John Possumato, Esq.

The inventory of even moderately priced (with OEM incentives) electric vehicles already has grown to double the average day’s supply of ICE units, even before the onslaught of 100 new EV models coming on the market in the next 30 months.
So, how does this help both dealer gross and make EV vehicles cost less for the consumer?
Simple, “Sell it Twice,” and leverage both the new and used federal tax incentives on the same vehicle.

Roughly 38% of consumers say they will consider buying an EV, with the remainder needing time to get used to EV lifestyle changes.

Used-BEV values are dropping like stones and over half of franchised dealers are refusing to retail them. Is this a momentary blip or does it indicate another roadblock to mass adoption, with many banks questioning residual values before welcoming BEVs as a substantial percentage of a loan portfolio?

Whether you call it a micro-lease, a subscription, or long-term rental, flexible, turnkey vehicle access without any long-term commitment now dominates personal transportation in Europe. And developments suggest that a larger presence in U.S. dealerships will be coming soon.

DriveItAway Holdings founder and Chief Executive John Possumato views this as the most exciting time to be a part of the automotive industry as it works toward a transition to electric vehicles.

The new Treasury Department rules exclude most EVs and PHEVs from the full $7,500 new-vehicle tax credit, but the department has ruled that all commercially leased EVs and PHEVs qualify for the $7,500 tax credit for the lessor.

The rapid push to electric vehicles might give a major incentive for a change in vehicle used/platform to usher in mass electric vehicle adoption, such as EV subscription services that could spur more usage.

While the new-car “agency” model is getting all of the attention, there are other disturbing trends afoot in some global OEMs’ efforts to “remake” distribution that so far in the U.S. have gone unnoticed. One is the control and retailing of used vehicles.

Between the OEM agency model, EV incentives in the federal Inflation Reduction Act and California phasing out internal-combustion-powered vehicles, it’s hard not to read the handwriting on the wall.

Dealers charging high prices above MSRP across the board are creating national news and public backlash, and it’s not just the OEMs that are watching.

Between Tesla, Rivan, Lucid and Fisker operating without dealerships and the agency model introduced by traditional manufacturers, marking up above MSRP during these demand-driven times may come back to haunt dealers.

The question remains: how to get to the “early majority” phase of adoption, beyond those affluent enough to already have a few cars in the driveway. Persuading a lower income, single vehicle household to opt for a more expensive EV in a “charging desert” neighborhood seems way off.

It seemed like every third booth or so, among 200 transportation companies, was selling some new, innovative and convenient system for home, work or public charging. CES 2022 made it clear electrified vehicles are the future.

Vehicle Ownership Enablement Programs Provide Freedom and Mobility to Those Who Need It Most and Provide a Much Larger New Employee Pool for Entry-Level Jobs.

Over-the-air updates could enable technicians to identify and diagnose a problem remotely and have the parts ready for a vehicle service appointment, boosting a dealer’s efficiency and net income, says Bill Cariss, president and CEO of Holman Strategic Ventures.

Under the agency model, the franchise dealer no longer is the focal point of a new vehicle sale; instead, the customer places an order directly with the OEM and names a preferred dealer. The price and dealership mark-up or commission is set by the OEM.

Car dealers have always used “runners,” but perhaps the accelerated growth in digital retailing and “door to door” vehicle service requires a more scalable program and process.

The introduction of new-vehicle subscriptions faded out as a nonstarter on the fringe. Will electric vehicles provide the volume use case?

When an esteemed Wharton finance professor and the country’s largest private vehicle wholesaler independently warn of the same future, its probably worth taking notice

What do Uber eXchange Leasing, Fair.com and Maven all have in common? They thought they could make money renting to “gig” rideshare or delivery drivers, and they are all out of that business, or out of business.

For gig platforms that self-insure for collision and liability, whatever is paid out in an accident beyond whatever deductible is stated is coming out of the platform owner’s pocket, not an insurance provider.

Volvo says it will be an all-electric vehicle company in 2030 and by that time will convert entirely to online sales, essentially relegating dealers to delivery and service centers. Such an announcement puts car dealers on notice as to where OEMs want the “puck to go.”

The pandemic has accelerated many changes. Some customer-centric services, such as a vehicle “concierge” or pick-up and delivery, went from a convenience to the price of admission for most fixed operations.

For those dealers not in the premium luxury end of the market, wouldn’t it make sense to investigate the marketing, technologies and new ways of securing business in the subprime, deep subprime and first-time buyer side of the business?

Home delivery for many items such as prepared food and groceries are costing everyone more money, and everyone is losing: the merchant, the delivery company, the driver, and most importantly, the consumer.

Facilitating a program that provides a process for private ownership to lower-income households that do not have vehicles would speak to the “Poverty of the Carless” immediately.

The new stars of Wall Street in automotive retail, Carvana, Vroom and Shift, are gaining value and market share despite historic losses and only recent breakeven results. So what defendable market advantage do they have over traditional car dealers? Nothing more or less, than a new way of thinking about the customer.

If I were time warped from January to now, I’d think I was in a sci-fi remake of “The Andromeda Strain.”

In this episode of the Auto Remarketing Podcast, Cherokee Media Group president Bill Zadeits chats with John Possumato, founder and chief executive officer of DriveItAway. Possumato talks about "an accelerated evolution of innovation" spurred by the business impact of COVID-19, his take on Carvana and Vroom, and more. Plus, he explores the advantages dealers may have over startups and disruptors.

These frightening times may prompt some dealers to venture into new strategies and tactics that make them stronger and more prosperous in the long run.

The Pandemic is creating massive downward pressure on used vehicle residual value projections, new ways to remarket may help

NADA Chairman Rhett Ricart is right: “Dealers will be more than just fine” as the world changes

Some are safe bets. Others are educated predictions. All are noteworthy

Is a Car or Truck Subscription Best Suited for the Fleet and Commercial Sales Side of the Automotive Business? Lets Look at the Fleet Vehicle Needs and Use Cases

Tremendous Opportunities for Independent Dealers in Mobility as a Service – the Shelter from any “Storm Clouds” Ahead

It seems that all you have to do in today's market to raise billions is subsidize your product at a tremendous loss, then when buyers flock to your door, call this a disruptive force that will change an industry: Profitability is something that you can defer with a story.

With the Advent of Ride Sharing, There is a New Critical Need Afoot for the Old Days of Direct Fleet Service to End User Customers at the Dealership Level

Car dealer are smart to use ride-sharing for transporting service customers. In contrast, the shared-scooter business seems dumb

The Rise of Ride Sharing Presents an Opportunity for Dealers to Create New Customers and Profits Today while Preparing for the Future

Drivers for ride-hailing services can be a prime source of fixed ops profits

We face two contrasting viewpoints. Which is to be believed?

Leveraging Ride Sharing for Your Benefit

An interview with John F. Possumato

Here’s a primer on all those different mobility services.

Why the smartest people in the room are wrong...

No one seriously thinks Tesla will sell the majority of EVs in the coming years. This task is for the major manufacturers and their dealers.

The idea of being able to convert a purchased vehicle into a cash-generating asset is an almost irresistible incentive to buy and upgrade.

Where do dealers fit in the world of car sharing, ride sharing and ride hailing? Is it a big threat or great opportunity?

This may be a blinding glimpse of the obvious, but the J.D. Power 2017 U.S. Customer Service Index Study confirms a chunk of dealership service department customers prefer text as a channel of communication with the shop.

Yet, paradoxically the same study indicates only a fraction of dealers to date are rising to the occasion to offer this customer preference that also would for now offer a competitive advantage because of its rarity.

The article explores why there may be this… Show more

This may be a blinding glimpse of the obvious, but the J.D. Power 2017 U.S. Customer Service Index Study confirms a chunk of dealership service department customers prefer text as a channel of communication with the shop.

Yet, paradoxically the same study indicates only a fraction of dealers to date are rising to the occasion to offer this customer preference that also would for now offer a competitive advantage because of its rarity.

The article explores why there may be this divergence of customer wants/dealer service, and what automotive retailers can do to implement change today. Show less