The transcript from this week’s, MiB: Doug DeMuro Reviews Cars, is below.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Overcast, Google, Bloomberg, and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.
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VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
RITHOLTZ: This week on the podcast I have an extra special guest. You guys know I sometimes wonk out with cars and auto reviews, and I’ve spoken to a number of people in that industry. Today I have pretty much the Mac Daddy of YouTube car reviewers. That would be Doug Demuro.
His stats are kind of insane. He’s got about 3.7 million subscribers and just billions of views. I — I’m not using that as hyperbole — billions of views. He’s pretty much driven every car under the sun — new cars, old cars, exotic cars, and has created a really fascinating business around filming himself doing car reviews. He’s got a very charming sense of humor, especially in writing. It’s quirky, kind of reminds me a little bit of Dave Barry. And he also is really, really insightful with automobiles.
I don’t know if it’s by the end of each review he has convinced me or we just start in the same place, but I find him to be enormously insightful when it comes to the value of cars, what their strengths and weaknesses are. Hey, is this something you might want to pick up as a weekend driver or is this a car you could take the kids back and forth with? It’s just really interesting. There’s a whole universe of YouTube car folks, and some of them just deal with the craziest, most exotic stuff.
Doug is very down to earth, and he gets as excited about a Ferrari as the next guy, but he also can take you through, you know, something like the Ford Bronco or a Range Rover Velar and explain the advantages of them.
If you’re a car person or if you’re actually shopping for a car, go to his YouTube site, Doug DeMuro, and just search for the car you’re looking for. I’m pretty positive you’re going to find something either identical to or similar to what you’re looking for. And he can really share some insights as to that specific car.
I could babble about this forever. Rather than do that, with no further (ADO), my conversation with Doug DeMuro.
VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
RITHOLTZ: My special guest this week is Doug DeMuro. He is a car viewer, but not just any car viewer. His YouTube channel has 3.7 million subscribers. His videos have been seen over 1.1 billion times. Each one averages about a two million view count per video. He has won numerous awards from YouTube and others, including the Gold Creator Award. He is the author of two books, “Plays with Cars” and “Bumper to Bumper.”
Doug DeMuro, welcome to Bloomberg.
DEMURO: Thank you for having me. I appreciate it.
RITHOLTZ: So let’s get a little overview of — of your career. You began at Porsche as sort of a cubicle drone working spreadsheets. But — but at least, you got a really nice company card, didn’t you?
DEMURO: Yeah, so I worked at Porsche. I was 21 that I just graduated college and I had a 911 a series of them actually. I had a four 911 company cars during the time I worked there and a Panamera. But I only crashed two of those five cars, so it really …
(LAUGHTER)
… didn’t all work out pretty well I think (inaudible).
RITHOLTZ: Thirty-three percent, that’s a great percentage. Oh, wait, you had four cars, so 50 percent.
DEMURO: Two out of — two out of five, two out of five — four 911s and a Panamera.
RITHOLTZ: Okay.
DEMURO: So I crashed one of the 911s and one of the – and the Panamera.
RITHOLTZ: Now the 911 I read about was a rainstorm. You come around a — a — a turn and there’s a tree down on the street. How did you — how did you crash the Panamera?
DEMURO: Oh, that one — the Panamera was not my fault. The guy pulled out in front of me. He like ran a stop sign.
I also considered the 911 not to be my fault, you know, with the tree in the road, but my bosses didn’t see it that way. They were not in agreement with me.
RITHOLTZ: Was the tree falling just as you came around the corner or was the tree already there?
DEMURO: No, it was hitting the road. But it was a dark road, and it was a — it was a sharp corner and you just — you couldn’t avoid it, in my opinion.
RITHOLTZ: Right, unless you were driving more slowly, which is what the officer would’ve said to me.
DEMURO: I think — I think that was their point of view.
RITHOLTZ: Driving — right — too fast for — for road conditions. I — we’ve all been there.
DEMURO: Right.
RITHOLTZ: So you begin writing not long after you’re at Porsche. You wrote for “The Truth About Cars,” which is a great blog. Way early, that blog was telling people that G.M. was going to go bankrupt years in advance. They were dead right.
You — you wrote for Jalopnik. What — what led to this side gig?
DEMURO: Well, you know, it’s interesting. I mean, I was 21 and I was working at Porsche, and then I was 22 and 23 and — you know, I don’t know, I was just — at that age it — it’s hard to sit in a cubicle. You know, I — I just was thinking to myself, “Am I’m really going to do this forever?” And it was cool having those cars, but they weren’t mine, you know, they were rental cars essentially from the company, but you had it for six months and then you get another one.
And I — I just remember after, you know, the third or fourth one, you pick it up and it’s kind of lost, it’s magic. And you think to yourself is this really going to be my whole life? You know, am I going to be driving other people’s cars? And that’s kind of the highlight of my life. It’s picking up a new (inaudible).
And so I started to kind of think about what do I want to do really? And I was actually writing already for autotrader.com, writing like just boring, you know, generic car articles. You know, should you buy your car at the end of the lease or whatever?
And I just decided, my wife and I were like, “Let’s just take this job.” So one day I quit and started — yeah, I mean, started writing The Truth About Cars about two weeks after I quit, and that began the — that was the seed that sprouted.
RITHOLTZ: Now I recall reading something of yours about the Chicago Auto Show that was surprisingly funny in a very Dave Barry-like way. It had a sense of humor. It wasn’t your straight, “Here’s the latest and greatest from Hyundai.”
DEMURO: Right, right. Yeah, I started — I started going after kind of a more humorous slant on it. You know, I had quit my job on the theory that I could make a living being funny with car. Even though no one had — that wasn’t really a thing that existed.
I have — when I look back on it, it sounds like this craziest thing I’ve ever done in my life. But, you know, I was 23 and it didn’t really. The stakes were low basically. And so I gave that a shot and it — and it — you know, that kind of grew an audience around me.
RITHOLTZ: Was that paying the bills? I mean, writing online …
DEMURO: No …
RITHOLTZ: … is not exactly …
DEMURO: … no, at the time …
RITHOLTZ: … a lucrative profession.
DEMURO: Correct. No, at the time, I was making all of my money from writing for Autotrader. I — they were doing well, and they needed a ton of content to sort of help drive traffic, search traffic and things to their car listing.
And so I was writing — the stuff that most people saw I was getting paid basically nothing for, but the stuff that I was getting paid for, you know, people weren’t really seeing unless they were in-market consumers, you know, trying to decide between like a RAV4 and a CRV. It was that kind of stuff.
RITHOLTZ: So then you end up picking up a 2004 Ferrari 360 Modena for about $80,000 half down, half financed with your parents …
DEMURO: Yeah.
RITHOLTZ: … cosigning the loan. Tell us your thinking behind that purchase.
DEMURO: That was also one of the craziest things ever done. I have no idea why I thought that was a good idea, but it turned out to be my thinking was, you know, now if you go on YouTube now, there’s an enormous amount of people who have really crazy cars and do videos about them. But back when I bought that car at the beginning of ’13 – I don’t know, the end of – but either way, people weren’t doing that.
YouTube was primarily confined to a bunch of teenagers kind of screwing around, and there were very, very, very few like exotic car owners, like that was out of the realm of a lot of what you choose to have. And so my thinking was, at the time, I was running for Jalopnik — the popular, you know, car blog — it became clear to me that video was maybe something I should try. And I thought, you know, it would be a really good idea to have something like this that would really, really attract people. And so my gamble was if I buy this car, maybe I can get a lot of people, you know, interested and excited and watching or reading my — my column. And so that was the — that was the theory.
And yes, I had never finance a car before, so my parents had to cosign, even though I put half down and my parents had to cosign the loan.
RITHOLTZ: So the first video of yours, I think, that caught my attention was you basically letting 20 friends and strangers drive the Ferrari and film it, and basically capture the their reactions. I suspect that video went pretty viral.
I started on Business Insider, but in prepping for this when I Google that video, a ton of places talked about that. Was that your first really big video?
DEMURO: Yeah, yeah, it was. I mean, like you said, it got kind of picked up everywhere. And before that, you know, I was posting the videos on Jalopnik, and so they’re doing pretty well because there’s a pretty good traffic there, there was at the time.
And then it kind of started — that video, yeah, that really was like, oh, my God, this — this can happen. I didn’t even realize, but people seem to think that was pretty crazy. And now that’s another trope on YouTube. A lot of people do that, letting their friends drive their whatever. It’s not, you know — you couldn’t do go viral with that content anymore.
RITHOLTZ: So after about a year with the Ferrari, you say, I know what’s even less reliable and you go out and pick up,” was it the Aston Martin after that?
DEMURO: No, I think it’s hard for me to remember now. It’s funny because, at the time, it was so important to me, but I think right after the Ferrari I had a Hummer. I had a ’95 Hummer, H1 Hummer …
RITHOLTZ: Oh.
(LAUGHTER)
DEMURO: … which was just the biggest disaster automobile that has ever existed. And I had a Nissan Skyline that I had imported from Japan, which was kind of …
RITHOLTZ: Ah, the GTR.
DEMURO: … but those two cars, that was all the audience, right? You had like the Japanese sports car crowd and then you have the old American truck crowd, and I was like, “This is — this is perfect. I can split the — I can split the audience.”
RITHOLTZ: And then somewhere in the middle there was a Lotus Elise, which you drove cross-country.
DEMURO: Yeah, I — I actually did that before I started even doing any of this. I did that just for fun. And it was the most miserable experience I’ve ever had. I wish I had done it when I was writing about it and making videos because — because it really wasn’t worth it to just do it.
RITHOLTZ: And for listeners, Doug is about 6’3″, maybe even taller and the Lotus is …
DEMURO: Yeah.
RITHOLTZ: … just tiny.
DEMURO: The worst drive in my life. And also, I discovered in the middle of the desert it didn’t have air-conditioning. I did this in July, and I didn’t find out …
(LAUGHTER)
… it didn’t have air-conditioning until Day 2 when I was in the Mojave Desert. And I remember at one point I pulled over simply to get a bottle of water so I could pour it on myself. It was that level …
RITHOLTZ: Right.
DEMURO: … of comfort.
RITHOLTZ: Drenched. Now, if I recall also the Aston Martin went back and forth across country. What was that experience like?
DEMURO: Yeah, you know, I — I kept trying to figure out, well, I’ve done this, I’ve done that, how do I get even more — reach even more people, make even more of an entertaining thing with these cars I’m buying.
And so this Aston Martin at the time and probably still, Aston Martin offered a one-year warranty with unlimited mileage on their used car. And, you know, Aston Martin and British Cars, they don’t have the greatest reputation for reliability. So I (inaudible) and I exploit the hell out of this.
So I bought one, and yeah, and then I drove it to 34 states, to Canada twice, D.C. and then sold it by almost 20,000 miles on a car in a year. I have a picture of that car next to a bison in North Dakota, which most Aston Martin owners don’t have.
And — but it was pretty good actually. It was reasonably reliable. There were some hiccups at the beginning, but after that it was cool, but I think a lot of people were interested in seeing, hey, here’s a used, you know, $40,000 exotic car, how bad it really is it? And so I wanted to find out and I guess I did.
RITHOLTZ: It turned out not to be that bad.
DEMURO: It turned out not to be that bad, yeah.
RITHOLTZ: So now you start buying other cars to do reviews. You had a Dodge viper, you have the Range Rover or the Defender 90, the E63 Wagon. When did you come to the realization that people really wanted to hear from an intelligent, but fun car reviewer?
DEMURO: You know, it’s interesting. Initially, I was buying all those cars just to make videos with and since I have now kind of morphed into buying cars for myself and making videos with other cars for exactly the reason that you state. It became clear to me, people really wanted to see the reviews. And, obviously, I couldn’t buy cars fast enough.
And what became clear to me was that people wanted to see, you know, all sorts of different variety of interesting cars. And — and I could start to provide that.
And yeah, I mean, I don’t know. I — it just sort of started to take off. It was one of those things where when you do YouTube, you just make a ton of different types of content. And whatever gets the most popular, you make more of that. And that’s exactly how I did it. You know, I — I — I started making some silly stuff with my own cars and reviewing other people’s cars.
Well, the reviews of the other people’s cars, they got a little more popular. And so, you know, started doing more those and more of those. And the next thing, you know, you know, a billion views, like you said.
RITHOLTZ: So you’re armed with an Emory University degree in Economics. You get about …
DEMURO: That’s right.
RITHOLTZ: … $2,000 worth of equipment. And you launched …
DEMURO: Yeah.
RITHOLTZ: … a YouTube channel that you don’t really think is the future of your career, it’s just, ah, let me throw some — some videos up here. How long before it became wildly successful,?
DEMURO: You know, it’s interesting. The — my initial intent was I — I — I — I felt then and kind of still feel that I was a better writer than a video person. And so the initial plan was that the videos would simply be a companion to my writing.
And I remember in the summer of ’15, so that was about a year and a half after I restarted videos, I — I was looking at my articles and my numbers on the articles were not that strong. And I happened to glance at my YouTube numbers at that time and they were really strong. And I started to realize, “Oh, I’m getting more views on YouTube than on the articles.” This hadn’t even occurred to me because I was so laser-focused on the writing.
And then the following summer of ’16, I started doing two videos per week. And that’s really when things started taking off. When I started the consistent schedule and started to really focus on YouTube, that’s when things really started to blow up.
RITHOLTZ: And in 2016, those reviews as opposed to one of your early reviews back when you had the Ferrari, crack me up was Ferraris don’t attract women. You — you would …
DEMURO: Right.
RITHOLTZ: … put — put parts of Ferrari and film people walking by. Women could not possibly care less. But when you reversed it and put a woman in a Ferrari, guys flock to it like — like a — like the strongest magnet in the world.
(LAUGHTER)
DEMURO: And, you know, guys always flock to new cars. You know, it’s so funny, men always think I’ll buy this car and women will be all over me whatever.
No, who — who’s actually all over you when you have a Ferrari is like teenage boy. A pointed edge (inaudible) take pictures, you know, they are the ones (inaudible). And, you know, guys is generally (inaudible), but women generally don’t really care that much. That’s one of the things that I’ve learned. If you’re buying a car to impress someone else, you’re probably in the wrong — you’re barking up the wrong tree.
RITHOLTZ: To say the very least. So let’s talk about some of the reviews that you do. How do you go about selecting cars? What — is it just a function of what’s available or are you thinking about a checklist than saying, “You know, I really haven’t test drove, you know, a 488 recently and it’s been upgraded. Let me — let me give that a shot.”
DEMURO: It’s an interesting question. So when I first started, it was a function of what was available. And I remember people would reach out to me with like a Lamborghini, and they’re like, “Oh, my God, a Lamborghini,” you know, I got to go and film it, and I would.
Now because the channel is so big, I still do it the same way. I solicit people to get in touch with me rather than me getting in touch with people because I just think it’s kind of entitled to call up someone or send an email to someone and say, “Hey, I’m …
RITHOLTZ: Right.
DEMURO: … I’m the guy on YouTube. Can I review your expensive car?”
It’s easier if they contact me because the channel is now so big that I get contacted about pretty much every car that you could imagine. And so now, yes, it’s sort of like a checklist, like I know that X, Y and Z cars perform well, so I make videos of those cars. New cars perform tremendous well, so I work very closely with dealers and, to an extent, with auto makers. I don’t like doing it but — somewhat in order to make sure that, you know, I have new cars right when they first come out.
And then still some private owners. You know, I film — last week I filmed and it hasn’t gone up yet, but I filmed the 1986 Nissan Maxima. Occasionally, there are cars that I just personally have an interest in. And, you know, I filmed three new models that week, and I’m kind of — I just want to do something weird and saw these things like that. But it’s — it’s less and less common. The new cars is what people mostly want to see.
RITHOLTZ: In prepping for this, like normally I watch your videos of the cars I want to learn about or — or sea, but in prepping for this, I looked at just some horrific cars that you reviewed, whether it was the — what was the name of the Cadillac convertible before the XLR …
DEMURO: Oh.
RITHOLTZ: … the — the Allente (inaudible)…
DEMURO: Yeah, the — the Allente. I just did the Allente.
RITHOLTZ: Yeah. Ah, just — just such the worst G.M. garbage. And you — you did a Buick Reatta with that …
DEMURO: Yeah.
RITHOLTZ: … easy touch.
DEMURO: Yeah, yeah, (inaudible).
RITHOLTZ: And even when G.M. got — was ahead of the curve with the technology, they — they found a way to mess it up.
DEMURO: That’s right.
RITHOLTZ: But you also do like, you know, pretty new stuff. You did the Jeep Gladiator, you did — you know, anytime you did the most recent high output version of the Range Rover Velar, you do pretty mainstream cars not just exotics.
DEMURO: Yeah. No, it’s gotten to the point where now I — I try to film if there’s any new car that has even a little — (inaudible) that’s been a buzz around it, I do try to make sure I have a video on it, just important to do. And — and honestly, my channel is kind of a weird one because I’m — I’m split between enthusiasts and in-market shoppers.
And so …
RITHOLTZ: Right.
DEMURO: … I’ll review — I’ll put up a review of like the Toyota Venza and (inaudible) Highlander, and people will be like, “Why are you reviewing this piece of crap?”
But actually that video end up getting a million views or a million and a half because people are actually buying it. Well, then the next day I have to put up a video of, you know, an old whatever, Porsche. And then the enthusiasts come back, and I lose the in-market shopper, then it’s kind of a — it’s a think line to walk and, you know, you get criticism on YouTube no matter what you do.
RITHOLTZ: So let’s talk about those new cars. We’ll talk about the exotics later. What sort of prep work do you do when you’re getting ready to go out and shoot a car for the day? Take us through your process. What do you do to get to prepare?
DEMURO: So — but, you know, at the start of it I — I read the script, and I don’t script the whole video. You know, most of my video I go through kind of the little works of the car. I don’t script — script that because it’s difficult to know what those things will be until I kind of get to the car. But I script the intro and the outro, and you can see me standing next to the car talking. That’s all been scripted.
The actual quirks and features of the car, I just have to kind of figure out when I’m there because it’s just too difficult to figure that stuff out until you’re really up close with the car. And as a result, filming the car can take six, seven hours because you spend two, ,three hours just kind of pouring over every button, every future of the owner’s manual, all that stuff to figure out where everything is and how it all works. And so that’s pretty much the process. There’s not that much prep at the beginning, but when you’re actually there, it’s really kind of intense.
And I don’t think — you know, people see it on the screen and I’m kind of a goofy guy with these stupid clothes and people just think it’s easy. And it’s a little bit harder than you might realize.
(COMMERCIAL BREAK)
RITHOLTZ: How did the DougScore come about? I assume you throw that in afterwards. You take notes and you do that and prep, you’re not doing it on the fly while…
DEMURO: Correct.
RITHOLTZ: … you’re recording. So …
DEMURO: Correct.
RITHOLTZ: … DougScore, Quirks and Features and, of course, this is a — how did these hallmarks of your videos come about?
DEMURO: The DougScore came about because I was realizing that people weren’t watching the end of the videos. It’s interesting. The way my videos work, I spend 20 minutes talking about the little quirks of the car and only about five minutes driving the car. And the reason I started doing that was because usually by the time I had gotten a car, other people who are better than me reviewing cars had driven it already. And so people weren’t — didn’t care what I had to say about the drive. They only care about the quirks.
And so I thought, well, I got to get people to finish watching these videos somehow, and so I put in the DougScore. And — and that has really blown up the, you know, the rate to people. People — sometimes people skip stuff just to go to that and see like where I’ve put against other cars.
RITHOLTZ: You don’t have the DougScore online anywhere, like every now and then, I — I’m — I don’t want to have to pull up a video such to the end. If I’m just looking for something specific in the prep for this, I was surprised that the DougScore does not seem to exist anywhere other than mentioned in the video unless I’m — I missed it.
DEMURO: It is — it is on my website. I have to do better about making this clear because I get this question a lot. It is on my website.
If you go to dougdemuro.com, you can click on DougScore and the whole sheet is there. It’s like a Google doc. That’s been kind of interesting.
RITHOLTZ: Ah, OK.
DEMURO: You can copy and paste it into Excel and manipulate it. And I get people every couple of weeks emailing me and saying, “Hey, ,here’s some weird, you know, cool metrics I just did with the DougScore,” and that sort of thing. And it’s always interesting kind of to see how it’s shaking down because I don’t do that much analytics with it.
RITHOLTZ: Well, you should because that’s a lot of data across a lot of cars.
DEMURO: I know. The interesting thing and has really become initially was just kind of this interesting way to get people to watch the videos. Now it’s become actually useful information because in a lot of car segments I had reviewed all of the vehicles. And so it’s like here’s something you can actually use to maybe, you know, compare stuff.
RITHOLTZ: And to be fair to you, normally when I look at rating systems, I’m pretty critical in, you know, waiving them off. I don’t disagree with you all that often. Every now and then I think I would be a little more generous in the utility usefulness of certain exotic cars because if you’re going out and buying a $400,000 car, you’re not bringing stuff home from Wal-Mart. It’s not — so — so saying …
DEMURO: Right.
RITHOLTZ: … the car has a small trunk is like, well, but this is not their only car, it — they’re not taking …
DEMURO: Right, right, right.
RITHOLTZ: … it home from the supermarket. But for the most part, I usually don’t disagree with you other than a point or two this way or that.
DEMURO: Yeah. Well, I appreciate that. I think — it took a lot of time to kind of refine it, and we’ve gone through several refinements, but now I think it’s kind of dialed in.
RITHOLTZ: When did you come to the realization that YouTube video reviews of automobiles could be a full-time job?
DEMURO: I remember the day. It was — I — I was driving that Aston Martin across the country. And on the way back — at the time, I lived in Philadelphia and my — my wife had a family reunion in California. I thought, well, I have this unlimited mileage warranty (inaudible) drive the thing out there and back.
(LAUGHTER)
And on the way back — she flew, by the way, she was not involved. She didn’t want anything to do it. But on the way back …
RITHOLTZ: Smart girl.
DEMURO: … I did meet up with my fans, and I did one in — in — I — I had never been to North Dakota, so I went like the northern route back. And I — I went to Boise and then Fargo, and then Chicago, and then Minneapolis and Cleveland.
And I — I assumed, at the time, that maybe a few dozen people would (inaudible) to this thing. And I still, to this day, remember it was Minneapolis. I pulled in. There were hundreds and hundreds of people. The Oscar Mayer Wienermobile showed up.
(LAUGHTER)
And it was unbelievable. It was just an incredible — it’s — of course, with COVID, you can’t even imagine such of that bit now. But it was this unbelievable thing that all these people, all these fans were so excited. And it poured that night. Everyone still came out.
And I called my wife on the way home from that and said, “I think this may actually be a career,” like I think I might actually be able to do something out of this and — and not have to go to law school or whatever the prevailing thought was at the time, like this may actually work. It was only when I finally saw that display of people that night that I kind of realized this was maybe the future.
RITHOLTZ: Let’s put these numbers into a little perspective, put a little flesh on the bones. The numbers I’m going to throw out are — are pretty general. They’re available online from all sorts of other sites that tell you how to be a YouTuber. But typically, if you’re up to a one to two million page views per month or video views per month, that should throw up somewhere between $0.25 million and $0.5 million per year. Are these sites ball parked right or they — is that to broad a range?
DEMURO: Yeah, and it is. These sites often — they do offer really broad ranges. But, you know, it’s interesting. The way that YouTube works, I — I’ve been very surprised to learn that some channels make a ton more money because of the type of content they do, and some make a ton less because of the type of content they do. It all depends on who your viewers are. And then there’s a lot of …
RITHOLTZ: Right.
DEMURO: … YouTubers in addition who do a lot of paid advertisements, ,which I’ve generally avoided. I do like one or two …
RITHOLTZ: Endorsements?
DEMURO: … of those a year. Yeah, endorsements. I really …
RITHOLTZ: So …
DEMURO: … really really have (inaudible).
I — I feel that my ethics as a journalist is important to very much minimalize those. Occasionally I get an offer I can’t refuse, and I’ve done maybe three. But most guys do one every video. So you can make a lot more money that way.
But I’ve also always tried to play the long game here, and I think that by doing ads like that, you kind of — people don’t want to watch your content. As much as every time they turn it on, there’s a minute, you know, ad for a shaving thing. But anyway, you can make pretty good money. It’s going pretty well.
RITHOLTZ: Quite, quite interesting. So let’s talk a little bit about buying and selling cars online. I just sold an SL this summer on eBay. Coincidently, what I paid for it 17 years ago, an ’86 560SL, I got …
DEMURO: Yeah.
RITHOLTZ: … my R8 on bring a trailer. I found my wife’s M 325iconvertible on CarGurus. I don’t remember how I found the M6. It might’ve been CarGurus, but that also was in Indianapolis. I had a flight in Indianapolis and drive it home, but it — it’s not just car guys buying cars online, it’s everybody. How has the Internet changed how we buy cars these days?
DEMURO: Yeah, I mean, it’s just — that’s just it, right, like no one is not using the Internet pretty much to find cars. The days of leasing through Autotrader magazine or the back of the newspaper, that’s how I bought cars when I was, you know, just — just graduating from high school. And I was 16 and that’s what you do.
You remember you have to try to sit like they charge you by the letter so it doesn’t (inaudible) try to fit like P.W. for power windows and P.L. That’s what how it was back then. But now the Internet is everything, it’s so much easier. You get a ton of high-resolution photos and is a lot more information available to the buyer as to what they’re actually buying.
RITHOLTZ: I couldn’t agree with you more. I had the same experience you had on Craigslist with every crazy sob story coming out. Could you hold the note on this car, we’ll — we’ll take it from you like … yeah, sure, I’m going to do that. Right, it’s pretty hilarious.
So there’s a ton of transactions taking place, both auctions and just regular sales. What motivated you to launch Cars & Bids?
DEMURO: It — you know, one of the things that I started to realize is that there’s a large segment of the car enthusiast community, especially in terms of selling and buying that is devoted to what I consider to be sort of vintage cars, which include stuff going into the 70’s — 60’s, 70’s, 50’s. That’s where it is perceived, especially in the cars world that all the money is.
And I am very well aware being my age, but also because I know a lot of other people who are enthusiasts that there are — and it’s an underserved community of people who are interested in cars from the eighties and up. Those people are kind of ignored in the cool car space. And so I decided — you know, it’d be cool to have a site that just sold cars to, you know, from that era basically, the 1980’s and up. And so that’s kind of — that was what we wanted to do. And I think, you know, we executed and it’s gone reasonably well so far, I hope.
RITHOLTZ: Well, it’s certainly an interesting site. I think that you’ve made some improvements over many of the other auction sites. I mean, eBay is kind of a mess. But even …
DEMURO: Yeah.
RITHOLTZ: … compared to something like Bring — Bring a Trailer, you have a lot of really interesting — I would call them upgrades, some innovations that — that are pretty intriguing. Tell us what you think is the most distinguishing characteristic about Cars & Bids beyond just the fact that it’s 80’s to present.
DEMURO: Yeah, I think — I think there’s a few — that’s obviously the biggest one to me is that the specific focus, which I think attracts generally like younger people or people who are (inaudible) in that world. But the other stuff is I think the site is really clean and easy to use like a modern website is.
Some of the competitors — eBay like you mentioned, Bring a Trailer — I just don’t think it’s quite as easy to navigate, and it’s — and it’s clean and simple. And my team of the designers and the engineers who created — developers — did an incredibly good job of making it like a modern website since we knew we would probably have a younger audience.
And to me, that’s probably the easiest thing just the — or the — the biggest differentiators. There’s just simplicity and ease of navigation on the site and using it, and seeing the cars and being able to kind of see everything displayed, it’s not — it’s just very simple to use. And there’s more stuff that’s going to come out as we grow that’s going to make it even easier to navigate. So it’s important I think to make something like that. And especially when you take a look at the competitors and just geared for not really kind of the modern — the modern auction (inaudible), I would say.
RITHOLTZ: So what’s your role on the site presently? You were the founder or co-founder. Are you just marketing and strategy or — or how involved in the day-to-day are you?
DEMURO: Well, actually, it’s interesting. I incredibly involved. So when we’ve launched the site, we didn’t realize how successful it would be. And so we just weren’t ready with — with employees.
I think we finally have the team in place now. It’s been two months since we launched. I think we’re finally — or three months rather. I think we’re finally ready to take on the volume and — and sort of start wrapping things up.
But if initially I was doing everything, I mean, it was a disaster. I still am doing most of the reserve setting of the cars that come in, so that’s such a giant driver of revenue, you know, making sure the cars have the right reserve prices (inaudible) actually.
So — and then I — I add a little Doug’s tape to every listing that goes up. And I personally write each one sort of my thoughts on that particular car, and that car is placed in the market. And then yes, marketing and strategy is sort of my big contribution to the site since that’s run best at.
RITHOLTZ: So what are the goals for the site? How many cars do you hope to auction each week? And — and what sort of dollar volume do you think you can move?
DEMURO: It’s a good question. We’re not sure. We hope and we believe that there’s a market for — I don’t know — 20, 40, 50 auctions a week, something like that. I really want to be the premier place for cars from this era. If you’re looking for an 80’s (inaudible) car, Cars & Bids, go there. You’ll find a wide variety.
We’ve done a good job with that, but I think I really want to kind of ramp it up and make sure that basically anything you might want is available on the site at any time. And if it isn’t, well, check back next week. So I’m hoping to be able to really kind of scale it and get it to a point where it is the default for people looking for a car from (inaudible).
RITHOLTZ: So two nuts and bolts questions about the operations of the site. One is the reserve price. You point out that cars without reserve have a tendency to attract a lot of interest. I was always curious why the option doesn’t exist for a seller to allow the reserve number to drop mid-auction. Not — not necessarily that reserve has been met, but if an auction is attracting a lot of attention to just say we’re making this now a reserve list auction to see — see what that does to the bidding.
DEMURO: It’s interesting. So if a — if a seller reaches out to us during the auction so they want to simply remove their reserve, we have honored those requests. So a few cars have actually slipped to no reserve during the auction. And — but we generally tell sellers not to reveal their reserve during the auction because …
RITHOLTZ: Right.
DEMURO: … one of the things that we found is when someone says, “Oh, the reserve is X amount,” it makes the bidders feel that the car is only worse X amount. And so …
RITHOLTZ: Right.
DEMURO: … they get kind of disappointed or sort of slowed down their bidding or just stopped bidding all together. Once it gets closed or hits that number because they no longer think they’re getting any form of a deal whereas if the reserve is sort of sitting there in the background, you don’t know it, people just bid what they think the car is worth, which frankly, objectively, is how a marketplace like that ought to work. People pay what they’re willing to pay and whoever pays them, you know, pays the most. That’s it. That’s the person who win.
And so when you say, ,”Oh, the reserve is 30,” bidders start thinking, well, 30? I was going to pay 33, but now that I know that the seller only thinks it’s worth 30, I’m not going to bid. And so we try to — we try to really coach the sellers don’t reveal your reserve. But if they’re willing to pull the reserve completely off, then yes, we generally honor those requests.
In our opinions, those auctions probably should have been no reserve from the beginning, but it’s very difficult to explain to sellers, “Hey, you’re going to get more money if you don’t know reserve.” Cars like — we just had an Audi R8 and pulled the reserve off in the last day. And it’s like that guy should’ve gone no reserve from the beginning, it was a really nice car. It was clearly going to get a lot of views.
But people say to me, “Well, what if you only get to do $1,000?” And I’m like, well, you know, that hasn’t happened yet for no reserve or reserve card. It hasn’t it — it hasn’t occurred yet. We have a lot of traffic on the site, and so it’s possible, but it’s very, very unlikely. People have a hard time …
RITHOLTZ: Yeah.
DEMURO: … taking that point — my understanding was.
RITHOLTZ: Yeah. I — I saw that R8, it was a 2014 on the first years with the dual clutch, if I remember, not a manual and …
DEMURO: Yeah, I can’t — I can’t remember. I think the one that the reserve was pulled off was ’17. It was a — it was the second (Inaudible).
RITHOLTZ: Oh, OK. The way I end up bidding on cars typically is I’ll try and ballpark what fair value is, and then I’ll bid up to 20 percent below it. And you’d be surprised how often you’re either the winner of the auction or high bid reserve not met, and then you speak to the …
DEMURO: Right.
RITHOLTZ: … the seller and they’re …
DEMURO: Right.
RITHOLTZ: … you know, 25,000 above high price.
And even if I’m on the low end, they’re just not realistic. But most of the time, it looks like — so this is a good math question. What percentage of reserved bidding auctions actually go through — through to a sale?
DEMURO: It’s something like 60, 65. It’s like about two-thirds. A good portion …
RITHOLTZ: And obviously, it’s 100 percent of the no reserve, right?
DEMURO: Yeah, exactly. So our steal rate (ph) is just 80 percent. The — and — but then a good portion of those reserve auctions are deals are made after the fact. You just didn’t have maybe the bidder in the room at that time to, you know, get the number up there or maybe the seller just decides, yeah, okay, I’ll go a little lower, I just want (inaudible) gone.
But that’s — that’s maybe once a day we do one of those or once every couple days. Typically, they’re — they’re — they’re hitting their numbers. And, you know, I don’t know, I — we’re doing our — we do our best with the sellers to try to get them into a reasonable ballpark. It’s amazing to me how many sellers ask for high retail as their reserve price. And I’m like that’s (inaudible) work, you know.
And then they get upset, and they’re like, well, you won’t give me — you know, the car — the car is worth — you know, the nicest one on Autotrader is listed for 40. This guy wants a 41 reserve, right? And he says, “You won’t let me sell the car at the price I want.” Well, there’s a lot of place you can do that, you know. I’m not standing in your way. It’s just kind of — but a lot of sellers are realistic and they understand that, hey, the reserve is kind of the bottom, I’m willing to accept bid to go a lot higher. And we’ve had a lot of very happy sellers where they put a certain reserve, and the bids went thousands over, and it just worked out for them.
And I try to explain that to people …
RITHOLTZ: Yeah.
DEMURO: … but again, it’s hard. Every seller is different.
RITHOLTZ: You know, the – the endowment effect is everybody believes that because they own it, it’s got a bigger value. Imagine trying to sell a house where somebody lived for 30 years, brought their kids up, have all their memories there. Good luck getting those people to be rationale in terms of …
DEMURO: Right. And it’s similar to that in a lot of ways. Exactly.
RITHOLTZ: So probably the most similar site to yours is Bring a Trailer, which has been around for a good couple of years. They were recently sold. What — what are the long-term …
DEMURO: Yeah.
RITHOLTZ: … plans with Cars & Bids?
DEMURO: You know, my partner and I discussed this a lot. I don’t know. Obviously, if the right offer comes during the right time, you know, that’s something we consider. But also, it’s a — it’s a good business. You know, we don’t hold the cars. We’ve already done a lot of the really heavy lifting creating the website and the marketplace and the terms and — and, you know, kind of figuring out a lot of the — the problems that have come up and now we have playbooks for them.
And I’m not really sure. I mean, our goal was to first see if it would work and it did. And now the next question is like what can we do to innovate and grow it. And I think once we’ve gotten to the point where we’ve made some cool new features come out that even enhance the experience to the further, and we grow it to a point that we’re really happy with, I think then we start thinking, OK, what’s next? Do we expand to, you know, beyond cars? Do we expand to older cars? Do we expand to whatever or do we look for a buyer or whatever? I don’t know.
But I think that’s a long way off. I think we have a long way to go before we feel comfortable that were — where we really want to be with it. I think there’s a long — a long-term plan there.
RITHOLTZ: Quite fascinating. So I know you cover a lot of exotic cars, but you also cover a lot of — of new cars that have come out. Tell us some of your favorite regular cars.
If — if uncle Fred or your sisters, you know, husband says, “Hey, I just need a regular hauler for going back and forth to work, to the train station, to Target.” What sort of cars do you recommend for those people?
DEMURO: You know, it’s funny, when people come to me with that kind of request, I — I try to steer them in whichever direction they’re already thinking because I don’t want to get blamed. So if they’re thinking Honda CRV, I’m like, yes, that is it. That’s the one you want. I hope it (inaudible).
RITHOLTZ: You can fit two baby seats and a ton of — of packages in the back of that, right? I mean …
DEMURO: Right, and that’s always …
RITHOLTZ: … that’s a little tiny for a family.
DEMURO: People come to me and they’re very distressed, and they say, “What do I get, the Highlander or the Pilot or the Explorer?” And the truth is when you’re looking at a car like that, you’re just going to abuse and use the family car, it doesn’t really matter all that much.
RITHOLTZ: Right.
DEMURO: They’re all good. You know, there was a day not that long ago where cars — there were some really bad cars. And that’s not really the case anymore. And I always tell people, look, go to the dealer. You’re going to play with the screen thing. That’s a big component of cars now, you know, drive them, see how they feel, and my views are I can generally point them in a certain direction, but I also don’t want to be — I don’t want to get them upset. And — and also there’s all these studies out that said that some large portion of consumers will change their entire automotive purchase if a different car is available and the color they want. And it’s like well, that kind of goes to show you that people don’t — people don’t really care maybe as much as we might think for cars like that.
But there are a lot of good cars out right now. I’ve been really surprised with modern Ford models, the new Ford Explorer is really great, really impressive car. It’s just really amazing to me how good that modern cars are in general. This — the technology that they now include, the features, the conveniences, it’s really quite something. And which is one of the reasons why I kind of tell people it’s hard to really go wrong if someone is going in kind of a wrong direction, there may be maybe thinking (inaudible). That’s when you start (inaudible) from that and better got it. But you really get that.
RITHOLTZ: And full disclosure many years ago — many, many years ago, I had the Eagle Talon TSi All-Wheel Drive, which was effectively Mitsubishi product. I saw one on your site in red and black that other than the interior color identical to the one I had. And to be fair, it was a pretty decent car for 20, 30 years ago.
DEMURO: Oh, yeah. No, hey, Mitsubishi was a great automaker at one point, but things have changed, but that car I mean, they’re so hard. In that particular one that you’re talking about sold for like $14,000, and it’s so hard to find a nice condition anymore. They’re such cool cars.
RITHOLTZ: And …
DEMURO: Those — those …
RITHOLTZ: … and that thing was mint.
DEMURO: … cars were so special. Yeah, yeah, it was. And they’re impossible to find mint because, as you know, they were all modified. Either the first owner modified it or resold it to some kid who’s a second owner who modified it, and then blew up the engine. And so finding one of those in nice shape is impossible now.
RITHOLTZ: So let’s talk about fun weekend cars. If someone said, “Hey, I’m looking for something used that I could toss around, take on drives out into the country or a long weekend, but I — I want a stick shift and I want to have a little fun,” what sort of car would you send that person looking at?
DEMURO: Generally, Porsches are popular in that segment for a reason. It kind of depends on their budget, obviously. And Miata, if — if your budget is, you know, under 20, Miatas are great. They’re just — they’re so much fun and they’re very underrated even by modern — by — by — by the general public, they’re very underrated. People think they’re just cars for, you know, people to drive around and their hair fly. They’re actually funny good sports cars.
And then — you know, then you can start getting into used Caymans and — and Boxsters. I prefer convertibles. And so I always kind of tell people to go out to that stuff, and you get more expensive than that, you know, yeah used 911, that sort of thing.
But there’s a reason that Porsches are — are so good and people always kind of idolized the idea of owning a Porsche, and so they’re always kind of into that, especially when they find out they can pick up used ones and they’re pretty reliable. It makes sense. That’s kind of what I generally tell people on that world.
(COMMERCIAL BREAK)
RITHOLTZ: So let me push back a little bit on some of your reviews on some of the sort of fastback SUVs and Crossovers. You — you don’t like X4s or X6s or the Mercedes GLEs. And even the Lambo Urus, you’ve kind of mocked the way it looks. You know, I — I saw your review of the most recent. I think it was either the Denali or the — the Yukon. And — and I think GMC’s new tagline should be, “We build rectangles.”
And if you’re not interested in like a big boring box, well, something like — forget the — the Lambo, but something like the X4 or there’s a — a smaller version of the GLE that has a little style and a little pizazz, and it’s not quite a full-blown SUV, which you may not need, and it’s not quite a full station wagon. It’s somewhere in between. What — what’s your beef with those — those cars?
DEMURO: Well, don’t you think there’s a — there’s a medium between a box like a Tahoe and an X4. I mean, what’s stronger than X3? How can we even get an X3? They’re great …
RITHOLTZ: Oh.
DEMURO: … and they’re more practical.
RITHOLTZ: They’re prettier than they used to be, the first-gen X3 is where it just got awful, although you could get them with a stick. When our …
DEMURO: That’s right.
RITHOLTZ: … Macan (inaudible) went back, I replaced it with an X4 because, you know, I have to — I have two big dogs. We go out to the beach on the weekends. Getting the older dog in and out of the backseat, it can’t be too high, so that kind eliminated the X5.
The X3 was like — and the GLE was a little over the top for my taste. I thought it was a bit much. This is about the same size as a station wagon, maybe a little touch bigger, but it drives, you know, the Macan drove like a sports car and — and ate up tires and breaks like a sports car also. The X4 seems to be like a reasonable compromise between — I don’t want a giant Sport Ute, but I need occasionally to throw a bunch of stuff in the back. And this sort of, for me anyway, just split the difference.
DEMURO: I don’t mind truthfully how they look as much because I don’t really like to judge cars on styling. That’s kind of a — people can do what they want there.
But to me, the problem is you could have an X3, you get more cargo space. From a cubic perspective, the — the floor …
RITHOLTZ: Yeah.
DEMURO: … the floor is the same surface area, but it’s all in the back obviously, and it’s cheaper. And that you’re not robbing yourself any rear seat room. And so to me it’s like so obvious. I would just — I wouldn’t consider an X4, I would skip right to the X3.
Now, the market seems to agree with you certainly based on the number of X4s and GLC coupe and all those things I’m starting to see around. The automakers have done a good job creating demand for these cars and people are interested in them, but I just find it to be so strange.
Now, I think part of it is that people don’t want — like you kind of implied — people don’t want the same boring SUV over and over again, so it was up to the automakers to think how can we, you know, make it more interesting. And so that’s how we got X4, X6 vehicles like that.
RITHOLTZ: You know, we went to the dealer and we got a quote on the M4.0 X4, and then a pretty nicely optioned X3. And then I went to a broker and got a quote, “Here — here are the options I must have. Here are the options I’d like to have. Here are the color combinations I’d like.” And he came back with the lease price, and this is the only co we lease — everything else we own — that was the same as the dealer quote for the X3. It made it a very easy …
DEMURO: Yeah.
RITHOLTZ: … decision.
So when I see the car and — and I never loved the X6, I thought the X6 was a goofy compromise. The new X6 is kind of nice also.
DEMURO: You know, the original X6 was quite a stretch. The newer one is a lot more of a rational looking car. I think they kind of dialed it back a little bit. I’ve always said that the new X6 was like the old X6 asking permission. (Inaudible) it’s like it’s made a little bit — a little bit not — it’s not quite as — as aggressive and as — as eager as the old one, but maybe that’s a good thing.
But also the X6, when it first came out, it was a really big departure, right? It was the first of those coupe SUVs, and so it was a — everybody is like whoa, what are they thinking? Well, now it’s become a little more accepted. And so I think there’s also a component of in our minds that has become a more reasonable car.
RITHOLTZ: So let’s talk about some of the crazier cars you’ve reviewed and enjoyed — LaFerrari, Bugatti Veyron …
DEMURO: Yeah.
RITHOLTZ: … McLaren Senna …
DEMURO: Yeah.
RITHOLTZ: … Koenigsegg Agera, what — and that’s just like the tip of the iceberg. Tell us some of the most memorable million dollar cars you got to drive.
DEMURO: In the Bugatti Chiron, which is Bugatti’s current, you know, expensive sports car, that was probably the most memorable. I mean, that I think it’s $3 million plus. It’s also just the cool thing. The Keonigseggs are cool, but I still can’t shake the feeling that it’s just an ultimate small volume manufacturer that just sort of build a few of these.
You know, Bugatti is like a legit company that’s pumping these things out, not that — not pumping about, but they’ve built a few hundreds. And — and it’s just so amazing what the engineering, what it was capable of that it could go so fast, it has so much power, and also be luxurious.
I mean, you drive that care, it feels like you’re sitting at a Bentley, and then you accelerate and it feels like you’re driving a race car. I mean, it’s really impressive that they were able to make all of that happen. And so that’s just a really special car. Driving that around (inaudible) that you’re in Toronto and driving that around just freak out. They get so excited, that’s a Bugatti, you know.
And that car, when I was a kid, the Veyron and then now the Chiron is like in the car, you know, the car you want. I just think emotionally that’s a really cool car.
But I mean, they’re all insane. Pagani — Pagani makes them — their cars are essentially high-quality jewelry, every little button and feature and switches perfectly chiseled and aluminum, and the incredible weight they think about every — even when you put on the hazard lights, how does that feel and blah, blah, blah. It’s incredible craftsmanship. And they’re all incredible. It was a really amazing thing is just the sheer number of million dollar cars that exist, which is now old quite a few.
RITHOLTZ: What is going on with the run of new Ferraris that we’ve seen coming out? Are they in — in danger of becoming a high-volume retailer? How many Ferraris are they going to continue to crank out going forward?
DEMURO: You know, if there’s some question, I mean, that — that is a big issue that they’re going to contend with over the next few decades. You know, the Enzo era, he died in about 1990, and the cars that matter were ever uniformly considered to be special. The company is sort of ramped-up ever since then.
And in the last two years, especially they’ve really ramped up. And they’re now going to be creating an SUV, which is — to a lot of their consumers, it’s sort of sacrilege. And I know a lot of — there’s a lot of discontent among Ferrari people about the new, you know, the new guard of Ferrari people. And the cars are just a lot more accessible. It used to be that you had to know what you were doing in order to drive one, and that’s not the case anymore. They have automatic transmissions. They’re very easy to — as long as you have the money, you can — you can buy one and drive it.
So yeah, I mean, it’ll be interesting to see what happens to Ferrari long-term. Does the brand start to become devalued due to their production?
RITHOLTZ: Well, it seemed to work for Porsche. Didn’t the Cayan kind of save the company? But you can’t just live on 911s forever, can you?
DEMURO: Yeah, there was a time in the 90’s were Porsche was like I don’t want to say hours away from bankruptcy, but certainly months. And they really had to kind of band together and yeah, create a diversified lineup. You couldn’t just exist on a couple of sports cars anymore. And so yeah, Cayan, you know, they did some special projects for Mercedes Benz and for Audi. They built some of their cars to make some money.
And then, you know, they — they said we need a — we need a smaller sports car, which became the Boxter (inaudible). We needed SUV. And — and so there’s some benefit there, but Porsche was never quite the brand that Ferrari was. And so Ferrari is a little bit more special. A lot of the reason people pay those kind of prices is because they don’t expect to see one every day. Well, we’ll see if that continues.
RITHOLTZ: We’re talking about a number of multi-million dollar cars. And if money was no object, what would you put in your garage next to the Ford GT?
DEMURO: If money was no object, I would get a Ferrari F40, which I think is a great car. But my all-time favorite vehicle is the Porsche Carrera GT, so the car that Paul Walker, you know, was riding in when he died. And that is I think the most special car ever made, the best car ever made, the greatest sports car of all time. And I would love to have one of those.
But the current going rate of 700,000 to 800,000, I think it’ll be a while before that happens.
RITHOLTZ: Affordable, reasonable. And I — and I have to tell you as somebody — as someone who’s not a giant 911 fan, I — I find them to look a little froggy. The the Carrera GT is a beautiful car.
DEMURO: Yeah, very special car.
RITHOLTZ: So let’s go through a few other beautiful cars. You basically talk me out of the Aston Martin Rapide, which have become incredibly reasonable. Every now and then I’ll throw …
DEMURO: Yes.
RITHOLTZ: … a tweet up today in depreciation and show a $200,000 car being sold for $45,000 used. I can’t get past that Garmin map system.
DEMURO: Yeah.
RITHOLTZ: It just kills the whole car for me.
DEMURO: Yeah. I know, I know. It was — you know, Aston Martin has always played the role of the small volume brother to the real automakers who are trying to sell, you know, high expensive cars. They have this amazing brand name and this amazing beautiful car. It’s been very difficult for them to create technology that rivals Mercedes Benz or Bentley or — or Ferrari with a big parent company. And so they always end up with stuff like that, and there’s always the Achilles heel.
Even when Aston Martin started making reliable cars, the technology was still total trash. And that’s a tough one, yeah. You get in that car and you see that, it’s like, well, it looks like the kind of thing my grandma stuck on our dashboard, you know, so she wouldn’t get lost, you know, in 2004, that — level.
RITHOLTZ: So let’s talk a little bit about some of the older trucks. We — we just saw the refresh of the Jeep Wrangler. Next, I think it’s June 2021, the new Bronco will come out, which I think they did a …
DEMURO: Yep.
RITHOLTZ: … spectacular job on.
DEMURO: Yeah, yeah.
RITHOLTZ: I’ve always been a fan of the Toyota FJ40’s which …
DEMURO: Yeah.
RITHOLTZ: … I’d love to replace the Rubicon with. But — but you went full insanity and got a Defender 90, a truck that I have always liked, but been horrified to own. What has your experience with the Defender been like?
DEMURO: You know, it’s interesting, the Defender is a very special car, and everywhere I go people come up to me and talk to me about it. And they always tell me they want one. And I always tell them you don’t actually want one. What you want is …
(LAUGHTER)
… a Range Rover feeling car that looks like this. But in reality, this thing drives like a piece of crap, which is what it is.
I always tell people the world is the worst like comfort and quality per dollar because Defenders — North American Defenders, they only made about 7,000 of them. And the cost of them is now anywhere between maybe $50,000 and $80,000. And it’s an enormous amount of money to pay for what is ultimately one of the great bad cars. I mean, it really is.
Even the hard top ones, you’re getting wet when you’re driving it under the rain. You know, it’s a disaster. And I explain to people, but I am an enthusiast to this car. I love this car, I grew up wanting one. And so it makes sense for someone who’s not really into it. But anybody who’s even slightly less than really into it, probably shouldn’t get one because they’re going to get tired of it quickly.
And this is what ultimate happens with these Defenders. Rich guys buy them. They think they’re cool. They’ve always wanted one. And then after about a year, they’re like, “Boy, this is a piece of crap and they just move it on.” And then, you know, the next rich guy comes in and he brings it to his house in Vermont and — and drives it for a summer in there. OK, it’s a piece of crap, and then he sells it and it’s in the Outer Banks for a couple of years. And then that guy tires of it. It’s very difficult to actually want to — want to use and enjoy that car unless you’re really into it.
RITHOLTZ: Your spare tire cover says Luke’s Diner on it. And …
DEMURO: Yeah, right.
RITHOLTZ: … the first time I noticed that, I say, wait, Gilmore girls? What’s that about? And then I go to your Twitter description and you literally …
DEMURO: Yes.
RITHOLTZ: … have fan of the Gilmore girls in your Twitter description. You have to …
DEMURO: Right.
RITHOLTZ: … explain what on earth is that doing there?
DEMURO: I love Gilmore Girls. I think it is one of the — I — I love anything with community, any television show, both movies, anything with community like a good –and they lived in this cute little town that was just the best little community. And I think it’s like the greatest thing I worked.
So every three to four years I watched the entire series, you know, again I start at the first episode and watched all the way through.
Now one interesting Gilmore Girls anecdote, I have tracked down the original Jeep Wrangler that was used in that television show.
RITHOLTZ: Hilarious.
DEMURO: And it was purchased after the show ended at a charity auction, and that person still owns it. And they own it in a small town in Connecticut, which is where the show takes place. And I have done everything I can to reach out to this person and try to buy it from them.
I sent letters and I’ve sent contact (inaudible) Facebook, and it doesn’t get seen. And so I’m terrified that I won’t end up with this car. But I really, really want it. I think it’s the great or the ultimate Gilmore Girls fan accessory. And I think I’d be perfect — perfect to own it.
RITHOLTZ: So when this show first came out, I never saw it, I never heard of it, I never thought of it. And during lockdown when it first began, my wife and I just randomly — because her sister loved the show — started watching it. And not only did we get into it, we watched one or two a night for the whole first — there’s like …
(LAUGHTER)
… eight seasons for the first three, four months of lockdown. And I was really sad when it — to see it end because it was just perfect escapism from the troubles of the world. It’s a small town. Everybody is …
DEMURO: Right.
RITHOLTZ: … humorous. It — it has flavors of other — you know, the — the dialogue is kind of like west wing. I don’t know if you’re old enough to remember Northern Exposure, which is another quirky town only in Alaska.
DEMURO: Right.
RITHOLTZ: But it — it was perfect lockdown escapism.
DEMURO: Right, exactly. That’s a — that’s actually a good way to put it. I hadn’t thought about that, but that is exactly what it is. People who are just — yeah, they’re friendly, they — they like each other, they care about each other. It is a good break from the current situation.
RITHOLTZ: So as long as we’re talking trucks and — and TV, what are your thoughts on the FJ40 from the 70’s or 80’s? I’ve always thought that was a solid reliable choice for terrorists and — and drug lords.
(LAUGHTER)
DEMURO: Yeah, it was for one thing. Those are great. You know, all these — all these older SUVs have become so sought after now. It’s really, really, really become a big, big thing. Everybody disposed of the vehicle during the seventies and eighties because they didn’t — they were just trucks. You use them, you drove it on the beach, you drove it at the mountain …
RITHOLTZ: Right.
DEMURO: … you went hunting with them. Well, now the ones that are left are so desirable. And the FJ40 has become, you know, one of the really cool ones, it being the original land cruiser. Those people get (inaudible) it people with newer ones and say, no, I don’t need all that comfort.
RITHOLTZ: Right.
DEMURO: It’s a special — it’s — it’s very, very exciting. All of these things are. It’s just amazing to me what the old SUV market has become in the last 10 years.
RITHOLTZ: I have a buddy who imports Defenders from Spain because she’s got family there. And I’m …
DEMURO: Yeah.,
RITHOLTZ: … I mentioned my interest in FJs, and it turned out that he had a family member in Colombia. And so we looked online at a bunch of places. We had him, as the local, go over to the refurb shop in — in Colombia, look at a bunch of cars, talk to the owner. They turned out to have mutual acquaintances. And we picked two cars to refurb in South America, in Brinton, New York.
He wanted a red one. I wanted the light blue one. The red one was refurbed and shipped, and when they were about to start on the light blue one, the pandemic hit, ,so I was unable to bring my car in. But his car is here and it drives, ,and — and he loves it. He got the soft top. He could not possibly be more thrilled with it.
And …
DEMURO: Yeah, and they’re so cool and so much to drive around.
RITHOLTZ: … it’s about …
DEMURO: It’s not fast, but it’s so much fun.,
RITHOLTZ: It’s actually nicer driving than my 2013 Jeep Rubicon, which incidentally is a salvage title, which I wanted to ask you about.
So I bought a flood car and all-in, replacing all the electricals, replacing the fuse, the three fuse boxes, three wiring harnesses — pretty much anything that plugged in, all-in I bought a year-old car for 20,000 when they were gone for 35,000. And I’ve 30,000 miles on it. I ended up replacing the radio and parking brake kind of rusted; I replace that. But I know you hang with a lot of people that are big fans of salvage titles, including some exotic salvage titles. What sort of advice do you give to people who want to buy one of the crazier cars that might have been smashed up or stolen and driven off the road? What do you say to people say, Hey, I could afford a limbo?
DEMURO: I would generally tell people that that’s fine if you know what you’re doing. You’re in the car. you kind of have an idea of what to expect. I mean, I wouldn’t just tell it to someone who’s looking for a bargain Lambo to go and get one with a salvage or a rebuilt title because at the end of the day, a lot of stuff could prop up. You wouldn’t want to do a good job of figuring out before you buy the car, what’s — what’s going on with it, what works, what doesn’t, what to look for especially cars that have been on flood because of, you know, rust components whether it’s salt water, flow that sort of thing. You definitely don’t want to do it unless you have a pretty good idea of what you do.
People see some of these prices and they get all excited. And then they don’t really realize how bad it could be if you don’t take the right precaution. That’s — that’s — that’s generally what I would probably say to people.
And also it couldn’t be be more difficult to get financed and insured on some of these cars, especially super high-value stuff if it, you know, prior flood, tired, serious accidents, that sort of thing.
RITHOLTZ: So I know I only have you for a finite amount of time. Let’s jump to our speed around. These are the questions we ask all of our guests. And let’s start with what are you watching these days? What are you streaming? Give us your favorite Netflix or Amazon prime shows.
DEMURO: You know, it’s interesting. For years I never really watched TV, and so I’m trying to catch up on all the important shows. So right now I’m watching Desperate Housewives, which is like ages old, but I — I — I — I only — I only recently saw the Sopranos. I’m just — I’m trying to like catch up. That’s — that’s my goal.
Really, I’ve enjoyed mostly just my — the idea of an — an entertaining night for me is sitting in front of the computer on Wikipedia and reading about various — learning about various things. And that’s how I spend most of my time.
RITHOLTZ: That’s pretty hilarious.
(LAUGHTER)
Who — Wikipedia for fun and — and entertainment.
DEMURO: The other night I spent about three hours on the Titanic Wikipedia and all that’s associated Wikipedia articles. That’s my version of a fun evening, believe it or not.
RITHOLTZ: So one of the things I’ve been doing for the past, I don’t know how many years, is just on the blog throwing up A car, it could be new, could be old. And I always just use it as an excuse to do some research into that car.
And I have to tell you, I am shocked at the quality and depth of the information available on Wikipedia and before people …
DEMURO: Yeah.
RITHOLTZ: … say, oh, all that stuff is wrong, you could go to the original source. Who are your early mentors? Who helped influence your career, whether it was as a journalist or as a YouTuber?
DEMURO: You know, I think the biggest early influence was, you know, Top Gear, which is true for almost all of us, you know, who are on YouTube right now. Watching those guys on that show, it was so special and so exciting. And I think we all kind of wanted to do that ourselves. And I think that was like the really, really my foundational like this is the coolest thing. That was definitely the biggest influence.
RITHOLTZ: And they were pretty hilarious. I know you got to meet Brian May. What was that like?
DEMURO: James May, yeah. It was amazing. It was like — you know, I mean, it was like meeting your heroes. And he was great. He was super nice. He was a really, really good guy. We ended up chatting for a long time about cars and everything. And I mean, how would — you know, for a guy who grew up with that show, this kind of life has been, okay, I’m going to do fun stuff with cars too. That was one of the coolest things I could even imagine.
RITHOLTZ: And Jay Leno also, you got to play with Jay Leno’s McLaren F1, right?
DEMURO: Yeah, that was really something. That was quite a car, and Jay is not afraid of driving the hell out of it, which is pretty crazy when you think about it.
RITHOLTZ: Yeah, what — what is that up to, that 8 million or 10 million, some crazy number.
DEMURO: So I think over that. I think the last one they sold is like 12. But, you know, Jay is special because it’s J and his — it’s basically a one-owner car and, you know, I think kids would be even more money than that. It’s a pretty crazy thing to think about.
RITHOLTZ: So what are you reading these days? Tell us some of your favorite books. You’ve written two of them. What — what do you like to do to keep your brain occupied?
DEMURO: You know, it’s interesting. I mentioned the Wikipedia article thing earlier. I also love reading long form articles. The website longform.org has all these …
RITHOLTZ: Sure.
DEMURO: … like long-formed journalism. It’s like my favorite thing in the world. And I read pretty much every single long form on there. I’m obsessed with that.
In terms of books, I don’t read that many books. I’m usually into these longer articles where I can learn more in like an hour. But I just finished reading a book called “Evicted” by Matthew Desmond. I’m really into housing and housing policy, and affordable housing, and building stuff. And I hate all these anti-building and anti — not in my neighborhood kind of people. And so I’m — I’m into that sort of thing — my one political stance.
But other than that, I’m not really that — it’s mostly long form journalism.
RITHOLTZ: Quite interesting. What sort of advice would you give to a recent college graduate who is interested in a career involving automobiles, whether it was journalism or YouTube or — or anything like that?
DEMURO: You know, if there’s a question, I mean, I — I — people are asking me — you know, what can I do, how can I get started, what should I do. And it’s — I got lucky because I started in ’13 and it was a lot easier then. And I don’t know what I would do now, but I know it would be a lot more difficult.
But the advice that I always give to people generally is, you know, hey, don’t stop. You have to kind of persevere because early on it’s difficult and it may seem like it’s going to be a disaster, but if you can outlast people, that may help.
And, you know, people are always asking, well, how can I get access to cars, that sort of thing. Just tell them what you have. Try to find some interesting niche angle on what you have, and make that, you know, your thing. Make it fun and maybe you’ll start to attract an audience and go there.
And — and the other really important piece of advice I always try to give to everybody is makes the kind of content that your audience wants, not what you want. That’s the real goal.
People always get caught up and oh, I want to drive this cool car. Oh, I want to check out this cool car. Well, does your audience want you to do that? And if not, ,maybe that experience shouldn’t be what you do. And then you should’ve said, you know, go out at a different angle or something like that.
RITHOLTZ: And our last speed round question, what do you know about the world of videos in automobiles and pretty much everything that you wish you knew a dozen years or so ago when you were first getting started out?
DEMURO: In terms of video production, I guess, I wish I knew just that you — that it’s doable, that it’s not — that it’s not something that you need an enormous amount of effort and equipment and professionals for that, you know, you can do it. As — as people say, if I could do it, anyone can (inaudible). I had no clue what I was doing initially, but I made it work.
And that’s kind of the biggest piece of advice I would have is that you don’t need a zillion dollar 0 budget to go into this world. You just need to make good content, and that’s the real — the real key, I think.
RITHOLTZ: Quite fascinating. We have been speaking with Doug DeMuro who is the Codevi-founder of Cars & Bids and the host of the Doug DeMuro channel on YouTube.
Doug, thank you so much for being so generous with your time.
If you enjoy this conversation, well, check out all of our previous 340 such prior discussions we’ve had. You can find those at iTunes, Spotify, Overcast, Stitcher, wherever finer podcasts are found.
We love your comments, feedback and suggestions. Write to us at mibpodcast@bloomberg.net. Check out my weekly column. You can find out on bloomberg.com/opinion. Be sure to give us a review on Apple iTunes. Sign up for our daily reads at ritholtz.com. You can follow me on Twitter @ritholtz.
I would be remiss if I did not thank the crack staff that helps us put this conversation together each week. Reggie Bazil (ph) is our audio engineer. Michael Batnick is my Head of Research. Atika Valbrun is our Project Manager. Michael Boyle is my producer.
I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.
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