#116 - How to Run 3 LHPH Stores with Joe Powell

Hello, welcome to this episode of the Independent Dealer Podcast. We are here with Joe Powell out of Oklahoma. Joe, say hi to the Independent Dealer crowd.

Hey guys, glad to be here today.

Today we cover so much with Joe about how he got into the industry, his lease here, pay here, background. We talk about the cars, the customers. We talk about some of his advertising philosophy and what he does in a couple of small towns in his three locations, how he got there, how he manages them. It's a really great episode. If you're interested at all in lease here, pay here. If you're interested in having multiple locations or if you just want to get to know jokes. He's a great guy and a good friend in the industry and contributes a lot in the forum. So here we go. You are listening to the Independent Dealer.

Podcast with hosts Luke Godwin and Jeff Watson.

Thank you so much for tuning in.

Let's do this. I started back when I was young, way back in my twenties, and decided that I could talk to people. So I was a farm kid back then and I got into ag equipment sales and that worked really well for several years. But what always intrigued me was I would drive down the highway going to trade equipment and every house I passed had three or four cars in front of it, but they might not have a tractor there. So I'm thinking maybe I need to be in cars instead of tractors for the long haul, you know what I mean? And so that was kind of a natural. And then also I was being kind of a salesperson. Somebody loves to talk to people, loves to sit down and interact with people. What always intrigued me about the car business was how could I walk in somewhere not want to buy a car and leave with a car? I didn't understand that. So that piqued my interest and it really made me want to learn what, what the car business was all about. So it was kind of a natural fit. I went from the tractor sales into franchise Chevy Cadillac type situation. Got my mark of excellence there and everything was good. But me and a friend here in town, we always wanted to open our own dealership. So he and I started here in Oklahoma back in May of 08. Right. Kind of before the last pandemic crash. You know, we went to the first sale, I was scared to buy a car. Didn't buy anything that week. Second week, I was like, okay, I gotta buy something if we're gonna do this. So I started out buying like Chevy Malibu GSAs, 06 models, something like that. Figured, well, if it's a GSA car, Low mile, something like that. We would not have too many come back. We did start with lease here, pay here from the very beginning because I kept seeing these ads from a lot of different places. You know, do you want to sell a car and make 1500, 2000, or do you want to sell a car and make 5,000, 10,000, 20,000? You know, because all of us, whether we're in the buy here, pay here, the lease here, pay here business, we can go pull those VIN numbers up that we've just sold over and over and over again. They just generated cash for years. So that kind of interested me. We had access to capital and that was always pretty good. And it's just kind of been a natural fit for us over the years. Take care of the customers, take care of the employees, and the business will grow. We started with the one dealership in May of 08. We started. This town has about 16,000 people. So not a lot of people. But I knew for me to get to where I wanted to be, I needed to expand, I needed more accounts, I needed more ar, I needed more payment stream. So I had a customer, a guy come in and 35 miles down the road and he was like, hey, let's open up down here. And I'm like, hey, let's do that. So came on, rented a place and then he flaked out before he got open. But that, that started in May of 11. So we pretty much doubled in size there after about a year or two. And then in 16, I had some more people come in and want to, want to get started. So I opened two dealerships in 16 that worked pretty well with one of them. After 11 months, I closed one of them down because there was just really not enough traffic for the salespeople or the accounts. So I had a three year lease on that building that I stuck with and I subleased it out. So we do have the three dealerships. We're not in huge areas, but my main focus from the time we started was to not try to compete with what somebody else is doing, do what I do. We like to do things a little bit different. That's why lease here, pay here is a little bit different. But I'm not concerned with how many you sell or you sell or you sell. I'm concerned with my capital and my growth range and I want to be on a slow growth and not just run out and burn through all of my capital in the first 60 days.

Yeah, Joe, let me summarize that. So right now you're sitting You've got three dealerships. They're all lease here, pay here. What volume does each dealership do? Are they all kind of even or does one do more than the other? Do you have a flagship?

One thing that I've come to realize, having the three dealerships is one dealership is going to do real good. One month and then they just kind of move around. So each location pretty much has two people. It's got a salesperson and a collector. So they're smaller locations. They keep about 15 units on the ground at each one. Last month we did 56 units as a whole. And that's kind of our sweet spot in that 50, 55 units a month.

So some are doing 15, some are doing 20.

How far apart are they?

We're kind of in a triangle.

Okay.

The first one is like 35 miles south. Okay. Second one would be about 20 miles west of it and then right back up the interstate.

And they all do their own sales and collections in that store? Yes.

Okay, so how about reconditioning? Do you have one central location for reconditioning?

Boy, I have struggled with service for years. My flag or chick Shay here, we. I had a service center here. I had another location. So just last summer I went uptown to a guy that was doing about 40 units and I bought his place. It's got six lifts in it. I have 8,000 square feet of service area. I closed another service center down and now that I'm just. I've got my own three car trailer. I just service everything out of the one locations. I got three A level techs there and I would have 50 cars on the ground. You know, whether they come back and had to trade the customer out or what we had to do to make it right with the customer. So service, we were pretty much out of one location.

Now you do any outside service or just reconditioning?

Just the only outside would be, you know, a customer pay on our car.

Okay. Okay.

Yeah, I definitely want to dig into that some more. But help me real quick. Let me wrap back around to when you say you opened a location. You said you had someone come to you and kind of propose it. So when you go to these, when you thought about opening your second, your third location, are you partnering with partners or owners or are these. You run them. You just have managers, salesmen and collectors.

Managers. You know, when we first started the company, me and like I said, a friend of mine opened it, I bought him out probably four years after that. So it's just been myself for the Last several years and just have managers at each location.

Wow. And with the distance, you don't find that being an issue? I mean, I'd love to talk about that multiple location and the quality and the control and keeping tabs on. Thing is that, has that been a challenge?

Well, it is a little bit. But we've kind of implemented some things that I help that I think or I know helps keep the message consistent. I do think that regardless of whether I've got three two person locations or you've got five people working for you, we always wonder about the message that any employee might be carrying on. So as the owners were concerned with that message, so we've created some things that we make sure the message is consistent, whether we have a brand new hire that has gone through our training. But I look back to my old franchise days when you go to the F and I box and he would have an F and I menu. He just kept turning the pages and showing this and showing this and showing this. We kind of developed a sheet that is a menu. So whenever a customer comes in, we get an app, we immediately make sure we can read it. Then we turn the app over and our menu is right there. So Jeff could sit down in five minutes, Luke can sit down in five minutes and know to follow the menu and carry on the same consistent message that the company wants carried out. So that's helped us quite a bit. We've tried some central locations in the past, but it seems better. One, one thing that we do do is after we do a sale and the paperwork's all done, the customer is ready to go, we put the collector, the account manager back on the customer for one more form. It's called our statement of understanding form. A lot of people are doing some of this, but what I found out is what I do know is what I hate most in life are surprises. You know what I mean? So customers would come to us after four months, five months, six months. Well, I didn't know that. Well, I didn't know that. Well, I didn't know that. So now then we have a statement of understanding form that they fill out in their handwriting. Everything that I've heard over the years that they didn't know that is on there. You know, it's built into the process over and over again. Repetition, repetition. So I found that, that collections, whenever we, we introduced the customer to the account manager and we had a little bit of problems in the three locations because one salesperson was introducing that collector as a person. He really didn't Want to talk to, you know, you don't want to talk to this person. This is a bad person. This is a collector. So we kind of had to change that up a little bit and let him know, say, this is your greatest asset. This is the best person that you can ever deal with in this organization. She's the one that's going to help you. She's going to make your account be successful. So once we turn the mindset around instead of the big bad collector to now then the account manager that's here to help you, you want to talk to her. Things really seem to help a lot there.

Yeah, I find it really interesting. You're collecting money in three different locations, right? Those collectors are working in three different. I imagine you've got some systems and some controls for your cash and your, you know, standard of delinquency and recency in each of those locations. Probably just continual fine tuning process, huh?

Oh yeah, we do. You know, I started out as an accounting major so you know, I'm pretty good. I find all that kind of stuff. But at the end of the day I've got great people and I think it's all about people. You definitely can't expand with average people. Everything I try to do on a daily basis has to do with my employees. I ask them to carry the message to the customer. I want to carry the message to them. I want to model the behavior I expect from them. So I think it all starts at the top.

So why with that whole collection thing, why would you not have a central location for collections like you are.

Again, we tried that. The customer never knew who their account manager was. It just because whenever people are coming in to make payments on a cash basis, they see their account rep, they get to knowing their account rep. Those account reps are normally local to that area. They know those people a little bit better. And it just has always worked better for us due to the one on one relationship versus somebody in New York City trying to make a.

Kind of. Humanizes that.

Yeah, exactly.

You know, sure, I've often wondered that because, you know, we're only one location doing close to the same volume you are. So that's interesting to me that you can kind of do that. So I know there's very few companies that offer lease here pay here in a DMS system. Just real quick, what are you using and is it cloud based? Does it allow you to kind of run everything from.

We do use dealpac now and we've used it for quite a few years. Just hearing this Last year they have gone to Amazon server, so everything's there, you know, so all the stores are connected into the same thing. I can connect into it from anywhere in the world, run payments from the Caribbean if I want to.

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Sure. Yeah. I mean, that's the only way to go, in my opinion. What? So, you know, it's funny that you, you started in the late lease here, pay here business. I find that it seems, Jeff, and maybe you can correct me if I'm wrong. A lot of people start in the buy here, pay here business and then make the jump to lease here, pay here. What? How did you. I mean, I remember you saying a second ago that you, you saw things coming out about it. What. I'm sure it's an advantage in your state to be lease here, pay here and that's the reason you're there. I'm not familiar with Oklahoma laws, but other than that, I mean, not being in the business and all of a sudden jumping in lease here, pay here is to me, that's an interesting path.

I don't necessarily think it's state, I think it's federal. I think lease here, pay here is basically buy here, pay here without the related finance company. And I think that's a huge deal. I don't have a related finance company. I don't have to sell my loans off to the related finance company. I'm only taxed on the dollars that come across the desk. So I don't have to pay taxes as a inflated taxes, then recoup them. I don't have to swap titles. You know, I'm not in the title business like most buy here, pay here and I'm not the related finance company business. I don't have to buy a trade back. I don't have to pass checks left and right. I just thought it was a waste of time. A whole lot of steps that I didn't need to be taken.

There's got to be some benefit in state law in Oklahoma. Our state laws are not beneficial to the to lease here, pay here. So I'm just wondering around that as.

Far as the state law Goes the only thing that the tax commission did come down and say was it was based on the length of the lease. So if I had a 12 month or longer lease, I would pay excise tax on the car. Okay. So that currently could be roughly all in all done, 9%. Whereas so that was on the car. If I did it on the lease payments, I could pay the lease. If the lease was less than a year, I could make monthly payments to the tax commission. But since we're doing a lease with an option to purchase, the customer is on record of that they're paying the tax, we're not paying the tax. So therefore I'm not taxing their payments due to the fact that our lease is 12 months or longer.

So what is your average lease here pay here, agreement.

Term? Yes.

Or money?

Most everything we write, we do a two and a half year lease with a residual that basically would pay out in six months. So all inward we do a three year term.

Okay, so okay, so you'd finance residual at the end of that lease.

Correct.

How often does that happen?

15% of the time. So not very much. Not very much. You know, we tried to, we make a run out of them to trade out in a year, another run at them, year and a half every six months. After a year we try to make a run at them to get them back out of that car and back into another car.

Sure.

So if your residual is a six month payout and you've got a two and a half month lease period, I'm guessing your ACV or I mean your retail price on these things has got to be in that 6 to 8,000 area. Somewhere in that ballpark. What's the typical retail price?

13 to 15 will be average. Our average payment is about $95. Some months it bumps $101.

So, okay, so about a 19. So tell me this with your philosophy. I know, I'm just trying to think back to the last lease here pay here guy we talked to. Are you looking to, to get two or three loan lives out of these cars? Are you buying something that's a little bit newer, lower miles, hoping that they'll be in it for two years, trade it back to you, they upgrade and now you've got a car that has a second life that you can put out on a second lease term. I mean, is that. Well, what's your kind of philosophy around your assets?

We have, as far as our warranty goes, we have a gold plan, a silver plan in New York. The gold cars are anything 8 years old or less or under 100,000 miles. When we go to the auction to buy cars, we only want to buy gold cars. I will create all of my silver cars, all of my bronze cars, everything below. So I do want to step up and buy a better car. I just feel like I have to so that I can get the life out of it. Five years or six years, we, you know, I don't know that there's ever really. I've said, hey, I want to get three turns out of this car or anything like that. Okay. We try to, you know, we bring a car back in and if the car still, the body's in good shape, we feel like the customer will have some type of pride of ownership in taking the car to the family reunion. You know, we'll throw another motor in it, another cranny in it, and then it'll get up, get down the road and make it happen.

So help me out with that. Obviously, my rub with lease here, pay here has always been the buy in and the ownership of the customer. You know, I think if you and my anecdotal or just my own bias is I think a lot of lease here payheres don't really make it clear that it's a lease. I think you kind of talk about it, oh, well. And then you have a buyout at the end or you have a balloon payment at the end. How do you get customers to actually take ownership of the car and they've been in it for 12 months and it needs tires, they're actually going to put tires on it, knowing they only have a year left in their lease, or they're actually going to change the oil or take care of the darn thing when they know it's essentially a fancy rental.

You know, I think we all deal with the same customer. I think that even though they know that from the beginning, a lot of customers, whether they own the car or whether they lease the car, they're going to treat the car the same. We sell it that way from the moment they walk in the door, even out on my road sign, it says lease here, pay here, or it says lease to own, I think is what it says. So we never hide from that fact. But I truly believe that a customer, I don't know that they think long enough, far enough down the road as to whether they're going to own this car in a year or not. As to whether or not they're going to put tires on it. I don't see. We don't have any pushback. With it, maybe it's. And we haven't had pushback from day one. We explained it from the very get go. You know, all cars come with a 3 month, 3000 mile, 50, 50 type warranty and we have a 3 day love it and return it type policy. Something happens, we'll get out, put them in another car.

Do you have an upgraded warranty or is it just the three three that you offer?

It's based on the car, the gold, silver and bronze. But that's something that we throw in that we do through our reinsurance company.

Right, right. But are you stepping in with a lot of customer repairs, help on those types of things or do you feel like these customers actually take ownership of this and they're fixing their cars, they're keeping their insurance.

We also do a in house insurance policy where we step out and buy the liability and then we mark that up little bit and do physical damage and cover that in house here. So we take care of that as well.

Okay. I mean that's really the beauty of the lease here. Pay here, I find is if you are okay holding their hand, so to speak, you can sell them the car, take the payments, cover their insurance, their liability, charge them a full coverage. Like you said, have a reinsurance company, you really are capturing everything. And if you have a decent service center, you can capture all the service and get the customer to participate as much as possible. Because ultimately it is your asset and you want to protect it and you're just trying to get that customer to pay for their wear and tear and their use of it, so to speak. Right?

Without a doubt, without a doubt. You know one thing that whenever we bring personnel from anywhere else actually, and I can't get them to understand that, you know, the customer's got a thousand dollar repair bill. If I get that customer to pay $100 of it now that I'm only paying 900, you know, whereas I'm getting ready to pay a thousand of it, you know. So the more we can set them up, you know, we don't like to do side notes, but if I can get them to. It's all about cash flow, you know, the more I can get to put against the account, the less cash I'm laying out.

How many accounts do you have?

575.

Okay. Yeah, so yeah, okay. With two and a half years, that makes sense. And you were talking about your return. How often do people return the cards? What's the percentage?

Three day?

Yeah, yeah, yeah.

Very few, very few. It is a love it or Swap it type policy. And that's the way we sell it. We don't, you know, we tell them up front, you know, you can't come in and kind of get a Schwinn bicycle and then come back in and want the Escalade at the same time, you know.

But it's that much easier with a lease though, right? Because what do you do? All you have is a couple of forms, right. You're not retitling it, you're not replating it. All your cars have plates on them. Right.

In Oklahoma just last year in Oklahoma just last year, they went to where the individual owns their own plate. So now then they should be able to carry plate car to car.

The person gets the plate and they just take the plate and put it on whatever car they're driving.

Yeah, they go down to the DMV and they say, hey, I went from this car to this car. They just change it in the computer because what happens is they bought a 12 month tag and then they traded cars after two months, they still own that tag for 10 more months. That's why it is. Yeah, yeah.

Nine, Utah. And they'll collect sales tax. Tax, they'll. They'll collect it 12 times.

Well, they'll collect sales tax again from us, but.

Well, they'll collect tag and license to 12 times a year on ours. It's crazy.

And used to be it was that way just until last year until there became an uproar that hey, I just paid that day, you know, and I lost like, well, tough. Toodles.

I mean, are there a good many lease here pay heres in Oklahoma?

Not that many.

Okay.

I'm in southwest Oklahoma, of course, Drive time does some lease here pay here. There's a couple of other organizations, you know, as far as like rent here furniture, rent here pay here furniture errands is more of a lease here pay here type organization versus the others that are just your rentals.

Gotcha.

Yeah. You know, I've always been attracted to the lease here pay here. Like you said, it's so from a customer standpoint, I can see the attraction. You're paying for what you're using. And if you want to buy this car at the end of two and a half years, there's an option for it. You know what I'm saying? You can own it. If you're sick of it and you want to upgrade time to upgrade and swap out of it to something else and you're not obligated to have that car. And I think that's very Attractive to culture these days. I think the notion of buying it and owning it free and clear is slowly losing appeal with the younger generations. In my opinion, it's a commodity. You pay for what you use and you get rid of it.

Well, I would argue a little bit against that, but I think it is attractive especially for, for people who like to trade cars a lot or cars.

But home ownerships going down, people are renting, more people are leasing, more people are. I mean, I just feel like that's, I don't know.

Well, if you could, if you could figure out how to make that lease every six months and it might be, it might be more attractive, I think. And the people you're talking about, Jeff.

You know, I think Even in my 20 group we have some members that they have a 30 month lease. Excuse me, a 30 day lease. Every time you make a payment, you renew. And that's the way like an errand rental furniture type thing is. Every payment it renews. You know, so you can get out at any time, get another car. You just have to, it's kind of like enterprise rent car. You have to make sure if there was a mileage clause or a wear and tear clause that that's covered and you move on down the road.

Do you have a mileage clause?

Yes, we do. 20,000 miles a year and we do prorate that daily. And I do know that about 63% of the time on these returns, they're going to put roughly 17,000 miles a year on it. You know, obviously you're going to have some come back to put 36 to 40 on them. Yeah, the car, after two years, it has 5,000 miles put on it too.

Do you have that issue with the people getting it to do an Uber Lyft or deliver pizzas?

We try to sniff that out anytime. Another, that's a big deal. Home health is a big deal where, you know, this nurse might drive 225 miles a day going around to see our clients. We try to stay away from that.

Obviously we do too. I noticed years ago that home health was a, was a definite problem and now it's, it's Uber. But you know, it's, it really depends on your customer, I think more than, more than anything.

Right? Yeah.

If you, you had talked, you'd said something to start with about asking him if he was rich dealer. And I, you know, that comes up a lot of times on the Facebook page and I, Joe, if you would speak to us about what rich dealer is and, and did you like it? And Are you out of it? I think there's some people out there that would like to know that.

You know, way back in the day, probably a couple of years into the business, around 20, 10 or 11, something like that, you know, didn't feel like we were selling enough cars, so we wanted to look into an advertising source. I never advertise a car. I always advertise something different. I always try to make my advertisements quite a bit different. It started out I sent some pictures to some ad people. They came back and they had me with a wig on, and I was a girl and all this other kind of stuff, and I don't care, you know, whatever, you know, it was fun and it moved along. So we did look into the rich dealers and we did join that. We went to some meetings. We never did buy into their radio advertising where it. And I like a lot of their concepts, and I even checked back with them last year to see about whether or not I wanted to go again. I love the marketing. I love the creative. And because that's just kind of who I am, what I didn't really align myself with was the need for the market spin. I think that, you know, saying that it cost me. I want to sell 100 cars, or let's say 50 cars, I got to spend 20,000 on advertising. I'm selling 50 cars and I'm spending 7,500 on advertising. So I, you know, obviously, if you spend 20,000 to sell 50 cars, your name's everywhere and people can't forget you. So I think there's obviously a lot of good to them because I like the marketing. I'm just not in on to again, ad spend side of things.

So you said you're selling 50 cars and you're spending 7,500amonth?

Yes, sir. Roughly.

Luke's got a calculator. I can hear it punching.

What are you spending on per car?

It's 150 a car.

150. That's respectable.

No, it's.

But I also do feel like that being a local, being a car dealer, we should sell 20 just by opening the door. I think I can sell 20. Agree.

Especially where you have a captive audience of lease clients. If you account for your portfolio, recycle and it's.

Yeah.

So what are you doing to marketing out of that $7,500? Can you break it down for us?

Sure. I do a. I still do a little. What do they call the little trader magazine? Things that go around in the free things.

You do this, huh?

I do.

I Was wondering who's still doing those.

Yeah, that cost me about 1500amonth for two markets. I don't know how long I'll do that. I'm doing to Kobe. It is really. We're getting a lot of ads daily from Takoby. I've got a BDC individual who she handles all those. She handles all the leads. She takes all the incoming sales calls. She takes all the incoming Internet leads, and she handles all the Kobe leads. And it's her job to set appointments.

And you have one person there.

Yes.

Joe. Let's break that down. Sorry. For those of us like myself that don't really understand that you have your own employee who is a BDC agent for all three stores. Right. And is handling all incoming calls that go to your. But then you have to Kobe, which is their Facebook marketing advertiser. What do they do for you?

Facebook marketing.

And they also have their own bdc, but you don't use them. You're just using them for creative.

They have some automated type setups. They also have some in house people that will respond to your leads if you don't respond in a timely fashion. And you can set that. You know, I think we've got our set to 10 minutes if. If she's got busy. And she will also assist a salesperson in her store because there's only two of them there. So the salesperson there, she's phenomenal. I don't really like salespeople collecting. I think it's two total different sides of the brain. You got one guy that wants to say yes to everything and you got one person that wants to say no to everything. But she can do it and she's good at it. So I let her sell and I let her collect. The BDC rep is also there. So if they get busy, the BDC rep get gets people on credit app. She gets people sit down. She gets process started. But if she hasn't got to Kobe lead, then the Jacoby people will step.

In and you find that the spend with them has been a good return for you.

It's obviously my highest ad source. It's probably in that 350 range, but it's pushed us up. We'll get another 10 to 12 units a month from them.

And what are you spending there?

Four grand.

Okay, so we're up to. We're up to 55.

That's kind of your big one. Yep. Oh, without a doubt.

And that last two grand, where is that coming from? Let's see.

We don't do any Radio. We do some internal boosting of ourselves. I figure $1,000 a month on internal boosting of customers. And some of it is I do a small little radio sponsorship in a local town here in my hometown. So that adds up.

So that thousand other thousand dollars use it like referral.

We spend about 500amonth in referrals.

Okay. Yeah, I think that's a, that's, that makes sense. I spend about five grand a month, so.

And it really comes down to that, like you said, Luke, the 35, 40. Yeah. Return on your money, you know, you weren't seeing it. And the Rich dad program says, hey, you know, if you spend 30,000 on ad spend, you're making, you know, 80,000. So it's a good return on your money, you know, and that's. Dealers don't always look at it that way, you know, So I think it kind of helps us to push that way to say, hey, you know, what would you spend to make three grand? You know, well, willing to spend 500 bucks to make three.

It's all about, you know, the number that people, people don't look at and don't think about is the what does it cost? An advertising spend per car sold. And that's all that matters, you know. And, you know, we sit in the 140s. Well, 150 is really good too. You know, I think up to probably 240is a decent number. And so you got to know that if I want to sell X amount of cars, I may, if I'm new to the market, I may have to spend three to $400 a car, you know, to get it sold. But if I'm, you know, been there for a long time, like you've been here since, oh, eight. I've been here since 85. Well, you don't have to spend as much. Your name's already out there, your brands already out there.

It depends on your market too, though, right?

Sure. Well, ad cost depends on your market for sure.

Yeah. So you're gonna spend a lot more per sale if you're in downtown la, downtown Dallas, as opposed to, you know.

We were doing TV there for a while, and we have a ABC affiliate in one of our towns in southwest Oklahoma. And I spend in $3,700 to $3,800 a month there. But I went away from it.

We still do TV once or twice a year, but most, most everything's digital now, like you're talking about. You know, I've often just. I'm so interested in these small town Dealers and the amount of cars they can sell. You know, you said 16,000 at the biggest. Is that the biggest town?

No, the smallest.

Okay.

You know, the 16,000. I brought back an employee a couple of months ago who's actually been with me. This is now his fourth time. That is against everything we believe in. In, you know, it's like just. It doesn't work. It doesn't work. But my gosh, he can sell more cars in. In the four months or so that he's going to be here. Then the next guy will sell in.

The eight months, and they stay on the books.

Yeah, good sales.

Okay.

So it's one of these things that I shake myself, come on back. You know what I mean? You know, because, yeah, I got a.

Rule once you go and you go. But I did just bring one by one person back. But, yeah, I never wanted her to leave, so I can't say much about that.

Well, I, you know, in this time, I've tried to. I'm trying to do more in my power to. He gets in his brain and he starts thinking about the wife and the relationship and all this other kind of stuff, or the girlfriends and trying to. Trying to keep you focused this time a little bit better.

Put some blind. Put some blinders on. How many employees do you have total?

I've got 10 on the books and I've got about four. Well, I mean, four contractors, you know, they're on the books too, but they're not employees.

That's. Does it take less employees for lease here, pay here than buy here, pay here? Is that. Anybody know the answer to that?

I don't necessarily think so.

I mean, it's got to be the same or more, I imagine.

Yeah.

You have a robust service center and you're requiring oil changes and you're, you know, I just feel you'd have to really stay on top of a lease here, pay here, car. You got to make sure that thing is taken care of. You got to get your hands on it every three to six months. That's just.

Are you able to use GPS devices and start interrupt things like that?

Yes, yes.

Okay.

Try different ones. You know, we have some, you know, after a customer's been in the family several times, we'll just put a wireless on his car. But we still do put them on. If they say something, you know, we just let them know, you know, our lender requires it. So it's not a big deal.

And I wanted to go back to one of the first things you said that you had the capital to start this. And if you don't want to, okay, the access to this capital, Is that through a bank or a local person? How did you end up getting the capital? Because I think that's a lot of people's issue. And when entering this business.

Yeah, totally agreed. I think it's everybody's main issue again, you know, I'm in my mid-50s. My parents came to town way back in the 50s. And the partner that I started with, his family was old school in our community, so we had good family names that we were able to go to a local bank. You know, this is the wildest thing of all. You know, we started with 50 grand. He put 25, I put 25. To this day, the bank, initially, they wanted a $30,000 CD, so they left me with 20 to start with. They took 30, and I think they put me on $150 line of credit or something. $150,000 line of credit. And, you know, as we grew up, that grew, but the CD always stayed the same. So they finally got me to 2.5, I think, as a line of credit. And I think I got in, like 1.9 deep at 1 point in time. But they still had that $30,000 CD that they really felt good about. You know what I mean? So, fortunately, the last two years have been pretty good. So we wiped all that out. And we don't owe them anything, but, by God, they've still got that $30,000 CD. So we were a local bank, but it was more because of not anything that he or I did. It was our family name. And being local in the community for.

So many years, those local banks are so important to communities. And even in bigger cities, if you can find the local bank, that's your best bet. And like you're talking about, you may have to give a collateral. That seems ridiculous to you, right? You know, they took. They took my death benefit, my dad's death benefit on life insurance policy, and they're holding that. The cash. The cash value death benefit as a just. It's crazy to me that they would even hear about that. But they. They care about it.

They do. It's funny things how they analyze things. And we're still staying out here dealing with the customers that they don't want to, and we're doing well with it, and they've got their $30,000 CD. But they came to me at one point in time, said, I think we might need some life insurance. I'm like, what? I'm not going anywhere. You know what I mean, so I think they hit me up with about it two or three times, and I never did it. And we just kind of went on.

That's. You know, there's something important in this, in what Joe talked about when making that relationship with a bank, and that is you've got to have something, right? It seems like so many people want to hop into this business with. Without any money. And don't get me wrong, I'm not saying that it can't happen, but, you know, $50,000, it's not a whole lot of money, but it's a lot of money, right? And so it's something I get frustrated with. People who just hop in this business, get these big line of credits and, you know, are floor plans, and they don't really have any cash to keep their business up. And I think that's really detrimental to people's thought process in our industry.

Oh, I totally agree. I was fortunate enough to never have to use a floor plan company. I did floor plan locally. They never held my titles. You know, they would come around and do a floor plan every now and then, audit. But people come into this business from, like a franchise world or from a used car store or something like that, where it's all about sell more, sell more, sell more, make more, make more, make more. Well, then whenever they come over here, if I've only got $150,000 line, I have to have steady growth. I have to control that growth. I have to make sure that if I'm going to advertise so much, I don't bring in a lot of people that really aren't buyers. You know what I mean? So you have to control your growth in this business with your capital. And as that capital grows, then we grow. Mm.

I've seen that. Yeah, I've seen that. Be a big problem in buy here, pay your out, sell your cash, and. Oh, yeah, and then you're out.

Either that or not have any money in the bank and their floor plan and everything. And that's been a big talk here recently. Some of these floor plan companies are starting to come back around now. You know, you might not had a payment, but I can promise you that. Interesting stuff.

I found it mind blowing that somebody talked about they were mad because the curtailment started back. Well, guess what, y'?

All?

That's what you signed up for, and you're selling cars. Why do you think the curtailments aren't coming back and then backtrack you anyway? You should. You should have already sold those cars. You had on floor plan, by the way.

I mean, we. We didn't pass along curtailments to our customers, you know, so. So we kept trying to collect, you know what I mean? So something you got to do.

All right, Jeff, you will wrap this thing up.

Joe, thanks so much for your time. We really appreciate it. This has been awesome. Great learning experience. It definitely makes me piques my interest again. At least here I gotta.

I gotta look forward again. Hold. Hold back, buddy. Hold back.

Come on over to the good side.

Yeah, man. I mean, just that he gets excited.

Joe, every time we talk.

Totally easier pay here, which is probably to. Probably to be said. You just got it. I mean, it's. I don't know, man.

There's some.

Whatever.

There's a big lease here. Pay your dealers in Utah. I know that.

Yeah, yeah, yeah.

It's pretty North Carolina. I'm not sure about North Carolina versus South Carolina, but.

Yeah, none in South Carolina.

Oh, really?

All right, Joe, thanks so much for your time.

You bet, guys, thanks.

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