Patrick Buckley: And then switching to the new side of things. Are you guys seeing any mismatch between higher content units in your inventory versus demand for a more affordable lower term units?
Mike Manley: I don’t think I’m seeing any mismatch. Obviously, we look as everyone does at our turn rates across different models. I think one of the things that’s happening in new that we saw in the quarter, at least I mentioned in my opening comments that I thought the team did well even though finance penetration levels were down. The reality is on the new total finance penetration on new for us remains stable, but it moved from what I would call just straight paper into leasing. And as it does that, that can help quite a lot with higher contented vehicles, obviously. So I think that was beneficial for us on the new side. And as I said, on new side, that’s where we saw penetration rates drop. So nothing that stands out to me.
When I look at inventory, the only differences I see in terms of turn rates at the moment are electric vehicles versus other powertrains where we are seeing improvements in turn on electric vehicles, but they are still roughly take twice — other powertrains turn twice as fast at the moment.
Operator: Our next question comes from John Murphy from Bank of America.
John Murphy: First question, Mike, you mentioned something when you’re talking about the used car business about how you might be willing to accept lower grosses, because there’s — you can make it up on the CFS side and there might be a retailable vehicle that comes in trade. It sounds like that’s kind of also alluding to that you might go a little bit deeper into the — maybe the third turn of the vehicle as opposed to just the second turn. Can you kind of maybe comment on what you were getting at there and how institutionalized that process is and maybe accepting lower grosses and trying to make it up or growing the business, if you will, on the CFS and on that third turn?
Mike Manley: John, I don’t — what I don’t want to do is create any confusion. So what we ask our sales teams to do is to obviously look at the overall growth that they generate. We want them to continue to hold or grow market share for the brands that they represent, but also grow new-to-use ratios within their business. So I think sometimes, particularly when you’ve got a high interest rate environment, as you’re constructing a deal in the showroom, there’s multiple different ways that a sales executive or a sales manager can construct that deal in an appropriate fashion for the customers. So that means that as you’re looking at that, you take a lot of things into account, does it represent CFS income and also does it represent an opportunity to get a trade.
But one of the big dynamics that we have seen is, and Tom alluded to this, is a shift in terms of average mix of used vehicle sales. So it’s also the fact that we were up sequentially, that was all really driven by vehicles under $20,000. So if I think about used vehicles, $20,000, 20 to $40,000 and $40,000 above. Under $20,000 still a huge amount of interest, a lot of growth if you’ve got the inventory there, broadly flat to down 20 to 40 and then 40 plus down. So as we’re thinking about trade, what we’re doing is we are, I think, investing more in trades to be able to keep our inventory at that sub-$20,000 level as well. So all of that we take into consideration because, as you know, sourcing a vehicle and we buy your car comes with a heap of cost, right, not just your advertising costs, not just your commission cost, your sales executive but the other costs associated with that channel.