#223 - Why Are Dealers Obsessed With Carvana?

You are listening to the Independent Dealer Podcast with hosts Luke Godwin and Jeff Watson. Hello, and welcome to this episode of the Independent Dealer Podcast, brought to you by Buckeye Dealership Consulting. The place by Dealers for Dealers. Fair and balanced. Yeah, all those.

Very unbalanced. Yeah, very, very unbalanced.

On the verge of insanity and incomprehension. Uh, Luke, this week I want to touch on some hot topics.

All right.

Seems to be a lot going on in the news right now. There's a lot of uneasiness, ups and downs. I mean, I just. I don't even look at my. My IRAs. I just. I don't even want to. I don't even want to tune in and see them.

But, Jeff, you know, I really don't have an opinion on anything, so it might be kind of a boring podcast.

Yeah. Yeah. How's your. How's your crypto investments going?

Yeah, you know what I think about crypto?

So a couple of cool things to start off with niada, they announced the NQD nominations.

I've been one of those before, Jeff.

All of us that have no idea what that means. What is that? And why do we care?

So, you know, I was an NQD finalist probably seven, eight years ago, actually. Dan Real was in that group. And honestly, I can't remember who won. I know Dan came in second. I think I was probably close to last.

But is that like saying you're like a Publisher Clearinghouse finalist?

No, it's better than that. So, okay, what you have to do is you have to win your state's nomination. In my case, it's North Carolina and South Carolina. So I'm Pretty sure in 2015, we won the Carolina's Quality Dealer of the Year. You know, and it's. There's a certain amount of people who are nominated from each state, and it's really a contest about, you know, who's. Who's really doing their job in the community and supporting their community and doing the right thing as a dealer. It's really a really good award. I mean, it's an amazing award if you can win it. But just being a finalist shows you that these dealers are doing business the right way. I just. It's. It's a great honor to win your state, and it's an amazing honor to win the national award.

So these are dealers that are active car dealers. They're doing good in their community. They have to submit multiple letters of referral. Right. From other dealers, business owners or something.

And I tell you that's. That Is a. That's a process in itself. Like when you, when you, when you submit a packet. So you have to submit this booklet to your state, and then you have people who look over the booklet and, and choose. And within the state package, you probably have to have five or more letters of references from people in your community, people, other dealers. I wrote a couple of letters this year for people in states. And then when you get a national, the book is like. I mean, it's probably 200 pages. Talks about everything you've done in community, what you focused on as a car dealer. Then it's all these other letters of recommendation. It is. I mean, truly, it probably takes 100 hours of work to get this thing put together. It's a big, big deal.

This is like the 1% of the 1%, right? I mean, 1% of used car dealers even care that there's an association and then there's the 1% of those that would ever be nominated for something like this because they're actually doing something more than just selling cars all day, which sounds like a lot of work. It is.

It is a lot of work.

You get some sort of a trophy or discounts or what's the.

So what's great about it? Well, what's great about it is this. You get the recognition from your, you know, from your constituents or from your peers in the automotive industry. I assume it's still the same way, but I think you get $10,000 to donate to your charity of choice. And sometimes you even get a car to give to the charity of choice for the year or something to that effect. I mean, it's a big. It's a big freaking deal. You get your name, you know, and picture put up at the NIADA convention in the Ring of Honor. It's a really, really big deal.

So speaking of convention, national convention is coming up June 20, so about a month from today. If you're listening to this on time, Las Vegas, hopefully you guys have registered. We'll see you there. It should be good old time and we'll find out who's winning this thing. It's a great. It's a great list of candidates and works.

Yeah, Thursday night at Convent is when they do this. It's. It's a big deal. Awesome deal. So just if you're there, go watch it. Give these guys. Give these guys your love. They really do a lot for. For the industry. They're the good guys. Not like Carvana or another.

I was going to say, speaking of barking and barking about stuff too much.

You hear my dog in the background?

Yeah. I wanted to transition to why is it that? As a group of dealers and it'll be the talk of the town, I'm sure. Still next month we get obsessed with Carvana. Why is that? And is it healthy? Is it not healthy? I mean, we all know they laid off a bunch of employees. Their stock prices dropped. They completed their purchase of the Odessa auto auctions and for their reconditioning service centers and whatever auction, they're still going to run out of there on the wholesale level. So they're making some moves. But it seems like there's two camps. There's the camps that are completely obsessed with them and want to talk about it all the time. And then there's other dealers who are like, it doesn't matter. Why are you guys paying attention? This is stupid.

Well, I think you should be in both camps, Jeff. I read an article the other day that was from, I don't think it was from the Wall Street Journal, but maybe the street and it was talking about they had, they had done a huge survey and the Garcias were betting that dealer that the public really were going to move all to virtual buy in. But the actual, the consensus of this survey was that there's still about 80% of the public that wants to touch field, test drive when they buy a car, not a commodity car, but a normal car. And so they just missed the boat on this. And Wall street missed the boat when they let their stock price jump to $380 a share and now it's at $30 a share. So there's a lot going on there. Carvana is really no different than any of us doing business. They just had a much larger scale. And when that happens, they affect the price of cars because they've got all this money that they can just, just pay whatever for cars and they can kind of control the market to a sense you may not, you may not have been in business. When CarMax first started, Jeff, and everybody was saying it's never going to work. It's this hidden. You can't buy cars on the street. You can't pay what they're paying. CarMax probably is one of the better run companies in the country. And so at this point now, it took them 25 years to get there. I just don't know that the Garcia's are in it for the long haul. So, you know, it's a short term tidal wave that many dealers are maybe discounting some of their poor performance on Carvana, eating up the market. Share. But you know, you really have to focus on your business.

Yeah, yeah, yeah. So the whole point is you can, you can't be obsessed with them because it's ridiculous, stupid. But B, you've got to be aware of them because they will take some market share from you depending on the price point you're in. But you can also learn from them. And I think that's what we've got to understand is don't look at it like, oh, these guys are stupid and horrible and they're going to be out of business in five years and, and just sitting poo poo. I'm like, hey man, what can I learn from these guys? What are they doing? Right? And yes, there is a small subsection of the buying public that do want to buy a hundred percent retail or a hundred percent virtually or long distance. So can I make that available in my dealership for those 20% that do want to buy their car online and they want it delivered? Well, what's, why don't I take advantage of that?

I mean, what, what you've pointed out in the past, Jeff, and is you love their website. You, you want it white. What do they call it? White box. Not white box or white label.

I think that's a donut company. Yeah. You want a white label. If you, if someone could go out there and say, hey, I'm a website provider and I have this website because, yes, it's a start to finish platform, right? Yeah, 100% all done in one location. And right now, us dealers, we pay, you know, seven different vendors to try to get something similar to it.

Yeah. And what's great is you can take that, you know, what they've shown us and incorporate that into your website. So there's so much to learn. You know, I buy cars from Carvana, so I like their platform. When it comes to buying cars, I think it's pretty simple. Wholesale cars. So there's, there's good things about them and then there's, there's bad things about it. So you just got to take the.

Good and the bad.

Never, never ever. And this doesn't matter if it's Carvana or Carmax or Four Seasons Auto Sales or Godwin Motors. Don't ever compare yourself to competition. When you start to do that, you are going to end up losing. You've got to run your business the right way and not worry about the person down the street because it really doesn't matter.

So when you talk about buying online, you know, I, most of our, well, I would say 50% of my inventory is coming online. Right. I buy, you know what, 20, 30 cars a month through OBE or Manheim Express. And we talked about the arbitration policies, right? So I told you guys I was going to get my numbers put together for my year to date purchasing through Manheim. And I've been psiing post sale inspecting every single car that I could through Manheim and Manheim Express. So real quick, Luke. I bought 68 cars that were all green light. This is just my Manheim Express stuff. This doesn't count backlots or any of the other things. We're just talking about Mannheim and their post sale inspection. Okay, 68 of those car. Out of 68 of those cars, 45 of them were eligible for PSI. There's a handful that weren't because they were off site vehicles or mileage or whatever. Yeah, for some reason the PSI wasn't allowed. So about 66% of the cars I purchased, I did a PSI. Out of those, I have 14 that failed. So a third, 14 that got kicked back a third. And out of the ones that passed, I had about seven that were actually fail Buyback, you know, buys like, hey, this thing failed, but you have to buy it because it's not a major issue or hey, we'll adjust a little bit, you'll keep it anyways. So I had a couple of those. So my argument is this, Luke. 33% of the cars I didn't buy, major issues, right? Engine, transmission, something seriously wrong with them?

Well, maybe.

Well, yeah, according to them, yes. I would argue that. Let's take the average. You know, maybe they were. Maybe that oil leak wasn't a big deal. Maybe the hard shift wasn't a big deal. I paid $7200 in psi fees.

How much?

72. Good God. That's 45psis times 160 bucks. So did I save myself $7200 worth of headache?

So if truly there were transmissions and motors that were bad, that.

So out of that 14, if I had two transmissions or two motors that would have eaten up that whole $7,200.

Yeah.

And a pop.

Sure.

A transmission.

I don't think that I see these condition reports and I truly don't think that the people doing the PSI are that good.

And so you think some of these are failing when they shouldn't?

I think so.

And okay, so I would also caveat this, and I should have said this in the beginning. I'm buying a $10,000 ACV, right? So 8 to $10,000 ACV. So yes, I'm dealing with what is basically the bottom of the bottom as far as cars go. The auction and green light designations. Right. Anything cheaper than that is not a green light. It's completely sold as is. And Luke's buying stuff that's a little bit higher, right?

Yeah. So I buy red lights. I buy typically from 60 to 140,000 mile cars. And only thing I buy over about 110 is trucks and big SUVs. Okay. I buy 40 to 45 cars a month. I don't psi anything except through my reinsurance company, through Buckeye.

And.

Out of all those true transmission problems I've had this year, two or three. Okay. And zero motor problems. So I think that if I, if I paid that $160, I think like you, a third of them might be kicked. Well, it's so hard to get cars. I don't want a third of my cars getting kicked because that's just like a waste of my time.

Yeah. I'm fine with it being kicked if it's going to be a $3,000 repair bill. And now all of a sudden I'm, I'm already paying good money for these things. Right.

But if it all averages out in which it should. If you learn how to buy cars properly and you buy enough cars, learn what to buy, what not to buy. If it all averages out in the end, you're going to spend, you know, three to $400 on some recon. You're going to spend three, $3,000 on other recons. If you do enough of them, your recon average is going to come back to fifteen hundred dollars in my opinion. So it's really a law. Averages, as long as you're buying what you know in a certain specific market, you shouldn't, you shouldn't vary much. You're going to have the ones on the bottom, you're going to have the.

Ones at the top.

So why give Manheim $7,200?

Not convinced.

I just think you miss a lot of cars or you're not buying. You're going outside your normal buy in thought process.

No, no, these, these cars are all my bread and butter, you know, these are all the ones that I would do. Again, it's. I'm not putting my hands on them. So, yes, I could see that I could save myself $7,200 by spending that time to go physically to the auction.

How about do this instead? If you get deal shield for 150 to $170 a month, then when the car gets to you you can make the decision whether to kick it or not. Or I think, even better, don't give the money to Cox or to Dessert or Carvana. Whoever take, put that money in your reinsurance company at 150 a pop and then you get to make the decision anyway. So I just think you might be missing out on cars. I think everybody's probably missing out on cars that they PSI cars because I think some of them are getting kicked that shouldn't get kicked because the things I've seen called for structural damage before that arbitration is kicking. It ain't structural damage.

Yeah, but still, you have a chance to talk to the arbitrator and say, hey, yeah, send me a picture. Or what was that? Or no, hey, yeah, can we get a price adjustment? Send it anyways. Or hey, fine, I'll just take it. Because I know that's not a big issue. So I think they're missing more than they're making because I still have these come in. I don't like having it shipped here and then having my guys have to find out if it's got an issue because then I've got to ship it back. So wait, have their guys verify the issue or kick it out and have it shipped back. The reason I like the PSI is because then it stays with them and I don't have all the hassle the back and forth and then I'm outside the arbitration window because I didn't get it shipped back by Thursday at 3 o' clock and holy hell.

Well, there's definitely an issue right now with logistics. I don't know if everybody's feeling that around the country, but I ship a lot of cars and Diesel fuel being $6 a gallon has more than made. Delivery costs go up by a third. And on top of that, the amount of time it takes is getting to be a real problem. So I don't know. I think there's two different train. Two different trains of thought. I just don't want to give any more money to big auction companies if I don't have to. And I don't want to miss out cars. Cars are so hard to find. I don't want to miss out on a car that. That really doesn't need what they say it needs and that I just. Yeah, I'm one of these people give me, you know, give me the right VIN and the right body. And if I've got to put a transmission in it, I know that the transmission I put in it's going to have a good warranty on it. And If I make it back up in interest, let's say if I make only $1,000 on the car and I make my interest and I get that back on the street, I'm okay with that if it's the right car for me.

So you mentioned a little bit about Buckeye, and obviously you guys know Buckeye are a sponsor of the podcast. Recently, there were some questions in the Facebook group about who do you use for reinsurance products? And Buckeye does agree. I mean, there's a bunch of different companies you can go with. One of the benefits, one of the great things about Buckeye is they are finding ways to use your reinsurance program for things like psis and bsis, and, you know, some of these. I don't know if you wouldn't use the word creative, but you would say.

It'S not creative, it's just. Yeah, it's. It's trying to figure out how to make us more money and how to figure out how to ensure our risk, because all big companies insure risk, and some of us just aren't big enough to ensure the big risk. But there's these other things that we can do that not only saves us tax income, it helps us build wealth. And Buckeye is key when it comes to helping dealers build, well, wealth. And also, man, like we've said before, they're putting their money where their mouth is there. They're consulting, and they're people that are selling you these products. They know a lot. Some of these guys have been in. In the buy here, pay here space, in the retail space for years and years and years, and they can come in and help you create plans to sell more product and to reinsure it.

On top of that. So we talked a little bit about inventory, and I want to touch on that one more time, you know, because the conversation has, you know, we constantly look at the market reports, right? And then hopefully in the next couple of weeks, we're going to have some guys come on from NAA and maybe even cars, maybe even Manheim, some of the market guys there to come in and talk to us about what the forecast is for prices. Do we need to be worried as dealers that prices are going to drop so significantly that we're going to be stuck underwater with a bunch of inventory?

I mean, it needs to be in the back of your mind. I don't think there's enough new car production right now for it to be a dramatic drop, but prices correct, typically in the summer. And so you need to be aware of that. But you Also got to have inventory to sell last year, Jeff. I got caught without inventory to sell because this time last year prices just went absolutely insane, went up 40%. And I'm like, oh, that can't last that long. And here we are a year later and prices aren't maybe up 40%, but they're still up 30%. So inflation's here. You don't want a quick deflation. If you do, we're all going to be in trouble.

Yeah. And I definitely think this is maybe conspiracy theory and we don't need to get into it, but I don't think that the powers that be have any interest in a quick deflation either. MMR numbers and whatever kind of calculations go into the soup there, they don't want because they also own the flooring line. And guess what happens if all of a sudden the Manheim numbers drop and all of a sudden you're out of covenants on your flooring line? They're not going to go out and call a bunch of flooring lines because they just know it's, well, not, not smart for them.

It's not smart for them. But if interest rates keep rising, that keeps. There's a lot going on there. I'm not, I'm no economist, that's for sure. But if they're having to borrow money to lend the money and then everything starts to back up, then you could get into a big hiccup.

Sure, they could get you with the interest, the carrying cost of the interest if you're on an adjustable line. But as far as the value of your inventory, I don't think they have any interest in you waking up in 30 days and having it 70% of what you're into it. If they have to hold MMR values and kind of let it come down softly instead of letting it, you know, drop.

Well, in April 2020. In April or March of 2020, that thing dropped so fast, they couldn't hold it back then. And so.

Yeah, yeah, yeah. You look at the historical retention, MMR retention and the sale through rate. The sale through rate was so horrible though, that you would almost argue that they probably. There was something going on there, you know what I'm saying? Like they weren't you.

They asked me when they shut the.

Auctions down, yeah, they were holding the cars. They knew they weren't happening, so they didn't want a bunch of transactions to happen. So the no sale rate went through the roof. Right. So anyways, what I've come to, my current philosophy is, and this should obviously Be a philosophy probably all the time is just running tighter. Right. If my goal is to sell 45 or 50amonth, how many cars do I really need in my inventory?

Yeah, so there was, there was something on the Facebook page the other day about how many I want to sell 80 cars. Yeah, I want to sell 80 cars a month. How many cars I need? Well, you know, ideally, like I said, ideally it's, you need 80 cars. But we don't live in an ideal world and it's taken so long to get parts currently that ideal world is hard to deal with. So 45 day supply, which is, you know, 120 cars is probably a really good number to strive for. And most of us are going to probably land in that 120 to 140 range. And so turn time is still important, especially with rising interest rates. You got to be, you got to be very, very tight on all expenses, especially, especially if you have money board.

Yeah. But if your system is running, I mean, you can sell 80 cars a month with 40 cars in inventory because that's not a static number, that's a moving number. I got 40 cars out front, let me tell you this. And every day I'm adding five and I'm selling five. You know what I'm saying?

Yeah.

Let me tell you this.

If you're doing that in the buy here, pay here industry, you're gonna sell yourself out of business, number one.

Well, if you have the cash, you're gonna do it. I'm just saying hypothetically, if I wanted to sell 50 cars a month, I really could do it with 40 cars in inventory.

And we did that last year. Okay.

At any Friday I got 40 cars in inventory.

But yeah, my turn.

We're not turned up in a static number.

Yeah, I think my turn got up to 14 or 15 in 2020 when we were selling the cars before they.

Got to the lot.

And it went back down to I think about 11 to 12 last year. And I think we're probably in that 11, but I'm sorry about nine right now, which is where I strive to be. It's really hard to sell more cars a month than you currently have on your website or on your lot at any given given moment. That's hard.

It's so funny.

It's hard.

I feel like sometimes it's the opposite though. And you look at that scarcity mentality. The scarcity creates urgency, creates purchases. Man. I sometimes feel like it's easier for my guys to sell from a half empty lot than a full lot. You know, and maybe that was an overall. Well, what happened to U.S. economic time. But it's like, hey, man, you know, I got 1 3rd row SUV. I don't know when I'm gonna get another. Do you want it or not? Because it'll be gone by tomorrow. You know, that mentality carries.

Yeah. If you have the right product at the right time, customers are gonna buy it and it's never gonna go away. But what we had last month, which we were a little off last month, started out great and then it dies because we ran out of inventory. We had plenty of people approved, and if you have people approved and you can't get that car to them quick enough, you're going to lose that deal. And so this month our inventory is back up and we're having a really good month. Who knows? Yeah, I don't know. There's got to be.

It definitely makes you look at your. Your turn time and your reconditioning process. I mean, again, parts are hard, mechanics are hard, all that stuff slowed down. But that turn time. And as quick as you can get that car through your shop, that's going to make a big difference. Are you doing anything unique to get rid of aged units?

Not unique.

So would you recommend it?

Yeah, for sure. Luckily, we haven't really had that many age units in the last three years. I did wholesale an age unit two weeks ago. It was just probably a little too high for my lot, so I went ahead and moved it on down the road. It was not a bad buy, but it was. It wasn't a prudent buy maybe. So I don't recommend putting steps and things like that on it because salespeople end up expecting steps. So they, you know, spiff, stips, whatever. Yeah, spiffs, yes. Sorry, not steps. Anyway, what happens is salespeople get used to those and when they see a car getting old, they'll let it get old. They're like, hey, boss, you've had that car out there for a while. Can you offer a $500 goal on that? Then the next car they sell is that one. So I don't recommend it. I think. I think you should. If you have an age unit, the first thing you should do is drive that car home tonight, Jeff.

And you should say, find out why.

Why is it aged?

That's why.

You may figure that out real quick why it's aged and then drop the price. It typically, if a car has been sitting too long, it's price. Even if it's price to market, it's still price something. Something's out there that's. That's odd. So you drop it $500, drop it a thousand dollars and see what happens. Sometimes it's too low on price to go up.

Yeah.

You know, so there's always reasons. Don't offer. Don't offer. Just throwing out money to salespeople to sell a car.

Sometimes I find, especially in my price point where I'm not really losing a lot of value. You know, we joked around about this, but I typically will keep a car until it's like right on the verge of common law. And if I did sell it, it would take half of my assets. So we've had a couple of birthdays. I think I've got one car on the lot right now that's about to have a birthday.

Oh, my God, don't say that. Don't say that on the podcast.

Well, I've come, I've listened to it. I like, I like looking at it, but sometimes. And what I should do more often is take that car and send it back through recon, you know, strip all the stickers, pull everything out of it, send it back through, get it inspected again, find out what's wrong, put a couple dollars into seat covers or new seats or a paint job or do the bumper or new tires, grab some wheels off Facebook and slap them on there and then have a detailed again, stick it back out front, restock it as a new inventory, you know, reset my date for inventory, and now all of a sudden, it's a fresh new car.

I tell you what, for sure, get that car we detailed. If you, if you've got a car that sat over over three months, maybe even two months, you should get that car re detailed because people have gotten in and out of that car and.

Got a dirty set. All the stickers are faded, all the license plates are faded, and man, just.

If you've really had a car for a long time, let me tell you what to do. You should be mandate mandated to drive that car yourself for like a month. Just. Just for the principle of keeping a car almost.

Yeah.

Get out of your fancy Tesla and drive that car, Jeff.

Yeah, no, I, I wouldn't be caught dead in that thing. So real quick also to talk about our other sponsor, Pastime. I'm doing something. I'm. You're going to hate me for this, but I'm bringing back my loaner vehicles. And the reason why, and the reason this ties into pastime is I am putting an active track Pastime GPS in all of them. Which I recommend you guys do with all your assets. I've got them on my trailers. I've got them on my lock cars. I'm going to put them in my loaners. I'm doing that for customer service, strictly customer service. We are transportation. We sell someone a car, they need transportation. If they're out of it for a warranty item, I'm going to give them transportation. And I think I've gotten away from that because I am angry at my customers sometimes, but it's stupid. I got to keep them driving in something. I can't expect them to just walk to work for three days while I fix the car that I just sold them. So for me, it's a customer service perception in the community. I just want to get back to that grassroots vibe of we're here to take care of you. But the GPS side of it is things are getting. Things are crazy, man. Like, cars are getting stolen, your lot's going to get looted, people are taking off and stuff. It's just being able to sleep at night.

Well, I passed down great partner of mine for, for years now. And the GPS has revolutionized how we collect, how we control our assets on the lot and off the lot. So for sure having any way to protect your assets and as much as insurance costs and the ability to get insurance. Now if you, if you did lose a car, file that only on your insurance might make you not have insurance and be out of business. So I think it's just an extra way to protect your asset and I think pastimes the guys to do it with.

Yeah, strap it to your golf cart. You know, when your golf cart gets stolen off your lot and someone tears it up, you know, but it's, it's so cheap. Um, I put one, I put a speed notification on the car hauler that we use that I just bought. And so I'm going to have a conversation with my LA Tech guy today because I got a notification that he was going 90 yesterday, taking a car up the freeway. There ain't no reason to go 90 when you got a single car haul trailer behind you. So that's a conversation to be had. Luke, in closing, I mean, we covered.

A lot of stuff.

If we continue to see a downturn in the economy, if we continue to see some sort of a recession or correction or whatever's going on right now. What do dealers do? Tips, ideas, things you're doing to make sure that we, you know, can weather the storm.

If there is one deleverage, you know, deleveraging is something you probably should do. Jeff, you may argue the opposite, but I think it's. Yeah, I think. Well, two things. If you, if you have enough cash, deleverage. If you don't have enough cash, you may need to leverage. So look at that. Make sure you do it. Get your expenses down if you need to. I think buy here, pay here, will. Will thrive in a down economy. So I'm kind of looking forward to it. And it's coming. I do believe, Jeff.

So people may argue differently. And again, I'm not an economist. You're not an economist. Take it for what it's worth. It's not the debt that puts you under. It's not the debt that crushes you. It's the payment on the debt that can put you under. Right. So when you say deleverage and I say, oh, the sky's falling. I need to go out and pay off my lines and get out of debt. And then all of a sudden, I don't have cash to make payroll on Friday. That's probably. Or I don't have cash to stock my lot or I don't have cash to make this move that I need to move. That's what's dangerous. So deleverage to the point that it frees up capital. And so at this point, you might be a little behind the ball or if you're going to deleverage, don't do it so drastically that you're hurting your cash flow. But really, cash is king in these situations. Right? It's going to get you through the rough times. It's going to get you in a position where you can take advantage of rough times and access.

Access to capital. So if you have access to capital without leveraging yourself is the best thing to do it.

So I don't even like access, though, because guess how, guess what? That gets cut off. What happened to everyone's flooring lines? During COVID they thought they had these great flooring lines and they could go out and take advantage of cheap cars and they couldn't.

Well, I'm not talking about flooring lines. I. I don't. I won't consider that leverage.

That's okay.

That's. That's.

But if you have a line of credit, your bank could be like, oh, we don't like what's going on here.

They could, they could. But if you have the right relationship with your bank, I think that doesn't happen as much. Especially if they know our business. If they don't know our business, we need to. It's Our job to explain it to them.

Yeah, well, good luck with that.

It's hard to explain it to ourselves sometimes.

Hey, I have subprime auto loans. Would you like to give me a line of credit?

Click. Oh, gosh.

So, yeah, be prepared. And look at the reserves. Do you have cash reserves? Can you make it through a tough time? You know, if your inventory drops, if your cost of cars go up, if your repos spike, if these things happen, can you still make minimum payroll, minimum rent payments, keep the lights on and still sell cars, you know?

Yeah, for sure. You know, couple of things we got coming up, Jeff. We will be at an idea convention. We will be at Tiada convention. We've got some new Tiada stuff coming out soon, I think. If you haven't checked that out, check that out. The Texas Independent Dealer Podcast.

And make sure you join the newsletter.

The newsletter. That was the next thing I was going to talk about. We've got a newsletter that's going to start dropping every Monday morning. Jeff, how do people enroll in that newsletter?

Because you go to the independentdealer.com and you just punch your email into the subscribe to newsletter. And then as soon as we get that thing in a.

It's a beta format, beta beta testing.

Right now, we don't want to spam you, we want to bring you value. So it's going to be a mix of articles and input and videos that will be useful.

Yep, for sure.

Yeah. So during the newsletter, be sure to leave us a review. It helps with the podcast and we'll talk to you guys next week. Dealers helping dealers.

Please leave us a review and subscribe.

The Independent Dealer Podcast.