Jeff Dyke: Yes. I mean we’re buying more and more cars off the street. That percentage is growing with us every month. We’re very focused on that. Like I said at EchoPark, I think that those cars are going to be 25% of the mix. It’s a much larger percentage mix. On the franchise side, we buy very few cars at auction if any at all. So 90% of our cars are coming from purchase off the street or trade-ins.
Michael Ward: Okay. And you kind of alluded to it about the captive subs, finance subs getting back into the game a little bit subsidizing leases and it sounds like they’re subsidizing loans as well. Just wonder if you can comment what that does for your business both plus and minuses?
Jeff Dyke: Yes. I mean they’ve really had to do it on the electric vehicle side, right? So 90% of the electric vehicles we’re selling are all leases, just because the MSRPs were too high and customers want. Just don’t see the value in paying a difference between electric and an ICE vehicle. But certainly, it’s making a difference in the business. You can see it in our new car volume had a great new car volume quarter. We intend to have another one in the fourth quarter and moving forward. And they are 100% back in the game. They’re doing a great job. Really, really good job for us. And so we expect that to continue.
Michael Ward: Okay. And towards the end they’ve stepped up leasing, correct?
Jeff Dyke: Yes.
Michael Ward: 100% lease upfront.
Jeff Dyke: A 100%.
Michael Ward: Yes. And what — you have a higher luxury mix than most. So what is the percentage of leasing on the new vehicle side?
Jeff Dyke: Well, when you bring — the thing that’s funny now is and we should all as an industry start talking about is the difference between ICE and leasing and combustion engine and leasing and electric vehicle. The percentage for electric vehicles 85%, 90%. Even for Mercedes, it’s above that. In short-term, I think that’s going to continue on. And it’s in the 30% to as high as 50% range depending on the brand on the luxury side as well.
Michael Ward: Perfect. Thank you. Thank you very much.
Jeff Dyke: Sure.
Operator: [Operator Instructions] Our next question comes from the line of Bret Jordan with Jefferies. Please proceed with your…
Patrick Buckley: Hey, guys. This is Patrick Buckley on for Bret. Thanks for taking our questions. Taking a look at used GPUs and the strength there. Was there anything specific driving that? It sounded like sourcing has improved a bit as far as getting cars off the street but anything else to call out there?
Jeff Dyke: Yes, 100%. It’s disciplined day supply. We’ve always had that. And in this kind of environment that’s going to show up for us. We have a very, very disciplined way that we manage inventory. As I said earlier, 20-day supply front line 10 days in the pipeline. We don’t go over that. That might cost us some sales in some points in time. But in this kind of day and time it really does help. And so that’s keeping the margin strong for us on the franchise side. And on the EchoPark side, that discipline really does help and it’s made a difference in our margins.
Patrick Buckley: Got it. That’s helpful. And then we’ve also heard some talks of a bit of a mismatch between EV production and inventory levels and retail demand there. Are you guys seeing the same thing? And do you guys expect to see some heavier discounting as we enter 2024?
David Smith: Yeah. Actually, it’s very interesting. This is David. Depending on what part of the country you’re in, I got the chance to drive one of the new Mercedes electric vehicles recently and it was a fantastic vehicle. But the demand for that particular vehicle is certainly higher as I’m sure you’ve seen out West. And — but in some areas of the country as Jeff said you’ve got to discount that car heavily to get it — to actually get it sold. So…
