Aubrey Janik discusses the potential crisis in the 2024 car market and how to navigate the challenges and opportunities it presents. In this episode, car market expert Aubrey Janik joins host Andrew Brill to provide an in-depth analysis of the upcoming challenges for the auto industry. Janik, a seasoned car investor and Turo fleet owner, offers her insights into the potential crisis and explains how you can capitalize on market conditions. Discover why Janik believes the car market is on the brink of significant disruption, what factors are driving these changes, and how both buyers and sellers can adapt their strategies to protect their investments. From buying and selling cars to leveraging platforms like Turo, this episode is packed with practical advice for navigating a turbulent market.
Aubrey Janik 0:00 I'm very anti lease. Just in general, I think that in today's market leasing, it just very rarely makes a lot of sense. I understand that there is a tax play with leasing and that kind of adds a whole another dimension to leasing that can possibly make it make sense. But I just think for leasing, you're putting so much money into the lease and then at the end of the day, you don't really have anything to show for it. And so for me, leasing is in the majority of cases, it just doesn't make sense. And you know, there are exceptions like the EV tax credit can make sense with leasing businesses, but we'll kind of negate that. Andrew Brill 0:33 I like to welcome in Aubrey Janik. Aubrey has her own YouTube channel discussing all things autos. Aubrey helps people navigate the car market. But she also has an interesting way of making a bunch of money with her cars. Aubrey, welcome to wealthion. Aubrey Janik 0:54 Thank you for having me. I'm excited to be here. Andrew Brill 0:57 So just you know, let's start generally what the heck is going on with the car market? It seems to have changed since I started driving. And I'm not going to tell you how many years ago that is. But the car market has definitely changed in recent years. Aubrey Janik 1:11 Oh, yeah. I mean, it's changed, I would say more in the last like four to five years. And it probably had changed like the prior 15 to 20 years. And it's just been a real night and day difference. And so kind of the long story short, cliffnotes version is that during the pandemic, due to a variety of factors, including, you know, shortages, incentives, companies cutting back on production, there was not enough cars being produced for really kind of that 2022 Like beginning of 2021 period of time. And as a result of that production shortage really came to a head and 2021 where you know, you heard about dealership lots being empty, people couldn't find cars, cars were selling for a lot more than what they're worth, you could sell a used car for much higher than what you paid for it. And that really came to head during that time and summer of 2021, specifically almost exactly the same time in 2021. And it really continued up until really until about last year where production just did not meet demand. And as a result, car prices were very, very high. And then in the last like about year or so maybe a little bit over a year, the car market has started to very slowly but surely level off. And now you are seeing higher inventory. I mean inventory is increased new car inventory specifically has increased 55% and May of 2024, compared to May of 2023. You're seeing these lower prices. But the problem is, is that, you know dealerships really reacted to the lack of inventory a lot faster than they're reacting to the surplus of inventory. And so when in 2021, we saw prices skyrocket very quickly as a result of low inventory. And you're not seeing that dial switch back quite as quickly today. And so prices are still I think higher than they should be dealerships are still a bit unwilling to negotiate. It's very difficult to navigate the dealership process. And so we're really fighting the ramifications of what had happened back in 2021 through 2023. Andrew Brill 3:11 Yeah, there's a lot in there. And there was a ton of information, I will tell you, during the pandemic, it seemed like everybody went out and bought a car. And we were one of the things you said you could sell a car for more money than you bought it. And that actually happened to me, my son had a job in Florida, I bought a certified pre owned Honda Civic, awesome car, I just bought a second one for my other son. But we ended up selling it because he didn't need it anymore during the pandemic for more money that we bought it. So that was a great thing. But also during the pandemic, Aubrey it seemed like everyone, like you said went out and bought a car. Because I had a part time job that was about 100 miles from my house took me an hour and 40 minutes to get there and get home. And it started taking me three and a half to four hours. So fortunately, that was a lot of time for me to spend in the cars had to leave that job. But you're right. I think that you know, that was a time that was very strange for the market. And it's going to end up having to level off and you know, come back to earth a little bit. But I want to ask you about the car buying process. Now it like you said there's not a lot of negotiating you seem to walk in and like I said, I just bought a certified pre owned and when you walked in, they have an internet price. There's almost no negotiating on you have to find first of all, you have to find the perfect car. And then there's no negotiating on these cars anymore. So you know, they can have anybody selling a car because there's no salesmanship any longer. Aubrey Janik 4:32 Oh, I mean, I could write a book on this topic because it's something that I Andrew Brill 4:37 Please do. Aubrey Janik 4:38 I should. It's something that I put so much thought into because it's so annoying. I think that the car industry and specifically car sales have become that it was already truthfully kind of a bad industry like a bit skeezy and it's become just so much more so over the last couple of years and it's it's horrible. And so you have like these discrepancies of you know When you go into a dealership, not only are they not willing to negotiate, they're not transparent on pricing, they are kind of giving you the runaround. So many dealerships are offering, you know, these packages that are required. I bought a Tesla back in April, and I ended up buying it on Facebook marketplace us. But before I went to Facebook marketplace, I went to a local dealership that had the exact term I wanted, they had the price, I was willing to buy it right then and there. And we walk in and the guy puts me to his desk, I was with my husband, and he's like, Hey, before we go and show you the car, I want to let you know that we require all of our buyers to buy this $2,500 Like premier Package, which includes all of this crap. And I just got up and left. I was like, This is ridiculous. And I left and I was I told him like you wasted my time. This is ridiculous. And then I ended up leaving, and I ended up buying one on Facebook. And these, I think that the unfortunate reality is, is that because people are still buying cars. And because automakers are still making great profit. They haven't felt the need to change their dealership practices. And I do think until you know, their bottom line and their sales are hurt by these shady practices, they're not going to change. And so they're still kind of sticking to this skeezy approach that they took in 2021 because they had the power that even though this dynamic is shifting, they're not shifting back to where how things were. Andrew Brill 6:17 Yeah, I went into a dealer and they wanted me to pay for a low jack that was in the car. And I said, well, I need it. And they said, Well, you still have to pay a fee because it's in the car. But someone else had already paid for that low jack that was in the car. They didn't refund their money when they brought the car back to the dealership. So here I am thinking, oh, you know what, I don't need low jacks. We'll take it out. But I was like, Nope, I walked away from the car. So yeah, you're absolutely right. There's things like that, that we really need to look out for, I guess. And interesting. You said you bought a car on Facebook marketplace. I'm always a little nervous about doing that. I did buy a car off Craigslist once. But it was a 2000 threat. It was six years ago, I bought a 2003 BMW with very few miles on it. And I had a mechanic check it out. So how do you go about doing a Facebook marketplace or Craigslist or something like that, as opposed to going to a dealer. And you know, feeling like you're really got your clothes ripped off? Aubrey Janik 7:15 Yeah, yeah. I mean, they both have their pros and cons. And so I like I rent cars on on Turo. So I buy a ton of cars. And my my husband is a big car guy. I like cars. And so I buy a lot more cars than the average consumer. And the majority of the cars that we buy are on Facebook purely because it's just much easier to negotiate. It's definitely easier to buy cars on Facebook, if you're paying in cash, which is what we predominantly do. Like if you're financing it, it does add complexity to we're going to a dealership may make more sense. But it just the negotiating power with going through Facebook is so much stronger. And I have found that, you know, you have to learn how to do a proper ppi. So the pre purchase inspection you have to be able to feel comfortable going through and saying okay, this is needs to be fixed. This car's not worth buying, like you have to know how to look for the red flags. And that could be either, you know, doing it yourself, or it could be hiring a mechanic to do a third party inspection as well. Either way, you know, knowing how to navigate that is incredibly important with Facebook, because you know, there isn't those even with dealerships. There's not a ton of safeguards. But there are more safeguards with like a CPO, or even a just a used car through a dealership than there would be through some random person on Facebook. But you know, car sellers also get screwed from the dealership. And so you go to a dealership and you buy and you sell one of your cars, they're gonna pay you 20% less than what the car is worth. And so a lot of car sellers are like, No, I'm gonna keep my 20% and I'm gonna do on Facebook as well. So I think a lot of people equate Facebook marketplace to just a not a good platform to buy cars from and while that can be the case, it isn't automatically the case by default. Andrew Brill 8:53 Talk to me about new versus certified pre owned, versus used. Obviously you buy used through Facebook marketplace, I don't remember I sold I had a similar situation with an old car where I I didn't trade it in I actually sold it on my own because I felt like I would get more money so that and I did get more money than they were going to give me for the trade. And so but it's talk to me about new versus used versus certified pre owned. I was looking for a certified pre owned only because I felt like it had a little bit more of a warranty. I bought a 2020 Honda Civic and they give you it only has, I think 17,000 miles on it. So you get that 100,000 mile guarantee. And so and actually the one that I had bought from my older son had an air conditioning leak that they fixed for free because it was CPO. So talking about the difference between those things. Aubrey Janik 9:47 So the big difference between CPOE and I guess I'll go in order of like new CPOE and the news. So new is obviously going to be the most expensive and I think that there's always this I think wrong connotation Even with new cars were like, Oh, we want a new car, because it's going to be more reliable. It's going like we want reliability. And while I do think that new cars are inherently probably going to be a little bit more reliable right out of the gate, just because they've never been used before, I think that this idea that like, you can't get a reliable car that's used, it's just very, it's very false. And a lot of people I think, get that wrong, especially non car people, like you hear, oftentimes, people say, like, oh, well, my family gets rid of a car every four or five years because of reliability. And that just isn't the case. Up until I got my Tesla, my daily driver was a 97, former owner that was and still is very bulletproof. So it all depends on the car and the maintenance. But with new cars, you have that aspect of, you know, warranty, you have the reliability that people associate with it, but you have the massive depreciation that you're going to have as a result of that. And for that reason, I think in 90, really like 98% of cases, getting a new car just simply doesn't financially make sense. Like you can put your wants into it, and maybe justify it that way. But whenever we look at the numbers of the situation, new cars very, very rarely make sense. I think one of the exceptions, and there are a handful, but one of them would be like a Toyota, foreigner, Toyota, foreigners, they don't depreciate at all, really, they hold their value extremely well, if you really wanted a foreigner it could make sense to buy it new. But then we go into the you know, the CPO in the US, which is I think, you know, the best case scenario is you buy a three year old car that is already depreciated, you had somebody else absorb that cost, and you come in and own it. And you can do so in a really I think financially sound manner. Now the difference between CPOE oftentimes is there in it depends a little bit on manufacturer, but it comes down to the warranties that's offered. And then also like the reconditioning and so with CPOE, a car has to meet certain set of standards for it to be certified pre owned. And automakers actually kind of changed this a bit during the pandemic, Honda was one who kind of notoriously expanded their CPOE offering I don't actually know if they like limited it back, I need to check into that. But they made it so that the I believe it might have been 10 years, I can't don't hold me to those exact numbers, but they changed their CPOE to be significantly older than it was before as a way to accommodate to the changing car market. And so I do think that CPO in some ways has has maybe lots of lost its meaning a bit just because of the fact that they are accepting older cars. And I think that this reconditioning that they say can be a little bit, either misleading, or maybe just not as important as they make it seem, I think, especially with third party warranties and account like you can get warranty even on a regular used car. So you know, I think that CPOE has has merit for sure, I think that if you aren't a car person, going CPOE can maybe provide you with that extra bit of just confidence going into the deal. But I personally wouldn't hesitate getting a non CPO car and I wouldn't like advise somebody to not buy a non CPO car either. I think that it just kind of depends on the deal. Andrew Brill 12:55 So you obviously are a seasoned professional and picking out the red flags. And you're going out there and buying a just plain old used car. How does somebody educate themselves into those sorts of things? Aubrey Janik 13:06 Yeah, that's a great question. And I think that it's I think that it's a topic that a lot of people just are really daunted by I'm actually working on a course right now that goes over that, because I think it's such a big problem in the market. But I think a lot of it comes down to education and going out and searching for the information, which I know is so much easier said than done. So like YouTube is a great tool. I mean, I make videos about it. But there's so many great creators on YouTube that talk about you know, what to look for when buying a car, what to look for, like for price for a PP, ppi. Really the entire purchase process red flags to avoid how to negotiate. I mean, there's just a plethora of information on YouTube alone that goes into it. One strategy that we also use for cars that we have never purchased before is like Facebook groups nowadays, there's Facebook groups for every type of car out there. And so if we're looking for, for example, in November, I purchased a Lincoln Navigator it was the first time I've ever owned a Lincoln. And so we went on to the Facebook groups and we like asked owners like what their thoughts are we we searched through the threads we figured out you know, what are the common problems with this type of car. And we are able to kind of weed out which models we wanted which we what we needed to look out for. So Facebook groups are a huge tool as well. And then I find kind of the third and probably the least valuable is like these typical consumer reports type of things so like like Consumer Reports cars.com KBB. But so often, you're really going to learn just so much about talking to owners who either have driven the car or currently own the car as well. Andrew Brill 14:36 What am I looking out for when I look walk into a dealership? I know that you obviously don't go into dealerships? I feel like I need to take a shower after I leave. But what what am I looking out for I you know, the dealership that I walked into? I saw a guy sitting at a desk that had a drill on the desk wearing a polo shirt. I thought he was a maintenance guy and three guys in suits that didn't seem to want to help me and my son And but it was the guy in the polo shirt that not only was great. And he showed us two cars, they said these aren't the cars for you and showed us a third ones that this is a fantastic car. Now, what am I looking out for when I walk into a dealership? Aubrey Janik 15:13 Yeah. So I think I think that there's a few layers to that question is like, there's kind of the personal wants versus like, what is the flight crux of the deal? And like, what do you need to look out for from that regard? So we did, we've purchased in recent years, two cars from dealerships, the majority of them are through Facebook, we purchased the Lincoln actually through a dealership, and then my husband has a pretty expensive GT 500 Mustang, which he purchased at a dealership as well. And I remember whenever we were searching for the Mustang, it's a near you know, it's about a $95,000 car. So it's, it's expensive. And whenever we were looking for that, if he felt like the dealership was being kind of dismissive to him, he would leave immediately. He's like, I don't want to do business with somebody who isn't going to treat me with respect. And so that was big for him. Personally, I feel like I feel the same way as a woman, like, I don't want to go into a dealership and feel as though the salesmen are being condescending. So I think there's kind of that personal aspect to it, like, Who do you want to be working with, you're going to be making them money. And I know, I don't want to help make people money, who I feel like don't deserve it. And so I will go to a dealership that treats me fairly. And, you know, I feel like I'm being treated, right. So there's that perspective of it. But then whenever it comes to the actual deal itself, I think, you know, there are a few things that I look out for is one RV being forthcoming with the price. I think that that's a big thing. And I think it's such a big problem in today's market, I hate the idea of, you know, let's wait until we go like, why don't you test drive the car first? And then I'll tell you the price or like, why don't we go sit down and then I'll tell you the price. Just tell me the price. And I think that's a big one. willingness to negotiate is another I'm not paying your advertised price. End of story. If you're unwilling to negotiate even just a little bit. To me, it's just you're not worth doing business with. I'll wait until a dealership is willing to do that. And I think that's one of the things that's so. So I think we strange about this current car market is that there's so many dealerships that aren't willing to negotiate like the ones that you mentioned earlier. But then there are a lot that are and so to me, it's like okay, I'm just not going to go to the ones that aren't willing to negotiate like I'm not going to pay over just because you guys are stuck in your ways. Find one that's willing to negotiate. So that's another factor as well, the willingness to negotiate transparency with pricing. And then of course, you know, the type of car that you want as well is, no matter what dealerships want to say the inventory situation is significantly better than it was in 2021. Like there's no comparison. And so I think a lot of times dealerships want to try to convince car buyers that hey, there's, there's like, yeah, this car might be more expensive, but inventory is tight. And so if you want the car today, you have to get this more expensive one. But that's not the case. There are a ton of new cars out there. There's a ton of good ones available to buy. So you should also make sure to be patient for the one that you want, and don't fall into the pressures that I think a lot of dealerships like to give their customers which is like it's either this one or nothing type of thing, which I think far too many dealerships do. Andrew Brill 17:58 Yeah, there's a lot of hidden fees. One person one dealership wanted me to pay a like a $1,500 CPO fee, and another one didn't like I don't understand it's the same Honda deal, not the same Honda dealer, but the dealer. So I didn't understand why one would try to charge me a CPO fee and one didn't. So I obviously went to the one that didn't. But how important is checking out the CarFax and can you trust the Carfax? Aubrey Janik 18:27 Oh, I mean, I think whenever it comes, Well, I guess so I guess there's kind of two ways to answer the question is like, what are you doing with the car if you are? Well, there's a slew of issues that can come up with like having a rebuilt, titled car that you maybe didn't know that was rebuilt. But I think if you're aware of that possibly getting a rebuilt car may not be the worst thing ever. But I'm going to assume that anybody watching this doesn't want to rebuild car in which case checking Carfax is incredibly important. I mean, this is even more so true whenever you're talking about Facebook sellers, because it's so much more common on Facebook than it is in dealerships. But you have, you know, the issue of a total loss, rebuilt title rolled back mileage having more owners and they said it did. And while some of these issues may not be deal breakers, like if somebody tells me that a car is a one car owner and I check the CarFax and it's actually a four car owner, that probably isn't going to deter me from buying the car depending on the car. But it certainly will affect negotiations. And I remember a couple years ago I went to go buy a car for Turo and they had said that it had like 124,000 miles. And I checked and had 240 Like it was significantly higher than what they had said. And so like Turo aside, even if I was just buying that car for personal use, I'm paying significantly more for that car because I think it's 125,000 mile car when in reality it's 240. And so Carfax is just so incredibly important to run. I think that everybody should do it if you're buying a car. And I think in general Carfax are is very reliable. I mean they have the Carfax guarantee, which is I think a big plus but then Carfax is also I think more than any other car vehicle history report. It's viewed more as the standard. I mean, if you go on like the NHTSA website even which is like the National vehicle database for like recalls and issues with vehicles, you will find information that may not be depicted on the Carfax. But if you look at the Carfax dealerships use Carfax Turley uses Carfax, it's kind of viewed as like, sort of like how like Band Aid versus bandage like how or like jetski versus like these things that we associate the brand with the item, I think Carfax is the same way like people view the Carfax as the vehicle history report. But in reality, the vehicle history report can be distributed by a lot of different companies, Carfax is just the one that's kind of most commonly known for it. And they are, in my opinion, the best and most reputable. Andrew Brill 20:40 As someone who buys a lot of cars, do you check out a vehicle history report before you purchase? 100%? Aubrey Janik 20:45 Yeah, I'll do it before I even go to the car. Andrew Brill 20:50 Now, how reliable you see all these cars.com Carvana car Max, it's almost like buying a car without seeing it, they say they'll ship it to you. It shows up on a flatbed and you know, it comes to your front door, how reliable are these type of places. Aubrey Janik 21:07 So I think it can be a hit or a mess. And so I've purchased a couple of cars over the years, sight unseen, the my husband's GT 500 was one of them, and so is our Lincoln actually. And I think, you know, with Carfax, or I'm sorry, Carvanha, they do have the guarantee. And so I think that Carvana from a price perspective, I think you can find better deals like I wouldn't lean on Carvanha is like the end all be all best deal provider. But they do offer a guarantee. And so I have never heard personally of instances where Carvanha didn't like uphold that 30 day money back guarantee, or whatever it is, might be seven days, whatever it is. I've never heard of these major companies not coming through with that I have heard it's difficult, like you do have to jump through some hoops in order to get it. And so I think as long as you're like willing to accept the fact of like, okay, if this car doesn't come to me, like I expect it to I want to return it, I think it's fine. I think that buying a car sight unseen is okay in a number of occasions. But I would expect or I would encourage you to get a PPI done by a mechanic. And so in the case of the two cars that we've recently purchased sight unseen, we actually paid the dealership, I think it was like 200 bucks. And in both cases that were Ford, because Lincoln's word as well. And we paid a Ford dealership to actually like go to the vehicle, or we had to ship to the dealership. They did a ppi, they sent us an intense report. And then we made the decision off of that I would never consider buying a car sight unseen, without some sort of tangible evidence of what that car's condition was at the point of purchase, whether that's from an independent party, like a third party dealership, whether it's from Carvanha themselves. I think that PPI is very, very important. Andrew Brill 22:47 Alright, so now let's talk about the cash in your pocket and lease versus finance versus pay cash. Aubrey Janik 22:56 Yeah, so I think I'm very anti lease. Just in general, I think that in today's market leasing, it just very rarely makes a lot of sense. I understand that there is a tax play with leasing. And that kind of adds a whole nother dimension to leasing that can possibly make it make sense. But I just think for leasing, you're putting so much money into the lease, and then at the end of the day, you don't really have anything to show for it. And so for me, leasing is in the majority of cases, it just doesn't make sense. And you know, there are exceptions, like the AV tax credit can make sense with leasing businesses, but we'll kind of negate that. I think for most people, that leasing just doesn't make sense financially. Whenever it comes to financing and paying cash, I think it comes down to just like the math aspect of it, which is can you get a low enough interest rate to justify financing that? Or would the term be short enough to where even if it was a higher interest rate, it wouldn't be a big deal. And so for and I also think long term goals also makes an impact is like what do you plan on doing in the next year with your money, like, for example, whenever I bought my Tesla, I bought it in cash predominantly, or almost solely because of the fact that I knew I wanted to buy a rental property at some point this year. And I knew that if I financed it, it would be a negative on my credit, and I didn't want to risk that. But if you have no plans to make any large purchases, and you get a solid rate, I think financing it is fine. I also think that a big portion of the equation, which I think a lot of people don't talk about is the value retention of that car. If you're buying a you know, 2024 Audi that's brand new, and you're financing it, I think that's a terrible financial decision because it's going to lose value, it's probably going to be a bit of a high rate, especially in this market. It's going to be high monthly payment. But if you're financing say a, you know, maybe a Toyota rav4 or even like BMW has have been holding their value fairly decently you finance something that isn't going to depreciate the same rate. Even if it's for a longer term. I think that's a much better play then financing one that's going to depreciate so that appreciation play also comes into account with financing which I think a lot of people forget. Andrew Brill 24:55 How valuable are sites like Kelley Blue Book, I know that I went I looked at you Do I checked out what my car should be? And they give you a range. And they also tell you a little bit about the car, how reliable are those sites? Aubrey Janik 25:09 I found that they are. So I use KBB quite a bit. And I think the thing about KBB, that is just a big factor here is that everybody uses KBB. And so like KBB, can almost swing the value of the market just because people use it and mean, I come across weekly people saying, well, the KBB value of this car is blank. And it doesn't even matter if that's the actual value, they're gonna go buy it, because KBB is reputable enough to where they almost set values in a way. So from that perspective and loan, I think you should be aware of what KBB values are for a car. But the problem with KBB is that there is some nuance to like, what is what goes into that value? Is it excellent is it, you know, good. And it's like what is excellent, like my excellent might be different than your excellent. And so I think it is a good tool to use, I think you should be aware of it. But I also think looking on Facebook marketplace and cars.com. Even if you're not going to buy a car and cars.com and Facebook marketplace, looking at these third party platforms and seeing what are these cars actually selling for, that's a big indicator as well. And so for example, going back to kind of my Tesla purchase, is I knew going into my Tesla purchase that Tesla's were being dropped in price left and right, I knew that the ones online weren't selling, they were being discounted, they were being, you know, sitting at lots for weeks, if not months at a time. And so it didn't really matter that the KBB might have priced my car at 32. I knew that if somebody really wanted to move that car, they needed to be closer to 27 or 28. And so I the way that I view KBB is it is one of the many tools that you absolutely should use. Andrew Brill 26:36 What are some of the others? Aubrey Janik 26:37 I think kind of going back to what I mentioned earlier, I think Facebook Marketplace is a great one to see what people are doing are pricing their cars and and what kind of cars are being listed. I really like cars.com, I think cars.com is a great one, because on cars.com. If you click on the car and you scroll down, there's typically a graph that shows how long this car has been listed and how many price reductions it has had. And so that gives you some great insight as well. And then even looking at things like CarGurus has a service called CarGurus used vehicle value index, you can see how different listings have trended in the last 3060 90 days. And so those are kind of the top ones that I typically look at is KBB, cars.com, Facebook and then CarGurus. Andrew Brill 27:19 So you have a Tesla electric vehicle, and obviously have some gas powered cars. Yeah. Do you see the Evie market really, it has taken off, but obviously went through a dip, you see it picking back up again. Aubrey Janik 27:35 Um, I don't think it will ever be where it was. So I think like the days of, you know, going through like back in 2022, Tesla's were selling for more views, they weren't new. My brother in law had a Tesla Model y during the pandemic, he ended up selling it for five grand more than when he bought it for a year after he bought it. So those days are over. I'm a strong believer of that. And, you know, I think that I think that EVs probably will become a bit more in demand than what we're looking at today. Like I don't think that the like people will get more confident with EVs. I feel confident about that. But the thing that I think will need to be taken into account is I do think that EVs like the amount of them available will also increase. And so even if we see higher demand, we'll see higher inventory. And so you won't see the difference in the cost. And I think that they will always just I think for the foreseeable future, I think EVs will continue to depreciate poorly. And I think as a result, it's going to bog down the entire market. And not only does it have to do with you know, consumer, consumer, just being nervous about EVs, it's also going to have to do with the fact that EVs are still so new, that they're changing so much over time. And people, they're just not going to hold their value as a result. I think long term plug in hybrids are probably where the market is going to be trending. Toyota has been kind of touting that for a few years now. They've been very skeptical of EVs, and I'm in the camp of Toyota, I think that just for the foreseeable future, and I'm talking probably 10 to 20 years, I think that plug in hybrids are just where people are going to feel more confident. Because even me, I love my Tesla. I've been incredibly impressed with my Tesla. I got it because I wanted to see what it was like buying an Eevee. But if I didn't have access to other gas cars, there's zero chance I would have bought an EV. Andrew Brill 29:15 So how many cars do you own right now? Aubrey Janik 29:19 33 total. Andrew Brill 29:21 All right. Talk to me about that. I know you have a unique way of making some money. And look, I've rented cars and I've seen Toro as one of the options. Yeah, I have not used it yet. So I'll be honest about that. But I know it's out there. So talk to me about how that works. And 33 vehicles. I think I have three now and I only drive drive one of them at a time. Obviously my son has the other one. And one sits in a garage that I only use during the summertime. So talk to me about how you make money with Turo. Aubrey Janik 29:52 Yeah. So my husband and I have a Turo fleet. And for people who aren't familiar with Turo, it's sort of like an Airbnb but for cars and so you rent out car goes to people they pay you. And then there's like a slew of other things that go along with it. But that's a very summarized version. And so we own a fleet of amongst those 33 Cars are also our personal cars as well. And so I think 29 is actually zero cars. But the way that it works is you just like you have these vehicles and you rent them out. And if you've ever looked on Turo, you probably see that like, there's a lot of different types of cars, you have people who kind of get the new sexy car like the cybertruck is a big one right now. But then my business model is sort of the exact opposite, which is normal everyday cars. And so I go after you know, Mazda's Honda's a lot of Toyota's Ford's, and my kind of whole play is really kind of diving into what I've spoken about on this on this discussion is, you know, going after cars that have already depreciated buying them and cash renting them out, and then either selling them or they eventually get totaled, and kind of rinsing and repeating that, and I've been doing that since 2017. Andrew Brill 30:55 And how do you make money with that? Obviously, is there a Turo site is how did you get set up? Aubrey Janik 31:02 Yeah, so you can make money a few different ways. But I would say the kind of main ways is like you do go on turo.com. So it's just like Airbnb in the sense that like, you go there, you set up a profile, and you list a car. And then from there, you have a daily rate. And so you set the daily rate based off of the car that you're renting, as well as market demand. And different markets will have different prices for different cars. And so you listed and then people rent it. And so you get money from like the daily rate, you can also do extras. And so for example, in my cars, we offer children's car seats. And so that's like a fee that you can add, but you could do like beach equipment, I think bikes is an option. There's like a handful of like a catalog that you can choose from. And then there's things like you know, you get a convenience fee for gas, which is $10. But it does add up and then a big area where you can potentially make money is also like off of the play of buying the car. And so that's one thing that I talk about a lot on my channel is that with Turo, you not only make money off of the front end, so like renting out the cars. But if you buy the cars at the right price, you can also make money off the car itself, either, you know if it gets totaled, or if it ends up needing to be sold. And so if you buy cars that already have depreciated, you buy them at below market value, you can then make a pretty good profit, like off of that vehicle sort of as if you're flipping a car type of thing. Andrew Brill 32:16 So in the last seven years, you've bought and sold cars have you bought them for Have you sold them for a little bit of a profit, or you're just looking to get your money out? Talk to me about how you sell those cars that you've been renting to people. Aubrey Janik 32:30 Yeah, so typically, so my business model specifically, and you could go a few different routes, so you could do the kind of buying, renting and then like aiming to sell. For me, we typically only sell if there's an issue with the car and like the car is creating a problem either maybe it's just getting too old, the guests are starting to notice or it's like having mechanical problems. And so our business model typically doesn't involve like it's not revolved around selling, but we obviously do, because it's just part of it. Our big thing is we want to buy cars at the right price so that if they do get totaled, we're not losing money. And so like a good example of this just recently happened in the last month, we had a 2000 I think it was a 13 2013 Mazda three, which was we bought in 2021. We bought it for about six, I think 6000 It might have been 65. And it was totaled last month. And we paid out about 8200 for that. And so we ended up making money off of the car, because we bought it at a discount. And so our goal is definitely to make money off of that, whether it be through the sale or through the total loss. But you know, it doesn't always shake out that way. But across like the I think we've owned over like 53 cars over the last seven years, we've never actually lost money off of a total loss. And the only time we've lost money on a sale was recently with a Honda Civic that we had to sell because of maintenance issues where we lost $200. And so we do try to kind of limit that downside by just buying the right cars. Andrew Brill 33:52 And how often do the cars get rented out? Aubrey Janik 33:56 Oh, I mean constantly. And so right now, like, as I'm recording this with you, we have one car here at like at my lot, and then all other ones are being rented. And then we will have like cars that are in repair in cars that are like needing maintenance done. And so to have just one car that's available like that isn't being rented is I would say a bit rare. Like there's typically like one to two cars being repaired as well. But for the most part, I would say 90% 90 to 95% of the fleet is rented out at any given time or is like being prepped for next rental. So like there's obviously downtime between one rental and the other. But it might be that like a car gets returned this afternoon, and then it goes out tomorrow afternoon. And so I would say quite a lot of our cars who vast majority of them are either in a state of being rented or are in the state of being prepped for the next rental. Andrew Brill 34:40 And what is the overhead like with Turo obviously, you clearly make money doing this, but there has to be some So besides the the cost of the car insurance and maintenance what else what other overhead is? Aubrey Janik 34:53 Yeah, so it depends a lot on the type of operation that you have. And so you I mean if you talk to 10 Different Turo host especially the large joins, you're going to get probably 10 different strategies of how these hosts manage their overhead. So there is like going to be parking and a lot is going to be one, or like an office space, people oftentimes will either buy shops or they'll buy like a lot in your airport or rent one out, we actually have a different strategy because we're targeting local rentals with normal cars. We don't go after like airports as much we do sometimes deliver to the airport, but we have our lot in a pretty residential area. And so we actually just rent four spaces in a commercial lot. And that's kind of the rotation that we have with our cars, because our cars are so often rented. You just those four spots are fine. So for us overhead is actually really low, because we do the work on the cars itself out of our house, and then we store them on a commercial lot. That is it 200 ollars a month for the four spaces. And so for us that works out well. But overhead with things like insurance and maintenance can be significant. And so that's where buying the right cars is super important. Because if you were to buy a bunch of cars that break down a ton, you're going to be just in in over your head with maintenance costs, it can get overwhelming. So it kind of it comes like all these different pieces of the puzzle have to come together in the right way to make sure that you can make money. Because otherwise, you know, insurance can get expensive. overhead. I mean, a maintenance and repairs can be a lot if not being taken care of you do have the parking you also have the comp component of like staffing. So like what is your business models where you can limit your staffing and turn like any business is a game of you know, limiting the overhead. And if you let it get too far ahead of you, you're going to fail. And I've seen it happen to a lot of hosts over the years who just inflate their operational costs, and then they end up drowning. Andrew Brill 36:39 And how do you go about insurance? You have to you know, it's clearly not regular insurance that you have to buy for this car. Aubrey Janik 36:46 Yeah. So there's kind of two schools of thought is you have have like the gray area of insurance. And then you have like the proper way of doing it. Obviously, like with me having a public platform and having 33 cars like I have commercial insurance. And so I go with a company called ABI and they have like a Turo segment of their of their insurance arm called ABI period x, which is actually an insurance arm specifically designed for turbo hosts. So that's the route that I go down. And there's a few other offerings out there. It's actually been a real pain point for turbo hosts the insurance route because there's just not a lot of options. And so ABI is one you can go like with traditional commercial insurance one providers GMI, which also offers insurance for Turo hosts. And then there's a new offering called tent, which I've heard if he thinks about, but then you do also have hosts who just ensure on their personal policy and hope that their insurance company never finds out. Because turtle offers protection packages while the car is being rented. You do limit your downside by doing that. But of course, it's definitely a gray area. And there's a there's a point where you're kind of being a bit too risky with it. Andrew Brill 37:48 And where do you advertise? Where do you let people know hey, look, I've got a car for rent, because I've seen it and I can't remember if I've gone on hotwire or other other rental sites where I actually see a Toro car for rent I've never gone that route like I said, but I have seen it. Aubrey Janik 38:04 yeah so whenever it comes to like those types of like third party platforms where like you can actually click on it like a like a kayak or hotwire type of thing. Turo actually is the one who does it for you. And so they are they're actually not advertising like a specific host car saying, Hey, we're going to advertise apres car and kayak. It's just like this segment of vehicle and then you can click on it, it'll take you to the right car. But for the most part, you know, there's a few types of marketing that you can do. I'm a big proponent of like many platforms out there. I think YouTube being a great example of one they are going to be the best advertiser for you like you can promote your YouTube video all you want, but like unless you're adhering to what YouTube views is like a good video you're not going to be pushed and it's the same thing with turbo like you can advertise as much as you want. But if you're not doing what Turo views as like a strong profile, you're not going to get as many bookings and so I'm a big believer in making sure that your settings are advantageous to get as many as possible so things like you know through a one hour advance notice three hour trip buffer time so the time between trips being available as often as possible limiting your calendar blocks, but I do know of hosts and I've never personally done it just because I've never had to but I do know of hosts who will go to like local shops and give them business cards who will kind of network with local dealerships places that may not have a you know designated rental car like arm and to say, hey, if your customers need a rental car, here's a route that you can go down or going to like parts players like O'Reilly's and Autozone those types of things. Andrew Brill 39:28 So can I go to the Turo website and see cars that are for rent? Aubrey Janik 39:34 Yeah, for sure. So you go to turo.com and then you type in your location and then I believe you have to type in the timeframe as well. And so you type in the timeframe, your location and then all pop up cars and you can also customize like, what is the time that you want to pick up you want to pick up at nine you want to pick up at 6am midnight and then it will give you different results based off of you know what your what your parameters are. Andrew Brill 39:55 Is there a difference between urban and rural rentals? Turo I mean, that difference in price, but difference in size, I guess. Aubrey Janik 40:04 For sure. I mean, just like any business, you know, if you go into New York or in Dallas or LA, you're gonna have a lot more population versus like the middle of Nebraska. And so there's going to be a different set of demand with that. I think it also depends on like, what types of cars you're renting. So I'm a big believer, and I always tell people like you should know your market really well. Like I live in Dallas. And so I know the Dallas market, like the back of my hand, I know what cars do. Well, I know what settings you need. I know the areas that my renters are coming from. I know it very, very well. But if you were to say like, Hey, what exactly should I do, and you know, Omaha to make it work, I wouldn't know the exact details, but I may have a good idea. And so in the case of like, let's use Denver as an example, like Denver, you would probably want to have four wheel drive, like you probably wouldn't want to get a convertible, an SUV would be a good option. And then in Miami, like it's the exact opposite, you probably would want to convertible. And so it depends on who you're targeting, as well as where you live. And like what the socio economic background of the people who are you're gonna be renting to. It also is important as well. Like, if you're in a lower income area, you probably don't want to rent like $150 a day car and so all of these pieces come into play for sure and have a heavy impact on you know, what cars and what the markets gonna look like. Andrew Brill 41:18 Fascinating. So you can actually be a fleet owner like yourself and make a good chunk of money. I'll be thank you so much for joining me this was extremely informative, both on the car buying side and how to make money with with cars. I never, never imagined that it would be. I mean, you make it sound easy. I'm sure it's not that easy, but I'm sure it's you know, it's a ton of work, but you make it sound like it's not only work but fun. So Aubrey Janik 41:48 Oh yeah, yeah. Andrew Brill 41:49 Find that find the gems, if you will. Aubrey Janik 41:51 Yeah, it's a great business. I mean, I'm I like it and I like the car market in general. I think that the car markets, an interesting just segment of consumerism. And so I think that the entire thing is just fascinating to me, but thank you for having me. It's It was great to join you today. Andrew Brill 42:05 Tell me about your YouTube page and where we can find you on social media. Aubrey Janik 42:10 Yeah, so I have a YouTube channel. I actually have two I have a like informative desk Style channel that's takes place where I'm sitting now and that's just under my name, Aubrey Janik. So youtube.com/aubreyjanik. And then I have a vlog that kind of walks through more of the day to day of our Turo operations that features my husband as well. And so that's titled Aubrey and HP. You can also find me on Instagram and Tiktok, Aubrey dot Janik for both. Andrew Brill 42:33 Well, thank you so much for joining us. It was a it was a lot of fun. And hopefully, we got some more Turo people or people that might be looking to build a fleet. I know I'm in here in New York City, but we have we have viewers all over the world. So we'll, we'll hope that they give it a look and follow you as well. Aubrey Janik 42:51 Awesome. Well, thank you so much for having me. Andrew Brill 42:53 That's a wrap on another discussion here on wealthion. thank you for joining us if you need help being financially resilient, please head over to wealthion.com and sign up for a free no obligation portfolio review with one of our registered investment advisors and remember to follow us on social media for the latest news and information to help you invest wisely. And if you could like and subscribe to the channel, we'd greatly appreciate it and don't forget to hit the notification bell so you can find out when we post new videos to the channel. Thanks again for watching and until next time, stay informed, be empowered and may investments flourish. And if you like this content, please watch this video next.
