Randall Seymore: You’re right. So as all the valuations went, significantly up over 2021, 2022, and then obviously starting April last year, they were going down anywhere from 2% to 4% a month and the fourth quarter, it was down 4%, 4% and 2% from October, November, December. So, look, it was a challenge without a doubt. You had to turn the inventory quickly. Otherwise, you’re caught with that at a lower number. You can sell it. But as we come into the new year in January, it’s absolutely stabilized, and we’re seeing that in February as well. Our gross per unit will definitely be up in January for the first handful of trading days in February, the same thing. I’ll make one other point. When we were right sizing the inventory, we wholesaled 10,000 cars, but our wholesale, we actually made about 370 pounds per unit, which was down from 400 pounds per unit Q4 last year.
So it wasn’t down much and you think about the market going down that the way it did. So there certainly wasn’t a fire sale. But conversely to that, we, in late November and December, went out and acquired a bunch of used cars strategically as the market was deflated. And now as the market stabilized and hopefully goes up some, that’s part of the reason we’re seeing better grosses this month. So I think we were a bit advantageous there with our team.
Roger Penske: Well, look, I think, Daniel, the key thing, David, is that we were paying money for used cars. It was almost, in some cases, near what they could buy a new car for. So the amount of gross profit that was available to us from an advanced rate from the finance company. Remember, we financed a lot of the used cars, left us a very small margin. As the cost of sale comes down now, it’s going to give us a chance. Now, we’ve got interest rates pushing that up on a finance deal, but I think we’re going to see our margins will increase as we go forward. And I feel good about the used car business. We want to turn the loaner cars. All these things are going to help us as we go forward, especially on the premium side. And hopefully we’ll start to get some lease returns. You talked about advantageous buying 250 cars from Mercedes, I think, in last year and in the fourth quarter. So these things will start to help us that we can execute on.
Richard Shearing: And our average transaction price last year was over $34,000 a used car. That’s high.
Roger Penske: And what was it doing? What it was a year before?
Richard Shearing: It was flat on a year-over-year basis, roughly. So it really when you go back, I think, to 2019, prior to the pandemic, it was 25…
Roger Penske: Car numbers coming down. We can see the sale price of car shop. So I’m not sure exactly what it is, but I know it’s coming down and that’s going to help us get back in the sweet spot
Shelley Hulgrave: That’s right.
Roger Penske: We’re not competing with, what I call, the OEM dealership, right? We’re going to be done in this, it’s a different market.
David Whiston: Sorry, was that $34,000 at car shop or the retail stores?
Richard Shearing: That’s total consolidated every number that’s everybody if you look at car shop the average transaction price was just under $21,000 in the fourth quarter.
David Whiston: Okay, thank you very much.
Richard Shearing: You’re welcome.
Roger Penske: All right, David. Thank you.
Operator: And with no further questions in queue. I’d like to turn the call back over to Mr. Penske, for closing remarks.
Roger Penske: Yeah, Brad, thanks. Good quarter. We had some headwind, obviously, but feel good about the balance of the year. Obviously, we talked about battery electric vehicle that’s going to be a big focus on us and how we deal with that as we go forward here. So thanks, again. We’ll talk to you next quarter.
Operator: And that does conclude the call for today. Thanks for your participation. You may now disconnect.
