John Healy: Great. Thank you for taking my question. We haven’t heard the word affordability used on this call compared to the last couple. And my thought is that your performance probably reflects you guys kind of changing and adjusting the merchandise you have on the lots and the site to meet retail demand. Can you kind of talk about how the — maybe the mix and the age or the mileage of the vehicles that you’re selling today looks versus a few months ago? And maybe just the multiyear outlook for supply because I think there’s some concern in the market about your ability to source vehicles kind of in that late model category given the fact that they might not exist for the next couple of years. So just love to kind of hear your thoughts about what you’re selling today and what you think your merchandise mix might look like for the next year or two?
Bill Nash: Yeah, great. Thank you for the questions, John. So I think from a affordability, look, there’s still an affordability issue out there. Even though our average selling price is down, it’s still up substantially over where it used to be. And I think in the previous calls, we’ve said, hey, if you think about the affordability, 85% has been driven by the vehicle price, 15% is driven by the interest rates. I think we’re probably more in a 75-25, which is more driven by the prices coming down, which automatically gets your interest rates makes a little bit more. But I think we’ve knock on wood, I think we’ve kind of peaked on what the increase in payments. I think we were running. If you look at just the CAF business, we were running about 150 monthly higher than pre-normal times and I think we’re probably down to 130 or so.
So there is still absolutely an affordability issue. I think your question is great when you think about the mix. Our prices were down roughly $1,600. But the interesting thing, while your acquisition price is down almost and that was more than 50% of the price swing. There’s also a bit of an age mix thing here as well. And what I mean by that is if you look at the zero to four-year-old cars that we sold a year ago compared to the zero to four-year-old cars that we sold this year, we had less percent of those. So we dropped a few points, which means less of those newer cars and what you’ve shifted to is we’ve actually seen a little bit of uptick in the eight plus. And so that obviously is going to drive down your overall selling price. It’s also a little bit of a tailwind for us on margins as well, which played out in the quarter.
I think the last part of your question, which was the supply. We’ve gotten this question in the past. And what I would tell you is the fact that the new car sales rate has been off of what it traditionally is, that’s not an environment that we’re unfamiliar with working in because if I think back in the past, we’ve seen that before back in the ’08, ’09, the reduction in new car sales was actually more dramatic than it is now. If you look at the new car sales that we’ve been experiencing here more recently, we still haven’t hit some of the numbers that you saw back coming out of ’08 and ’09. So and we were able to manage through that period very well. And I would tell you, we have a better tool in the toolbox this time with self-sufficiency being so high.
So we’re not worried about the availability of inventory just like we haven’t really been worried about it over the last year.
