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00:00 My concern is what obviously the Cox Automotive gentleman
00:03 was saying, and Mitch has done some research
00:04 on that financing component.
00:06 Because here is the issue,
00:08 is that it is very, very expensive now to finance a car.
00:12 Give us those payments that you were researching.
00:15 - Yeah, so here's an easy outlook, right?
00:17 Let's take a look at a Tesla itself, right?
00:19 Here's a Tesla Model 3, right?
00:21 It's valued at 33,998.
00:24 It has 39,000 miles on it.
00:27 And let's take a look at what the average payment
00:30 would cost here.
00:31 So if we take a look here, down payment at zero, right?
00:34 And having a good credit score at 670 to 739,
00:38 pretty decent credit score there.
00:40 Estimated payments here, 658 to 751.
00:45 Let's just be honest.
00:48 What average American or middle-class American
00:52 is gonna be able to afford this payment?
00:55 $700 a month is the monthly payment.
00:59 - I don't care if you're saving gas.
01:01 You're not saving that much gas.
01:01 - For a $34,000 car.
01:05 $700 a month is the monthly payment for a $34,000 car.
01:10 And you wanna know something?
01:12 A lot of cars are more expensive than that.
01:14 Like, I need to start thinking about those Ford F-150s,
01:16 those Lightnings, which are running up $80,000, $90,000.
01:20 - Oh yeah.
01:21 - That would be a fun one to look at.
01:23 But I mean, it's very difficult to see
01:27 the majority of people just going
01:29 and continuing to buy new cars.
01:30 People were finding money for a while,
01:32 but eventually higher interest rates do matter.
01:35 I think it's hard to get bullish on all this stuff
01:37 until we actually start seeing the Fed actually pivot
01:40 and start cutting rates.
01:41 So I am completely out on buying any of the automakers
01:44 until I actually start to see the Fed
01:46 talk about lowering rates.
01:47 - You don't wanna buy the Ford Lightning
01:51 for $1,480 a month?
01:55 - What is it?
01:56 - $1,480 a month, Dennis.
01:59 That's all it is.
02:00 - $1,400 a month, Joel!
02:01 Who's buying that car? - That's all it is.
02:03 That's all it is, just $1,400 a month.
02:07 You might need to live in a trailer park to have this car.
02:11 - $1,400 a month.
02:14 It's a beautiful truck. - Oh my God, look at that.
02:15 - Don't tow anything with it, though.
02:17 - Look at that payment.
02:18 Oh no, it could go up to $1,600.
02:20 - Oh, to $1,600.
02:21 $1,400 is on the low end.
02:23 $1,400 to $1,600 a month.
02:25 - Holy crap, Dennis.
02:26 - Sometimes it just takes a little bit of research
02:28 to realize why Ford is trading six times earnings
02:31 or why GM is trading five or six times earnings.
02:35 You know what?
02:36 This demand is gonna go, poof!
02:38 It's going off a cliff.
02:41 You know, why are the solar stocks,
02:42 why does ENPH go down every day?
02:46 - The focus now, right, Dennis?
02:48 - The focus now, right, is not that the Fed
02:50 is gonna maybe do 25 basis points more.
02:54 I think that's kind of maybe a given,
02:56 whichever way they go there.
02:57 It's more how long do they stay at these interest rates?
03:01 Because that's what's gonna bend and break the consumer,
03:03 right, if it just stays there for, let's say,
03:06 mid-2024, late '24. - Absolutely.
03:09 - That's where I think we gotta just focus now.
03:12 It's not necessarily the change of not raising rates.
03:16 It's when do they pivot?
03:18 The good old pivot.
03:20 - And when they're trying to do a deal here,
03:22 do you think like maybe some execs at Ford
03:25 are looking at these monthly payments and thinking,
03:28 "Man, we are in as good as it gets.
03:29 "We're in the Goldilocks, you know,
03:31 "the last couple of quarters here.
03:33 "We got interest rates that are still ticking higher here,
03:36 "and now we're looking at these payments
03:37 "and we're struggling to sell the Ford Lightning."
03:40 It's like, man, you know, maybe our sales
03:42 are kind of up at peak sales right now,
03:44 and if our sales start going down,
03:46 ooh, and our labor costs start going up,
03:49 that doesn't sound good for the bottom line.
03:51 So I think there's gonna be, you know,
03:55 I think it's, right now the UAW
03:57 just keeps looking at the record profits,
03:58 and they say, "Why don't pay us, pay us, pay us, pay us?"
04:01 But I think when you look out a little bit,
04:03 I think those record profits
04:04 aren't gonna be records next year.