#235 - New Vehicles DTC, Housekeeping And Tax Planning

You are listening to the Independent Dealer Podcast with hosts Luke Godwin and Jeff Watson.

Are you sure you're ready for this?

I'm ready for it, buddy.

Well, welcome to the Independent Dealer Podcast brought to you by Buckeye Dealership Consulting. Luke, you joined an exclusive club this week, haven't you?

I have, Jeff, I really have. And I'm. I'm so excited about it.

Only other.

The only problem is that you're in the same club.

Luke finally broke down. Finally broke down and bought him himself an electric car. What's your feedback?

I've got so many things to say about this whole process. The only part of the process I did not like was the length of time it took to get the car. So I ordered. I ordered a brand new Model Y Tesla on Easter Sunday, which was performance April 6th. Performance April 16th.

Okay.

And it was promised or not promised, but you know, when the day I ordered it, it said it would be here late May. Right. And I was like, great, that's a month away. Well, I picked it up yesterday. So four months later. Well, four months later and I have it and it's great.

Well, you're doing great compared to some people. I mean, four months is not a long time to wait compared to some of the backlog on these. Had you ordered a, you know, a Hummer, an F150, a lyric, a Lucid, all these other cars, Model X. Yeah, the X's are like a year out or more. So there's a lot of them that are definitely backlogged and pushed back, but they're actually delivering them.

So, you know, what's interesting is we'll get into the, the specifics of the electric cars, you know, here in a minute. But the first thing I want to talk about when it comes to the process. And I bought this for several reasons. Number one, to see the process from Tesla, and number two is experiment with the. The EV portion of it. Right. But the process as in terms of ordering the car, taking delivery of the car, and everything was done on my phone. I never had where I had to sign one piece of. In the, in the Tesla dealership yesterday when I. But I ordered it online. I applied for financing online. I signed all the documents online or on my app, within my app. I sent my insurance via my app. I scheduled my delivery date and time on my app. I transferred money for my down payment via my app through Plaid. I mean, everything was done on my app. I don't have any papers. Like, I left there without any papers. So why can't we Do. Why can't we do that?

That's a very good question and I would say two answers to that.

A.

I don't have the technology, we don't have the technology stack and I don't think anyone out there wants to develop it because it's very expensive and I've talked about that a million times. B, it's something about a car, I mean new car, it makes sense. Right. And that's probably the bigger picture. This is the DTC model that Tesla's done that I think all OEMs would love to go into. I'm sure they'd love to skip the retail new car store, right? The markups, the market based adjustments that are going on right now that are just making it just ugly for people to buy, order a car, have it shipped to their local dealership for delivery and then for some reason that dealership thinks they need to put a market based adjustment on it. It's like, I ordered that car, I custom built it on their website. You, you're literally just facilitating this paperwork for whatever reason because you're not as far along as Tesla is, but I have to pay you a market based adjustment. So that kind of stuff's going to come down the line and I think give a lot of these OEMs kind of like firepower to just circumvent franchise laws which could be coming.

Yeah, I would think so. I mean they're strong in states, franchises are strong in states and it's going to, it will take some states longer than others.

Well, they're going to do a test with us. Right. And they're just delivery centers. They're not dealerships. Ours in Utah service, they're delivered, they're delivered at a service center which is registered as a used car. So I don't know how that works. But they deliver new ones in our state without a new car license. No idea. Here's my argument. If something goes wrong, if something is out of the ordinary, if you don't fit into each one of their steps, it is insanely hard to deal with them. Nobody can say, nobody has a direct answer. No one has the say to go around and outside of the norm to get things done. So that's my issue. Think about dealing with corporate, dealing with the big, you know, some guy in a call center in LA because you have to change your delivery date or it showed up with the wrong tires or the colors wrong or some small issue with your financing had a snag. Like that part is brain damage.

Well, hold on, I'm gonna push back on that because I would get Texas if I didn't do something right. And I could text back and forth. So I submitted a document for financing, and they said, well, hold on. That document is not going to work. And they. They sent me a text message. And so I said, well, okay, what do you want? They tell me I sent it to them email, and boom, it's done. Like, approved within seconds. So I didn't have a. I didn't have a problem there. Now you're probably right. It's not like going to Jim Neal's Pontiac and, you know, Paducah, Iowa, and, you know, and talking to him directly.

Yeah.

You're not gonna be able to talk to Elon Musk. That was the first thing Haley wanted to know. Did you get to see. No.

Maybe.

No.

But the process was great.

But you've got to follow their process. This document doesn't work. Get us a better one. Okay, let me go get it and upload it. Yeah.

Know.

And it's like, no, no. That's all the proof of income I have. Like, we need this to work. Or, hey, I'm. I'm tax exempt. Can we deliver this car? Tax exempt? Because I want to register in my business's name. That just, like, blew their brains. They cannot deliver.

They deliver mine taxes.

I do not believe it. They did.

And, well, I think. I think the luck I have.

And.

I was picking it up in North Carolina, and I'm a South Carolina resident, and so I think that's how I got lucky.

Yeah, I tried to do that. They did not go for it here in the state of Utah. I tried to pick it up out of state to say, hey, no, I'm not a Nevada resident. I'll pay tax back in Utah when I get home. And they're like, no, no, you can't do that. You have to take delivery in Utah, and we got to collect your sales tax. And they just, like, blew their brains. So anyways, that's my argument. Other than that, it's super cool. Like, I know my buddy, he had his service done the other day. He dropped it off, didn't talk to anyone, parked the car in the parking lot, left. They did the service. They notify him by the app. He shows up, pays for his bill via the app. They give him a code to get back into his car. He gets back into his car and drives away.

So that's neat. You know what I noticed? So that time when I ordered this car, I was looking into possibly order an Arabian lucid And a couple other things and there'll be a year or more on a Rivian and lucid. I'm just not quite there yet on. But back then when I was ordering these things, they would give me a price and Tesla price, so I knew exactly what I was paying. Well, since then, Tesla is $4,000 car I bought. But since then also Rivian will not even give you a price. Neither will lucid on their cars. They will, they say this, they say give me $1,000 and then we'll tell you when you can build it out.

Yeah, yeah. And if you want it, we'll sell it to you at whatever price we have. And if you don't want it, we'll sell it to the next guy. And conveniently enough, they all jacked up their prices by $7,500 to match the tax credit that came out, which for your case you wouldn't even qualify. So there was no point in you pushing your delivery off till next year and trying to get a tax. Might as well just taking it.

Yeah, what the heck.

Yeah. So I think for us as dealers, it's a long ways down the road. Right. I don't plan on carrying electric cars or buy here pay here electric cars for a very long time. A, they're not cost effective and probably won't be for a very long time. B, servicing them. The new, the older, like the first versions of these electric cars, you know, I've had an electric Kia Soul, we've had an electric Golf, we've had the electric Focus that I've sold here. Junk. Just such a hassle. They just crammed a battery into a gas car and tried to call it electric with all these off the shelf parts that don't talk to each other. And then when one breaks, they can't get it because it was only Produced for like 2 months to get these like 2000 Electric focuses on the road. So you've got a bunch of bricked electric cars. The Kia Soul was the best one even though it only had like a 60 mile range. That I think is the best early version which could actually be a buy here pay here car.

Their engines are so bad. Their engines are so bad anyway. And the gas ones, they need to put an electric motor in there.

You do not talk bad about a kiss or.

I don't, I don't sell them. They're horrible.

I buy them by the dozens. I will take them all. We, we sell them like we're selling ice to an Egyptian. They go so fast.

Let's get, let's go down that, that ev because I can argue that we will be selling them sooner than later. But I think that Tesla is so far ahead of everybody that I don't even know at what point we won't be. At what point to people who come to me to buy cars. Right? So hey, I want to use Tesla, then I will sell it. Not necessarily buy here, pay here, but it's sooner than later. I, I just feel that, yeah, I don't know.

I mean I've sold quite a few that I drive personally, but they're fifty thousand, you know, eighty thousand dollar cars. So they don't fit my demographic. I'm not buying a ton of them. Yes, people want them. Yes, as long as they're under warranty. Obviously Tesla's way ahead of the game because they worked out the bugs. I would not buy a first version F150. I would not buy a version 1. Lyric. I would not buy. They've got a couple of years to work the bugs out on those cars. Not to mention even discussing self driving capability. Not yet. For me, I don't care about saving the planet. This is not an environmental play for me. I will kick a squirrel right in the face and I will burn a pile of tires in my backyard before I have to pay to have them hauled off. Like I don't. I will dump oil straight down the drain if it's close enough.

Oh my gosh, I don't care. I do not do that. That's Jeff Watson Four Seasons.

This is not an environmental play for me. This is strictly ease of use, low maintenance and performance. So if I have a car that is steps away, months, maybe years away from driving itself from point A to point B with very little to no intervention by me, I'm 100 in. Man.

I agree with that. I think that's man, that's so, so possible for our consumer to buy here pay here consumer. If they, if they did not have to own a car but could have a subscription model with EVs that pick them up, taking them work, do what they need to do, man, it would save them so much money and make us so much money because we could just have fleets of cars to go and pick. I think it'd be awesome.

Yeah, yeah. You, you're a buy here pay here model, but you're just buy here pay here transportation. You know, your own fleet that you manage and you recruit folks and blah blah blah, compete with Uber for self driving robo taxis. Luke, what are you seeing in the wholesale markets? I am Seeing a lot more inventory. I have a couple of set searches that I look at OBE and backlots and man, there's a lot more cars out there.

There, there is. We have bought, we can buy anything we want to buy right now. Prices, I feel have dropped 20% from their high. That's 20%, but they were probably up 40 and 60% still. The really, really nice specialty car, still bringing money sometimes. But everything else I think is kind of leveling out and I think it's going to level out through the first of the year and then we'll get this, we'll probably get the spike back in February, but it'll. I think, I think we're on the back side of this inflation car inflation deal.

So your, your angle or input or attitude would be it's okay to buy right now things are soft. They're not going to get substantially more soft. In fact, they could level out and, or tick back up as we get closer to tax time.

Yeah, I think so. I, I don't see. There's no way there can be substantial drop because when you ride by new car stores, they're still about empty.

Yeah, I don't, They've got to keep.

They'Ve got to keep the door open.

I don't think new cars are being delivered anywhere near the volume that they expected them to be at this time. And no, but I don't know if I have any facts on that, but.

I had a friend who drove his kid up to see his grandparents and in Indiana and they had to drive by the Ford F150 plant in Kentucky or somewhere right around there. He said there were, I mean, I think he said a mile or more of F150s along the interstate and they were like 300 yards deep. So he said there's. And they're just sitting there. So they're waiting on chips. You know, as soon as those ships arrive, that's a bunch of trucks being delivered. But how long is it going to take to put all those chips, you know, those, those in the car and get them delivered? So.

Yeah, you know, do they rebadge venom?

No, they've already, they've already been.

So they'll all be delivered as 2022s in 2023 probably. I mean, that's going to be confusing, right?

There's still a new car. They're still a new car. You know, back in the day you could walk into a new car store and buy a two year old new car.

Yeah.

So, you know, I don't know that it would. I don't know it's gonna be that much difference. They're not gonna get the. The price that they want.

But yeah, it seems like with those chips do start delivering, they will start pushing those on to new car stores lots so that they're not storing them at the speedway. And then all of a sudden these new car stores are going to start getting competitive because all of a sudden they have 50 F150s sitting, taking up all this space and flooring line, and we're going to be back to the old model of OEMs, shoving inventory onto new car lots.

Yeah, maybe. I told you this. I was up in Rhode Island a couple weeks ago and I was at the port there in Rhode island and there were cars as far as you could see. So, you know, there are cars. I just don't know if they're in the right spot. And I. I don't know. So it's not going to be. Demand has slowed, so stores will start building back inventory. Yeah, but it's not going to be a cliff.

I. I don't crazy more expensive. I mean, looking to get my wife an SUV. Geez Louise, man. 80 grand, 100 grand is like. And that's a used, you know, Denali or a used Grand Wagoneer. Like, geez Louise, man. It's insane. And we just accepted it.

You can't. I mean, I don't think you could buy a new suburban for less than 80, could you?

Yeah, no. And my kids will be freaking climbing all over the seats with their cleats and dropping ice cream on it and tearing the thing up. I just. I can't even stomach it, so.

And what's great and what's great, when you buy the new one, they don't come with backup, backup sensors or any of that. They have to work. They don't have the chips to make them work.

What in the world? So it's crazy times we live in, Luke. We got taxes coming up, tax planning. This is a good time to talk about Buckeye. Get your reinsurance company funded with as much dollars as you can. Right. Because we all know the IRS is coming after you. We're going to have some episodes next week and the week after to talk about some of these IRS changes and some of the fun things you can do with your reinsurance company to fund it, but then also to get the money back out of it. Right, Legal, tax wise.

Yeah, there's plenty of ways to get your money out.

Yeah.

Yeah. There's plenty of ways to get your sorry can you hear me, Jeff? My Internet sucks today, everybody. Sorry.

He spent all his money on his Tesla so he can't afford to have good Internet anymore. So, yeah, we're going to have Rob on and some guys to talk next week about how to get the reinsurance money back out, how to borrow it back to your business legally, which is kind of the, the cherry on top of the reinsurance pie, right?

Yeah, you know, I've done both and Buckeye is the place to go if you reinsurance, but I've done both. I've loaned money to, to our company and you have to loan it through your, through the people who own the reinsurance companies. Loan back to your company. We've done that and I've also taken distributions from our warranty company after we've had money sitting there for a long time, just because I'm not sure that we're going to ever be in the current tax advantage state. We are with long term capital gains and so we took it out at 20% capital gains hit compared to a 37% real gain. So it's, there's so many good ways to use your reinsurance company and to use it as a tax planning method. And we are heading into the fourth quarter, so you need to start thinking about that right now.

Yeah, you're doing a lot of stuff right now. This is kind of the dog days of summer where we have a little bit of time for us. Sales have stayed pretty strong. So, so we're still pretty busy around here.

But for me it's, it's coming, it's coming.

I'm looking at the fun stuff to keep my dealership going. Right. I'm looking at continuing to build out my policies and procedures manual. I'm doing some housekeeping items around the car lot. As far as like, you know, my lighting, my balloons, my signage, little things and little upgrades that just keep the, your car lot looking exciting, inviting, those types of things.

Yeah. You know, if you got capital expenditures, it's very good time of the year to start taking those. If you've been putting off, putting in LED lights or a new sign or something, you can write those off typically in one year. So great time to start. Just write down, just make a list of the things that you want to get done to make your lot look better or that tow truck or whatever. You know, it's a good time of the year.

Start thinking about it or even fix your processes. You know, I'm looking at, I'm switching CRMs right now. I'm, you know, Going to explore new accountant. I'm going to, you know, like I said, my policy and procedure manual. I'm trying to get that built out better. So it is a great time to look at your numbers, your payroll, man. Look at your payroll. Who, who are you using for payroll? What's it costing you? And do you have everyone at the right pay structure? I cannot believe I thought again we harp on this all the time, But I thought $15 an hour was like competitive in my market. And then I drove past frickin Domino's and they're offering little snot nose that face kids $15 an hour to pack pizza boxes. Like that's who I'm. That's not the labor pool I want.

Yeah, you can't hire anybody good for less than 17 an hour. And yeah, they're going to work in the shop. It's $22 an hour. So yeah, that, that day is going.

So what you've got to be careful is you can't put an ad out there that says, hey, I'm hiring XYZ for $20 an hour. And then your current customer, your current employee is like, well, I'm making 17 or I'm making 15. What are you talking about? You're gonna hire this new person five.

Bucks more than me? You should have, you should have. Well, you should have already adjusted your, your in house staff with. If not, you probably lost them.

Well, of course I haven't said anything. I'm not going to talk to them about a raise until they ask, right?

No, no, gotta be, gotta be proactive on that, Jeff. If not, you're gonna lose people. And it happens, it happened to us because we got this time last year got caught with our pants down.

Yeah, you do not want to. And that applies specifically to collectors, right? I mean very, very important. And I think when we talk about all this stuff, we sometimes take our eye off that prize of. Oh man, I'm so worried about inventory and parts and employees and all these things. But it's like, man, have I given my collector and my collections department any attention in the last six months, 12 months, I've been so worried about getting cars and getting them cheaper. I haven't even, I haven't even taken deep dives and look at static pools or collector numbers or training like that's that.

That was a realization I had in May. I had already worked on her pay because I didn't want to lose her and my collection manager and I started looking at some numbers in May and really I've got A plan every week on how I work collections. And only thing I do when it comes to working collections is. Is work. My collection manager. But I have certain reports I pull daily and then I can pile a collector's report that I did. I send out Monday morning to everybody that works in collections says, this is what we did good last week. This is what we didn't do good last week. These are troubled accounts we need to work on. This is your delinquency, this is your recency. This is your promise to pay percentage paid. We've got to get that up. Are we doing good? You know, these are all the things that you need to be making sure that you're managing your collectors and you need to manage yourself, make sure you manage them.

Yeah, yeah. It's a good time too, to audit your GPSs. I know that the 3G expiration, you know, there's been some talk about that. I'm pretty sure if you've been keeping up on your GPSs and renewing them, replacing them as needed, you shouldn't have much of a problem with that. Obviously, Pastime is a great sponsor of the podcast and everything they've shipped for the last.

I don't know, as far as I can remember.

Yeah, yeah. Is a 4G 5G compatible device, so you shouldn't have many problems with that. It may be some of your real legacy customers that you've had for a minute or two on some of those old bricks with the backup batteries you might want to look into.

Yeah. And also when you're doing that is to look into your repos that you resold because they may have a really old GPS on them. So make sure you're doing that. But Pastime, such a partner in our industry, they. We talked about it last week with Lease here, pay here. It doesn't matter what type of business you're in, there's a solution that Passtime can help you with and their reports are very good. So if you need to go in there and figure something out to verify your GPSs are working, there's a report in their back end that can let you do that as well.

Yep. And then you get the customer in for a free oil change or a service visit or some reason, and you just drop a little wireless GPS right inside the headrest of the car and you're up and running again if you need to.

Yes.

Yeah. Perfect. Luke, what else are you doing this time of year to make sure you're using your time wisely?

You know, like you talking about dog days of Summer. And they can be really monotonous here in South Carolina. Back to school. It's stupidly hot. It's actually not hot today, but so you have a lot of free time on your hands. And what I've done, done, like you're talking about going back to basics. Make sure I'm using my time wisely. Make sure I have a plan together for my assistant general manager. What is he doing with his time? Taking those things that I shouldn't be doing and putting them on the people who should be doing it. Delegating. We talked about that in a newsletter because those are the things that can make you money in the long run. I'm finding my who, Jeff. I'm not. I'm not trying to do all the house.

Not the house, but the who.

Not the house, but the who's. And finding my who's to do when these get done.

Yeah, it's a good time to learn, too. And that'd be my plug for our newsletter that goes out every Sunday. You know, practical tips that we try to give out to help you guys know, you know, here's one small area of your dealership you can focus on, whether it's firing employees or hiring or delegating or building a structure. And here's a small task you can do this week that will help you get a little bit closer to being a little more well run, you know.

Yeah, this.

Yep. This way newsletter. And Luke, I also wanted to plug. There's a lot of other good resources. So obviously you guys listen to our podcast. I was listening to Maggie from cm. CMC Coaching. CM Coaching. She's always around at the industry, always helping out. C M Coaching. She puts out a good podcast, too. That's short. It's 10, 15 minutes. It's on call training. So sales, BDC collections. That's great. Yeah. You find some good episodes and you just forward it over to your collector, say, hey, check this out. Subscribe to this. Be listening to this. And now you're learning. Your team's learning the roads. Jim Rhodes, we were on his morning show the other day, which we will try to tack this on that on the end of this podcast. So if you have stuck around this far, stick around a little bit longer and you'll hear that fun little interview we did with Jim and Michelle Rhodes.

And all these are free, Jeff. That's what's so great about that. Free ways to. To get better to no matter what kind of business you're running. So use them.

Yep.

Cool.

Luke, I gotta run. I think Everyone else has gotta run. So if you do stick around, we're gonna attack the Jim Rhodes octane morning show. I don't remember what they call it.

I think that's right, the morning show.

Yeah, the morning show they do every Friday. So, guys, have a great week. Hope everyone sells ton of cars.

We are so happy that we could have both. Luke Godwin, Jeff Watson from the Independent Dealers Podcast.

Yay.

Wait, hold on.

The applause. Yeah.

And the crowd goes wild.

You know, it's so much fun having one of these boards that has like all these really fun that we can use when we want to. And so first off, guys, I'm a fan. I'm a pretty big fan. I really, really love what you guys are doing. I love the content of, you know, how valuable what it is you guys are talking about for dealers out there. And, and yeah, it's just I, I plug, plug, plug. I think that the last one I, I talked about, everyone should listen to were the three ways that you're losing money. I forget the exact title right now.

But the one with Steve Carsten. So good.

Such a great, such a great podcast.

So, yeah, so we got a ton of stuff to talk about today. I. I'm in in particular, I'm looking forward to learning kind of how your podcast came to be a thing. Michelle loves telling the story about how our morning show came to be, so I'll let her tell that story afterwards. But also, I know I saw a mention out there that Carrie Watkins was going to be tuning in, looking forward to getting educated, so she knew we had some smart guys on. So, Jeff, I'll be counting on you to say something smart first. We'll have you say something smart first and then we'll go to Luke. So.

Smart.

You do listen to the podcast.

Yeah, no, you guys, we'll have some fun today. I think we wanted to jump into a couple things and I wanted to.

Let them know how they got it started.

Oh, yeah. So, Jeff, why don't you tell the story about. So which one of you said we should do a podcast? Or was it a wife? Was it 20 Group? How'd this happen?

So it was November 2018, and I'm a big, big audio fan. I don't my attention span for reason.

He can't read. He can't read.

It's the big words that get me. So a lot of audio books or, you know, audio podcasts and, you know, Cardone and Gary Vee and bigger pockets and all those were big at the time. And I thought, you know, there's not really a strong car dealer education type podcast. You know, I think Cirillo had his, and there was maybe a couple other small ones. And so I reached out to the Facebook group. We have a kind of a closed dealer only Facebook group called the Independent Dealer. And I thought, you know, who could I find in here that is both smart, charismatic, well connected, attractive, and would be a great co host, you know?

So he reached out to Dan Real first.

So after Dan Real shot me down, oh, God.

Had to settle for me.

I went for someone with more of a radio face and I found Luke. And yeah, it's kind of funny that a couple of months ago I went back and looked at our early conversation and. And it pretty much flowed the exact same way in the first couple of emails as it still does today, which is, dude, where are you at? Where are you at? Are you serious about this? Are you gonna do it? Are you getting on? Where are you at? Yeah, and. And we finally crowded into it. So it's been good. Yes, yes. About to be four years. So. So, I mean, still enjoying it.

I'm kind of with Jeff. I was a huge podcast fan. I've been listening to podcasts, I, I guess since they came out. I remember downloading them onto my ipod. How long ago was that? And, and using a tape deck in my car so I could plug, you know, use the tape deck and actually plug it into my pod tape to my ipod and listening. So I've been listening to podcasts forever and, and really going back and forth to auctions. Years ago. Enjoyed it. I tried to learn to speak a different language, but that never worked. But anyway, so I was kind of. As soon as Jeff brought it up, I never even thought about it. And I just thought, yeah, this is something I want to do. And I, you know, I. Jeff is the brains behind it. I'm the face and the voice. Thanks, Jeff.

Yeah.

That's awesome, Amanda. Yes, it is. Kramer. We've been in that office at Luke's office. And yes, that was one of the first things I asked when I was like, is that Kramer? That's Kramer. And yeah.

And we've also been to Jeff's place in southern Utah.

I haven't. You have?

I thought you.

No, I didn't go with you. Yeah, yeah, we were. We were doing our RV tour and it just finished a stint in Zions national park. And then we were just kind of doing laundry in St. George, probably clarify.

We were near Nash or near the park. I don't think you can camp in the park.

So you may have been. You may be of one. One of two people that have been coast to coast in both studios.

Oh, yeah. How about that? Wow, that's a pretty.

We should get a star. Some kind of badge put on the.

Website sticker on the back of your RV or something.

There would only be. I mean, there's only probably a couple other people. I. You know, there's a lot of people that come here.

Right.

But getting to Jeff is a little harder. I'm a little nicer. I went a little nicer to vendors.

Anyway, we headed over to Luke's because we couldn't get approved at Jeff's place.

Oh, gosh.

So that's. I mean, really, the philosophy of the podcast is Luke and I. I mean, we're not experts. I don't. We don't claim to be. We're not accountants. We're not lawyers. We have no professional. Professional education. But we're. We're like. We're the reporters, right? We're curious.

We're.

We like to ask the questions. We like to find out the answers, not only for ourselves and our own operations, but, you know, people that talk to us or ask questions of us. It's like, well, hey, I don't know how that works. I don't know what that's supposed to be, but let us go find the experts that do know, that do study it, that do have the answers, and so kind of look at ourselves as like the news reporters of the, you know, car business.

Yeah. What's. I mean, that's a great point. I probably learned more being on the podcast and had more opportunities about being on the podcast than ever before in the. In the car business. And, I mean, don't get me wrong, before I was on the podcast, I was speaking a little bit and doing a couple of things, but nothing. Nothing to the. To this extent, and just the knowledge we get and our network has grown so much by doing this. It's benefited my bottom line. It's benefited me as a person, really. So it's, you know, it's kind of selfish to do it honestly. Jeff.

Yeah. So you. You guys. You said you knew each other through a 20 group, is that right?

No, no, we didn't know. We didn't. We didn't know each other at all. When Jeff reached out, I was like, who's. Who's this Yahoo?

Right, right, right. Yeah.

I mean, I. I'd been a.

Is history.

I've been a. I've been a convention, you know, participator, and for years at that point. I guess I probably started going to conventions in 2010 or so. So I'd been to national convention since 2010, a couple state conventions by then. So I knew a lot of dealers because of my involvement with niada and I'd never met Jeff and I was like, well, who's this guy? You know, Utah? I didn't even know there was dealers in Utah. And so yeah, we, you know, we, we formed a fast friendship and then we, then we were in the same 20 group. Now we're not, but yeah.

Okay.

Well, I have to say, as a listener, there's a really great chemistry between you two. Oh, it's kind of, it's, it's fun to listen. The banter and, and all of that. You guys seem to really, you, you play well together.

It's easy.

It's easy when you don't like each other.

Yeah, it's easy when you know you're always right. That helps you guys decide who's always right.

Oh, that's funny.

So, yeah, Michelle, you didn't tell the story about how our little morning show came to be.

Have you guys familiar with how our little morning show came?

Of course.

They listen every morning.

Oh, I know, because they do listen every morning, right?

100.

Yeah. So you. We had already, we'd already started the, the Tote the Note podcast and, and which is kind of like our 60 minutes. It's a little bit more heavy. The heavy education kind of of podcast. And for those of you who want to see everything we've got out there pretty much. So you can find it all on YouTube, we only have a few right now on our syndicated station. So there's my plug. So we, we were sitting in our newly updated podcast studio for Tote the Note and we're just playing on a Saturday. We're just, we got the headphones on, we got the mics on and we're listening to each other. It's like, this is really cool. And then I turned over and I looked at Jim and I said, we should do a morning show. And Jim's like, we should do a morning show. So this was a Saturday and our first broadcast was Wednesday. And, and so we've just been, you know, Monday, Wednesday, Friday, 9am Eastern. Even when we went to Niada, it was 6am out there. That was fun.

People don't, you know, and people may, but I don't think people in general understand the amount of work that goes in to do a morning show or a one week podcast and the commitment that that you have to do. I remember at the very first and maybe in the first four or five weeks, Jeff, I said something to Jeff, we can just take this week off. He's like, that's. That's not how this works. You have to be very consistent and you have to keep it going.

And.

And luckily we've built enough content that we can. And I don't know that we've ever really recycled anything, have we, Jeff?

Yeah, I'm trying to think back. I don't know that we've ever missed a week. I do think we've repeated one and every so often we have to go to like, the highlight reel where it's like, oh, we didn't have time. Let me grab some old episodes and piece them together into something. So we've done that once or twice. But it. I do remember, I think around maybe the 18 month mark, we. I felt like we were in a bit of a lull where I was like, oh, shiz, man, we have covered everything. What do we do now?

Well, then we started Covid, but.

Oh, you guys started Covid.

Now we know.

But now I feel like I'm. I'm back. I'm back at like, it's like, it's month two. Like, we've got so many topics and so many ideas to cover that, right? It's like, oh, man, it's silly that you're like, well, let's buy here, pay here. Or it's the used car industry. Or it's. What do you. There's a million things and there's always going to be a million things because it's ever changing. Your philosophies are changing, the details are changing. Like, yeah, it is kind of silly that we can just talk about this industry for hours and hours and there's.

So many new people we meet that, that can be on and get a good interview. So, you know, just shut up and let them talk.

There will be new topics come up on Facebook today. So, you know, it's like you just gotta kind of see what, what's happening out there and keep up with the dialogue, because that's what I say to Michelle. We will not run out of stuff.

We've had so many people say you could. How are you gonna keep having content? I mean, what are you going to talk about? It's like, oh, it's easy, it's easy.

Yeah, there's just, there's plenty. And there's just always something new, whether it's going to be the new industry news or these latest conversations. Because, you know, there are. We. We just find that there's stuff that comes up inside those groups where, you know, there's, there's both sides of a, of a situation and maybe it's a repo situation or whatever, you know, and for us, we're keeping our morning show down to about 30 minutes. And so we just kind of want to keep that.

Yeah.

Pretty brief.

And I do want to, I do want to agree with you with y'. All. It is a lot of work to do one of these.

That's why I'm.

When I, When I say the easy part. Yeah, when I say the easy part, it's just like coming up with topics like who can we talk?

That's.

That's more, that's the easy. Just like the brainstorming. But then you have to orchestrate who's coming, when are they coming? Do they have the proper links? Do we, you know, what do we do with this after we're done recording? Are we all going to be there? Luckily, and I, I don't know if you guys have, have experienced this that we've. There's. There was one. At the very beginning, it was kind of a rough start because we started like. Yeah, it was rough start. I went to Disney World with a good friend and I was there for a Wednesday broadcast and a Friday broadcast. And so Jim did him by himself.

On a dial up connection.

On a dial up. It was.

Terrible. Terrible.

Internet people don't get to see behind the scenes. And. And I'll tell this story on Jeff just because I think it's funny. Kerry Watkins, who's hopefully watching and listening. I think I saw her a second ago. We. One of the first years we did how I built this or maybe the second year, Carrie woke up, got all dressed up and makeup on and all this. And, and we recorded the entire thing. It was, it was great. I'm sorry, we didn't record the entire thing. We did the entire interview and then at the very, like Carrie jumps off and then Jeff goes, I didn't press.

Record and I didn't know Carrie at the time. I was like, can we call her back and do this again? Like we did it, but we just never aired it.

It was, it was Gordy Tormolen in our case.

Yes, it was Gordy terminal.

I mean, it was brutal.

And.

And I was like, oh, my God, Jeff, what in the world? And so we, we were able, you know, thank goodness Carrie is a good sport and a good friend of ours, both of us now.

And.

And so we're just like, Carrie, you're gonna hate us. But this, we've got to redo this. And she was, she was a good sport, so she's gracious.

That is the fear. So I don't, I don't want to miss the opportunity to talk to you guys about kind of, I know that you guys are in this for similar reasons and, and really it's about education and reaching more people out there. Michelle and I have kind of a newfound motivation to do what we can to help reach those, you know, approximately 18,000 buy here pay your dealers that are not very engaged at this point in time. You know, they're just. We go to the conferences and you guys know, we see the same, you know, a few thousand people, sometimes the same few hundred people. And so we just recognize there's a whole group out there that's just missing out on being connected to the conferences and just education as a whole. And you guys deliver some fantastic education. And so I think that's part of the motivation here. So I wanted to shift over and kind of talk a little bit about what you see about the industry. Do you guys share that perspective about, you know, just a lot of people not plugged in?

Yeah, I mean, it's, this is something that state and national associations have been going through for years and it's. I'm not sure that we're ever going to have 50 engagement. I'm not sure we're going to ever have 25 engagement. When it comes to, to dealers, there's really some very small dealers. There's some really big dealers who, you know, some of the big dealers think they know what they're doing. They don't need, they don't need to listen to us or don't need to, to go to convention. This, that and other. Then there's some really small dealers that just don't know. I think what we're doing, both y' all and, and us and other breakoff type associations are trying to bring some more of that into the fold. I don't know that's ever going to be more participation than what we currently have, but we're going to try, right Jeff?

Yeah, I think that's probably it. I mean, you look at any industry and there's probably 10 or 20% of the people functioning in that industry that care to be involved with any kind of formal education if they don't have to. They're not forced to do continuing education or some sort of thing. They just don't. You know, I think about any other industry I'm involved with. And it's a very small fraction of the people in that industry that care to learn through conventions or podcasts or communities. So it is what it is. But, yeah, we're hoping that we're reaching the few that do that get on itunes and search up, oh, yeah, how can I learn about buy here, pay here, or get on YouTube and want to learn about something, how to run their dealership better and, and hopefully that, oh, wait, there's a whole podcast for this, or, oh, There's a whole YouTube channel community that's built around bettering my dealership. So, you know, by having it there, at least it's an option for people to someday discover if they decide to get curious.

It's amazing the amount of people. I mean, you talk about. We've been on for four years. It's amazing amount of people when you go to convention. And I mean, I just figure people know who I am, so I. I'm kind of oblivious at times, which is probably not the best. So people. I'll start talking to somebody, and then somebody will say, oh, I recognize your voice. I know who you are. And then the next guy standing next to him goes, what are you talking about a podcast? You know, what. What is this? So the amount of people you even meet at convention that don't even know what we do, and then the amount of people that. That we reached don't know about convention. So it's a. It's a huge. It's an overlap there that we're still exploring, I think.

Yeah.

And I love. I love what you. What you mentioned, Jeff. As you know, the. There's not a lot of people that tap into the formal education. And basically what you're doing. What we're doing with a podcast is kind of informal education. It's like fun and entertaining at the same time. And so we really do have the. A different kind of an opportunity than the conventions do to be able to pull people in. And it's like just, you know, listen, have some fun, learn a couple of things, and then go about your day. You don't, you know, and I know for Jim and I on this podcast specifically, is that we, We. Because we have a little. We have a different format than the independent dealers podcast, where it's more just conversational and, you know, a couple. A few days a week, that it's kind of more like Good Morning America is what we've. Something like that where we can. Hey, guys, the. The thing is happening. You can still register. And let's go to do the thing. And, and, and so it's just, I really love that we, that the, what you guys are doing, what it is that we're trying to do too is just like, let's just have some fun and let's just get people tapped in somehow. Let's get them involved somehow. Even if it is just for the entertainment factor because you know, you hear the stories and this, the fun stuff and it's, it's a great way to get people starting to get tapped in.

Yeah. And I would just share that. You know, Michelle and I announced on Wednesday, we announced some time ago that we're marching ahead with the BHPH nation. So right now it's just a landing page and you can pre register with an email. But what we're building there is a platform that we believe will be of benefit to lots and lots of dealers. And the best example I can give you the way we intend for that to work is have all the resources, somebody hits BHPH Nation and they'll be able to, you know, find all the registration information for their state associations, they'll be able to find the independent dealer podcast there. They'll be able to find, you know, all kinds of education. And so there, there will be a whole platform there that we think will be a benefit. And we announced on Wednesday we're making that a non profit. So it's like we're just trying to make it clear we're not doing this for Jim and Michelle. This is about the industry. We're inviting everybody, including you guys to join us and helping so, you know, create.

So can I ask them? You guys, you guys willing to have your podcast listed there?

Hey, we're, we're fine with the podcast being listed anywhere. Yeah. You know what's, what's funny is, you know, you don't have to do everything for money. You know, it's, it's one of those things. It's like the, if you build it, they will come.

Right.

So it's, it's about getting content out there and I, it's a good thing y' all are doing because there needs to be more education.

Yeah. And so we're just trying to make sure all the associations are invited to join us. We're not trying to do anything that's going to be anything but a help to the entire industry. And if we can build something that just makes it easier to pe for people to find all the stuff in one place. That's the idea. Right. Really, it's as simple as that. And so we're just, we're prepared to commit to build it. We're putting our resources into getting the thing built and then we're just trying to make sure everybody knows this is not meant to be a threat to anyone. And the best way we knew to explain that was just it's going to be a non profit. We're not in it for the money.

Absolutely. One last question we kind of wanted to, to cover with you guys is and Jim put on here. We probably won't have time to get to this, but observations. Why buy here, pay here dealers fail? Why if, if you guys have any, any input because I know you've interviewed a lot of people and I've seen a lot of, of things happen in the industry since you guys started your podcast and since you started bringing people on and you're trying to educate and all of that is what are some of your insights about how or why?

And before you answer, I'll share with you that I'm recording with Brent Carmichael this, this afternoon, a session on that subject. So, you know, obviously Brent's a lot of places and seen a lot of that stuff and, and I've seen some of that myself, but obviously we want to get you guys feedback on that as well.

Take it first, Jeff, and then I'll.

You know, I love this topic.

Gloom and doom Jeff, as I call him.

Well, here it is. I think it's realist. You know, I think it's, it's one of those things where you've got to know what not to do. You've got to know where your weaknesses are to know what could take you down. When. When I say when. When you ask me, Jim, how do buy here, pay here dealers fail? I don't know. It's probably happening to me right now. It's honestly the scariest thing about this whole industry and even one of the scariest things about hosting a podcast and putting all this on record is that someday myself and or my banker, the lawyers, the FBI or the SEC could go back and listen to all of this and have quite a case as to explain why, why I tanked and went under through my own admissions in my podcast. But no, seriously, it's, it is. I love the cautionary tales because it tells me what to look out for. We always talk about all that guy's making great money and he's selling these cars and he's living this lifestyle and everything's wonderful. But it's like, well, yeah, he's leveraged to the hilt and he doesn't have Cash controls and his manager stealing from him and he doesn't have a good turn time. So yes, I love to hear about all those things, how it's happening. This is my observation. Obviously, through the pandemic and hard inventory times, we saw a lot of dealers get out because they just couldn't buy, could not or would not buy the inventory at the inflated price. I'm not going to buy that car. It's too expensive. Blah, blah, blah, blah. Right. So a lot of guys just got out of the game. Capital constraints will probably be the next thing. What I worry about is that we are so focused as dealers on our inventory and how hard it is to get cars and how hard it is to get parts and how hard it is to, you know, find good people that I, as a dealer am not giving my collector the kind of attention and time that she needs to make sure my portfolio stays healthy. I'm so busy in the shop trying to buy cars and trying to get cars to the front line that I'm not coaching her and educating her and looking at these problem children. That could be quite a tidal wave of delinquencies coming if a couple of dominoes fall the wrong way.

Yeah, I heard a Bank of America did a survey over the last month OR so and that's 38 of Americans are behind on their, on their, their debt or behind on their, their bills. And so I say that number one, I think the reason buy here, pay here, people go out of business cause the capital, lack of capital or lack of understanding of how to use the capital they are given by, by lenders. Right. Some of them get on hamster wheels and can't get off and then they quit selling as many and then they're dead. So leverage is the, is the number one. Number two I think with is is taking their eye off of their business. As Jeff was describing, this is a hard business and I do not want to be in it forever because it is that hard. I'm, I mean I'm 20 years old. I look like I'm 80.

So. Yeah, right, we believe you.

But, but you know, it's. I've been doing, I've been doing the day to day of this 100% day to day from O since 01 and probably 20 hours a week from 96 to, to 01. And so I'm 21 years in and it is, it's harder now than ever. It's gotten harder in the last year. You lose focus if you don't go to conventions, you don't talk to other dealers. You, you know, you live in an echo chamber. And yeah, it's, it's hard, it's hard business. If you don't have capital, if you don't have the proper funding, if you're overspending, if you're over leveraged, you're going to go out of business. And that's what I see happening.

Yeah, those are great points, gentlemen. I think, you know, I think the leverage thing, we see that too. I talk a lot about people just moving too fast. I think there, there are businesses maybe where you can get away with that. Our business is just one, that when you move too fast, it's hard to keep your eye on the target as you talk about. And, and so yeah, it's, there's so many moving parts and what we do and buy here, pay here that, you know, if you, if you're going too fast, I just say, you know, you can race right off a cliff in this business if you just not paying attention.

Going too fast is something that, I mean, oh my gosh, these, these people get in business and don't have any capital and they're selling, you know, 16, 80 cars a month. I've seen those people die so fast. You know, two years and then everything hits the fan or even less than that. That's a, that's a really good point, Jim.

Yeah.

You also see a lot of absentee owners. They think that they can get this thing up and running and then they can go, you know, vacation and, and there's probably, I know there's some large buy here, pay here dealers that have got it figured out and they're living great lives and they're, they're, you know, vacation home down in the Bahamas and their whole operation just runs like a fine tuned machine. But I don't get it. I think more dealers get burned by starting to think they're making money and so they're out playing and doing all these other things and they're not watching.

Well, and it's. What you're saying is, is that what I'm kind of going down my own path on this one, is that a dealer that's really, really successful, if they stay successful, it's because they still have a very, very good finger on the pulse of what is happening in their business. And there are some things you can do with that from a distance and there's other things you can't.

Yeah, and I gotta say that's one of the bigger arguments. The, for 20 groups, you know, obviously 20 groups can be highly valuable and it's just, you know, getting. At least you get your numbers in front of you and you get to have other people see your numbers. And so that's a lot of value. And just having that part, that piece alone is, Is worth an awful lot to be able to know that other people are seeing this stuff. We, we've got, you know, kind of some built in accountability partners in that and, and you get to hear some different ideas because sometimes, you know, to your point about, we get, we get blinders on. We get in there and we're, we're fighting the fight every day and we quit paying attention to some of the, the other pieces, you know.

Yeah. And. And to your guys's point, to have someone like Jim, someone like Bill Elizondo, someone like, you know, Ben come into your dealership and train your people, educate them, but also keep an eye on things. You know, a lot of, A lot of, you know, employees and owners, they have blindsided spots and the employees might know the owner has a blind spot, but if they know that Jim's going to be in their dealership quarterly doing a training on some new thing or looking at some new aspect or analyzing some new metric or key performance indicator that, you know, it's. You're able to sniff stuff out.

Right? For sure. Yeah. So we'll invite people to join the, the podcast. We get that recorded with Brent. We, we look forward to his perspective on those things. But yeah, gentlemen, we appreciate you making time. We, we, we kind of have to keep these around 30 minutes. You know, by the time people drive into work, they got to get out of their car and get in the place.

It's a Sesame street culture. It's a little bit long.

But we do appreciate you joining us. Good information and we, we look forward to having you on again one day soon.

Thank y'.

All. Thanks.

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