it's noon here in ventner City New Jersey and New York City New York and this is car Edge live for Wednesday September 11th yes September 11th let's never forget and with your hosts Ray and Zach how are you today handsome feels a little surreal to be in New York um on 911 so yeah really tragic um even 23 years later still just an incredibly tragic day I remember we were living in Ariz and it happened the tax on the World Trade Center and the Pentagon and the the plane that landed landed geez um in Pennsylvania all that happened before we even went to school that day yes so we were we didn't even get to go to school I remember watching it I must have been six years old and I still remember it so anyway yeah incredibly sad day and very surreal for me to be in New York on it that to be hon I I would think it would be um it is uh I I remember that day vividly I was at the dealership and it was like holy crap what the hell's going on and and I remember when I got home that night how quiet it was because we lived near the Scott de Scottdale airport and there were no planes in the sky that night none and every now and then you'd hear a military jet and it was like it's like what the hell is going on with the world today and uh yeah it was really a uh a sad and confounding day um but we've made it 23 years since then and uh we shall never forget what that what today represents in the attack on our country and uh uh let's just I guess move on for the time being yeah and uh to the families of those who lost loved ones that day and are currently still impacted by all the health uh implications tied to it our thoughts with you all right today's show folks brought to you by uscar edge.com if my dad and I can help you with anything related to buying a car selling a car or protecting a vehicle please give us the opportunity to that's what we've built here over the past four and a half five years we are here to help car edge.com the big story this morning Dad Ally Financial came out with their latest earnings and holy cow Ali Financial warns of quote intensifying credit challenges and their shares were down over 15 16% yesterday the challenges have intensified over the quarter as borrowers struggled with high inflation the consumers consumer lenders Finance Chief said we've been talking about autol loan delinquency rates and delinquency rates in general and it seems like yesterday that alarm Bell finally went off for others in the world Alli financial and we had talked about it for a long time with santand there and others their autoone delinquency rates through the roof man like highest levels they've ever experienced before and now people are starting to pay attention it yeah it's it's hard to imagine that um that suddenly everybody woke up yesterday and said oh holy mackerel people are overextended people have been utilizing their their credit card lines of credit to well live their normal lives and and that at a certain point uh car loans are going to be harder for people to afford to make their payments for any number of reasons and and those those reasons can can be um interest rates are higher than what people have been used to for the past 15 years uh price of cars is higher than what people have been used to uh in history uh length of term of loans are longer than they've ever been um automobile insurance has gone up 2530 per in the last year or so uh so you start adding all these things up and it shouldn't come as a surprise that people are having a difficult time paying for the overpriced vehicles that they have agreed to purchase um and and so for for the folks that Ally to uh enunciate that yesterday and for others to suddenly go oh who could have seen this coming it's like hell we've been talking about this for two years we've referenced this data from S&P frequently it's last year we need to find a way to get updated data like this for you know I don't know last quarter but Ali Financial their autol loan delin rate last year was already up 77 basis points 6.17% you can see there santand Auto loone delinquency rate was 13.35% Capital One back up at the top 7.3% and when we come back here to the article in July and August delinquencies and net charge offs that is debts unlikely to be recovered Rose about 20 and 10 basis points respectively and allies Retail Auto business compared with its expectations that was the big story here Dad is we missed expectations the expectations were for things to be pretty bad and the market understood that they actually were worse than what Ally had you know LED on to or what the market had anticipated and I think the story is probably not as accurate as it could be things probably at the at the at the real level are even worse so so if I understand what you just said that had allies still met their expected earnings uh Wall Street would be fine uh they wouldn't be concerned and and and the only reason suddenly that they're concerned is because well the stockholders um might get left holding the bag because well they didn't hit their earnings it seems to me and and you you've heard me say this a zillion times I'm not a bright person but it seems to me that the value of a company has to be based on more than just earnings and hitting no ST and hitting earnings projection uh there are underlying things that need to be looked at and if you could look at data from six months ago 12 months ago 18 months ago that showed that delinquency rates were Rising year over year quarter over quarter well then it should come as no surprise that at a certain point they're not going to be able to hit their anticipated earnings goals I mean why why don't we look at the full picture instead of the little picture just asking just sorry I just I don't like when we take it down the angle of trying to be like stock PR prognosticators but you do you Dad whatever You' like to say my my thinking here is yes the bag for the industry that's really the big story here is that the cat is entirely out of the bag autoone delinquencies are going to continue to get worse and these companies know it now investors are aware of it as well I I got you Pops I got you you had Frozen so I removed you from the screen we don't want a Frozen dad oh okay I'm sorry well I've been frozen before chirogenic is a wonderful thingi it daily will auto loan forgiveness happen I think that's a really good question are we going to see so many people who can't get approved for an auto load are upside down in their vehicles and these Banks like like there's there's a path here for like I don't know bailouts to happen again I don't I don't anticipate that happening but if things get go really South the whole Market is dependent on Capital being able to move from these banks these financial institutions to the consumers and what you're seeing here from allly and really think what staming about it is that it's worse than they had anticipated in terms of people not being able to pay on their credit obligation so will we see something like auto loan forgiveness I I don't know I wouldn't say 100% no I I I would say this I would hope not yeah and and the reason I say that is because as as individual human beings we have a responsibility to live up to our obligations and if we obligate ourselves to doing something and I will say this in regards to student loan forgiveness as well if we sign on the dotted line with our eyes wide open then damn it live up to what you're signed up for and if it turns out you can't afford it then then so be it and if it turns out on an automobile loan that you can't afford it well it's not the government's job to bail your ass out and I will say in my opinion if the same thing happens to these giant corporations it's not the government's job to bail their asses out um you the way it's supposed to work in capitalism as as I understand it is there's winners and losers based upon how you run your business if you run it successfully you're going to be a winner if you run it unsuccessfully you're going to be a loser and you don't just get to to have forgiveness for everything because well you ran it poorly I you know and I I I don't know I just we it's not to a certain degree it's not my responsibility to to to to make up the difference for your mistake okay it is my responsibility as your neighbor as your fellow um human being to say are you sure you want to do this do you think this might be in your best interest would it be possible for you to get a little better understanding of what it is you're about to sign up for before you sign up for it I'll be there to support you with that but if you sign you own it all right so delinquency autoone delinquencies are through the roof negative equity is through the roof pops obviously does not want to see any type of intervention here and I don't really blame him but this could be a sign of the market continuing to slow down on the demand side because it's going to be more and more difficult for these people to actually re-enter market and purchase Vehicles which should put downward pressure on car prices I feel like a broken record though saying that for the years that we have I want to come here to the chat Dad yes before the show started from Matthew Hoskin thank you Matthew ink to deal on a new Porsche Cayenne $93,600 sticker price $81,400 price before taxes and tags the invoice on the vehicle is 83,7 180 fly up to San Francisco to take deliver on Saturday Saturday Porsche San Francisco wheeling and dealing of all places trunk money on Porsche CS wow that is that is insane Porsche with a $112,000 discount holy cow um I believe it's a hybrid um so it probably qualifies for some federal or state rebates but yes there are deals to be found and deals to be had um you just you just need to look for them yeah you absolutely do we've got great job Matthew by the way great job congratulations Matthew we've got a question here from Hunter do you believe GMC will roll out more discounts and rebates and prices will drop waiting till the end of the year what do you think Dad what do you think is going to happen between now and the end of the year well you know me I I I believe the the week between Christmas and New years's is is is the best week to buy a car because well that's when manufacturer support whether it be consumer rebates or or support to dealers so Dealer incentives are at their grow greatest to encourage dealerships to make deals so that the manufacturers can hit their numbers that they projected for the year so if you're asking me do I think that we will continue to see General Motors roll out more discounts and rebates I believe they will um for instance If the Fed goes ahead and reduces interest rates this year this month which they've indicated they probably will well then suddenly it becomes less expensive for GM to underwrite 0% financing or 0.9% financing or 1.9% financing so with the if and when the FED reduces the Fed rate I think it becomes easier for GM to to offer subvented interest rates and and I think you know GM is looking to push as many sales as they can and to help offset these higher interest rates they'll do it either with it subvented interest rates or cash back to the customer but there there will continue to be and even though people don't want to believe it dealerships are taking shorter deals than they have dealership front-end new car profits are lower than they have been in years um and getting back to what they had been prior to co and what many people don't realize and I know I'm frozen what many people don't realize is that prior to covid new car departments were the least profit performing departments in dealerships for years and years and years okay and yes round it out we have also seen incentive spend up what is it $3,000 or so year-over-year for the industry so incentive spend is already sign ific L higher than it was last year this time last year two years ago and will continue to get better every single month between now and the end of the year and Matthew coming back thank you Matthew not a hybrid Dad wow hybrid over $122,000 off on a Porsche Cayenne not a hybrid like sink in Cayenne were selling at at or above sticker price during the height of the pandemic you now have an environment all cars even Toyotas most Toyotas all cars are negotiable again folks so you know regardless of the manufacturer incentives which again are up $3,000 year of year continue to get better between now and the end of the year you also have the dealer negotiability which we see every single day with our car buying service our concierges there's deal to be had there's 100% deals to be had and Matthew's deal is a perfect example of that very nicely done um yes and and and and you know there yes are there dealers out there that are still asking Market adjustments yes will are are some of those dealers who are asking those Market adjustments will they refuse to come down off of them yes guess what go find a dealership that a isn't asking for it or B is willing to come off it because they are out there okay just because one dealer that you talk to might not be willing to do it doesn't mean that there isn't another dealer that's willing to do it I want to come back to the chat here for a second but then with the FED potentially lowering interest rates I wonder what impact that has on the Ally story AKA all these people who are going to linin on their auto loans can't they refinance so anyway I want to talk about that we'll do that in just a second from Baron of great matter thank you Baron okay Ray I agree 100% you sign it you own it do you believe that for student loans too I I do I do yeah I I I do I I just it is incumbent upon each one of us when we're about to put our name on a on a loan document or any kind of commitment like that that we do our due diligence and we understand what it is that we're agreeing to okay and I don't care if you're an 18-year-old and you say I don't have enough life experience or I didn't have enough life experience to understand what I was doing when I did it BS okay you it's you did it you own it I'm sorry I you know and and I get accused of being oh you know he's he's a socialist he's a liberal he's a if you sign your name to it you own it okay do I feel bad for you yeah I do do I feel bad for you enough that I'm going to give you my damn money to make it make it right no I'm not you own it I'm keep moving okay did we get some breaking news what's the breaking news I something about Volkswagen um yeah I don't think it's anything too crazy it's just a continuation of what we've been talking about uh Volkswagen has pulled out of uh out of Labor talks um in Germany so this is a big story over there Volkswagen is uh going to be shutting down production capabilities in Germany for the first time ever I mean it's this is this is pretty alarming stuff yeah and and we have from a very creditable Source um that they have already made the determination to close down a a a plant in Brussels that produces um Ali vehicles um that could not only close the plant down but it could impact upwards of 3,000 people who work there um and and this is from the source that we have this is a decision that's been made at the corporate level um and everybody might not well they might know about it now but they didn't know about it before yeah so we're going to continue to see not only a degradation of performance of these big car companies here in the United States but it seems like it's happening internationally it's kind of the same story internationally as it is here at home dead big push to electric vehicles hasn't seen the up have those companies haven't seen the uptake as a result they're now looking for ways to cut cost you see it here in the United States we uh and it also is kind of funny Jeep uh Jeep had this headline much actually I'll pull up because could have been really got to be kidding me but I'll just put up now you jeek seeps perfect quality on EV launch Quest reverse sales like Jeep sales are sliding because they built really expensive electric vehicles Ford recently came out and said you know what we're going back to all hybrid VW is not immune to this either they've pushed and pushed approach for electric power trains and unfortunately they haven't seen the uptake in demand and as a result they're now looking for ways to cut cost 11 billion in cost and so all these job losses are going to be a result of that oh absolutely and and John G may I say I understand Brussels is not in Germany Brussels is in Belgium um I actually have a a cousin who was born and raised in Belgium um so no I understand where Brussels is um it it's just it the the impact is all across Europe from what's happening with this german-based company absolutely yes so know big news obviously coming out of Germany thank you Baron of Grey M we'll pull this up right quick thank you sir lowering rates still doesn't make it right for most people to buy a car uh the price if the price is too high if I sign to join the military I own it understood I actually if it's okay with you I don't want to have the conversation about signing contracts anymore um I will say yeah interest rates interest rates coming down B interest r coming down let's spend a moment on that will that positively impact things will that create an opportunity for people who are falling behind on their auto loans to refinance and monthly payment what is it take there it will not and the reason it will not is nobody's going to refinance you if you've already proven that you can't afford to pay the loan off um you know if you drop the interest rate uh a half a point it's not going to drop your payment enough that it's going to matter so let's say your payment $750 a month and you're 61 to 90 days late on your current loan um and you can get a a 50 basis points drop in your interest rate and so your payment goes from 6 750 to 743 well guess what if you couldn't afford 750 you can't afford 743 and and so based on how you're handling your current loan it's not going to help you get into another loan gota so so lowering fed funds rates will not create an offramp for people who are already behind no now here's here's what I here's my fear the lowering of the Fed rate meaning also the lowering of consumer rates for auto loans is the perfect excuse for manufacturers not to adjust their msrps and and offer more affordable Vehicles so that more people won't find themselves in a situation of signing up for a car that they can't really afford that's my concern um that this this will the come down so it's like all right we don't need to lower yeah yeah we don't need to lower the MSRP because well we're we're lowering their monthly payment and we know that 85% of all buyers are are are monthly payment buyers and and that really doesn't address the real issue which is the cars are too damn expensive okay so even with cheaper interest rates they will continue to remain too damn expensive yeah they absolutely will we've got here from trivia time shorts could people refinance if their car isn't worth as much as they owe on it anymore that's interesting uh could they depending on their credit if they have good credit they can we know banks have been financ ing upwards of 150% of a car's value to people with really good credit if you have spotty credit they they're not even going to finance 100% of the car's value yeah without participation from you so yes and no it dep you know if you have really good credit yes they'll do it if you if you have less than Stellar credit no they won't yeah yeah we're going to turn to a really interesting story that we covered earlier this week we have in just a moment before we do fly Chopper fly thank you headline Falls by 600 points after inflation report reduces chance of a jumbo sized rate cut interesting interesting we do know that the FED has indicated that rates will be coming back down in some capacity who knows how low they'll go but that should be aside from the argument that you were making Dad where essentially it creates a justification to not discount Vehicles as much or lower msrps as much it should generally be good news for people because it's just it's going to yield better better monthly payments better payment terms which is better because you know if you're signing up for we've had we've seen examples of 20 plus% interest on a used car the average financing right now for a new car is over 9% average for used car is close to 14% you want those numbers to be lower oh absolutely but you we also we we want it it's a two-fold thing we want the rates to be lower and we want the prices to be lower not just one but both yeah you need both okay because when the prices remain too damn high and they have for the last three and a half years um as interest rates go up or go down it still isn't impacting the payment enough to where those payments aren't becoming more and more difficult for people to handle the update we have Dad dealership overturns produc kicks for cash contest win after making three field goals in a contest during the boiler niers produ boiler makers season opener the student was later told he was less than a tenth of a second too late we have an update here this update yeah the update is that that uh the rman group decided that they would honor the lease if the kid wanted the lease or they would just hand them five grand um and and they're adjusting the rules and regulations regarding this this program moving forward um it seems as if they caught enough negative publicity that they realized a $5,000 spend which they should have done last week before there was negative publicity if if if they would have said last week hey you did great unfortunately the insurance company says you didn't do it in the time allocated but you know what in the spirit of doing what's right and being there for our customers and our friends in the area we're going to give you the car anyway that would have bought them so much Goodwill and to do it after you tell the kid you're getting nothing I don't think that buys you the Goodwill you're hoping it would I hear you but they did end up making the right decision kudos to them for not doubling down on the wrong decision and making the right one we've got here Dad from Tammy Tammy Lo thank you Tammy really apprciate it just bought a car last week thanks to you I prepared and confident the dealership I dealt with was so honest they provided everything before I could ask for it I even got my C for a little under MSRP Yay good for you Tammy I'm glad we could help in way on car edge.com Community there's a success stories Channel Tammy if you take an interest in sharing your story with our community they would love to hear it they'll pull that up just to share with everyone there are thousands yes thousands of success stories posted over on the car Edge Community if you have a moment cared. Community you can see it right here this is the success story Channel see what other people are paying for Vehicles learn about their experiences you can see it all right here on theard and just between you and me how how much does it cost to participate in the community community forum is 100% free we've got here from Nathan thank you Nathan may not contribute on here but I bought an extended warranty from you guys and subscribe to your website appreciate your work thank you Nathan really that and a friendly reminder to folks if we can help you in anyway car.com pops we're going to call it just a couple minutes before the half hour today I got to walk over to a different office for an important meeting at 1 p.m. so I don't want to be late for that I'll be back in my normal setup tomorrow from Washington DC you'll still be sitting there in your condo like you always are and again um today's a day of you know try and try and bring some levity to it through the show but yeah really a really a terrible day just really a terrible day so um I'm gonna be thinking about that I've never been in New York City on 911 and so I'm going to be thinking about that as I go on this walk it's just it's just it's spooky being here to be honest I'm sure it is I'm sure it is go go take care of what you imagine having been here I mean it's just it's just nuts I can't even WRA my head around it was it was it was scary being in Arizona yeah um and and you know we were thousands upon thousands of miles away from where you know all the destruction was happening but still it was scary there in Arizona it was it just you had no idea and um it was it was an unusual time at best scary time anyway all right folks we'll be back tomorrow thanks pops yep thank you hansome have a good meeting