Rates Down/Payments Up, Scout DTC “Exactly What Customers Want”?, Apple’s AI Ads

The Automotive Troublemaker w/ Paul J Daly and Kyle Mountsier

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We’re live from Lafayette Indiana to start recording the second season of More Than Cars! Today, we’re running through the latest industry data from J.D. Power, pushing back against an article from the Verge that suggests Scout is doing “exactly what customers want”, and how Apple is innovating with its advertisements.

Show Notes with links:

• J.D. Power’s preliminary October data reveals that while auto loan interest rates have dipped, monthly payments on new vehicles continue to climb, driven by reduced trade-in values.
  • The average interest rate for new-vehicle loans fell to 6.7%, down from 7.4% a year earlier, with monthly payments reaching $738 on average, a 14% increase from October 2023.
  • The average new-vehicle transaction price dropped 1.6% to $44,904, with used vehicles averaging $28,472.
  • Trade-in equity plummeted 10% to $7,909.
  • Cars are spending an average of 50 days on lots, more than double last October’s 20 days.
  • Leasing rose to 23% of sales, driven by increased incentive spending, now 6.3% of sticker prices.
  • Thomas King of J.D. Power explained, “This holiday season may require innovative strategies to entice customers into acquiring a new vehicle..”

• Scout Motors, backed by VW, is embracing a direct-to-consumer model, sidestepping traditional dealers and aiming for a seamless, digital-first sales process. Dealers, however, are already pushing back with legal threats.
  • Scout plans direct sales for its Terra and Traveler EVs, similar to Tesla’s approach.
  • CEO Scott Keogh promises a “transparent, super fast, and super easy” buying experience.
  • Relying on an in-house digital platform, Scout bypasses the traditional dealership model.
  • Scout aims to open 25 "Workshops" for service and test drives, plus Scout Studios for sales.
  • “Only through a direct sales model can Scout Motors get a full 360-degree view of the customer,” says VP Cody Thacker.
  • Key: it is clear consumers are getting information about dealers and their lawsuits from external sources and the rhetoric is against dealers.

• This week, Apple launched two new ads promoting its Apple Intelligence tools. While these quirky ads showcase AI’s ability to fix human oversights, some critics argue they highlight a disturbing trend in tech marketing.
  • Ads depict relatable mishaps, like forgetting birthdays, solved effortlessly by AI tools.
  • Directed by ad comedy expert David Shane, the spots add humor but raise questions.
  • Critics say Apple’s ads subtly suggest AI as a “cure for the dumb and lazy.”
  • Apple has used tech with heart in past ads, but these seem to replace human effort.
  • “So far, Apple Intelligence is showing us how to construct a false impression of ourselves,” observers note, questioning the underlying message.

Hosts: Paul J Daly and Kyle Mountsier
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