This week we had the pleasure of speaking with “Joe” Pete, the owner of UZDCARZ, Inc. located in Pompano Beach. Joe has a unique perspective. First of all, he’s a seasoned pro who’s lived through many of the wild rides we’ve seen in the auto industry from the Cocaine madness of the ’80s, the AutoNation takeovers and corporatization of the 90s, the 2008 financial crisis, and today’s inventory shortage.
About Joseph “Joe” Pete
Do you remember back in the ’80s, if you wanted to buy a new car, the “AutoTrader” magazine was God. As a young buck and huge car nut, I’d pour over the pages of the “AutoTrader” magazine every time I could get my hands on one. I remember there was a dealership that would post tons of used cars for sale and they had an incredible variety of cars at various prices. That dealership was called Anything on Wheels and the young Joe Pete was one of the key figures marketing the vehicles. It worked and the team sold a ton of tight margin cars, but in high volume.
Fast forward to the ’90s where the late Wayne Huizenga triumphantly started gobbling up local dealerships and consolidating them under the Autonation umbrella. Anything on Wheels was one of those dealerships that was taken over by Autonation. During this time, Joe gained valuable corporate experience that helped him grow as a professional and gain insights into the rigid corporate structures and politics. Eventually, as Autonation consolidated dealerships, it closed down the operation that once was Anything on Wheels.
However, due to his experience and tenacity, it didn’t take long for Joe Pete to land on his feet as he quickly became a General Manager (GM) for a South Florida Mazda dealership. He continued to grow as a professional, but wasn’t particularly fond of the new car sales process. He preferred the opportunities and deals that were available with lower priced used cars. He also had a preference of working with the everyday individuals struggling to make ends meet who desperately need a good car at a fair price.
Fast forward to the mid 2000s and Joe Pete is wanting to take greater control over his career. So he opens up his own used car dealership in Pompano called UZD CARZ, Inc. Yeah, just as the 2008 financial crisis is about to hit. And what does he do? He thrives.
How did he succeed? Great products. Great service. And most importantly, in this absurdly shady business, Joe Pete’s commitment to honesty and integrity. Joe’s blunt, straightforward, no bullshit attitude sets him apart from the many shady characters that come and go in South Florida.
Furthermore, unlike many dealers that will sell anything, Joe is particular about what he sells. Guys, in this industry, we know certain used cars are crap. Many used Chrysler products are notorious for having repair issues. Some of those Nissans with CVT transmissions cost thousands to repair and are known clunkers. Joe gave us the example of the 2007 – 2010 Hyundai Sonata. A quality, reliable used car. But he said he won’t touch the 2011 – 2012 Sonatas because they were garbage. Why sell garbage to a customer who will ultimately have a bad experience and have it reflect poorly on him?
So Joe focuses on cars he knows don’t have a reputation for major mechanical flaws. Isn’t great to work with a used car guy that won’t even carry the notorious lemons and focuses on the quality vehicles? In fact, he’s expanded his portfolio to add some specialty models like certain Lexus models (built by Toyota and known for reliability) and the Mazda Miata (one of the simplest and most highly refined vehicles of all time.)
USED CAR SHORTAGE
We asked Joe what he thought of the current automotive shortage and he had a lot of surprising information:
First he explained that his warehouse can store anywhere between 50-60 cars at a time and that he’s typically full. But in the current shortage, he has about 30 vehicles currently available.
According to Joe Pete, there are multiple factors. Factor #1, and nobody’s talking about this, is that during COVID-19, many of the main auto auctions went virtual. Sounds like a good thing, right? Well, not necessarily when dealers from the northeast, midwest, and Texas are paying higher prices to poach our inventory.
OUT OF STATE DEALERS POACHING LOCAL INVENTORY
Why would dealers elsewhere want to poach cars from South Florida?
We’re spoiled in South Florida…and so are our cars. Cars in Miami don’t get abused as they do in other states. Let me explain. One, we live in flat terrain. Our cars don’t get the engine and transmission stress of going up and down mountains…every…single…day.
Furthermore, when’s the last time it snowed in Miami. Oh, that’s right. 1978. Our cars don’t have to drive through snow. Our cars don’t get salt underneath them like they do up north.
Y’all complain about pot holes in Miami. Please. Folks. It doesn’t freeze in Miami. Do you know what standing frozen water does to cracks on roads. It creates epic pot holes in places as close as Georgia, Texas, and of course everything else north.
Plus, since it doesn’t freeze in Miami, all the seals and gaskets stay pliable. They don’t freeze and get brittle. Okay, your old dashboard may crack from then intensity of the South Florida heat.
Here’s the point. Cars in South Florida tend to have less alignment issues (less pot holes), less environmental deterioration, and less mountain region drivetrain stress. And this little secret is out. So dealers in other states are competing with our own local dealers in what has traditionally been an overabundant supply of used cars in South Florida.
Of course, that supply has now dwindled. And a dealer in Wisconsin may be willing to pay a few thousand more for a used pickup than what a local dealer would traditionally pay.
What happens when supply decreases and demand rises? Prices go up.
Add to that the current chip shortage for new cars and you have a perfect storm of a used car chaos. As Joe stated, “I am a used car dealer whom has survived many obstacles in the business but this is one that is going to test everyone involved.”
USED CAR PRICES
Joe Pete tells us that as a result, used car prices in South Florida have gone up by as much as 30 – 40% since the start of the pandemic. That’s huge!
As Joe pointed out, well maintained homes appreciate in value. But cars, by there very nature, deteriorate over time. They wear and tear. They get bumps and cracks. The paint fades. Etc. Etc. As a result cars depreciate in value. (Note: We’re not talking about well maintained exotics and classic cars that can and do appreciate.)
The current shortage is creating what some call a bubble in used car prices. With prices going up by 30 – 40%, you might have significantly more equity in your driveway than you had a year ago.
In fact, if you have a lease that’s coming to an end. Don’t you dare just turn it. According to Joe Pete, many of these lease end vehicles have anywhere between $2,000 – $3,000 in equity value. In other words, you can cash out of your lease deal or use the equity towards another vehicle.
WHEN WILL IT END?
Unfortunately, Joe believes the shortage will only get worse in the near term future. According to Joe, this won’t come to an end until we see manufacturers increasing production and filling the new car lots again. He doesn’t expect that to happen for at least a year.
We talked about the state of automotive financing for car buyers. He had mixed news. He said, “It’s easier for the non-qualified customer than ever before.”
“It’s easier for the non-qualified customer than ever before.”
Joe Pete believes what happened in the 2008 financial crisis to homes will happen again with cars. Yes. It’s easy for virtually anyone, even people without a social security, to get financing for a car. Inflated prices and bad loans are a recipe for disaster in a year or two when inventories replenish and used car prices tumble. Sound familiar?
Joe shared the following tips for car shoppers:
- Buy what you can afford AND afford to maintain.
- Find a reliable / trustworthy mechanic that has experience working on your make / model
- Use YouTube and Google for guidance…Many simple things, you can fix yourself.
He reiterated once again, “Drive what you can afford to drive.”
“Drive what you can afford to drive.”
ABOUT UZD CARZ, Inc.
Small dealer who cares about their customer!
We offer cash prices with short term financing options for people who have a large down payment but are just short of the full payment. We are not a “buy here, pay forever” business and will not charge you high prices just to finance. Many dealers do not want your cash business and will never talk about prices; we are just the opposite. Why deal with higher prices and long payment terms when you can pay it off quickly? You owe it to yourself to check us out before you drop your hard earned money on a “buy here, pay forever” loan! We offer cash prices with small in-house loans allowing for short term, quick payoff, low interest payments. No embarrassing credit checks, no games or hassles. We won’t tell you one price, and raise it later if you decide to finance. Don’t fall into that trap! Call (954) 781-2888 now before you drop your hard earned money on something you’ll regret. Up to 6 months 0% interest loans and other Flexible Terms to fit you. NO COFFIN packages (you won’t be buried in our cars)!!!
NOBODY DELIVERS MORE….. FOR LESS!!!!!
We may not always have what you want but we do always have what you need..reliable, quality, reasonably priced cars and respect you as a customer!
UZD CARZ, Inc.
1080 SW 12th Avenue #1
Pompano Beach, FL 33069