#200 - David Zapata - How I Built This

Welcome to the Independent Dealer Podcast with hosts Luke Godwin and Jeff Watson. A podcast by dealers for dealers. Here we go.

Hello and welcome to the Independent Dealer Podcast. We continue our series here of how I built this. We've had some awesome stories from dealers and their journeys through the used car industry, getting to where they are now. And today we are joined by Mr. David Zapata. Did I get that right? David?

That's right, yep. David Zapata or Zapata.

You did.

You didn't say it right, Jeff. I like the way he said it a lot better.

Let's hear you try, Luke.

Zapata.

Zapata.

Zapata.

Zapata. Sorry.

There you go.

David, you own Cars Mart. Not to be confused with Carsmart, but Cars Mart. And you're up there in Michigan, right? Just kind of north of Bend or something?

Yeah, yeah. And pretty close to the border with Indiana.

Okay.

Yeah.

Nice, man. So it's getting cold up there.

It is.

That is no fun. So David, give us real quick, give, introduce yourself to the dealer community and give us kind of like your 0 to 60. What kind of dealership do you run? The size, the scope? Introduce us.

Sure, yeah. Well, my name's David Zapota, you heard, And I have a family owned business, which means I work along with my family. I really only have one employee that's outside of our family. And it started about four years ago. We've gotten into the buy here, pay here business about three years ago and we've slowly made that into our top priority. We really like doing that. It's worked great for us since we started. We pretty much averaged about 15 cars a month. On our retail side, like cash sales, we were usually averaging between 2000, $2500 profit. And then on the buy here pay here, I mean, it differs quite a bit.

Yeah, it's interesting. So you didn't start out as buy here pay here, David, but, but that's what you are now, or 90% for the most part.

Yeah, yeah. I would say that the first, the first year we started to buy here pay here, we were probably like 80% cash sales, 20% buy here pay here. And then the two years ago it was kind of 50. 50. And now we're at the point where we're probably more like 60 or 70. 30.

And David, my dad, it sounds like kind of the way my Dad's operation started 36 years ago that, you know, originally you, you open up and you're a retail dealer. And what happened with him? He was having problems getting People financed back then, it was a lot different than it is today. What spurred your change from retail only to being in the buy here, pay here space?

Well, quite a bit of things. The main thing is I actually got into the business because I wanted to do something more with my money. Back in 2010, I started a program. Pretty much learned how to manage money, and the program really went around how to become your own banker. So the idea of making money work for you just really stuck with me. I've been, you know, throughout my life, learning more and more. And, I mean, the buy here, pay here business just allows for you to do that. That's kind of the idea behind it. And I knew when I started the dealership, that's kind of where I wanted to go towards. We just. I mean, I started my business with $23,000 and, you know, then borrowing money from family members, and I got my family involved. And then once I had, you know, a little pool, then they started doing the buy here, pay here, and we've been growing since.

And how many account.

Yeah, go ahead, talk to me about that. Sorry, Luke, you were going to ask probably, how many accounts have you grown to now? Where do you sit now?

About. Let me see. Because we've sold quite a bit, so I think we're on the low side. It's under 150 since we started, but.

$23,000 up to 150 buy here, pay here accounts in. What'd you say, four years? I mean, that's aggressive.

Yeah.

I want to talk, David. What about the family dynamic. I find that so interesting from a young car lot. I mean, obviously, you know, Thanksgiving and Christmas coming up, you guys are shutting down completely this week. Because I know how it was with what I was running all family. It's like, well, we got a family vacation, so we're shutting down the place.

We've done that quite a bit. Yep.

What's the dynamic there? How did you. I mean, are you partners with your family? Did you bring them in ownership? Are you the boss and their employees, like, pretty much talk to us about that Dynamics. I think so many dealers start out that way.

You know, it was. I brought the idea up to my dad. So my dad and I are both mechanics, and once I got my ASC certification, you know, I always talk to him, hey, let's open up our own shop. He was working out of home. He wanted to do something, you know, at home. And I was like, I don't want to do that. I want it to be legit or, like, you know, we can't do it. And I brought up the idea of starting a dealership, and he was just like, oh, no. Like, you know, I don't want to get involved. You know, I'll fix the cars, and that's it. So I was like, fine, you know, I will. I'll start it up. I'll send you the cars, you fix them. I'll come help you when I can. And, like, we'll do it that way. And that's how I started everything. Just everything, just all in my name. And, you know, it kind of got to a Point in 2019, the place that I purchased had a big building that was for storage units, and we gutted that whole thing, and we turned it into a repair shop. So after one year that my dad saw, you know, kind of how things were going, and he was a contractor, basically. He didn't like that because I told him, like, hey, man, you gotta set aside your taxes. He wasn't. He had to pay taxes. And he's just like, oh, you know, I can't do it. So I'm like, all right, I'll hire you. And from my perspective, it's really been easy in that fact that I get along pretty well with my parents. I have both of my parents working for me and my brother. They're in the mindset that they just want to work hard and, like, leave me out of everything else.

So you start on your own, then you hired your parents. That's the opposite of what normally happens, right?

Yeah.

Do you have any siblings involved in the business?

Yeah, my brother.

Oh, goodness. I.

Both your parents, your brother, your wife.

My wife.

Nieces, nephews, cousins, eventually. Oh, my. So what is your brother?

Is.

Is your brother sales or no?

So my brother does the auto detailing, and this past year, midway through last year, he started going to automotive classes. He was like, hey, man, I want to, you know, fix cars with dad. And he's been doing that for a year and a half, and that now, I mean, he's doing amazing, to the point where I've had another detailer guy come in, and I'm looking for another detailer because it's more beneficial to have a good mechanic.

Much easier to replace a detailer than a mechanic, that's for sure. And you have such a great advantage coming being asc, certified as a dealer, you know what to look for. And I think some of us come the other direction. You know, I have, you know, medium mechanical abilities, but I don't always know when I'm looking at something at the auction or on the street, or if my guys are tearing into something in the back, I don't always know where they've messed up, you know, where they did something wrong. So you as the dealer can go back there, stick your nose under the hood and be like, hey guys, you know, I know what you're talking about. This is wrong or this is right. Let's move forward. You know, I think that's such a great advantage that you have.

It's. That's actually been a double edged sword because I bought vehicles who were like, oh, like I can fix that. And all of a sudden I have 10, 15, 20 vehicles that, you know, I can fix that. And it just piles up and that's not necessarily a good thing, you know, and when I do find a car that is in good condition that I like, know, I was able to test drive, inspect, whatever, all of a sudden everybody else is bidding it up more than I'd like to pay for it.

So you're the guy that everyone follows around at the auction. Yep.

I mean, in a sense, you know, and I don't want to be known for that because then, you know, be fighting with everybody else on that.

So, yeah, we did that for a long time. We would always go down and preview the night before. And all the dealers started to know that if I was bidding on something, it was a good car. So I had to start bidding on stuff. I didn't want to try to stick them with a real lemon to try to throw them off the scent. Yeah, so you have to kind of, you have to play the game.

Yeah.

Follow you.

Yeah.

But did you go to, did you go to tech school to become a technician? Is that how you got into it? I mean, it's. Your dad always in the automobile, automotive repair business?

Yeah. Yeah. So my dad, I think he, he went to local school for Automotive back in 2002, 2003. He's been a mechanic since. And I actually went to school for that. Before I went to school, I kind of had already, you know, learned a lot from my dad. And to me personally, it was really disappointing going to school because a lot of people take it as a joke. And I ended up getting ASC certified on my own. I just, you know, kept studying, learning, took my ASC certifications and I ended up working at a European shop, working on European vehicles. And I mean, that's just another, it's more challenging. So I felt like that even sped up the process of me learning even more. So it was nice that I, that I Did that, did.

How does your, I guess coming from that background, getting your asc, going to school for becoming a tech, that, that really shows you how much you, you think training is worth it, I should say.

Oh, yeah, definitely.

What are you, what are you doing as a car dealer to get that training and to, to kind of simulate what you've done in the repair business?

Well, for, for one, you know, with my brother, really, I continue to motivate him to keep doing that, and it's really worth it. And if I were to find, you know, when I'm ready, because I know I'll be ready at some point here to find somebody else, even if they're not yet a certified mechanic, I'd want to get somebody in. I can. Hey, man, you know, let's, let's get you trained. Let's get you motivated to go to school, because even if you only work here for a couple years, that's just going to benefit you, you know, in life altogether. And I mean, I'm all about that.

Are you, are you doing any training to become a better car dealer or, you know what?

Oh, yeah, yeah.

What are you doing on that side?

Going to conferences, just building relationships. Ever since I got my wife involved, we've been really doing a lot of learning on and structuring our business, how to, you know, keep it growing. No program in particular, just kind of a lot of pick and choose here and there.

Yeah. And we talked a little bit earlier. David, I know you are a Buckeye customer and you're using some of those products, so of course we need to plug them because they sponsor the podcast. What are you using them for? You know, a dealership of your size selling about 15amonth. And some of those, majority of them are buy here, pay here. Where do you find that useful?

So earlier this year I was finding myself. Our motto for our business is dealing with integrity. Ever since I started, honesty, transparency has always been a priority. In fact, none of us at my dealership, we don't have any salespeople. Our main focus is just the vehicles, and the vehicles are going to sell themselves. That's always been our, my train of thought. And, you know, it's worked out good for us. I've had many people that they think they can come show up, look at a car just to be super nitpicky about it, to find things wrong. And I'll tell them, like, hey, you know, you're welcome to go look at other cars. This one's going to be here if you want. And I've had so many people come back and like, shoot, yeah, that is a good car. You know, we'll tell people straight up, this is a used car. It has, you know, dings and scratches. But I don't mean to get away from your question, so with. With Buckeye earlier this year, I started noticing that we were. If something happened with a car, like, we're always going to be responsible. We're going to respond and help people out. You know, something minor happens, whatever alternator goes out, a couple months on the road, hey, bring it back. We'll take care of you. And because of doing that, we were like, all right, you know, we need some kind of a pool of money where we're already holding ourselves responsible. We're already helping people out. Why not have a pool of money in case something major does happen that we can pull from and just continue doing what we're doing. We were selling third party insurance. We're using an alpha warranty. And anytime something happened, if it's not covered by that warranty, I'm like, what the heck, man? I just sold this car, sold the warranty. You know, a water pump failed three months down the road. Well, usually water pumps are covered, but you know what I mean, something that's not covered, and then it just makes us look bad if we don't do something about it, especially if we sold them insurance. So here we are, taking care of the problem anyways.

Yeah.

So once I found out that Buckeye had a program similar to what we wanted, where we could sell our own warranty, then, I mean, we've been, you know, it's been great because now I have a little pool money where something does happen we can pull from, and, you know, we're gonna take care of people. So.

Yes. You don't want to send the money away. Right. We talked about it all the time. Keep it in your own pocket.

Yeah, yeah.

It's funny, Jeff. I think the reason so many people end up being getting reinsurance and selling aftermarket products is because we get so frustrated with other warranty companies not. Not doing what they said they'll do. Right?

Yeah. And.

And so you. You get so frustrated and you're like, well, you know what? I'm going to open my own reinsurance company. Of course we say, buckeye's way to go. Get your own reinsurance company. Get it going. But the biggest. The biggest reason is because you get so dang mad at aftermarket warranty companies that don't cover what they say they're going to cover. They don't take care of your customer.

Right. But, like, we're surprised that they're trying to make money. You know what I'm saying? Like, we're surprised that Mannheim doesn't want to arbitrate something or glosses over something in the post, Sal. Like, we're surprised that the insurance is going to pay their loan off when it's totaled. Like, we're surprised the customer is not going to keep insurance. It's like, come on, guys, we know that the warranty company's there to make money. They don't want to pay on these claims, and they're going to find every reason not to. And those are the ones that rub us the wrong way, you know?

Yeah. But, you know, it's so frustrating because you talk the customer into doing it. You're going to be. I mean, ultimately you're going to be the person who's going to be responsible.

And you're going to fix it anyways when the warranty company says no.

Yeah.

So why keep that pool of money when you can do it a different way? And so, David, that's. That's a really smart idea. Glad, glad you decided to go with Buckeye on that.

So, yeah, yeah, it's been great.

David, I want to know what else. What other. Are there any other things you've implemented at your dealership as you've grown that you feel like have really kind of changed the course or been kind of fundamental game changers for you? I mean, is it your, you know, your marketing, your website switching over to more buy here, pay here, like any of those things kind of jump out to you?

So I would say that we are currently in a big transitional moment, especially because of COVID Things have drastically changed, going from being able to get near $4,000 down payment on a car to people looking to put only 1500 downs on a vehicle now versus few months ago? It makes a big difference on how you structure deals, what kind of cars we're going to buy. It just makes it rethink everything. I tried a lot of advertisement as far as advertising our vehicles, and I personally found that all that has to do is with just money. You know, people looking at. At a car, a lot of times they're just looking for, oh, where's the cheapest car? And some of that advertisement, like, you know, either with cars for Sale car, carfax or auto Trader. For us, those don't really seem to work because of the price idea. So now what we do is we just advertise who we are and what we do, you know, we are a dealership that is dedicated on dealing with integrity, of being honest, being transparent. And we're here to help people in the best way possible. And that's what we've been advertising, using Facebook, just a lot of post interaction with people, and that's worked out great for us.

You know what's funny is I think it took me 25 years to figure that out. Jeff. Look, we got somebody that's been in business for five years that understands it's brand advertising, especially what we do in the buy here, pay here industry. It's about being able to get that customer engaged with you, get them to trust that you're going to take care of them and the cars will sell themselves. Once you have that message out there. And David, that's good to hear that you're doing that. Did I hear you say earlier that you had sold some accounts or are you keeping them?

No. So we've been working with Agora and we've sold our accounts to them, but in return, we are able to see some of the profit as customers continue paying on those accounts. So they're not necessarily sold and gone. They're sold. And depending on how they do it, we continue to receive revenue from those accounts.

And, David, is that Agora the only person you've ever sold accounts to?

Correct. Yep.

I know it's kind of hard starting with $23,000 to start building up.

Yeah. Talk to us about why. Can I ask you why? What's your philosophy behind that? Was just to free up cash flow and try to keep going, or what was the.

Yeah, so it kind of got to a point where a lot of families and friends started noticing what I was doing. But it just took a lot of time dealing with not only the accounts that we have, but now, you know, dealing with other family or friends money that it was easier to just have one place to get funding from that I could continue to finance my account, and it made life easier.

Let's go. Let's go down that route for a second because I think that's really.

An.

Anomaly that you would borrow money from friends and family to start funding a buy here, pay here store. I think it's actually a really good option. Talk about how that looked. What percentage rate were you paying those people? Did you have people all of a sudden coming in demanding money back? How does that look, David?

Yeah, so I try to do it very conservative. So we can just use round numbers. If I sold an account, financed $10,000 and I had $6,000 into that account, I would only ask for the $6,000, and I would set up a payment plan according to what the customer was paying, and I would pay back the investor 80% and I would keep 20%. And that allowed me to pay them back quicker. And then once that those 6,000 were paid off and I continue to receive money, then all of a sudden I'm keeping 100% and I don't owe anybody anything. And I was paying 15% on that, you know, on that 6. 6,000.

So you were paying. So you were paying them back 6,000. You're paying 80% of the payment back? Is that what you were doing?

Yeah, so. So if somebody is paying 300amonth, I'll be paying 240 back to the investor.

Okay.

Until you get it paid off at 15% amortized over the. The length of the contract or just. Until. How did you amortize that?

Yeah, so whatever. I would put it at 240 until that was paid off.

Okay.

Yep.

That had to be a lot to keep up with, David.

It was, yeah. Yeah. I mean, fortunately, I found programs where it made it easy. You know, the bank account, just go in there, set up my monthly payments, automatic payments to this account. And like, you know, once it's set up, it's set up, it's done. I don't have to worry about it.

And how many people did you have doing this for you?

I probably got close to 20.

Whoa. Wow.

How much money at that point did you have indebted to them?

Close to a hundred. I got to.

Okay.

It was like. Yeah, yeah.

And you don't do any of that anymore?

No, I still do, but, you know, really with the pool of people that I do it with is much smaller, so probably down to like five, which is much easier to deal with and work with. And, you know, it keeps us, you know, I can control and utilize the money still. Those five. It's easy to manage. It's not overwhelming, and it makes things just flow easy. We're happy using it. They're happy getting interest on that.

It's such an interesting story. I mean, the way that dealers in general, and also specifically buy here, pay here is in the beginning, how you get your capital is you're just. You're scrapping, you know, you're doing everything you can. You're getting 10, 5 grand from 20 people, you know, to try to fund some deals. And then you got a whole separate accounting and spreadsheet and thing to kind of deal with. And then eventually you can Kind of see yourself start to build some momentum, get some financials underneath you, and then you. You can narrow it down to, like, the five best lenders. And then you also can get someone like Agora or, you know, I don't know, Spartan or Texas or any of these, whoever these other lenders are to start giving you money. Hopefully a local bank would extend you a line of cred or something as you start to kind of build up your. Your financials and your. Your reputability. But you do, man, if you have a dream and you have ambition and you have integrity, then you just scrap and you're fine taking ten grand from your. Your great Aunt Susan because you know, you're good for it and you're going to make it happen, you know?

And, David, how did you approach these people when it came to, you know, how do you find 20 people? You just go, hey, I need $5,000. I mean, how'd you. How do you set it up? Sorry for the interruption in the podcast, but we'd like to talk to you about Tax Max. Tax Max is a great way to get that tax money. Right, Jeff? And it's going to be a big tax season.

Yeah. So this is being recorded mid November. Not sure when it's going to go live, but I have already done three deferred tax deals.

Awesome.

Based off estimates. So 2000, 1500 and another 2000 deal. These are kind of our preferred customers. Current clients that wanted to upgrade. They use the Tax Max program. Last year, the year before, so they know how it works. We know how their taxes work. I mean, it was really. It's a slam dunk. And it's deals we would have done anyways for these customers because they're good clients. They pay well. This is just the opportunity to help them get into something a little bit nicer, a little bit of an upgrade. And for us to, you know, eventually not be as cash strapped in that deal because I paid more for those cars.

Yeah, everybody's paying more. And I tell you, Tax Max is a way to make sure you get that money. So rush out. Sign up. We have a code, right, Jeff?

Yeah, I think it's dealer pod or pod 20 or something like that. Look it up in the show notes, make sure you use our code so they know that we're doing them some good and we'll get back to the episode.

Yeah, pretty much. I'd call friends, I call family. Like, hey, you know, you got some money? You want to make some interest on what? I ask questions like, hey, how's Your. You know, do you have your. Your savings in a Bank account collecting 2%. You want it to collect 15%, you know, and then the other thing is, I told them, like, hey, I'm. You're not going to have your. Your money strapped for two years every month. You're going to be getting, you know, a decent amount of principal back, plus interest. So, I mean, I talked it up.

That's great. I like that idea, Jeff. I really do.

Yeah. I feel like. I feel like I'm gonna jump online and start, like, a GoFundMe or like a crowdsource.

Or like a crowdsource, I think, is what you'd have to do.

Yeah, I'm gonna go crowdsource my next line from just random people off of Twitter and then collecting.

And that's what Agora is doing. They are crowdsourcing money to fund, you know, And I mean, really, I. I see what they're doing pretty much what I was doing, just in a. In a larger scale.

Yeah.

From.

From real banks. Yeah.

Yeah.

With crowdsourcing. Yeah.

So we talked about some of the things you've done, right. Can you share with us something you feel like you've done wrong? Like, is there some pothole you stepped in or something you blew up that you would tell dealers to?

Yeah.

So I'll tell you a joke. Okay. There's a drunk guy walking on the street, and he's just walking, and boom, he hits himself. He keeps walking. Boom, he hits something else, keeps walking. Boom, he hits himself again. He stops. He's like, 1, 2, 3. He's like, oh, I'm not home yet. Two more.

Is that what you feel like?

Yeah, but in a way, definitely, you know, kind of walking to a destination and you hit bumps. But you don't want to be drunk, right. You don't want to forget that you're hitting this stuff. You want to be able to next time you're coming around like, hey, you know, I hit that bump. I'm not going to hit it again. And we've. We've done that. I mean, I've done that plenty of times. I think more than anything, the number one thing is buying cars. Been burnt so many times from local auctions. Buy a car, green light, and then all of a sudden it has major problems, and they're like, oh, that's not covered. I mean, I'm sure you guys know about all this. Besides that, a lot of times I got from people that, oh, you know, you're working with family, that's, you know, that's not going to turn out good. And it's had its challenges, but more than anything, I mean, it's probably been the best decision I've made. And I did write some other things.

Yeah.

To speak to those two points, David, and say we talked about last week or a couple of weeks ago. We spoke. When you are a small dealer and you're buying 10 to 15amonth or whatever it is, every single car.

You can't.

Afford to have 1 out of 10 or 1 out of 15 be bad because you just. There's no way to cover that. So, yeah. You know those days when you would crawl up and over top of and underneath every single car you bought, you know, it's a great reminder for those dealers that are buying, you know, 100, 150 every month. Like, you know, we start having to scale and we maybe get a little bit lazy, but do we really need to, you know, are we leaving? Are we losing a lot of money? Because we just think that's the cost of trying to buy that many cars when it's like, no, it's just giving it the same attention that you used to give it at 10 or 15 cars. Now you need three buyers to give that many cars attention.

That's an interesting point you make, because I found myself, you know, when I was having to buy just a couple, you know, like, you talking about 15 to 20 cars a month, I inspected them like they were gold, Right? Yeah. I drove everyone after I bought it. I did all this. And the more cars I had to start buying, the less I could focus on doing that. And so you end up getting problem cars more often, right?

Yep.

But it's. I think it's a part of doing business. Cost of doing business. And go ahead.

I'd say you're not willing to scale. I'd say if it got to the point where you can't put your hands on 50 cars anymore, you need another one of you. So those bad buys would more than make up for someone's salary to try to hire and train another Luke so that you can really buy the best 20 or 30 cars each.

I don't. I don't think. Well, I don't. I don't know that can actually be done. Because when you start buying a lot of volume, you're going to have mistakes. It's just the way it is. Luckily, the bigger dealer you are, the more cars you buy doesn't hurt as bad. And, you know, it's one of the reasons we use Buckeye, you know, psi, because we Know, we're going to make mistakes. It's too expensive, really, to send the car back to the auction with a mistake. Now you just got to repair it and move on. And I think some people get. If you're buying the right car and there's a problem, well, just fix the problem is kind of the way I look at it. Even if. Even if it costs you two grand to fix the problem, if you fix the problem, you're still gonna make money. So who cares, right?

It's tough. So recently we did a. I looked at two 2012 Toyota Camrys, both of them very similar mileage, 108, 116,000 miles, similar trim. And one of them I got for six grand, and the other one I paid nine grand for. So the $6,000 Camry, I mean, you can kind of imagine $3,000. It was. I mean, it was beat up. Like, I need to replace both bumpers. The interior was trash. Like, we took all the seats, all the carpet, door panels out to clean it and get it. Okay. But now the $6,000 car, it looks like a $13,000 car. I mean, it really does it into it. Well, I mean, really, it was. It was a elbow grease. We've only put, like $200 into it.

Yeah.

Time wise, we spent, you know, three. A little bit over three days on it, which, I mean, it's. It's time when it still counts a lot.

Yeah.

But the. The $9,000 Camry now, I mean, I think we had to put. We put two TPMS sensors on it. We didn't even have to do an oil change on it. I mean, it was great car. So looking at those things, it's like, you know, all right, what do we do? I actually, then the $9,000 Camry, I couldn't sell because we had no title. I just got a title for it last week. So we're gonna put it up for sale, and the $6,000 car is just about ready. So, I mean, which. Which is the better deal, you know?

Yeah, that's. I get that problem all the time. It's like, oh, I have to buy that car. But how long would it take to do this or that?

It depends. Do you have more time or more money? Do you have more manpower or do you have more money? Because obviously, when you could argue that that $6,000 camera, you put another, you know, with manpower and opportunity loss, you probably put another two to three grand into it, even if you didn't actually spend two to three grand.

Right, right.

So with the Manpower and the opportunity, you could have been getting another car ready. Instead of spending three days on this one, you could have spent half a day and had four more ready for the front line. That changes things. But, yeah, if you've got mechanics standing around and you've got the time, then maybe you can go out there and polish some turds and make some money on them.

But, you know, one thing, the one thing. And if you again, have a car that's hard to find and it does need a transmission or it does need that, but again, if it's a hard to find car, you just have to buy it and kind of bite to pull it.

Right.

Because you know it's going to sell as soon as you get it ready.

It's like real estate, right? Fix and flip. Sometimes they're fix and flip, sometimes they're turnkey, and sometimes it's all about location. No matter what you're going to pay for that thing, it's in the perfect location. Just buy it, fix it how you need to fix it, because you know it will always rent. And it's the same with those cars. Right. Put whatever you got to put into it because you know it's going to be a quick turn regardless.

Yeah. If it's a. If It's a Chevrolet Z71 crew cab, you just got to buy it.

Yeah.

Make it work. Right?

Yeah. Well, I mean, I personally will say that I would rather buy the $9,000 car. And it's pretty much because of what you said, Jeff. You know, I'd rather get more cars ready. And, you know, I mean, there's just those three days. I lost a lot of time that, you know, I could have had help doing something else.

You admitted you got a bunch of projects back there. You got a bunch of builders sitting on the back lot. You could have gotten knocked out. David, any other advice for dealers before we leave you today?

You know, I would say attend conferences, NIDA conferences. Making connections has been such a huge thing. Just being able to hear what other people are doing, see what they're doing, build those connections. It really helps structure and being flexible and open to make adjustments. Just because you've been doing the same thing for 10, 15 years and it's worked out till now. I mean, times are changing, right? I mean, we have a whole pandemic that we have to deal with, and the whole country is dealing with it one way or another, some places harder than others. So I think to be able to be open to make adjustments, flexibility is probably the biggest thing because we're still having to do that right now.

Yeah. That's great advice. Thank you, David.

Yeah.

That it awesome.

Oh yeah, sorry, I didn't mean to hit it.

I had a couple more things. I guess one thing that I had, you know, written down too was I had written down money now versus money later. You know what's better? Do you need money now or do you need money later? I tend to think of money later as in I try to play things safe. You know, I'd rather make sure that my money is going to be worth a lot more in the near future, especially with inflation and all those things and having to structure my business where I know my money's gonna be worth a lot more later than trying to get everything just quick money now and then, you know, how far does that go?

That is the concept of buy here, pay here, I think.

Yeah.

Compared to retail.

Yeah. Agree.

Yeah. Where you're putting, when you're putting a car on a note for two to three years, you know, I'd almost. It's a hard argument both ways because you're locking in that, you're locking in the value of that car today and letting them pay on it for three years. Right. We look at ourselves with inflation and the way we hedge against inflation or the way we, you know, you look at your house, you're like, yeah, I'm locked into this house and this interest rate for 30 years. So regardless of what money does or what house values do, my payment is all, my mortgage payment is always going to be $2,000 no matter what for the next 30 years. I don't care if inflation goes crazy. So it is kind of an Interesting almost catch 22 on buy here, pay here because you are locking people into three year loans. I look at the cars that I sold 12 months ago, I would love to resell them again today for two to three grand more than what I sold 12 months ago ago. And those people are tied into it.

Yeah, but with the buy here, pay here, I mean, don't you have more opportunity to get that car back than if you would have sold at retail?

Good point. And if you go lease here, pay here, do you have even more opportunity to get that car back here?

We go down that rabbit hole again.

Yeah. If you are of the opinion that these assets, that cars as an asset will continue to kind of hedge inflation to a degree like we have seen, I mean, think back. Free cash for clunkers. You know, things have just gone on a straight upward trend since then. Now if you could force these Cars to come back to you every 24 months and they're worth more than what you actually thought they were going to be worth. That's a great, you know, you want to take that sucker in for trade, you know, on a lease termination.

I think that's where David has a good point, that in the buy here, pay here industry, you should, you should be able to recover a lot more of those trades. But unfortunately, sometimes those trades aren't worth anything once you recover.

And that's why the buying the cars is such a big thing. Because, you know, I'd rather spend a little bit more on a Toyota than, you know, maybe on a, you know, Chevy Cruze because a little Toyota Corolla is going to be worth more than the Chevy Cruze is going to be in three years for sure.

Don't you talk bad about cruises.

I don't.

I will not sell them anymore. So it's garbage.

That's a good point.

When you look at your business model, you look at your business model and you say, okay, If I'm a 3 or 4,000 ACV, what is this car worth in two to three years? Yep, scrap metal. Now if I'm an 8 or $9,000 ACV, does this car have two lives in it? Can I get this sucker in on trade in 24 months and then sell it again a second time? You know, and if I'm a Luke, I'm a 15,000 ACV, I'm gonna buy here, pay here. Now, that car might have three lives. I might be able to sell that sucker three lives and I can trade this person in every two years, two and a half years, get them in on trade and keep selling that thing over and over. So it's a really interesting argument when you look at your ACV and what is your long term game plan and goal? And I know we all naturally, I fight to stay at a low ACV because I want that car to be affordable and I want it to be, you know, but there's a lot of, you know, downside that comes to having a 3 or 4000 ACV.

Big time. Yeah, yeah.

The brain damage, the customers that it draws in, the ability to recycle that trade in. It's something I'm definitely battling right now.

Which one's better?

Yeah, we went down a crazy rabbit hole there, David. But hey, to wrap this up, we really appreciate your time. Thank you for coming in. Everyone can take an example. David, when we met him at convention, I think it was in Round Rock at the Texas. None of us had any business being in Texas.

None of us.

San Antonio. San Antonio. Not it.

Not was it San Antonio.

I think it was.

Okay. Who knows? But. But David came right up and he said hi and he introduced himself to everyone around him and he talked to everyone. And when we saw him at lunch as he was networking and. And chit chatting with dealers, I mean, what a great. David is a great example of a dealer that's just out there just like soaking it up like a sponge, talking to everybody, being involved. So props to you, David, for that.

Yeah, thank you. Well, I've never had experience with this. I mean, I come from a background of being a mechanic, not a car sales by any means. So I like the idea of getting all different kinds of point of view and.

Yeah.

David, thanks for your time.

Thank you.

Sweet.

Perfect. All right.

You can edit me out.

Cutting him off.

I didn't mean to cut him off.

No, y' all edit out our fake. Our fake out ending.

Oh, you're good, man.

Cool, man.

Thank you.

Appreciate it, David.

Yeah, thank you, David.

Yeah, no, that was very helpful.

Have a happy Thanksgiving.

Good hearing from you guys. Happy Thanksgiving. Will do. Thank you.

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