It's about 800,000 square feet, the largest Honda dealership built in America. Cause we've always believed we were gonna be number one. A gas station, barbershop, an actual courthouse. Three surprising things that can be found at one of the nation's top Honda dealerships. But the real secret to building one of the most successful dealer groups in the nation, philanthropy and lots of it. Today I'm speaking with Rita Case, CEO of the legendary Rick Case Auto Group based out of South Florida. Don't forget to click subscribe so you never miss an episode.
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Read a case on the CDG podcast, read a welcome. Hey, thank you very much, Ose. How does a husband and wife duo, two car dealers get to be number one in the country? Yes, we had a lot of fun the whole way. I was very good in one area of the business. He was very good in another area of the business. So that was the first key to our success. I was really involved in the office, parts and service, human resources and building that part of the business to structure the operations. And he was about how can I sell more than anybody else? So we both had different directions and that made a very good combination for a very successful partnership. We both wanted to be the best we could be what we were doing. We respected each other. That's I think is key.
But when it came down to compromise, we would make a list. He would say what he thought was, and I'd say what I thought, if there was a tie, he always won. I always let him win. But, and that was okay. That was just the way the partnership worked. And how many years did you and your late husband rake? How many years did you work together with? Actually, when we met, which was in 1977 at a 120 group meeting, we ended up getting married in 1980. So I was in Santa Rosa, California. He was in Akron, Ohio. So we never lived together or anything. When we got married is when we started our actual, married life together. So it was since 1980, we've been together and building our business together. Wow. So you worked as a husband and wife duo for 40 years, roughly speaking.
And I wanna ask you about that, but you also came from a car dealership family. Is that correct? Well, my dad was one of the first Honda motorcycle dealers in 1959 when they came to the country. And in 1968, when Honda decided to bring a car to the United States, they offered it to their motorcycle dealers because that was their network. And my dad was the first assigned Honda automobile dealer in the country. So he's dealer number one. And that was in Santa Rosa, California. The dealers originally, the car dealers were originally given to California dealers cause Honda was based in LA, their motorcycle division. And that's how it started.
So my dad was a motorcycle dealer. He ended up becoming a Honda car dealer in 1968. I started selling Hondas when I was in high school because it was such a small little car. If you remember, the engine was less powerful than some of the Honda motorcycles produced at the time and it was the smallest car presented in America. It was even smaller than the Volkswagen Beetle. So I was selling those in high school and after school, my parents shot. So that's how I got my car. So I started with my car, but mainly we were selling motorcycles. It wasn't until the oil and bar go that the Honda product really took off. Same with Datsen and with Ljoda. So this was meant to be, right? You came from a family with selling Hondas. You married a Honda dealer. I mean, this was all meant to be. And what years were you the number one dealer nationwide? Well, Rick was the number one in the 70s. He was the number one dealer at Akron and Cleveland in the country. And then as the dealerships in LA continued to grow and think, but he had even been number one in the country in the, in some of the years in the 80s, but not in the late 80s, more in the early 80s when the accord first came out in 1980. And then we then ended up getting the franchise here in Fort Lauderdale in 2002.
So when we opened that dealership, we were number one in the country in 2003 and we're number one right now. So you're number one right now in Honda today, presently? Yeah, today was the number one volume dealer year to date for Honda 2024 with the number one volume dealer for Volkswagen. And we have been that consecutive years. So yeah, most of our franchises are in the talk. We're number three. That's incredible. And we're number, we're number three of the Hyundai number seven with Kia in the country. That's incredible. So I want, before we get into the business side, I think you bring a very unique perspective here as having worked, you know, as a husband and wife duo for so many years. I wanna just first like car business aside, do you recommend this to people in general, working with your spouse? There's, you hear so many like negative things and then there's people that are like, oh, it's no, it's great. Like what's your take on this? Wow, that's a great question. I really think it has to do with the each individual person's passion. If you're a person that doesn't really, just wants to support your husband's career and to be that person that's a support to that career, that's one kind of relationship.
It was different than my relationship. I wanted to win at what I was doing. He wanted to win at what he was doing and we both happened to be in the car business. So I supported him, he supported me, but that wasn't how we really operated. We were both had different goals and different directions and different past, different passions, but they just came together to make one dealership operation. So I really think it has to do with the two people and what they're trying to get out of their careers and the relationship.
I mean, I think that makes sense, right? Like self-awareness. And so I guess what you're saying is like it's situational and we shouldn't just like draw a hard line black and white. And look, I'll tell you like from my perspective, right? Having grown up in a family business. It was, I mean, the highs were high, the lows were low. It was, there's some things that are obviously tougher about being in that environment. Whether you're in, by the way, whether you're an employee or you are a family member, right? It's just a different type of operating environment when you're operating in a family business. But I think NetNet brought me a lot of lessons for life, just problem solving and navigating really getting a level of emotional intelligence. I think it helps you develop that as well.
Well, I mean, I was the dealer's daughter for so long. I was always discounted as just being in the meetings because I was Bill Manley's daughter. So people didn't even give me any sort of respect or any consideration. I was just the dealer's daughter. I was there because the dealer was there and he brought his daughter along. And then after I asked my dad to leave and let me run the store by myself because that was never gonna happen with him there, then I met Rick and I become the dealer's wife. I started all over again. You have to, in order to get respect at the level in which you might personally desire, you've gotta earn that respect. And it's much more difficult when you're the dealer's daughter or the dealer's wife, opposed to being not related to the dealership owners or the dealership leadership.
Yeah, well, obviously we know the industry term PhD. Papa has a dealership, but we haven't heard that industry term had, husband has a dealership. That's a new one. No, but in all seriousness, I mean, I think that, I love that line of chips on shoulders, put chips in pockets, right? It's like, it seems like just hearing you talk, it seems like you had this chip on your shoulder and you wanted to prove yourself. And to me, at least from the first, I had a five minutes of this conversation, that was likely a big driver of your success. So with that said, I do wanna move forward. And I wanna talk a little bit about just your operations today, your business. What does that look like today? And how have you reinvented yourself for operating, right? Since your husband passed, there's been obviously a transition in operations. I'm curious to know how you operate today.
Well, when my husband had, what my husband did, what Rick did for the company was the advertising, the manufacturer relationships, these sales side of the unit sales, vehicle sales. And I worked on parts and service personnel, like you said, the financing, that side of it. When he passed away, it was right in COVID, 2020. We regrouped with my team, because I did have, you know, it was running all these dealerships and I did have long-term people that was always really a positive. When he passed away, we all got together, we decided all the things that Rick did for the company. And we figured out who was gonna be best to help me with those areas.
And fortunately, I had a 16 year CMO for marketing. I had a 15 year sales leader. We had all the people that we had were long-term in our corporate office. There's seven of us, there's not a lot. And we all just regrouped and we, and for 35 years, he worked for one guy that produced all of our spots. We always, we didn't have an ad agency. We've never had, Rick was our ad agency. His brain was our ad agency. And we produced our own team, Rick and I were on all the TV spots, we produced our own radio spots, we did them ourselves, we did our own newspaper.
So we worked with one gentleman who did that production for us. So after he'd been working with Rick for 35 years, we, it was pretty much, you know, the car business is the car business. We're not really got a new message. It's what's your payment, what are the new models? So he took over that advertising for us to continue that. So our operations really haven't changed much. We haven't added any more people. We just continue to do what we knew how to do.
So I wanna break that down a couple, a couple of different segments. First of all, you mentioned that he was sort of the visionary with respect to marketing, right? And we know we're living in times where competition is more brutal than ever. There's crazy consolidation in the industry and marketing, brand positioning, what you offer as a dealership, in my opinion, is more important than ever. What have you done in the marketing front since he's passed? How have you handled that? How have you, you know, really focused on pioneering and continuing to be a leader in the market from that perspective? Well, before we passed away, we were seeing on TV and in all the ads and in all the radio as Rick and Rita. We were a team and we were in all the commercials. We were a family owned and operated dealership group.
And we built a community around that brand. All of our stores are named the same thing. They're all named Rick Case. So when Rick passed away, I brought my two adult, our two adult children. We have two, Rick and I had two children, have two children, I should say, I'm sorry. And we brought, I brought them in immediately into the commercials. I never did a commercial by myself. So there was a period of about 30 days we went off TV, not our commercials, but without anyone on them while there was a period that the community found out that Rick had passed away because he wasn't sick very long. So then I brought my kids on. So now all of our commercials are with my son and my daughter and myself doing the commercials together.
We are a brand that is one of the edge that I believe sets us apart. We are a family owned and operated dealership group. And we are the most recognized community leaders in Broward County, you know, South Florida. So that's our edge. So in your mind, having family on these commercials in your mind is an edge because it tells the community that you're true local family owned business. And that provides a competitive advantage. Is that how you see it? I absolutely believe that's true. Coupled with, we do so much community work.
We are on, you know, we built, we just finished the largest workforce housing project in Broward County's history. We built 76 homes called the Rick Case Habitat Community for Habitat for Humanity. We started the project, our name is on it. We do, we just did CPR kits for every middle school and high school in Broward County. But we're doing these huge initiatives that we get recognition for as a newest article. And I think the combination of our community support and that we're a family owned and operated card dealership group is the edge that's going to keep us as this consolidation continues at a fairly rapid pace in South Florida. You're like a philanthropist disguising as a card dealer. Like.
你知道吗,我们正在做的,我们建造了布劳沃德县历史上规模最大的劳工住房项目。我们建造了76栋房屋,名为Rick Case Habitat社区,为人类家园组织。我们开始了这个项目,我们的名字也在上面。我们刚刚为布劳沃德县所有中学和高中提供了CPR套装。但我们正致力于这些巨大的倡议项目,并因此获得了最新的文章报道。我认为我们得到社区支持并且我们是一个家族经营的汽车销售集团是我们区别于其他竞争对手的优势,这将使我们在南佛罗里达地区持续进行的整合中保持领先地位。你就像个慈善家,假扮成汽车销售商。
We've been doing this. We so believe in the community. We never do it to go ours. I know I love like, I love pushing on this because I just think it's interesting to me that like there's like 30 logos on your website of different things you're involved with. I know you're sitting on multiple boards. I just find it interesting kind of, I like to dig into the brain. Like I want to know like why the drivers, right? That's what interests me. And it's like, why do this? Right?
Like at the end of the day, you're going to sell cars and look, lots of people obviously, you know, we all want to get back to community. Everyone wants like we all want to be in a society that's driving, but like, is this, why is it so important to you? Right? And I'm not saying that by the way, I'm not saying that negatively. I'm not saying that negatively. I'm saying that in like a positive way. Like what is it about your life? Like how did you get so that you decide to position a business? I'm a marketer. So I think about brand positioning. And like your brand positioning is super clear to me. It's like the family, the community give back. That's definitely one way, right?
Let's look at the complete other way, right? You have like the big company, you know, I'm not going to pick on anyone, but like, you know, what's it like to say, car max, carvana, like that's very different. You're going to expect a very corporate experience, you know, clear expectations, it's like, da da da da da da. So is this like, why position yourself this way? Truly, we've always been caring about people. We truly would see a need and then we would go after it.
When we had these, we had 16 bicycle stores all throughout the Northeast Ohio and all the way down to Cincinnati. And we had these bicycle stores and we would see these kids coming and wishing they had a bicycle during the holidays. And Rick and I go, you know what? What if we ask everybody in the community to bring in the bicycle, they no longer need because they're not using it anymore. They're kids out brought and we'll just give them to any kid that couldn't afford a bicycle. And I'm like, oh, that sounds like a really good idea.
So that was in 1981 and we still do it today. So it was just the idea of how could we match somebody who needed a hand up with something that we could, we could help and we've just continued that. We like to start initiatives that we believe are going to make a substantial difference in people's lives. It may have nothing to do with the car business or even any publicity like the Boys and Girls Clubs.
When we got to South Florida in 1985, they had three boys clubs and we said, wow, this is a really good place for kids to be safe after school, to get an education. And we led over the last 37 years from three boys clubs to 13 boys and girls clubs serving 12,000 kids in Brown County. You're strong hold in the South Florida market, of course, in Georgia, right? What led you to these markets? I mean, was this accidental? Do you think that, you know, are you, was this intentional? Like why these Southern markets?
Okay, so we were in Cleveland with all these motorcycle stores and bicycle stores. We were the largest volume hind the dealer in the world. We were the largest volume Kalamazaki dealer in the world. And we had these motorcycle stores that sold bicycles, moped and all four brands of Kalamazaki, Yamaha, Suzuki and Honda. And that was kind of our main business from Cincinnati, all the way up to Northeast Ohio. We had the Honda store in Cleveland, the Honda store in Akron.
And actually we pioneered every new car brought to the America since 1980. So we pioneered a Suzoo in 1980. We opened two of Suzoo stores. We opened Mitsubishi stores in the 80s at the D-Hoo store. So when Acura was coming out with, well, excuse me, when Honda was coming out with Acura, that was in 1985 when they were introducing the idea of getting dealers. And then same year in 1985, so was Hyundai from Korea.
So we applied for both of those franchises, the Acura dealership and a Hyundai dealership. And we were awarded those. We picked Fort Lauderdale because we thought, huh, it's going to be difficult opening an Acura store in Cleveland, Ohio, the first Japanese luxury vehicle, because that was before Lexus and before infinity. And the Korean product we felt would be a better opportunity as well. Since really there was no Korean products at all sold in America. Most people in 1985 thought of the Korea only the war. They weren't like Japanese. I mean, I say, yeah, I wasn't alive back then, but I believe you. Yeah, well, you know, and that's what, you know, everybody knew that Japanese made a good product because they had the cameras and they had other things, but the Koreans had nothing they were selling in the United States. So that's what brought us to Fort Lauderdale.
We wanted to pick a place that we thought would be the best melting pot for these brand new franchises. And it was either LA, Texas, or South Florida. And we picked South Florida because it was the team's same time zone as we had the stores in Ohio. So that's how we ended up in Fort Lauderdale. And at the same time, we convinced Hyundai with our enthusiastic proposal. They said, you know what? You're gonna be an amazing dealer. Why don't you open a point in Atlanta, Georgia? So we opened two Hyundai stores on February 18th, 1986. And one after a store on March 20th, 1986, those were the opening days for those brands in America. And that's how we ended up in Atlanta and how we ended up in Fort Lauderdale.
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Talk to me a little bit about your Fort Lauderdale Honda store, which is again, number one volume. How is that store operated? Like give us some of the nitty gritty. I wanna get to the details. Oh, that's a little late. So that was a market that was developed. It was an open point, that area was an open point. It was when a new freeway was put in just on the West side right up next to the Everglades. So it was for new communities for happening and it was an open point. So we ended up building a six story parking garage. It's about 800,000 square feet. The largest Honda dealership built in America. And because we believed that we were gonna be, because we've always believed we were gonna be number one. We just never thought that was always our focus and our passion.
So the way we've opened that store, we have, it's very unique in order to drive that much traffic there to be the largest volume. We have an eight pump gas station there that we sell gas to our customers at cost. There's an activation called the Rick Case Rewards card and that activation card, it's like a credit card, but it's not a financial card, it's just an activation card. So you can go up to the pump, activate the gas pump with your card and pump gas at cost. We and that's an eight pump. That's for anyone at any time, if I'm a customer, I can come pump gas at cost at your Honda store. Yes, it's a full gas station with eight pumps. We also have a car wash there, the same thing. The car washes car wash for life, you can come every day. It's often as you want and you have an activate, this Rick Case card, it activates the car wash and it has a dryer, it's a really nice car wash. So we have a barber shop there.
因此,我们开设了那家商店的方式非常独特,目的是为了吸引大量客流并成为销售额最大的商店。我们在那里有一个八泵加油站,我们以成本价向客户销售汽油。还有一个叫做Rick Case Rewards卡的激活卡,这是一张像信用卡一样的卡,但不是金融卡,只是激活卡。所以你可以拿着卡去加油泵,用你的卡激活加油泵,然后以成本价加油。这是一个八泵的加油站,任何时候任何人都可以,我是客户,我可以随时到贵公司汽车店以成本价加油。是的,这是一个配有八个泵的完整加油站。我们还有一个洗车中心,同样的道理。这个洗车中心是终身洗车,你可以每天来,随时想洗车就洗,而且有一个Rick Case卡来激活洗车中心,有风干设备,是一个非常不错的洗车中心。所以我们在那里还有一个理发店。
I mean, we get out of here. Whoa, you have a barber shop. I love that. You're giving me, this is giving me, I'm not comparing here, but it's giving me like a long go to your vibes. I had Doug, Dougie Row on the podcast. And we were talking about them being a destination. It just seems like you've sort of a similar strategy in like being a destination and not being a dealership. Well, you'll love this then. So you've got to remember this was a brand new market, a new freeway had come out, there's a brand new market. So there was a lot of homes being built, but there were no public services there. There was no clerk of courts, there was no place to get a driver's license, no place to get a wedding or a marriage certificate. So we gave Broward County an office at our Honda store. So we had a wedding chapel, you could get married there, you could get your driver's license, you could pay your tickets. We gave them space in our dealership to open a clerk of courts for Broward County because there wasn't anything out there. Anything we could do to get traffic to the dealership has always been our role.
Okay, that's very interesting. So you've really optimized, okay, you've optimized for traffic to the dealership. And have you ever like, what's the return bin like on that? Like what do you know about that, right? So people come to, I mean, do people really come just, hey, like I get my haircut at Rick case Honda, like is that really what people do? How does that work? Oh my gosh, the barbershop is full, they've got three shares in there. Absolutely they come there because it's a discounted price too. And our theory is that if somebody's coming and getting gas for cost and they're driving a Cadillac, they're gonna think, you know what? I'm gonna give that Rick case an opportunity when I'm ready to trade in my car. Why wouldn't I? We are the largest voting precinct in Broward County. So when they were looking for this to vote, they didn't have any place to vote. We said, well, you can use our dealership to vote. So we have the largest, we have 45, I think it's 4600 registered voters that come to our dealership showroom every time there's a vote. And are we clear out the parking lot? We offer coffee and donuts. We do the whole thing. Everybody wants to volunteer to be on the voting at the Rick case location. So the idea is the more times people come to the store getting a free benefit, wouldn't they think, let me give those people a chance. Let me give them a chance. That's why we're, you know, that's what we're number one.
Yeah. I mean, you did answer my question because I was wondering, yeah, like, you know, and I was wondering like, what are you doing differently? Like to be number one, that doesn't happen accidentally. And so you are a traffic machine, right? You are bringing, you're funneling people, all these people to your dealership. And oh, by the way, you could buy a car here as well. And we also do something that nobody else does. We double the factory warranty. So if you buy a Hyundai from us, you get a 20 year 200,000 mile warranty or a key it's 20 years 200,000 mile warranty or a Honda. How does that work? We double the factory warranty. So the factory, and this for free, you get that for free with every car you buy. So we, so when the warranty is with Hyundai, it's a 10 year 100,000 mile warranty. By the way, did you know Rick wrote that? So in 1996, when Hyundai was in real trouble, I don't know, were you born then? When is it? Yeah, yeah. I was born there, not 85. I was born there. I was born in the United States. Come on. Hey, come on. I have listened to three kids. I'm in my 30s. I was born there.
Well, in 1996, when Hyundai was really in trouble, which you, like I said, you weren't living as a car owner then, but Hyundai was really good. They went from selling 300,000 cars a year in 1988 to selling 90,000 cars in 1996. They were basically going out of business here in the United States. We had all these Hyundai stores because we'd opened a couple in Ohio. We'd opened a couple in Florida. We had a couple in. And we had Hyundai had to succeed for our operation to succeed. We didn't have the Honda store then. We didn't have the Volkswagen store. So Rick, we went to the Koreans. We went to the Hyundai executives and we said, you have a choice. You can either leave the country because you're just about ready to go out of business. Most of their dealers had given back the franchise and taken their big beautiful dealerships and made them Toyota or Nissan or something else. Or you can change the name of your brand, change it from Hyundai to anything else. And let's start fresh with your product. Or you can do my 10 year, 100,000 mile warranty, which will, which at back then in 1996, it was only the 24, 24, was pretty much it. 24 months, 24,000 miles. That was the standard warranty for cars back in 1996. So he said, if you do this 10 year, 100,000 mile warranty, people are gonna go, wow. You know, maybe I should consider a Hyundai again. Well, that works. We know in hindsight, but I'm curious now about the economics behind us. How do you double that for your customers? Like, how do you do that and stay competitive? Like behind the scenes, what does that cost you? How do you actually do that? We buy an extended service policy and we bank that most people aren't gonna keep their car 10 years or 100,000 miles. And those that do, they have a warranty. When you think about it, how much is it gonna cost to put an extra 100,000 miles and 10 years on a car? How many people do you know that have a car over 10 years? Not very many. So it's not really that much risk. It's just, it's a cost of doing advertising. It's an advertising. It's a marketing cost. You know, one of the things we're doing right now, because one of the biggest complaints that people have is how long it takes to buy a car. It's been a, you know, a complaint for, for the number of years, people say, wow, why does it take me so long to buy a car? So what I developed about two years ago is you 90 minute guarantee or the first payments on us. So the idea is you come into our dealership and if you're not in and out with your new car or used car in 90 minutes or less, your first payment is on us. Now, in order to do that, the people have to go online. They have to fill out a lot of the paper. They have to fill out basically all the paperwork that you have to do with the dealership. So they have to do some work at home and then they get a green check mark either a QR code or they can print off a green check mark. They bring that in and they're gonna be in and out 90 minutes or less. So just keep, you know, adding benefits to people.
And do you still have scenarios with people going over 90 minutes where you end up paying their payment? It's been very rare because they have to fill out the form online. So we've already picked out the car. They've picked out the car, they've made the deal, they know the price, all basically we're doing is just getting the car. It's already gonna be ready anyway. I love it. Yeah, yeah, I mean, I can just imagine that person that comes there and sits for 45 minutes with insurance company and like up 90 minutes is up. Payments on you. Well, we do all the insurance online as well.
Yeah, so you make sure that they come prepped so that there's no excuses. And they can do it online. They complain about being at the dealership too long. Okay, we'll sit at home and do it all. It's all available now. You can completely purchase a car at home and we can deliver it to you if you choose. What's it like to be a general manager at RICase Auto? What's your day like? Being a general manager at RICase Honda or being a general manager at RICase Hyundai or any of the stores, it's a great, I welcome you to have them on your show. They will tell you it's a great, great job. It's not even a job. They have so much fun. It's more like, Why? Well, first of all, they're very proud to wear their RICase shirt like I have on today. I mean, this is my uniform. They can, they are so proud to wear it because wherever they go, people are coming up to them and going, Oh my God, you work with RICase?
They gave to my, to my, you know, humane society or they, my family's living in one of their homes or they gave to the Cleveland Clinic Hospital. They're proud to wear their RICase shirt. I think that's first of all, which makes them so motivated to be on our family. Plus we treat our associates as family and we treat our customers as our friends. That's why we wrote our book. We wrote a book to celebrate our 50th anniversary, which was 2012. So that was what, what 12 years ago, we wrote a book called, Our Customers, Our Friends. And it's free.
We give it out at the dealership. You can get it online as well or anywhere you want, but it's a book about, it's a book about how we treat our customers, how we support the community, what we did start to finish. It's a whole story about our career, pioneering all these brands as they came through. I mean, we were the largest smart car dealer. We brought Fiat back. I mean, you name it. We've tried it all. But to be a great general manager in our company is just basically having good people skills. We always say, you know, you can, with the right personality, the positive personality, you can train the skills of sales. We're just a people business.
How do you compensate your GMs? Well, our compensation plan for our general managers is a hundred percent commission, as is all of our sales managers, our salespeople, service advisors. We are a hundred percent commission organization, except for possibly the title clerks and things like that that are hourly. Our general managers are paid on adjusted net. Adjusted net is operational net, not including any fixed expenses, anything, you know, from the fixed expense line, the rent, the insurance, the repairs and maintenance on the buildings. Interesting.
All of those things are not included in their expense. So it's, it's top line, less controllable expenses. There are people who are advertising. That's how we pay them. We, they get a percentage of that with a draw against it. I think that's, That's really interesting. Cause you know, the gripe you usually hear about being paid on net is that, oh, I don't want to, you know, pay for the owners real estate and stuff like that. It's a conflict of interest.
So I think that's a really cool model that you do adjusted net. Now tell me, but tell me about 100% commission, right? Like I want to know why do you, why do you have this type of model? And obviously like I'm not, I don't mean that in a way like clearly it's performance driven. I know that, but I would, I would make the case that is that really the smartest business decision for everyone giving you have a pretty predictable business. And you know, you may be even overpaying by being a hundred percent commission versus having, you know, some portion salary, maybe offering a little bit more stability even arguably to the employee, but a lot,
what a lower commission basis. So anyways, what's your thinking about 100% commission? Why do this? Well, the way that we've always presented it and we've had a lot very stable workforce. So that is proven to us that we must be on the right track because we do have very stable workforce is we explain to them, we are giving you an opportunity to run your own business. We seek out entrepreneurs, whether it's an entrepreneur in the service advisor, it's an entrepreneur as a parts manager.
We want each of our associates to be, have that entrepreneur bug that, I'm going to run my own business. A service advisor runs his own business, he really does. A salesman runs his own business. So why, we believe that if they're going to run their own business, then if they do well, then they are going to receive the financial compensation in line with what their effort is and what their results are. And if you design those percentages to your business model, then you're never going to be paying them too much. You're not going to pay them too much if you design the percentage based on your model.
Like for example, we just give you an example, like let's just talk about sales managers for a minute. Let's say I have eight sales managers at the Honda store and I'm going to say I'm not going to pay out. It doesn't matter whether it's the Honda store with eight sales managers or the Mazda store with two, for example. I'm not going to pay out any more than 12% of my, I don't know what you want to say if it's the gross profit of the department, which is F&I, including the PVR. And then it doesn't matter whether I have eight or if I have two, I'm only going to pay out that much.
So if I add another sales manager to my Honda store and go from eight sales managers to nine sales managers, which is going to produce more gross profit, otherwise why would you add them? And everybody else gets reduced. How are you handling recruitment of salespeople, the conditions? How are you driving that recruitment?
Are you having struggles? Yeah, I have an HR department and we've had one for years. And when we need sales, when we need salespeople, we'll run traditional ads. We have a recruiting bonus for our associates. If they can bring somebody in that fits the position, there's a recruiting bonus that they get for, we want them to bring in their friends and to work into the dealership. But we haven't, we're fully staffed. The only place we're looking for people with B technicians, I think the whole industry is exploding in the fixed operations.
Because when the cars were highly priced with the short supply, people bought out their leases, they kept their cars, they didn't trade them in, because the payment was going to be so much more. And the cars are made great anyway. So they kept their cars, that has promoted a lot more service work. And what I'm saying is that we have, we've had record service every single month. I'm talking about total company-wide. We are breaking the record in our service every month, and we've been in business for over 60 years. So some of our stores have been 38 years. That's how big service is. So that is the place where we're most looking to come up with the solution to build technicians.
All right. I want to ask you also, we know affordability is the hottest thing in our country right now, or maybe say the coldest thing, because people can't afford cars like they could in the past. And it's a problem. And so I'm curious to know about, well, a couple of questions here, but first things first, where you're at in the country. Are there any different, like regional differences, regional trends that you're riding? We know that in the Northeast, leasing is always the highest leasing penetration, right? Go to New York, people are leasing like two out of every three vehicles. So I'm curious to know like how you are managing this affordability crisis that our industry is dealing with, where you're based.
The first thing that came to my mind when I was thinking about this question was, well, Florida has had a massive influx of new residents. Lots of these people came with money. And so maybe, just maybe, you're dealing with a population that has more disposable income and can actually afford cars. I'm just like hypothesizing, I want to hear from you, how are you dealing with this affordability issue in your market? Well, it hasn't really touched us yet, to be honest. Fort Lauderdale, South Florida, the people still are buying cars. We're still selling. We have inventory now, of course, everyone has inventories, availability of inventory, but it isn't stockpiling up the brands that we have. We are with brands that still have a loyal customer base. And also in Atlanta. So I have not seen my associates, my general managers, telling me that they're struggling getting people to have an affordable payment, where the manufacturers are definitely discounting.
There's definitely incentives. There's, you know, they're working with the interest rates now. There's some submissive with interest rates. Leasing in Florida is very high. Like you just mentioned, a good strong 70, 70, 80% leases. Atlanta's not so. In Florida? Yes. Florida and the North East are the same. They're both almost all leasing. Oh, absolutely. We've been, and that was a big turnaround when the supply situation people stopped leasing.
So we're going to really start feeling that those leases are not going to be coming back that we're used to having come back, which was our CPO chain of inventory. So how are you, how are you prepping for that? Are you prepping for it? Is there just like wait and see and again for the audience listening, where I mean, we're referring to the leasing cliff here, where, you know, we're like a month or two away of having a massive, massive drop, you know, 50 to 80% in some cases, some stores of lease returns.
Obviously fewer lease returns means fewer used cars in the market. And again, it's a supply constraint environment. So how are you preparing for that for you? Well, that's a really good question. And we're struggling with figuring out exactly what the impact is going to be. The people that were leasing that bought their leases, they're going to be are we're hoping that they're going to be trading them in now.
Because they bought out their lease and now they are going to trade it in as a regular purchase and maybe release another car because now leases are again, a forward of them. So we're counting on that and that would also be a use car stream for us. We do believe that we're going to have less availability for CPOs plus the auction too. That's another thing. We used to buy a lot of cars that low miles off the rental car companies, but they also didn't buy any cars because they had no cars available to them from the manufacturers.
So it's going to be, it's going to be interesting, but I do, I'm not too worried. I think they'll be, they'll be used cars available. There always have been people that were buying after lease. They're going to come and buy a car. People that postponed buying a car in 2022, 2021 and 2023. They're going to be ready for a car. So I think we're going to see a steady stream of use cars coming in, maybe not least returns, but still use cars.
So if I just sum this up, I mean, all in all, it seems like you're not really too concerned in your market with respect to affordability. Are you seeing any stark differences between Florida and Atlanta when it comes to that affordability issue? No, not yet. Because remember in Atlanta, we just have, we have Audi, Mazda, Kia and Hyundai. Those are the brands we have there and Genesis. We have a couple of Genesis. And so I have to say, no, not yet. Not yet. Are you, are you having some states that are saying people can't afford to buy cars? I would say it's a lot beyond states. I would say it's, it's, you know, looking at, first of all, we know certain brands, we know increased prices more than others, which has created an issue.
For example, yeah, yeah, which we know that. I mean, it's definitely, you know, on the, on the high end, you know, over like 50% since 2019 and prices are coming down now. So they're readjusting. But yeah, I mean, I think, you know, we're seeing least, least penetration rise across the country. So more people are leasing, leasing has become more attractive. And it's not that rates have gone down or anything like that. It's simply that people need that lower payment and leasing is just a more attractive option.
You know, we're seeing payments over $1,000 a month at record highs. Now we should expect payments to be a record highs because inflation, but the rise in car payments is outpaced, a rise in inflation. And so yeah, I think altogether it's, it's definitely, you know, it's definitely been a big issue for consumers. And we haven't seen while prices have come down and are coming down. I mean, it's been pretty steady. Yeah. On the use car side, we are seeing a little bit, I'm getting kind of like a full update here, but bear with me.
On the use car side, we are seeing a little bit of accelerated depreciation now versus, you know, prior years, like 2019 and whatnot. Again, you know, we'll see how that impacts the retail markets, but all in all, I think it definitely is something that I think a lot about and what does the future look like for car sales and how do, where do prices go from here? Well, the manufacturer is going to continue to make cars. They have factories. They've got, they've got to make cars. That's their business.
They will figure a way to price it so people can afford it. They're not going to let the cars pile up at their ports and stop building them. So if in fact, the price point gets to be where it's not able to sell at the volume they need to sell so that the dealers buy the cars, they will figure a way to make the price work. That's what they've always done in the past. We're not just going to sit here and be a stalemate. Yeah. I mean, I think that's what the competent manufacturers do, but I think that also, again, I don't want to say incompetent, but maybe not as savvy manufacturers that are slower to adjust. You know, that has a real-world impact. And that's when I have dealers, you know, sending me messages on Twitter and LinkedIn saying, Hey, I'm looking for a job at a Toyota store or, Hey, I'm looking for a job at a Honda store or whatever, because they know that they're going to make the bread over there and they will have, you know, more value in what they're selling. So I think that's kind of, you know, the overall kind of industry trend that I'm noticing today. Well, I believe that the manufacturers, they're going to have to come up with whatever we need to sell cars. I don't see the interest rates going down. I'm on the board. Well, they're going to have to. So they're going to have to swallow that pill and, you know, make it, make adjustments as quickly as possible. How do you view your used car business in general, in this market? Like you have any stores that outperform and use versus other, you know, obviously some stores are stronger and new, some are stronger and use, some are stronger and fixed. So where do you kind of view yourself and how do you just treat your used car business in general?
Our used car business this year has been great. Definitely up over last year. Those reasons are more availability to get used cars. That's, you know, a plus. And all of our franchises equally have a similar used car growth. It's not like the Honda store has less or more or the Mazarati store has less or more. We're finding that the used car business is very much growing. And it all depends on if you have the right wide variety of inventory. So that's what's changed in the last couple of years. It was a roller coaster with used car inventory ever since the pandemic. It was a bit of a roller coaster. So we're feeling very positive about the used car business this year and going on in the future. I think it's going to be great. What's exciting to you nowadays? This is like my new favorite question. But it's really like, you know, I've been I've been asked to like, what's what's keeping you excited? What are you what's on your mind nowadays? Like what's what's exciting?
Well, you know, just becoming time dealer of the year was certainly very exciting out of 17,000 car dealerships in the United States to be chosen as the time dealer of the year. I'm still like on cloud nine over that. I got invited to go to the 100 most influential people. So I was surrounded by all these famous, you know, sports stars and movie stars. And so I felt like I was, you know, something big was really, really fun. Got all dressed up the whole bit. So I have to say, yeah, I really looked forward to that. I was really excited. I've been named the lifetime. I'm getting the lifetime award at name ad this year in August. So then looking forward to that. I'm excited about being the. I'm on I'm on the card dealership guy podcast. Oh, I forgot about that. Yeah. I'm kidding. I'm kidding. I'm kidding. I'm kidding. I'm all my family and friends. You got to listen to this. There we go, baby. There we go. But definitely I'm excited about the car business as well. I'm glad to be in business. I know people thought, well, wasn't it great having the. Order taking short supply, but that's not the business. This is the fun part. So when I say I'm number one, I really earned it by selling the most when you have it on your lot.
Before we wrap up, any closing thoughts? I mean, what's your outlook for our industry? Like, where do you see this industry headed in the next couple of years here? Really with all this change happening now and I'm in the market from consumer preferences, how people buy a car technology, right? What's your overall outlook for the business?
I think it's going to be a really exciting time. One of the most exciting 10 years of the auto industry, both the EV, the hybrids, I think hybrids are going to become much more popular than the EV trend right now. I think the early adopters are kind of done and the ramifications of having a battery car. Now that the Tesla's are going to be 12 and 15 years old, we're going to see, you know, how that whole trade-in value works when you know the battery is on its last leg or its last charge. But I really feel like this next 10 years is going to be really exciting for a car dealer. The whole AI that's coming out, where it's going to be able to integrate with your customer service and they have a consistent customer experience, I believe that 75% of every single phone call that comes into a dealership, whether it's an even the online communication, can be handled by AR efficiently, accurately, consistently, honestly. And then the other 25% will necessarily be something that has to actually be happened by a human interaction. But I see that as being such an advantage to both the customer and efficiencies of the dealership. So I'm really excited about AI and what it's going to do in the dealership environment.
I also think that the cars that come out are going to be really fun with all this connectivity that they're going to have and some of the new ways that they're building the cars are coming out. Edgy, everybody's kind of competing with the style. So I think it's going to be fun again, like the 50s, when every car came out was totally different. So I'm excited about that as well. I'm very positive about the franchises that we have, the Hondas, Hyundai, Kia, the Audi, Volkswagen, Genesis, the brands we have, I'm really excited about. We don't have some of them. We don't have every brand, but the ones we have, I'm feeling like they have a great future, a solid future, and that they all support the dealer body. They all support the dealer network.
The cons. Yeah, you definitely have a good batch of brands on your side. I really think that's important. So I think my best years are ahead and I'm hoping to be number one with all my franchises. That's my goal. I love it. Great, great positive mindset. Rita, this has been super fun. Thanks so much for coming on. I really had a blast. Thank you very much. You see, I appreciate it. We'll have to do this again. All right. Hope you enjoyed that episode.
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