#245 - The Power Of The Irregular Payment w/ Bill Nylan

Hey everybody, thanks for joining us today. Before we get the podcast started, we want to make sure you guys have done your safeguards trainings with Tiada. They put together an awesome program for everybody. This applies to every state, everyone in the federal United States of America, Lower Continental 48 and, and Upper and the.

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You are listening to the Independent Dealer.

Podcast with hosts Luke Godwin and Jeff Watson.

Hello and welcome to the Independent Dealer Podcast brought to you by Buckeye Dealership Consulting. Luke, you know, it's like Christmas come early.

What time is it? What time is it, Jeff?

You know, it's my favorite time. We have got Bill Nyland from Tax Max here with us. Every year this comes around and we're really excited to talk about it because for those of us in the buy here, pay here industry and even not in the buy here, pay here industry, even typical retail dealers, this is still the best time of year for us. Bill, how you been? What have you been up to? Real good.

I've actually been on the road for the last couple weeks, actually a couple months. Lots of dealership trade shows and, and meetings and training our existing clients. So it feels good for me to be back in the office.

Yeah, I get that, man. It's traveling, you know, when you travel, it's fun. It's coming back. It's not so much fun because you get bombarded. So it's almost at the end. You go, I'm not sure really want to go anywhere. Anyway, tax time is here. Jeff's favorite time of the year. He's actually Jeff. I'm gonna let y' all in on the secret here. Jeff is actually Tax man. Santa Claus.

Yeah. I dress up in an all green suit and just run around throwing cash at people. I take the cash from them during the year without them knowing, and then I throw it back at them. It's like a forced savings account for all of My friends, family and employees, it's. It's a great system. But, Bill, you guys, you really do support the industry. So first off, kudos to you guys for going to all the trade associations and sponsoring Buy Here, Pay Here United and everything else you do helping us here at the podcast. But what we really want to dive into and people that have listened to this far in and haven't turned us off already. What is going on with tax time? Is it dead? Last year a lot of people were like, man, I didn't even see any tax money. Tax time didn't happen. Blah, blah, blah, blah. It's not going to happen again. Money's already spent. No one's getting tax returns. Give us the actual truth. What is, what are you seeing from someone that is not just picking out one little anecdotal situation? Right? It's like, yeah, your dealership might not have seen tax time because you weren't prepared for it, but what are you seeing across the board as it relates to our last tax season?

So last tax season, there was still some Covid money still floating out there, and the COVID benefits were making tax returns insane. The average refund last year jumped from the 5,000 to 7,711. So there was a lot of money out there. The issue was that a lot of people lied on their tax return about how much they received. I didn't get any of my stimulus, I didn't get any of my advanced child tax credit. So they put zero, and then by putting zero, they inflated their tax return by sometimes $10,000. So that kicked out an issue with the IRS where they had to prove their identity. And what? Long story short, the money trickled out, all the way out, until money's still trickling out, even right now. But for dealers who actually had a tax partner, basically, they were still able to capture tax season by selling cars starting in October or even doing it all year round. So those folks who are looking to buy a car using their tax return, if you don't have a tax partner, you're not seeing a tax season because those customers are seeking out dealers where they can put their money to work. And today, so it's October, going into November, and people who are needing their tax return to buy a car, dealers are using the tax return to sell them the car today. So the old traditional tax season in the 90s is gone pretty much. But the new creative tax season is where you're doing it. You're putting it in play every day.

We are talking taxes. So we want to make sure you guys know, as you're listening to this, you're jumping on your computer, taxmax.com. you're signing up for the Tax Max program, and you're using the Code podcast. 22 p o d c a s t 22. Get 15% off your tax Max sign up. Just do it. It'll be worth it. You're going to make money. You're going to collect more down payments. You're going to get more cash in your dealership when we all need more cash in our dealership right now.

That's.

That's interesting.

You said something in there I want to cut. You said there's tax money still coming out now.

Yeah. So we've been working with our customers on helping them with their identity. And we have a unique situation where we can now basically get someone's identity issues taken care of in two weeks as opposed to six months. So that's something unique for Tax Max. So if they file with Tax Max, we can very much guarantee to get your money before April. If you file it somewhere else, then, hey, you're kind of on your own, huh?

So you said that people were saying they didn't get money when they. They did. I think we see this a lot. People file things they shouldn't be filing. I mean, how do we. How do we protect ourselves from that? Because it seems like that would be an issue if you were helping somebody do all this.

And that's a good question. The nice thing is that stimulus is gone. The advanced child tax credit payments are gone. So all the filings are going to happen in the next couple of months. Is really you just putting your W2s on there, you're putting your children on there. You get your child tax credit, you get your earned income credit, and then you have your math formula. And we're expecting the refunds to be close to $6,000 this year. So to answer your question, there is no more where you have to be honest and put how much money you got because of COVID Yeah, it's pretty much straightforward again.

And so let's paint the overall picture of what. What our crystal ball tells us our customers are going to be dealing with in the next two to six months. Right. I don't see our customers having any kind of a respectable down payment outside of their tax returns.

Yeah, right.

They're. They're stretched thin. Every dollar is going towards rent or food or something else. So I don't know. Luke, have you seen down payments get smaller at your dealership?

Yes.

I mean, Couple of months. You know, we've been, we, we always collect big down payments. And yes, down payments have, have not been as good as they once were. And I mean it's inflation. I mean it's costing our customer an average $500 more a month to live. And so if you look at that, it's kind of a perfect storm right now. And so tax season I think will be beneficial because it'll help, hopefully help kept it, catch up some accounts and also help with some bigger down payments because we, we have seen a slowdown.

In down payments and it's funny you said that. So as I mentioned, I was, I've been on the road for about two months at trade shows, dealer groups and I'd say 90% of everyone is saying that the collections are getting harder. Repos are for them at record highs or at least record highs for the last three or four years. Down payments are getting very difficult. So it's kind of the perfect storm that as you had mentioned with inflation, there's just so much pressure on the consumer. And the other things we're seeing is that consumers spending habits have remained the same. So they got all this free money from COVID I mean thousands and thousands of dollars. So instead of eating at McDonald's or eating at Outback, instead of eating at Outback, three eating at Five Star Steakhouses. So they've escalated their lifestyle and they're still trying to maintain that with, you know, status quo income and with like you said, their bills being 500amonth more.

Can we talk to my wife about this situation? I hope she doesn't listen to this one.

We've got a lot of stimulus money. I mean, who could have guessed that that would have happened? You know, I'm pretty sure we mentioned it multiple times here that these, the folks, they start considering those monthly payments or the earned income credit as income and they're going to live to that lifestyle, what that income is. And then when that got cut off, it's like, wait a minute. Yeah, where did that go? So yes, our customers are paying more for everything. We're going to be going through Christmas time. We're going to be having a lot of people that are just upside down in their vehicles, right. All of a sudden their car depreciated. So now they're flipped. They're going to need a little bit more down to get out of their car or they're going to need a little bit more down to get caught up. You know, that tax money will get us caught up and maybe it Won't save the account, but it'll definitely get them down the road another three or four months before we do have to pick the car up. So it seems like from our customer standpoint and from us as dealers, getting our hands on some of this tax money is going to be. Is going to be pretty crucial.

Yeah. So we're seeing a record number of dealers reaching out to us of all sizes, just desperate to come up with a plan. Because, Jeff, you touched on something, too. Cars that are on the. That are sold today were probably purchased six to nine months ago at the most. Highest inflated car prices. Now you've got car prices declining in value. So you may have sold a car to someone for $10,000, but if you repo that car, you can only maybe wholesale it for four. So the dealers we're talking to is they're doing anything possible to keep them in the car because they don't want that car back.

Just one more month. Just one more month.

And that's how to get them just whatever they can to keep them in the car so that. So now we're working with dealers trying to get them to tax season. Right. So, look, we'll take a partial payment. We'll work with you, but you just got to promise to file your taxes with us so we can get you current.

Yeah. Hey, I can't. I can't afford this $400 payment anymore. This $500 payment. Okay, Mr. Customer, come in. File your taxes. We'll take $2,000. We'll apply it towards your car. We'll refinance you and drop your payment down.

Absolutely.

I mean, great solution.

A great solution. And that's what a lot of dealers are looking to do, is actually refinement in a car and kind of re. Underwrite them. Because, you know, when you sold the car, their bills were X. Now their bills are X plus 5, $600. And you're right. They can. They want that car, but they can't really afford it. So that's a perfect solution.

Some of the biggest. Some of the big. Actually, the biggest repo loss I've ever had. Two of them, occurred last month. And it's exactly what we're talking about. Customers. It's twofold. Customers, repo, in short. And we sold at the height of the market.

So.

So these things are coming in and. And using tax max and using that, those programs can really help push this, you know, push this loss down the road or maybe prevent a loss. Hopefully, you can get them riding two or three more months, and they Total their car and the insurance company pays for it. You don't have to worry about it. I mean, honestly, that's what we're really hoping here. But it's, you know, we got to talk about the different ways that Tax Max doesn't just sell you cars. It can also help you, you know, not have that repo that's going to cost you $10,000 because I've seen it. All right, guys, sorry to break in again, but we're going to. Jeff, we're talking about protecting your assets. What's the best way to protect your assets?

Luke's not sorry. He says he's sorry, but he's not sorry.

Not, not sorry one bit.

We want to apologize for the fact that we do have a lot of sponsors on the podcast lately. We can't say no to people. Luke never says no to taking any sponsors money. So that's why we also have.

But we believe in the price, Jeff. We believe in the products it is.

And that true.

We turned down a lot of people that we don't believe in.

So that being said, we use these products.

You know that all our sponsors, Buckeye Pastime Tax Max, we use them. This one's Buckeye. Set up your reinsurance company. It's still not too late to get this established so that you can start 2023 up and running with reinsurance products.

It's the best thing to do. It's the best way to build wealth in the, in the industry, period, with products that you wouldn't normally think about. Jeff Psi, your cars. Don't give that money to Cox or to Carvana now. Or use a VSI product to help protect your portfolio because you're going to have losses and the losses that are outside the normal scope of your normal loss. VSI can help cover that. It also can help you pay less in taxes this year. And that's, that's a big thing we really need to be planning for, for what's going to happen in 2023. We need to do it now and we need to get VSI taken care of and possibly you could use that as tax saving in 2022.

Oh, yeah, you're going to regret that when you April of 2023 and you're cash strapped because everything's slow and you're struggling and then all of a sudden you have a massive IRS bill that hits at the same time that can be a huge cash drain from your business. So make sure you take it as many legal deductions as you can. And obviously reinsurance is a strong way to do that. So back to the episode. Bill, you also mentioned that and I think you talked about a little bit. Some dealers are using this year round and that's kind of mind boggling to me to say, hey, I'm going to sell a car in July. Let my customer know that they've got an irregular payment coming due in March of next year and then maybe even another irregular payment coming due in March of the year after that. Like to sell a car and schedule out two or three years of irregular payments, hitting on their taxes, that's like next level stuff.

It is. So if you really think about it, people get nervous. They think, well, I don't think I'm going to collect here. What if I don't collect it? So as an example, let's say, you know, Luke, you say you get high down payments for your car. So I'm just going to use, let's say you get fifteen hundred dollars as a down payment.

That's low, but. Okay.

Okay, well, no, well, tell me your number. Tell me your number. What's your average down payment?

It's around 2500.

Okay, so let's say $2,500. They're putting $2,500 down on this car. They're making their weekly, bi weekly payments. If you tell them, Mr. Customer, and here's the secret to the program, if everyone really wants to know, it's the only thing you really have to pay attention to. You underwrite the deal. Normally without the tax program, you're willing to let the car go. You say, Mr. Customer, would you like to skip five or six months worth of payments on your vehicle? And all of a sudden their eyeballs light up and say, well, of course I would. How do I do that? Well, we can estimate your tax return and take a small portion of your future tax return and schedule in your payments from March 15th. That is the secret sauce. If that guy put $2,500 down and he makes his normal weekly payments, he's going to make a twelve hundred or fifteen hundred dollar special tax season payment for March. Without a doubt, he's going to do it. Where the deals go bad is when they say, all right, Mr. Customer, I normally get $2,500 down, but I've got tax max and I can take $400 down and they get $4,000 in February or February or March. I wouldn't do those deals ever. These are deals you're doing anyway. If you normally underwrite the deal, you get the down payment that you want that's when you start the conversation, and that's how you'll win. 90 plus percent of the time these deals work. And what you're doing is you're taking, let's say your, your term is 50 months. You're taking the last five months of payments. Instead of them being payments months 45 to 50, you're putting it in month number nine. So you're more likely to collect that cash because the car's still new, they're invested in the vehicle, and you're, you're getting your.

You're getting cash on the street back quicker as quickly as possible. You know, accelerating that a few months with this huge. Because like Luke said, granted, they're going to total it and their insurance won't be current, and then you'll be. You won't get paid out.

I hear some dealers say they need to get to month 18 to break even. So to me, that means that you want to put as much.

I know a guy. Yeah, I know a guy that said like 24 months. I won't, I won't name any names.

But a guy named Luke.

Yeah, I know a guy.

So, yeah, so you're the perfect example. If your break even is 24 months, you want to put as much payments and inflated payments with tax season as possible to bring that 24 months down to 16 months.

Yeah, that's. That's a great idea. I hope I can do it.

I challenge you just to do one or two, and you'll be like a year later. You say, oh, my gosh, I did two. I collected both. And those deals now have a shorter term and you have less cash and deal.

Yeah, and the beauty is too. You were talking about that from a collection standpoint, it's like, look, Mr. Customer, you know, you're past due. We're picking up your car. Here's an idea. Let's use your taxes to get you current. Because guess what? When you go to try to get a new car from somewhere else, there is no credit out there. Nobody is going to loan to you. Everyone's tightened up. We are the last stop right now. There's no other option. So helping your customers see that this tax option to get them back caught up is the best thing. Bill, what I want to ask you is, you know, we set the groundwork and the argument seems pretty tight. Why are dealers not doing it? Like, what do you hear? Or what are the pushback on why you wouldn't put this program into place?

There's two or three things. Number one is that I always hear, well, what if they don't make the payment? What if I sell a car in July and they don't make the payment on March 15th? Well, what if they don't make the payment on August 1st? I mean, it's a buy here, pay here deal, right? So most of these deals will unravel because they're buy here, pay here. But let's say they make every payment possible, right? And then March 15th comes, and that's the payment that they miss. Well, you just have a conversation, say, Mr. Customer, hey, you. You missed this payment. What's going on? I did something stupid. I got my refund and gambled it all. Well, rewrite the deal because they're making their normal payments. The other thing they say is that I'm scared. I don't know anything about taxes. Well, we do all the tax work. The dealer needs to know nothing about taxes. And the newest one because of COVID is I don't have time. I'm on a skeleton staff. I don't have the staff that I used to. But with our new taxes by text program, you literally take 30 seconds and send the customer a text message. The customer will then open the text message. They now enter everything into our tax max system instead of the dealer. The customer will then be prompted to take photos of their W2s and tax documents with their phone. They submit everything to us. We finish the deal. We send them another text message. They review the return, and then they e sign with their finger, and then we file the return, and then we can get the refund advance money the same day, and that money still goes to the dealership. So now the time involved, instead of 15 minutes, is now 30 seconds.

I think your program's great. I haven't done it the past two years because of that. We just didn't have the staff to get it done. And I also think that there's a preparation that goes into this. Jeff and I've talked about this before. Advertising. This program works. You know, just because you have a sign sitting out that will do your taxes doesn't mean you're going to do this. You've got to be committed to it. You can't do deals you're not supposed to do. You know, it's just a tool in your tool belt. But you have to make sure you have advertising. In my opinion, you have to advertise for it, because if you do that, then people actually come in, ask for the program, and get it done. Jeff, did you do any advertising last year? All right, Jeff. Last one, buddy. Who is this Pastime?

So pass time GPS guys. Still a great sponsor of the podcast. Hopefully you guys are ordering from them. If you use our promo code, you can get one free unit when you buy your first five. So if, if you're not using Pastime, you should be the wireless gps, the wired version either, or whatever fits your application. We've talked about it a hundred times. You got to get these things installed. I don't know how anyone sleeps at night, especially if you're buy here, pay here, let alone if you're retail. Here's the deal. People get desperate, times get tough. Theft will go on the rise. I think that's just the formula whether they're stealing cats or whether they're stealing the whole dang car. Yeah, it's going to happen, Jeff.

Actually, we had a newsletter episode talking about this. And so if you haven't subscribed to newsletter, please subscribe to it today. The Independent Dealer Podcast.com I think is is the way to get there. But theft does rise. And the way to prevent theft a lot of times is to limit the ability to steal. And this is one of them. Hide that wireless device in there somewhere and you'll never lose one.

And then guess what? The word gets out in their little cruise that Your dealership has GPSs in the cars. Boom. All of a sudden, you're not a target. So, yep, double whammy. Back to the episode. Yeah, so I do, I do a bit. You know, we put the signs out. We do the whole drive now, pay later, defer your down payment. And the biggest thing we do is like my finance sales manager, he is directly bonused on down payments, so he's 100% incentivized to make sure the down payments are large. And so the second third question you ask any customer, you know, hey, what are you doing with your tax return? What's your typical tax return? Hey, you know, we can get you into a nicer, better car if we can use a portion of your upcoming tax return as a down payment. Right now, everybody is okay with that. They all buy in. They all know. So whether it's the fourth quarter program and I'm delivering cars way ahead of time, or whether we're in the first quarter program, it's really not a hard sell to the customer if your salesmen are willing to ask for it and then jump through a couple of little hoops to make it happen.

One thing I ask dealers is when they have some pushback and hesitation, like, oh, my staff isn't Going to like this or I'm nervous to do this. So I asked dealers, do you sell cpi? Do you sell warranties? And they all say, well, of course I do. And so, well, the first week you did cpi, the first week you did warranties, was it weird? And they're like, oh my God, I was so scared, I didn't know what to do. And now it's just part of their business practice. It's the same thing. You make it part of your business practice. I also say, okay, when you offer CPI or warranties, do you offer it to just your worst customers only or do you offer it to everyone? And they say, well of course we offer it to everyone. You should offer the tax program to everyone. Whether they give you the full down payment, more of the down payments, they give you more than what you asked for. Customer, would you still like to skip four months worth of car payments? Of course.

It's always, and I tell people this all the time, anything, any athletic products you're using at your dealership, you gotta sell 100 of the product 100 of the time. You sell 100 of Gap 100 of the time, you sell VSC 100 of the time. If you're doing tax Max, you do 100 of the time, you ask for reviews 100 of the time. And you and CPI as well. And all that works because if you don't train that way, people just pick and choose, they don't get it done.

Yeah, yeah, well said that that's the cherry on top, that that is literally how you do it.

And a lot of people said they didn't have a tax time last year, right? Guess what? I still had a tax time, right? I mean I did what we, we looked at it. I did a twice as many deals last year as I did the year before with an average refund of about $7,000. And I think I brought in, I don't know the math offhand, 50 or 60 grand in tax time down payments. So the difference is I didn't have a tax time, I didn't get any of those. Which is what dealers are saying. Or me who got an extra 50 grand in cash that I wouldn't have gotten had I just been everyone else, right. So I'm in about better of a position. 50 grand worth, I mean that's huge.

I don't know why every, Everybody will take 50, 000 extra in cash for sure.

It's real money. It's not like, it's not like paper where it's like on an income Statement like it's no money in your bank account.

Yeah, it's not, it's not, it's not selling my reinsurance product money that, that sits there, but it's a cost and it'll come eventually. And. Yeah. Or CPI money that kind of comes in slowly. So some of that is direct to your bottom line. And, and I want to make a comment on the staffing thing. I, I think that if dealers think they don't have the staff, I think that's changing. You know, I've noticed that the hiring market's a little bit easier. We're getting more applications, we're getting more qualified applicants. So I don't think that I don't have the staff arguments going to hold up in two to six months. I think there's going to be good quality people out there. And if you want to bring in some extra money, it would be worth to be overstaffed, you know, pay them to be here, pay them to run the program. Get, get more cash in your dealership, for sure. Bill, anything else you need to share with us?

The biggest points right now is just don't, don't hesitate, don't wait, don't be scared. I mean, buy here, pay here is the risk business. Right. So, I mean, you guys are already adventurous people.

That's a nice way to put it. Thank you.

Yeah, I mean, you're in the risk business. I mean, there's no guarantee you're getting that next car payment. So stop blowing your terms out and reduce your terms. Increase your cash in deal, increase your down payments just by asking. All you have to do is just ask. And Luke said it absolutely perfect. You just have to make it part of your business practice. It needs to be presented to every customer every time the same way. And you literally start the conversation. Would you just like to skip four or five months worth of car payments? That starts the conversation. And then once you do this, it just becomes this is what you do.

Yep.

And speaking of things that you, that you're involved with, Jeff and I were there last year to my buy here, pay here United States, the summit. We're doing that again this year. And you're part of that as well, right?

Yes. So we're actually planning right now for 2023, and we actually signed a contract for 2024, and we're actually negotiating a contract for 2025. So we're not going away. Our goal to educate dealers, buy dealers was a success, and we're going to build on that and continue that theme of just, you know, pure education. And we, you know, the. The feelers out there that everyone really liked it. It was a unique concept. There's no exhibit hall, literally, when, you know, the meal functions were dealers sitting at tables, talking to dealers. And it was actually really cool. So we expect at least, you know, 20% plus more attendees than last year, and we're hoping that everybody wants to attend. And obviously you can find out more information@bhphunited.com Mm.

And I'm sure if you're a regular listener to the podcast, you will hear plenty about it in the upcoming months. So those three years you're scheduling out, is that Vegas? Vegas.

Vegas, yes.

Yeah.

Good.

Good for you, Jeff.

Well, you know, Vegas is the place you can go and, you know, for. Just to let everyone know, I think the cost for the attendees is 4.99 for an attendee, and it's a 199 for each additional staff member. Our cost is $1,000 per person with all the food. And the food is all, you know, buffet. It's not continental breakfast. It's actually eggs, bacon, sausage, pancakes, you know, lunch. I think we had ribs. And, I mean, it's good quality food. So we spend $1,000 per person on the food, the beverages, the drinks, you know, the $150urn of coffee. So you're going to get a quality experience, and we feel that Vegas is the best place to get that quality.

Experience, and it's easy to get to. I agree, and thank all y' all for putting that on, and we look forward to seeing you there, for sure.

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