker 1 (42:36):
Drive plus a trade.
Speaker 2 (42:38):
Yeah, well plus a trade.
Speaker 1 (42:40):
Okay, that's the fine, Prince. It was three thousand plus
a minor trade. But you know, yeah, I mean I
was very happy.
Speaker 2 (42:49):
You are very brave and have also been very lucky
when it comes to buying, you know, classic cars and
not having massive repair bills.
Speaker 1 (43:00):
I was thinking yesterday, I don't need to gamble. I
drive an old card.
Speaker 2 (43:04):
And you haven't had You've never had, like all of
a sudden, a ten thousand dollars bill for that car.
Speaker 1 (43:11):
Not a ten thousand no, no, no, But.
Speaker 2 (43:15):
Is it a nineteen seventy one?
Speaker 1 (43:19):
The one today is eighty three.
Speaker 2 (43:21):
Okay, you have multiple rolls choices.
Speaker 1 (43:23):
Yeah, but seventy five. Yeah, this is the other other one.
I should stop talking now because I sound really snobby,
but these are not expensive cars.
Speaker 2 (43:31):
No, it's awesome. I mean crops respect, but.
Speaker 1 (43:35):
Yeah it is. It is a little bit of a
gamble for sure. You know, we've talked about it before.
Sometimes you think why am I doing this? But it's
fun and.
Speaker 2 (43:44):
It's also it's not as much of a gamble as
it turns into when you get a late eighties into
the nineties.
Speaker 1 (43:52):
Yeah, you know, to get out of a car from
the seventies and into a car from the eighties, depending
on the brand, is a world of difference. And the
seventies to me at least in Rolls Royce years, feels
very closely connected to the sixties. The minute you get
into something in the eighties, it feels very modern compared
(44:13):
to the others, and.
Speaker 2 (44:14):
It can be much more expensive to repair.
Speaker 1 (44:17):
Yeah, I still want a Corniche or a Camarge, and
those are more expensive. They're out of my price range
and they're later models.
Speaker 2 (44:24):
So yeah, all right, what do you got coming up? Anything?
Anything good?
Speaker 1 (44:31):
No? What? No? I have nothing good? Everything is everything
has been delayed, postponed or canceled because of the fire.
Speaker 3 (44:40):
Ah.
Speaker 1 (44:40):
Yes, so you know, I do have an electromiccon electric
Macon coming. I do have an electric escalade coming. Still
got that vanquished coming, But they've all been kicked down
the road a little bit because we are still sort
of digging ourselves out of fire stuff, which is right
and completely understandable. But I know you're going to Indonesia.
Speaker 2 (45:02):
I have an eighteen hour flight to Singapore and then
from there to Jakarta, from there to Sarong and then
I take a boat about five hours towards Papua New Guinea. Yeah,
it's a long trip.
Speaker 1 (45:13):
Hey, how can you explain the genesis of this trip?
Speaker 2 (45:17):
So I am going to Raja Ampat, which is in
between Indonesia and Papua New Guinea, and it's probably the
best diving in the world. And I've been there already
many times with my wife. In fact, we got engaged
there and it's just our favorite place to go. But
(45:41):
it takes forever to get there.
Speaker 1 (45:43):
Yeah, that's very dedicated.
Speaker 2 (45:45):
Yeah, and so you can make a choice like, well,
first off, which direction you're gonna fly, and then break
up the trip a little bit to make it more bearable.
So last a year we went via Tokyo and we
stopped in Tokyo for a couple of days to recuperate.
And this fun. This year, I'm gonna go to Singapore
and we're gonna hang out there for a couple of
(46:05):
days before we go on to ind Ani show. But
right now I'm looking at an eighteen hour flight, like NonStop,
and that's like what nine movies?
Speaker 1 (46:17):
What's your coping mechanism for an eighteen hour flight?
Speaker 2 (46:19):
I mean, I don't really have a coping mechanism. I've
never been on an eighteen hour flight before me neither.
Speaker 1 (46:27):
The farthest I've gone as Cape Town and that's and
from from Paris that's a long one, but that's not
eighteen hours.
Speaker 2 (46:34):
I don't know. I guess I'm just gonna I bought
The Power Broker, which is a very long book, and
I'm gonna download a bunch of movies. I guess I'll
have internet access.
Speaker 1 (46:52):
So now I didn't realize you were a your scuba diver. Yes,
well we have that in common too. I love Patty Certified.
Speaker 2 (46:59):
I love it.
Speaker 1 (47:00):
Are you're not traveling with equipment.
Speaker 4 (47:02):
Are you?
Speaker 2 (47:02):
Yeah? Bring all my gear with me, not the tanks.
I just I want my own BCD so that I
am familiar with it. And you know, I'm an odd shape.
I'm very long and lanky, so I won't fit into
a wet suit whatever they no matter how big a
(47:22):
selection they have. Yeah. I mean I don't need much
of a wetsuit because it's going to be very warm water.
But yeah, I like to be familiar with my own gear.
You know, my wife doesn't, so she, you know, with
other than wetsuits. She she takes their stuff.
Speaker 1 (47:38):
But yeah, I get it.
Speaker 2 (47:40):
It's an amazing place. It's called Missoul m I S
O O L and I highly recommend it. But they're
booked out like.
Speaker 1 (47:49):
Years this is the name of the hotel, the resort.
Speaker 2 (47:53):
So there were a couple of very cool, like punk
rock kids on a live aboard in the nineties who
were diving in Rajan Pot in the time. The coral
was getting bleached out and they found a bunch of
shark fins on the beach and they were super bummed
about the sort of state of the sea there and
(48:15):
came up with an idea too, and it was fished,
you know, almost two extinction. Came up with an idea
to start, you know, kind of a luxury resort and
use the proceeds from that to basically buy off the
local fishermen. And so they said, hey, we'll split you know,
(48:35):
the revenue with the local communities there. There are not
many people that live in that area and if you
agree not to fish. So now they have like a
twelve hundred square mile no kill zone. All the life
has come back. I mean tons of mantas, I mean
fifteen twenty foot wingspans and they're all just happy to
(48:57):
swim along with you. A lot of reef sharks, a
ton of colors. I mean, it's like being at a
grateful dead show in the best wave possible. Yeah, it
really does. And you know Jerry was a big diver
as well.
Speaker 1 (49:15):
I didn't know that.
Speaker 2 (49:16):
Yeah, was he really with special he had a beard.
Speaker 1 (49:20):
Yeah, he could get the mask over.
Speaker 2 (49:21):
Kind of hard to create a seal, but yeah, you know.
Speaker 1 (49:24):
That's where my mind goes. Wow, I didn't know.
Speaker 2 (49:27):
Yeah, I'm looking forward to it.
Speaker 1 (49:28):
Oh, that'll be really lovely. Well, I hope you have fun,
and I hope you can endure the flight because it
seems like it'll be worth it at the end when
you get there.
Speaker 2 (49:37):
Yeah, no, I'll be okay. Yeah, it's it's a legitimately
first world problem, isn't it.
Speaker 1 (49:43):
Yeah it is. No one's feeling that bad for you.
Speaker 2 (49:47):
No, all right, cool. Well, I guess I'll see you
back here, same time, same place. Can't wait, February sixth.
Speaker 1 (49:58):
I cannot wait. I'll see you in New York.
Speaker 2 (50:00):
Actually awesome. That's going to be great.
Speaker 1 (50:02):
I can't wait. The best city in the world.
Speaker 2 (50:05):
I'm Matt Miller, and
Speaker 1 (50:06):
I'm Hannah Elliott, and this is Bloomberg
Bloomberg Audio Studios, podcasts, radio news. I'm Matt Miller and
I'm Hannah Elliott, and this is hot Pursuit.
Speaker 2 (00:20):
All right, we have a guest that you, I think
recently have interviewed. Yes, for your day.
Speaker 1 (00:25):
Job, for my day job writing about automotive things. Aaron Keating,
who is the executive analyst for Cox's Automotive, is going
to join us. And she's so informative and articulate about
what is really happening on the underside of the automotive market.
I thought she should come on and help us understand
(00:46):
what's going on with these high prices.
Speaker 2 (00:49):
Yeah, I'm pretty excited to talk to her. She knows
a ton about the industry because she has so much
experience and so many different.
Speaker 1 (00:55):
Used to work it out.
Speaker 2 (00:56):
Ye positions, Yep. My first car was an auty by
the way, the first car that I bought myself, Right,
My first car was my mom's baby blue Volvo two
forty station wagon. I put thousands of miles on it
without ever changing the oil, and then at like two
fifty the motor just seized.
Speaker 1 (01:18):
You know, I did that with the accurate legend. When
I was in college, I didn't really know, you have
to like check the oil.
Speaker 2 (01:24):
Yeah, I didn't really get that at the time.
Speaker 1 (01:26):
I didn't get that. No one told me. No one
told me. And yeah, the same thing happened to me
with my white accurate Legend with a phone in it. Unfortunately.
Speaker 2 (01:35):
Wow, cool car though, with the phone in it.
Speaker 1 (01:37):
Yeah, it was my uncle's. He was a corporate lawyer.
He was like the only car guy in my family.
He was cool. He's still alive.
Speaker 2 (01:45):
I fondly remember the first days of car phones. My dad,
also a corporate lawyer, got one and it was in
like a briefcase. Yeah, and I thought it was like.
Speaker 1 (01:58):
The curly cord.
Speaker 2 (01:59):
Yeah, yes, yeah.
Speaker 1 (02:00):
I thought it was extremely cool.
Speaker 2 (02:03):
It was pretty cool. I never had anyone to call,
but I was always like I could call someone.
Speaker 1 (02:07):
If I wanted to in case of emergency.
Speaker 2 (02:10):
But yeah, that volvo into a lot of grateful dead
shows and co and then didn't go to anymore. But no,
my first car ever. When I first started working for Bloomberg,
by the way, twenty five years ago this.
Speaker 1 (02:23):
Month, wild congratulations, I.
Speaker 2 (02:28):
Took my first paycheck and some money that I'd saved
up in college for a down payment on an Audi
A four station wagon because I'm not an idiot with
a two point five liter TDI motor that I mean,
it had one hundred and eighty horse power, but still
I could pretty easily get it up to two hundred
(02:51):
kilometers an hour on the Autobahn because I was in
Frankfurt and it was like my Schemobile for the perfect
next five years. It was such a great car.
Speaker 1 (03:02):
That's a really good choice, like very makes a lot
of sense, very practical but also cool.
Speaker 2 (03:08):
Yeah, a stick shift obviously, you know, three pedals. It
had like suede strips in the seats to hold you
in place, kind of sporty.
Speaker 1 (03:20):
You know what color was it?
Speaker 2 (03:22):
Dolphin gray? I they didn't really have many choices. Yeah,
you know it was like three different shades of gray
and then a bluish gray like what is this?
Speaker 1 (03:32):
This is pre married Matt obviously.
Speaker 2 (03:34):
Yeah, yeah, no it.
Speaker 3 (03:36):
Yeah.
Speaker 2 (03:37):
It was my first time, like you know, really living
in my own apartment away from home, a real job
after the record store, you know, and uh like a
grown up.
Speaker 1 (03:51):
Yeah, I remember those days that I had, and it's
just such a fun feeling for me, it sounds like
for you it was.
Speaker 2 (03:59):
That's such a it was amazing. My first cell phone,
you know, like with a monthly contract. Wow, and text
messaging was like the newest thing. No one could believe it.
I remember using the first BlackBerry that I ever had
in that car.
Speaker 1 (04:16):
Is that a company BlackBerry?
Speaker 2 (04:17):
It was actually BlackBerry gave me a model to test
out before they started really selling them. And my friends
couldn't believe that you could send and receive emails with
this cell phone. It was just amazing. That was before
three g. Let's talk about new cars with our guest,
(04:44):
Aaron Keating. She is out in San Diego at a
Toyota event driving the Forerunner, the new for Runner. What
a hot car, What a hot truck.
Speaker 1 (04:54):
Man. If you had that in high school when I
was in high school.
Speaker 2 (04:56):
Oh yes, you were cool. I had a buddy who
had one in college. It was sweet.
Speaker 3 (05:01):
Yeah.
Speaker 2 (05:02):
Aaron Keating from Cox Automotive.
Speaker 1 (05:04):
I have to say, the whole idea for this conversation
with Aaron Keating, who is the executive analyst for Cox Automotive,
I hope I got that right. Erin and of course
Cox Automotive owns Kelly Bluebook, but Erin also has quite
a long career in the automotive industry, and she has
(05:25):
worked for automakers, with automakers and now she's an analyst.
And what I was getting to is I called her
last week because I really wanted to understand pricing. We've
just seen all of the new average transaction pricing numbers
come in for twenty twenty four and it was so
insightful to talk to her about that. I said, you
should come on the podcast and enlighten us both. So Erin,
(05:48):
We're so happy to have you, of course, thank.
Speaker 2 (05:53):
You, thanks for joining. Yeah, you know, it's funny. I've
been focused on pricing as well because with the threat
of twenty five percent tariffs against Canada and Mexico, I
saw an estimate that new car prices could rise by
another three thousand I think that was Wolf Research that
(06:14):
put that out, and so I looked back at Bloomberg
Intelligence data, which I guess you must have the similar
similar data, and saw that the average new car prices
have gone up from I think it was thirty three thousand,
five hundred in twenty fifteen to forty eight thousand, eight
(06:35):
hundred in twenty twenty four, so a forty six percent
increase already. And then the threat of another six percent
on top of that seems crazy.
Speaker 3 (06:44):
We'll be crippling. And we think that's a fairly low number.
Could be depending on which models we're talking about and
how many you know. Again, I think Hannah and I
were talking about the fact that tariffs, you know, will
be impacted also just on how many times the cars
or the component trees going back and forth across the borders.
You know, we don't yet know how they're going to
solve for that challenge. If a part is going from
(07:08):
here over to Canada or down in Mexico and getting
put into a component, and then the component as a
unit is being sent back over here or being assembled there,
you know, if that's where it will add to the
cost theoretically, you know, you'd hope that they'd think through
that logistically, but how do they track the sheer logistics
needs in the supply chain to manage that complexity.
Speaker 4 (07:31):
I don't have a ton of confidence.
Speaker 2 (07:32):
And let's talk about pricing though in general, because it's
been a big issue, you know, especially during the pandemic.
They just took off not just new cars but used cars.
Is it just me or do automotive products just take
up a larger share of our income now than they
did ten twenty years ago.
Speaker 3 (07:54):
No, they for sure do, and there's a lot of
reasons that they do. And there's the cost of ownership.
Even though a lot of people Kelly Bluebook and other groups,
you know, look at total cost of ownership, it's a
little bit tough for consumers to understand because most consumers
will look at their monthly payment. That's what's really helping
them make their decision. But that monthly payment, which includes
insurance and things like that, those prices are also blowing up.
(08:16):
So it's not just even that the car itself is
more expensive and taking up a bigger share of your wallet.
Ancillary expenses that you have around that have also been rising.
So it's not your imagination. It is happening.
Speaker 1 (08:29):
And I know we spoke about the reasons for this.
I mean, this is not some arbitrary thing that automakers
are deciding we would like to make more money there,
We're going to up our prices. Can you just run
down it's going to be a repeat of what you
told me, But there are so many complicated factors. Can
you run down for our listeners what goes into the
pricing structure of why car is priced a certain way.
Speaker 3 (08:53):
Absolutely, and you know you mentioned Matt about COVID and
how the cost went up. Yes, there was a supply
and demand challenge within the market that did help increase prices.
So some of that, some of that pricing did go
up based on a supply and demand pure economics. But
over the course of the years, I think what a
lot of consumers don't necessarily understand or want to face
(09:14):
about themselves as consumers, especially in the US, is that
we're very picky in the US. I think I was
working with one of my guys in Kelly Doulbook recently
to see we have over six hundred and thirty variants
of vehicles in this country, six hundred and thirty so forever.
I mean, you know, I'm here right now at the
Forerunner launch and they have nine different levels of the
(09:35):
Forerunner itself coming out just for the twenty twenty five edition,
nine different variants and within that remember colors, interior, exterior,
trim packages. These things get really expensive to have to
come up with the right production planning to get the
right amount of each type of vehicle that every American wants,
and they want it just so and so the complexity
(09:57):
that we've demanded as consumers in US certainly put the
pressure on manufacturers to build to our specifications, so to speak,
and that's done and planned, you know, as we know
two to three years out from the product cycle. So
those complexities start to pile on pricing, which is why
you see a lot of companies trying to go towards
(10:17):
you know, platforms that could be agnostic across a couple
of different models and so forth. So the complexity, I
think is a really big one that we just don't
give enough credit to and the consumers, you know, to
be a little harsh, don't take enough responsibility for why
the cost has.
Speaker 4 (10:32):
Been driven up by a lot of that.
Speaker 3 (10:35):
Certainly, compliance and regulation complicates the cost structure of things.
Speaker 4 (10:39):
You know.
Speaker 3 (10:39):
We know that even the most recent regulations that are
coming through around the breaking being able to you know,
your card needs to build a break over sixty miles
an hour. Every new feature that we are putting into
the complexity of the US market specifically, I've talked a
lot about this with people who are looking at the
Chinese market and saying, you know, the Chinese can somehow
build cheaper cars just remember that a lot of the
(11:00):
markets are selling those cars into don't have the regulation
that we have for safety purposes and so forth in
the America, in North America, and so therefore the home
alligation requirements can become more expensive.
Speaker 4 (11:13):
So that's another reason.
Speaker 3 (11:15):
But we were also moving towards this transition with the
power trade, and right now electric vehicles are not profitable
for most auto manufacturers.
Speaker 2 (11:23):
You know what, I hate electronic parking brakes. I miss
a handbrake in a lot of vehicles, and I think
many fans of cars, like people who really love vehicles,
miss the handbrake and don't like the button the electronic handbrake.
Is that a regulatory thing?
Speaker 4 (11:40):
That's a good question, Matt.
Speaker 3 (11:42):
I can't imagine it is, because there's still plenty of
vehicles that have the push brake for your foot.
Speaker 4 (11:46):
You know, the pedal brake.
Speaker 2 (11:48):
That's true.
Speaker 3 (11:48):
Yeah, So I'm not sure that the handbrake would have
been thrown in there, but we want it, I would imagine,
and I can't say this is for sure, but I
would imagine we got rid of the handbrake because we
wanted more space for bigger cup holders, and we wanted space,
you know, women started asking can we have a space
for my purse to.
Speaker 4 (12:07):
Go in between that center console.
Speaker 3 (12:09):
You know, there's there's different trade offs that a lot
of manufacturers had to make based on again our very
pickiness of the types of things that we want in
our peoples. And you know it's not all that. But
to your point, for those of us that are enthusiasts,
we miss them all.
Speaker 1 (12:25):
You know what I think is has been And tell
me if I'm wrong, Aaron, But my impression of some
of these programs, like the Black Badge program and the
Night series program Rolls. Royce has their Black Badge, Mercedes
has a Night series that kind of group together some
sort of special customization and in a way that makes
(12:46):
the buyers feel that they are special and they can
reflect their own personality in the cars. Is that the
way that automakers are balancing being able to give customers
something that feels special and customized, but also trying to
manage efficiencies and the way that they implement some of
these special touches for lack of a better word.
Speaker 3 (13:07):
Sure, I mean, you're talking of course about brands that
are very high luxury and so you know, their profit
margins are a little bit bigger and allow them to
do a little bit more customization or create more specialness.
Speaker 4 (13:19):
In their products.
Speaker 3 (13:20):
But we're seeing that also carried down down market into
more affordable lineups as well. So for sure, I think
it's a matter of helping customers to feel more special
especially in the luxury market.
Speaker 4 (13:33):
The more you go down market, it's.
Speaker 3 (13:34):
Likely that people are believing that the younger generation wants
that type of specialization. And you know now that you
can yeah, customize your environment anywhere you are, I think
that they're and I'm not sure it's true. I'm not
sure that the next generation needs that type of specialness,
(13:57):
but I think we've all convinced ourselves, given the proliber
of all of our connected devices, that we need those
types of things everywhere. And you know, maybe if we
didn't give them to people in vehicles, we'd still be
dealing with cars that were a little bit more affordable,
and probably everyone would still love like.
Speaker 1 (14:13):
Windows that you have to crank to roll up rather
than right exactly.
Speaker 3 (14:18):
I've got my nineteen eighty three BMW three eighteen.
Speaker 4 (14:21):
N and it's got its stitch shift and roll.
Speaker 3 (14:23):
Down windows and non power steering, and I am teaching
my children to embrace you know, this is what a
car used to feel like.
Speaker 2 (14:30):
That's awesome. I think part of that is a padding
margins because I noticed recently Harley Davidson now charges if
you want black finishes instead of chrome on you know,
your forks and your exhaust and so forth, they charge
you one three hundred fifty dollars extra. That's not because
it costs them more in Milwaukee to put black finishes
(14:51):
than it does chrome finishes. It's because they know everybody
wants the black finish and it's an opportunity for them
to raise your price. Yeah.
Speaker 4 (14:57):
Absolutely, for sure. I think you're dead on there.
Speaker 3 (15:00):
I mean, the manufacturers have to look for ways in
which to keep the profitability at a reenable level for
them to be able to continue to move into the
next generation again of power trains and so on and technology.
That for sure, if there's an area where you think
that there's consumer demand for a specific specialization that you can,
you know, charge a premium price for that, of course,
will always help them with their margin market numbers.
Speaker 1 (15:23):
One thing that you mentioned we spoke about that I
thought was so interesting is how you really emphasize that
the more expensive cars are gaining ground. I think you
said that cars that cost at least eighty thousand dollars
increased thirty seven percent in December compared to the previous year,
and the average price of a vehicle in that segment
(15:46):
was over one hundred thousand dollars. So that to me
says and I think you touched on this, people either
want the most expensive all of the options, or they
want a very very basic minimum move and not not
sure this middle ground. Is that what you're seeing?
Speaker 3 (16:05):
Yes, and yes for luxury, for sure, we're seeing that
all the bells and whistles are now just an expectation,
and so typically people will go for the higher trims.
I think it certainly continues to speak to the vibrication
of our market. Also, you know, we've seen this trending
for the last couple of years, and so the rich
keep getting richer and it is becoming less less affordable
(16:28):
for lower to mid income. But we did see, you know,
inflation did drop a little bit for the lower quintile.
Speaker 4 (16:34):
I think last year we.
Speaker 3 (16:35):
Got to a gap of over twenty percent gap where
the lowest income quintiles we're feeling inflation at as high
of a twenty two percent rate versus the highest income quintiles,
who were you know, floating there around the three percent.
So it really does depend on what part of the
market you're in, the income quintile you're in, with how
(16:57):
inflation actually feels to your budget. So those lower trim
cars are going to always be more attracted to individuals
that really just need a mode of transportation as opposed
to looking for a car that they're you know.
Speaker 4 (17:10):
Loving and living.
Speaker 3 (17:11):
Luckily for them these days, even the lowest trim of
most models are really superior cars and great.
Speaker 4 (17:18):
Great modes of transportation.
Speaker 3 (17:19):
You know, you're really hard pressed to find a car
that's just a complete you know, like their bones, not
worthy of having. But that's I mean, part of the
reason you see interest in China is because you know,
they reportedly can build a car.
Speaker 4 (17:33):
For fourteen thousand dollars and again one seconds some alligator.
For the US, it will be different, but there's.
Speaker 2 (17:39):
Also a very healthy US market. And you know, I
hate to keep bring up Harley Davidson, but I've been
kind of obsessed lately, and to be fair, you know,
they sell forty five thousand dollars bike. So we're talking
about the same price level, but I've heard that they're
reducing their models offering and taking out some of the
mid tier price options because they just say, look, if
(18:02):
you can't afford to step up to the big boys,
we want you to buy used.
Speaker 4 (18:06):
And yeah, is that?
Speaker 2 (18:08):
I mean? I for a long time, I know Portia
has been a big supporter of their used market. It
makes a lot of sise to me. Does that Do
you hear that from executives as well?
Speaker 3 (18:16):
You know, I haven't heard that specifically from executives, but
it makes perfect sense.
Speaker 4 (18:21):
You know.
Speaker 3 (18:21):
The only challenge, of course now that we're going to
have in the next year or two is that we're
actually running.
Speaker 4 (18:25):
Fuel on fumes here.
Speaker 3 (18:27):
With used cars, because we did miss that gap of
about ten million units during the supply chain snarl and
the COVID crisis, and so interestingly enough, we are going
to face a little bit of a crunch and used
cars and use cars may in fact get more expensive
because of the supply demand issue there. But definitely we've
(18:47):
seen a lot of manufacturers hold on to their CPO programs,
and more than that, a lot of them, as you've seen,
are starting to put even older vehicles into their CPO programs.
It used to be held, you know, CPO used to
be relatively held for the one to three year old vehicles,
and now I think bomb that goes up to ten
years to keep a.
Speaker 4 (19:03):
Car in the Certify pre owned.
Speaker 3 (19:05):
Yeah, a couple of manufacturers are doing that, so one
hundred percent. It is always good for dealers and automakers
to have a healthy used market, for sure.
Speaker 2 (19:20):
Let's talk about the new vehicles. As we enter a
new year. You're out there looking at the new four Runners,
So yep, what do you like? What's exciting?
Speaker 4 (19:31):
Well, I will.
Speaker 3 (19:32):
Say, having just driven this Forerunner, it is amazing. I
forgot how much I love them. I've had two of
them in the past, and honestly, talking about budget, I
drove the SR five today, the lowest of the trims,
and it was fantastic. So I'm excited about that. I'm
excited about them coming out. This is I think the
sixth generation, and so they don't they don't come out
with them too often totally revamped and it's still the
(19:54):
same old good fore Runners.
Speaker 4 (19:55):
So I'm excited about that.
Speaker 2 (19:57):
The back windows still does the back windows still go down.
Speaker 3 (20:00):
Not only does it still go down, that but they
told me it's on for a permanent it will always
be a power back window.
Speaker 2 (20:06):
Yes, I love that fantastic. I love that truck. I
mean it's I think it's sort of underrated. You know,
people don't mention it a lot when you're talking about
you know, SUVs, and one of the issues has been
that it's chronically underpowered, like they always offer it with
that yeah three hundred horsepower V six and I think
it's yeah, now it's a four right.
Speaker 4 (20:27):
Yeah, they're going up to I think the top line.
Speaker 3 (20:31):
I should remember this because they literally just gave us
the walk around. But the top line I think.
Speaker 4 (20:36):
Is yeah, over four hundred, but it's it's real powerful.
Speaker 3 (20:39):
I mean, admittedly I was driving the I was taking
the Forerunner into ego mode and it still was, you know,
zooming along. And also, you know, you guys might do this.
I don't know too many carnerds that do this, but
I consistently drive my automatic and manual.
Speaker 2 (20:55):
Oh you do.
Speaker 4 (20:56):
I have taught my kids.
Speaker 3 (20:57):
Yeah, and I've taught my kids how to drive sure
automatics and manual because they not only do you need
to know how to like if you need to get
out of a situation. Quickly you can go down into
a lower gear. But also if you lose your brakes,
you need to know how to.
Speaker 4 (21:10):
Get in a lower gear. And so I love you.
As in the manual mode on automatics, I like.
Speaker 2 (21:16):
It too, and I like to shift with the stick,
not with paddles, so exactly the shifter down next to
my right.
Speaker 1 (21:25):
On those yet, Aaron.
Speaker 3 (21:27):
I think the SR five they said is in the
low forties. Okay, yeah, but yeah, so that's exciting.
Speaker 4 (21:34):
You know.
Speaker 3 (21:34):
I always love seeing a good old vehicle that's been around,
you know, and talking about keeping their used car rates around,
you know, I mean the foreigners especially to hold their
value for so long.
Speaker 1 (21:43):
So it's a sweet, sweet use truck.
Speaker 4 (21:46):
Yeah exactly. But you know, I'm not an.
Speaker 3 (21:49):
Electric vehicle adopter just yet, but I am interested to
see some of the new models that are coming out
this year. So that's kind of nice to see that
the power train is continuing to come into a variety
of manufacturers, given Tesla a little bit of a run
for their money.
Speaker 4 (22:05):
So I'm excited about that for this year. Let's see
what else is coming out this year? Are your favorites?
Speaker 2 (22:11):
I mean, well, I mean if I talk about the SUVs.
I'm thinking about it a lot because I'm I'm currently
driving a GMC Yukon to Nally Ultimate.
Speaker 4 (22:21):
Okay, jeez, yeah, do I love it?
Speaker 2 (22:23):
I mean I was telling Hannah coming home from the
airport the other day, my heart just connected with that
six point two liters V eight and I kept sending
myself voice memos trying to put into words what I
was feeling. It was just pure bliss. And the ten
speed transmission, I couldn't even feel it changing gears. It
(22:47):
was just giving me exactly what I wanted when I wanted.
And I love it so much. And it's obviously huge.
It's a body on frame truck. There are not many
of those left. You got the Ford Expedition and Nissan
Armada and that's pretty much it.
Speaker 4 (23:02):
And it's the only one.
Speaker 2 (23:04):
But this is the only one of the V eight, right,
They've all done away with their V eights. And the
only problem I have with it is the thing has
It's so luxurious, right, but it has twenty four inch wheels,
which is just so stupid because you want to be
able to drive over curbs and you're gonna pop a
tire as soon as you get anywhere near a bump
(23:25):
in that thing because the tires are so low profile,
it doesn't make any sense. But I love the VIA.
Speaker 1 (23:29):
Yeah yeah, did it fit in your garage?
Speaker 2 (23:33):
I didn't attempt to put it in my garage. The
GLS fits in our garage Mercedes GLS, which is not
quite as big, but yeah, I mean it's just for me.
It's another level the body on frame trucks, because you
feel like you can really abuse them in an urban
environment and you can't with the Mercedes GLS. This suspension
on that is shot after a couple of years.
Speaker 4 (23:54):
Yeah, yeah, yeah.
Speaker 3 (23:56):
I'm in the phase now where I have a seventeen
and a fourteen year old, so I'm kind of going,
do I want another SUV?
Speaker 4 (24:01):
I don't really need it anymore. I kind of want
a sports car.
Speaker 1 (24:04):
Yes, yes, come over to the dark side.
Speaker 4 (24:07):
Yeah, the dark side.
Speaker 3 (24:09):
You know, I love a wagon. I love a wagon.
I'm not gonna lie. There are there are six of
course is my dream. But you know, until I can
get one of those, uh you know, for a baby,
those are just my favorite.
Speaker 4 (24:22):
But but yeah, so I do love a wagon. I
think we should really normalize.
Speaker 1 (24:26):
Those locer there's such a mystery because everybody who works
in cars loves a wagon, every block, for every YouTube
content creator in fluid, yeah, everyone and auto make me
say they can't sell them.
Speaker 2 (24:40):
I don't get it.
Speaker 4 (24:41):
Yeah, I don't get it either.
Speaker 2 (24:43):
If I'm buying an M three, I want it in
a wagon, right right? Who would ever choose the sedan
when you can get the wagon?
Speaker 4 (24:52):
Agree?
Speaker 1 (24:54):
Why would you ever buy a minivan? Just get a wagon?
Speaker 3 (24:56):
Yeah?
Speaker 4 (24:58):
Right, exactly, I know.
Speaker 3 (24:59):
But you know, I've I've heard from many van lovers,
especially men who love them.
Speaker 4 (25:03):
It's like the captaincies. They're all, They're all that's.
Speaker 1 (25:05):
What it's about inside them.
Speaker 2 (25:08):
Any van also.
Speaker 1 (25:09):
Actually met had an experience with a minivan in recent Yeah,
I just and you did. Like it was the seat, it's.
Speaker 2 (25:16):
A seating position, and yeah, you can kind of move
around more inside them than you can in a station wagon.
It's not the same as a car, but they're.
Speaker 4 (25:27):
Yeah, I get it.
Speaker 3 (25:28):
I mean, you couldn't pay me to drive one, but
I get it. I can see the appeal. But O,
thank you. So yeah, So I'm in the car buying
mode right now. So it's kind of interesting in the
position that I'm in knowing the cost, the affordability like
we're talking about and how expensive these things get and
and interest rates and everything, and trying to navigate like, oh,
what is it that I want to do? I might
(25:48):
even go back to leasing. I know that's crazy.
Speaker 4 (25:51):
It's a word.
Speaker 3 (25:53):
I think for a lot of people, it's a bad
word because you know, we've convinced ourselves that it's it's
a way more expensive way to purchase a car. But again,
that monthly payment, right, but the monthly payments what most
people are shocking by. And you can just simply now
that leasing's coming back, you can simply get a more
expensive car for less money per month. And with the
pace of change of technology, Yes, to me, it just
(26:15):
seems to make a lot of sense, right, Yeah.
Speaker 2 (26:17):
Absolutely, if you've got a battery, if you're like Hanna
and I were talking with in our last podcast with
Alex Royd about battery degradation, and I don't know the
exact figures, and maybe my fears are a little bit overblown,
but I just think I want someone else to own
that problem. So if I'm getting a hybrid or god forbid,
a fully electric vehicle, and there are some out there
(26:38):
that I do like I like the key of EV nine, for.
Speaker 4 (26:40):
Example, fantastic.
Speaker 2 (26:43):
I would lease that, you know, because then yeah, at
the end of the lease, I can get whatever the newest,
better thing is. And also I don't have to worry
about the possibility that the battery lost fifty percent of Yeah, yeah.
Speaker 3 (26:56):
I mean, you know, we have an we have an
EV Battery Solutions group with Cocks Automotive, and I will
give you some assurances that what we've seen from a
degradation perspective, it's so low that the batteries really are
integrating very much. So it's really not something to be
worried about. Neither is range, of course, but a lot
of people still, you know, I think most people's anxiety now,
I like to say, is charge or anxiety.
Speaker 4 (27:17):
It can't be ranged.
Speaker 3 (27:19):
We can go just about as far on an EV
as we can on an ice vehicle, and the degradation
really is proving not to be that big of an issue.
But more importantly, I think the leasing makes sense also
because it's just such a new technology. Still, We're going
to see such advances that you're going to want to
be able to switch out quickly, you know, and we've
kind of exhausted the advances that we're making in combustion
(27:41):
power trains, so we need to recognize that. You know,
for me, at least, leasing an EV makes sense because
of that, because in three years it might just be
a very different car.
Speaker 2 (27:52):
By the way, on that note, Aaron, we've Hannah and
I have been emailing back and forth with a listener
who is wondering about buying a slightly used luxury EV.
So you know, everyone wants to get like a twenty
twenty range Rover, right because then you don't take the
initial hit somebody else eats the depreciation. But the worry is,
(28:15):
as soon as they're out of warranty, is it going
to become a money pit? And I think it's a
valid concern for not just a Range Rover, which obviously
they're notorious for that, but also for you know, a
Mercedes GLS, a BMW X seven, any.
Speaker 1 (28:32):
Of these big SUVs.
Speaker 2 (28:33):
Yeah they have they have the expensive air suspension and
if something goes wrong with that, you're out five grand,
you know, And they're all of these electronic systems are worrying.
What do you think about a gently used a luxury suv?
What would you.
Speaker 4 (28:49):
Choose as far As an ev or just any.
Speaker 2 (28:53):
No, any any luxury SUV, you know, any luxury trust
but we meant SUV.
Speaker 4 (28:59):
I meant yeah SV. Oh that's a good question. I mean, yeah, Range.
Speaker 3 (29:04):
Rover, I wouldn't mind. I wouldn't mind one of those
for sure. And I agree with you. It's nice to
have someone else capture the depreciations that you don't have to.
Speaker 4 (29:14):
Gosh, that's you're asking me to pick my favorite baby.
I don't know.
Speaker 1 (29:17):
I think the question about the range Rover specifically, too,
is they do have a certain reputation for being very
reliable from that era and just for always being in
the shop. And I'm curious is that a earnest earned reputation.
Speaker 4 (29:36):
That is a good question.
Speaker 3 (29:37):
I don't know that I have any data in my
back pocket to tell you.
Speaker 4 (29:40):
I haven't looked at.
Speaker 3 (29:41):
The range Rover recently all that much, because it is
a fairly low volume model for what we look at
at Cox Automotive. But uh, you know, I think most
cars these days are a heck of a lot stronger
and better.
Speaker 4 (29:53):
Built than we.
Speaker 3 (29:55):
You know, then we function our memory of how vehicles
used to be. I mean, even if you think about
the fact that when the minute you mention a luxury,
especially perhaps a German luxury, you know, everyone's like, oh,
I'd love to have one, but the expense of fixing it,
you know. And it's like, are we saying that because
we've been conditioned to remember that it was always so
expensive to bias?
Speaker 1 (30:16):
I think it is. I think it's people who don't
actually own and know, and they just repeat right, what
the popular wisdom is, which is not actually accurate.
Speaker 3 (30:26):
Right exactly exactly, you know, And the warranties are lasting
so much longer, and there are plenty of you know,
I mean not to give a little boost to the
F and I office, but there are plenty of you know,
products that you can purchase if you're so.
Speaker 4 (30:38):
Worried about the quality of the vehicle, that aren't.
Speaker 3 (30:40):
Terribly expensive and would ensure you against any of that
kind of stuff happening. And again, with regulation and recalls
and things like that, a lot of times the manufacturers.
Speaker 4 (30:48):
Can be put on the.
Speaker 3 (30:49):
Spot to have to pay for the specific repairs or
recalls that happen. So I don't know, I don't know
that it's a bad idea. Used is always going to
be a good choice.
Speaker 2 (30:58):
I think it's funny because because all right, I giggle
a little because Doug DeMuro bought the previous generation range Rover,
the L I think three twenty two, and he got
a bumper to bumper warranty from CarMax back in the day, remember,
and like then everything went wrong with his truck and
CarMax ended up paying out like fifty or sixty grand.
(31:20):
I like the just to point out that I like
the I think it's the L four h five generation
of range Rover, which is the just until twenty twenty one,
because it's the last generation with the supercharged five Leader
that that Jaguar Landrover is famous for. And the new
ones look a little too spacey for me. And they
(31:42):
have a turbocharged four point four Leader BMW motor, which
just isn't in the spirit of it.
Speaker 1 (31:49):
Yeah, yeah, I don't have a problem I mean with
the German motor in a British vehicle, to be quite honest,
I feel like that would be an upgrade, right, Eric,
what do you think?
Speaker 4 (32:02):
I don't know that I have a problem with that either.
I mean, if you you know I'm a big racing fan.
Speaker 3 (32:07):
If you look over to F one and the pinnacle
of racing to see, you know, which you know a
lot of people who don't know about racing, they don't
recognize that.
Speaker 4 (32:15):
Oh well, the.
Speaker 3 (32:15):
Ferraris what's powering the haus you know, or the Mercedes
is what's powering the Williams. And yeah, you know there's
I don't have a problem with people leveraging better power
units if that's what you if that's what you need
to make the car where it needs to go.
Speaker 2 (32:30):
Well, remember when BMW bought Earls Royce, they swapped out
the six and three quarter lead motor and and and
even Bentley for a while had like the rnage red
label and green label. Remember they put a BMW motor
in those and.
Speaker 1 (32:47):
The Anage is as you know, I think highly desirable.
Speaker 2 (32:52):
Me too, but I would rather have one with the
six point seventy five liter V eight than the BMW
power plant.
Speaker 4 (32:59):
You guys know you're stuff impressed. Hey, flying above my head?
Speaker 2 (33:03):
Well, well you mentioned racing, and I was on the
radio show with Tom Keen earlier this week. He put
me on the spot and asked me what I thought
Lewis Hamilton was going to do with with Ferrari. I
have no clue because I watched Motor GP.
Speaker 1 (33:17):
I'm loving all of the images they've released this week
of Lewis and a double breasted, amazing suit at the
home of Ferrari looking like a boss.
Speaker 3 (33:27):
I mean, yeah, I think he's gonna I think he's
going to do well. I think he's going to go
out on top.
Speaker 4 (33:34):
Why not?
Speaker 1 (33:35):
It seems so fitting as this top of his career
to cap it to me, it just seems very fitting
and to be honest, and I'm not going to air
anyone out specifically, but I had, you know, on certain
Ferrari press launches, I've like, you know, asked the guys
handling the cars, Hey, what do you think of Hamilton joining?
(33:55):
And they, like, honestly, some of them were turning up
their nose a little bit, saying he's old, it's a
PR stunt whatever, But hey, car doesn't know how old
you are.
Speaker 3 (34:04):
He's still precisely and were they watching the twenty twenty
fourth season?
Speaker 4 (34:09):
Are you kidding me? Like, Alonzo's even older and.
Speaker 3 (34:12):
He's still driving like a bat out of hell with
amazing racecrafts.
Speaker 4 (34:15):
Shut up, people, come on back, give the guy a
t's my world champion.
Speaker 2 (34:20):
I'm not sure he's a child too. He's only like
forty years old.
Speaker 4 (34:24):
Yeah right, I know that's crazy.
Speaker 2 (34:27):
Yeah, that's a kid.
Speaker 4 (34:29):
I mean it is a kid. For those of us
over our fifties, you know, that's a kid.
Speaker 1 (34:34):
I have a question for you, Matt. Yes, would you
drink Lamborghini coffee?
Speaker 2 (34:40):
Yeah?
Speaker 1 (34:40):
Sure, Lavataza and Lamborghini have just come out with a
Lamborghini themed coffee blend.
Speaker 2 (34:46):
Definitely, I would get my motor running.
Speaker 1 (34:49):
I'm kind of like, I don't know if I'm imagining.
Speaker 2 (34:52):
Like motor oil.
Speaker 1 (34:54):
Yeah exactly, I don't know if the coffee and Lamborghini.
Speaker 2 (34:57):
Is I want it to taste a little bit like
I feel like a garage.
Speaker 1 (35:01):
I feel like it's going to I mean, it'd be
kind of a cool gift.
Speaker 2 (35:04):
Are you a coffee drinker? I have?
Speaker 1 (35:07):
I have a coffee a day. I have one in
the morning.
Speaker 3 (35:09):
Yeah.
Speaker 2 (35:09):
See, I never drink no, I will. I will only well,
let's say I don't like the way it makes me
feel for the most part, but I will have a latte,
you know, something weak with a lot of milk.
Speaker 1 (35:25):
When I say coffee, I really do mean most of
the time a latte. I'm using coffee colloquially.
Speaker 2 (35:31):
I have gone to I used to go to, like
when Italy was hosting the G twenty. I would go
there in my other job and got hooked on drinking
the Espress there. I love an Espress, but it just
really got me wired. Oh yeah, I know.
Speaker 1 (35:49):
I know I can feel.
Speaker 2 (35:50):
I show that I can.
Speaker 1 (35:51):
Yeah, there's all fuel you for quite a.
Speaker 2 (35:53):
While, you know, I stay away from that, but I
would definitely try one if it was from because Lamborghini
is one of my all time favorite brands. I asked,
I love Lamborghini.
Speaker 1 (36:03):
Yeah, maybe someone needs to send you a pouch of it.
Speaker 2 (36:07):
Well, I would pay for it myself as a journalistic integrity.
Speaker 1 (36:11):
No, I meant me. Yeah, that was That was a
memo to myself. And speaking of memo, I would like
to hear you play your voice memos that you took
for yourself.
Speaker 2 (36:24):
Okay, So I so I didn't Actually they weren't voice memos.
What I did is I said, hey, Siri, write me
a note. So you know Apple iPhones have notes, yes,
and I will. I mean, I was just okay, this
car is an absolute pleasure to drive. The six point
(36:46):
two liters V just provides effortless power combined with this transmission,
you honestly don't even notice it shifting, and it gives
you everything you need when you need it. Obviously, it's
not a sports car. It's a very large truck, and
there are very few other vehicles that are this big
on the road. This only compares really with the Vord
Expedition on our model. Blah blah. I was kind of
like writing myself notes, yes, but it really the vibes,
(37:11):
the warmth of the engine. I kept thinking about what
Alex Roy said about how it kind of matches your heartbeat.
It just can't be replicated by a V six. All
of these manufacturers, most notably well for me as a
fan of the Ford Motor Company. You know they've gone
away from their six point two liters V eight. They
(37:33):
used to have that in the Raptor. Now they have
the eco boost in it, and it just it can
never be as good they I'm sure they're doing it
to be better for the planet, and I applaud that,
or to meet regulations, and I understand that, but it's
just not something that I would want to spend my
money on, even in the high output form like the
(37:57):
the Bronco raptor. It's a great moment, like the power
delivery is awesome, and it also you're never lacking, but
it doesn't give you the same feeling of luxury, you.
Speaker 1 (38:11):
Know, no, no, But but I'm okay with that, honestly.
I mean, I'm all about the right tool for the job.
And you can't expect luxury from a non luxury vehicle.
And that's not a value judgment. That's just a horse
of a different.
Speaker 2 (38:25):
Color, Yeah for sure. But so if when I'm driving
home on an empty highway in the middle of the night,
you know, listening to a little dead and Cornell, I
just want that V eight there. You know, I'm not flying,
I'm not in a race, but I just want that.
Speaker 1 (38:43):
You're a simple man power come.
Speaker 2 (38:45):
On and that fullness, you know, just to make my
chest feel good.
Speaker 1 (38:52):
I have no comeback to that other than I wish
that for you. I do really wish that for you.
Met It's so great, sounds like a great happy place
for you.
Speaker 2 (39:01):
Yeah. And this truck, by the way, it is I
keep trying to think of. On the one hand, there's
a lot of other stuff you could buy for less,
because how much does it cost over one hundred thousand dollars,
of course, And I guess you know, there are many
things that are more expensive if you buy a range Rover,
(39:22):
for example, you're gonna pay more if you buy a
fully loaded you know, Cayenne Turbo or even the GTS
that you drove. I would guess it was more option
to the way it was. But then there are a
lot of you know, a bmw X five. It's not
the same thing, right, it's so much smaller, but it
is an suv and it's luxury. You can get it
(39:44):
for less a Mercedes GLS or you know, even up there,
it's it's less.
Speaker 1 (39:52):
Prices are so weird these days.
Speaker 2 (39:54):
It is weird. But these these body on frame trucks
that are SUVs, they're essentially pick up trucks that are
you know, covered in the back. They're so expensive. I know,
even the starting price is eighty thousand for the Yukon,
maybe seventy for the Tahoe. I just don't know when
(40:15):
did we get this?
Speaker 1 (40:16):
Do you guess? The automaker with the highest average price
per vehicle in twenty twenty four, and this is coming
from Erin from Erin data.
Speaker 2 (40:25):
Let's see highest average price per vehicle.
Speaker 1 (40:27):
Not including exotics like Lamborghini.
Speaker 2 (40:29):
Ferrari, not including Rolls Royce.
Speaker 1 (40:31):
Not including Rolls Royce, not including Bugatti.
Speaker 2 (40:35):
Uh well, if it's if Porsche is allowed, I would
choose Porsche.
Speaker 1 (40:39):
Yes, yeah, you're right, ding ding ding. Apparently their their
average transaction price per vehicle is one hundred and fifteen
four hundred and seven dollars. Do you want to know
the second highest?
Speaker 2 (40:52):
By the way, I can figure a carera tee and
I don't get close to that low, So I understand
totally right. Even even for the careerra tea, I'm always
ending up at like one, which is crazy.
Speaker 1 (41:06):
She's just crazy because the t is supposed to be
sort of the thinking man's n affordable one exactly that
you don't have to get all of the other stuff
that you don't actually need. Yeah, I know that is wild.
Speaker 2 (41:17):
What did you What was your other question?
Speaker 1 (41:19):
Do you want to know the second?
Speaker 4 (41:20):
Oh?
Speaker 2 (41:21):
The second highest?
Speaker 1 (41:23):
Ummm it's I was surprised by this one, actually, but
we've mentioned it on this show. We've mentioned this brand.
Speaker 2 (41:30):
Is it Mercedes? No, BMW, Nope? What is it out?
Speaker 1 (41:36):
Land Rover? It's land Rover. Oh, isn't that interesting?
Speaker 2 (41:39):
That's crazy.
Speaker 4 (41:41):
I know.
Speaker 1 (41:41):
Land Rover is also over one hundred thousand dollars averaged
per vehicle. It's at one hundred and two thousand, seven
and three dollars.
Speaker 2 (41:49):
I guess that's because they don't have many lower prices.
Speaker 1 (41:53):
I think that is. It's all SUVs. They're all big,
they're all heavy, they all have a bunch.
Speaker 2 (41:57):
Of there's no mix. Like even Porsche. You can get
at the box Star or that cam.
Speaker 1 (42:01):
In and BMW. You know, you can get some true
a lot and that pulls their number down.
Speaker 2 (42:06):
You can get a ton of lower price BMW's. And
that's the same for Mercedes. Yeah. For a land Rover
you can only get basically after the discovery you get
like a range Rover Sport and a range Rover.
Speaker 3 (42:17):
Yeah.
Speaker 2 (42:17):
Oh yeah, Defender, I always.
Speaker 4 (42:18):
Forget it.
Speaker 1 (42:21):
Completely. Yeah, I know, isn't that wild? I mean, this
is why I in my own personal life, I I
was today, I drove a three thousand dollars Rolls Royce.
Speaker 2 (42:33):
To work, three thousand dollars.
Speaker 1 (42:36):
Drive plus a trade.
Speaker 2 (42:38):
Yeah, well plus a trade.
Speaker 1 (42:40):
Okay, that's the fine, Prince. It was three thousand plus
a minor trade. But you know, yeah, I mean I
was very happy.
Speaker 2 (42:49):
You are very brave and have also been very lucky
when it comes to buying, you know, classic cars and
not having massive repair bills.
Speaker 1 (43:00):
I was thinking yesterday, I don't need to gamble. I
drive an old card.
Speaker 2 (43:04):
And you haven't had You've never had, like all of
a sudden, a ten thousand dollars bill for that car.
Speaker 1 (43:11):
Not a ten thousand no, no, no, But.
Speaker 2 (43:15):
Is it a nineteen seventy one?
Speaker 1 (43:19):
The one today is eighty three.
Speaker 2 (43:21):
Okay, you have multiple rolls choices.
Speaker 1 (43:23):
Yeah, but seventy five. Yeah, this is the other other one.
I should stop talking now because I sound really snobby,
but these are not expensive cars.
Speaker 2 (43:31):
No, it's awesome. I mean crops respect, but.
Speaker 1 (43:35):
Yeah it is. It is a little bit of a
gamble for sure. You know, we've talked about it before.
Sometimes you think why am I doing this? But it's
fun and.
Speaker 2 (43:44):
It's also it's not as much of a gamble as
it turns into when you get a late eighties into
the nineties.
Speaker 1 (43:52):
Yeah, you know, to get out of a car from
the seventies and into a car from the eighties, depending
on the brand, is a world of difference. And the
seventies to me at least in Rolls Royce years, feels
very closely connected to the sixties. The minute you get
into something in the eighties, it feels very modern compared
(44:13):
to the others, and.
Speaker 2 (44:14):
It can be much more expensive to repair.
Speaker 1 (44:17):
Yeah, I still want a Corniche or a Camarge, and
those are more expensive. They're out of my price range
and they're later models.
Speaker 2 (44:24):
So yeah, all right, what do you got coming up? Anything?
Anything good?
Speaker 1 (44:31):
No? What? No? I have nothing good? Everything is everything
has been delayed, postponed or canceled because of the fire.
Speaker 3 (44:40):
Ah.
Speaker 1 (44:40):
Yes, so you know, I do have an electromiccon electric
Macon coming. I do have an electric escalade coming. Still
got that vanquished coming, But they've all been kicked down
the road a little bit because we are still sort
of digging ourselves out of fire stuff, which is right
and completely understandable. But I know you're going to Indonesia.
Speaker 2 (45:02):
I have an eighteen hour flight to Singapore and then
from there to Jakarta, from there to Sarong and then
I take a boat about five hours towards Papua New Guinea. Yeah,
it's a long trip.
Speaker 1 (45:13):
Hey, how can you explain the genesis of this trip?
Speaker 2 (45:17):
So I am going to Raja Ampat, which is in
between Indonesia and Papua New Guinea, and it's probably the
best diving in the world. And I've been there already
many times with my wife. In fact, we got engaged
there and it's just our favorite place to go. But
(45:41):
it takes forever to get there.
Speaker 1 (45:43):
Yeah, that's very dedicated.
Speaker 2 (45:45):
Yeah, and so you can make a choice like, well,
first off, which direction you're gonna fly, and then break
up the trip a little bit to make it more bearable.
So last a year we went via Tokyo and we
stopped in Tokyo for a couple of days to recuperate.
And this fun. This year, I'm gonna go to Singapore
and we're gonna hang out there for a couple of
(46:05):
days before we go on to ind Ani show. But
right now I'm looking at an eighteen hour flight, like NonStop,
and that's like what nine movies?
Speaker 1 (46:17):
What's your coping mechanism for an eighteen hour flight?
Speaker 2 (46:19):
I mean, I don't really have a coping mechanism. I've
never been on an eighteen hour flight before me neither.
Speaker 1 (46:27):
The farthest I've gone as Cape Town and that's and
from from Paris that's a long one, but that's not
eighteen hours.
Speaker 2 (46:34):
I don't know. I guess I'm just gonna I bought
The Power Broker, which is a very long book, and
I'm gonna download a bunch of movies. I guess I'll
have internet access.
Speaker 1 (46:52):
So now I didn't realize you were a your scuba diver. Yes,
well we have that in common too. I love Patty Certified.
Speaker 2 (46:59):
I love it.
Speaker 1 (47:00):
Are you're not traveling with equipment.
Speaker 4 (47:02):
Are you?
Speaker 2 (47:02):
Yeah? Bring all my gear with me, not the tanks.
I just I want my own BCD so that I
am familiar with it. And you know, I'm an odd shape.
I'm very long and lanky, so I won't fit into
a wet suit whatever they no matter how big a
(47:22):
selection they have. Yeah. I mean I don't need much
of a wetsuit because it's going to be very warm water.
But yeah, I like to be familiar with my own gear.
You know, my wife doesn't, so she, you know, with
other than wetsuits. She she takes their stuff.
Speaker 1 (47:38):
But yeah, I get it.
Speaker 2 (47:40):
It's an amazing place. It's called Missoul m I S
O O L and I highly recommend it. But they're
booked out like.
Speaker 1 (47:49):
Years this is the name of the hotel, the resort.
Speaker 2 (47:53):
So there were a couple of very cool, like punk
rock kids on a live aboard in the nineties who
were diving in Rajan Pot in the time. The coral
was getting bleached out and they found a bunch of
shark fins on the beach and they were super bummed
about the sort of state of the sea there and
(48:15):
came up with an idea too, and it was fished,
you know, almost two extinction. Came up with an idea
to start, you know, kind of a luxury resort and
use the proceeds from that to basically buy off the
local fishermen. And so they said, hey, we'll split you know,
(48:35):
the revenue with the local communities there. There are not
many people that live in that area and if you
agree not to fish. So now they have like a
twelve hundred square mile no kill zone. All the life
has come back. I mean tons of mantas, I mean
fifteen twenty foot wingspans and they're all just happy to
(48:57):
swim along with you. A lot of reef sharks, a
ton of colors. I mean, it's like being at a
grateful dead show in the best wave possible. Yeah, it
really does. And you know Jerry was a big diver
as well.
Speaker 1 (49:15):
I didn't know that.
Speaker 2 (49:16):
Yeah, was he really with special he had a beard.
Speaker 1 (49:20):
Yeah, he could get the mask over.
Speaker 2 (49:21):
Kind of hard to create a seal, but yeah, you know.
Speaker 1 (49:24):
That's where my mind goes. Wow, I didn't know.
Speaker 2 (49:27):
Yeah, I'm looking forward to it.
Speaker 1 (49:28):
Oh, that'll be really lovely. Well, I hope you have fun,
and I hope you can endure the flight because it
seems like it'll be worth it at the end when
you get there.
Speaker 2 (49:37):
Yeah, no, I'll be okay. Yeah, it's it's a legitimately
first world problem, isn't it.
Speaker 1 (49:43):
Yeah it is. No one's feeling that bad for you.
Speaker 2 (49:47):
No, all right, cool. Well, I guess I'll see you
back here, same time, same place. Can't wait, February sixth.
Speaker 1 (49:58):
I cannot wait. I'll see you in New York.
Speaker 2 (50:00):
Actually awesome. That's going to be great.
Speaker 1 (50:02):
I can't wait. The best city in the world.
Speaker 2 (50:05):
I'm Matt Miller, and
Speaker 1 (50:06):
I'm Hannah Elliott, and this is Bloomberg
Hosts And Creators
Hannah Elliott
Matt Miller
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