#261 - How I Built This w/ Dare Saul

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

All right, we got Dare Sols today. Thanks for being with us, Dare Solz. I'm sorry, everybody. Little town in Arkansas. How does little town in Arkansas end up selling 100 cars a month?

You want me to start at the beginning?

Yeah, I want you to start at the beginning, buddy.

All right. I get out of college 0809, you know, there's no jobs available. It's. Or at least I didn't think that there was a job available. I got a communications degree, went back and got a master's degree in business. And that those degrees hang on the wall over there somewhere, but they have made me literally $0 so far in my career. So I get out, I get a degree, and then there's no job. I go to work for my grandfather on his fish farm. And so I'm starting my little family. This is back in 2009. I got a little family started. Just got married, got a new, new kid on the way. And we buy this lightly used Tahoe, right? And they. The franchise store, like, we're there. We had the deal done on the phone. Franchise store gets us there. We're there like four hours. Okay? It was a horrible experience. They sent us through the box, bumped our payment $200. And I'm like, man, on top of that, they left the invoice to where they bought the car from another dealer in the glove box. So, like, I saw how much, like, there's. There's literally a sales manager still probably making some commission off of that deal. It was a good one. So. But really, you know, instead of getting, like, really upset, you know, I kind of got my wheels turning about, you know, what. What's possible in the car business. You know, I was working 60, 70 hours a week for my grandfather, barely making ends meet on his. On his farm. And I'm like, you know, I gotta. I gotta look into this. And shortly after that, my grandmother or my. My wife's grandfather passed, and he had a couple of old Cadillacs that I had helped the family liquidate. They said, well, Dar, you know, you're a. You know, you kind of an outgoing guy. Maybe you can help us sell these cars. They told me what. What they wanted for the cars. I cleaned the cars up, I put them out on the street corner, and I made, like, four grand. And that was kind of like the aha moment. Like, okay, I can do this, because that was more than I made an entire month working for my grandfather on his farm. So I make four grand just like that in a week, and I'm hooked. You know, I'm hooked. Still. Still don't know anything about the car business. Don't know about a dealer's license. Nothing. Okay. So as fate would have it, I find this ad. I don't know if it was like, Field and Stream or if I just found it online, but there wasn't, you know, in 2009, 8 and 9, there wasn't, like, Facebook dealer groups. There wasn't stock stuff on the web that you can find to educate yourself. YouTube wasn't as robust back then. So I find these books online about how to be a car dealer. That was what it was titled. And you had to send a money order and everything. Like, it took, like, six weeks to come in. I think I wasted my money, man. You know, And I didn't have 500 back then, but it was like 4.99 is what the. With the. It was like three books.

Do you remember who.

Who did those? I've got it. I've got a picture of it somewhere.

Ex.

It's called, like, expert car dealer or something. It was an attorney that wrote them out. California. But I'll send you the link when we get done here. But. Or I'll send you a screenshot of what it was. But, man, I'm telling you, I just absorbed those books. It taught me about dealer auctions. It taught me about getting my dealer's license. It taught me about, you know, indirect lenders. You know, all this stuff. I had no knowledge. I didn't. Like I said, I did not know a car dealer. The only car dealer I knew was a salesman who just knocked my head off at the Tahoe. So, you know, I'm like, I just learned all this from scratch. And, like, the first year, I just curbstone, right? I found cars on Craigslist. I mean, my wife would drive me way out in the boondocks to look at an F150 that had a side taken off of it, you know, because we were buying 500, $800 trucks and cars. And, you know, that's how we started, man. Just from nothing, from the bottom. And, you know, just kind of grew through gradual process, you know? Well, that.

That's. I mean, it just seems so funny, Jeff. And we talk about this. It's Dare and a guy we interviewed not long ago, Tim Evans. They had. They both started out as farmers. He was farming rabbits and Dare was farming fish. And then they both were curb stoners. I mean, that's A. That's something else.

Yeah.

So. So what town are you in? Arkansas?

It's a little town called Desert. It's. It's about an hour this side of Little Rock, west, east of Little Rock, an hour and a half west of Memphis, right on Interstate 40. We're a town of about 1900 people. I think we just got the new census and our town grew. But it was 1700 people when I first started.

And if you. Have you always been in that location, is that.

We've always been right here. We dabbled in a second location. So when we started, we actually started like way out into the country. Like, not even in desert. Like, we're. We're on a. A little road called Highway 11 where my grandfather had his fish farm in a grass lot, you know, and then we moved up to what everybody calls the four mile corner. We're still not in town, but we moved to. We moved closer to town, like two miles and. And then we try satellite lot and we closed that down. And then in 16, we moved to our current location where we are now. It's a very nice facility. And we, you know, we got it going on and we're right here on Main street in Desert.

What was. I gotta ask what the strategy was like, why not go to a bigger market?

What.

What was the game plan in staying in a 1900 person? How many cars can you sell?

Yeah. You know, so I was still kind of working for my grandfather, and that's a great question. I was still kind of working for my grandfather when I first started, so I could kind of do his thing, still make ends meet for my family and sell cars on the side of the road. Right. That's how we started. And so we just continued to do that. And my banker said the same thing you did. He's like, dare. You sold a car to everybody in desert. How do you expect to continue to, you know, sell these cars way out here? And so that's what we. We decided to dabble in a market 30 miles away that did have a McDonald's and did have a Walmart. It did have about 10,000 people. But what we found out, the Internet was the great equalizer. We had people driving across that lot to get to desert and vice versa. And it's like, why can't we just manage our inventory right here by my house? You know, this is where I live. That's where my kids go to school and everything. So basically we just, we just stayed here because of the Internet. You know, the Internet, people will drive an hour Two hours to see.

Hey, everybody. We hope to see you at Buy Here, Pay here United, April 30th in Las Vegas.

I can't wait. I was in Vegas yesterday. Yeah. But I'll tell you this. Buy youy Pay Here United last year, the summit was incredible. You know, we talk about this. Dealers helping dealers. This is what this is. And it's dealers. There's no freaking pushy vendor room and there's no, no craziness. And we had a lot of education. I'm going to be hosting the panel. I think everybody get a lot of you set up. We're going to be there together. Come see us April 30th through May 2nd. And it's going to be great. This great rate at the Bellagio.

Just payhereunited.com See you there. That's wild.

I can't even imagine. I mean, you think that.

We always think, well, we got to go to where the people are. You know, we got to. We got to be a drive by. But what you're saying is you're using the Internet marketing to drive people to.

You.

Do you think that, you know, the old adage of, like, do car dealers not need to be on frontage roads anymore? You know, is the Internet really your showroom?

It's the showroom, baby. I mean, we could. We could. There was a warehouse across the street. I wish I would have bought a few years ago, just sold. But I mean, like, you got guys doing it in the middle of a city in a warehouse that are. They're smoking it right now. And they're. To me, they're just as secluded as I am. You know, they got to bring people into their showroom that can't be seen. So really, I don't think I'm at a disadvantage. In fact, I've often said I'm at an advantage because my labor cost is a lot lower in service. And, you know, even on the sales floor, I'm probably, you know, paying a little bit less than national average on sales commissions and stuff like that. So I feel like that. I feel like that that's been an advantage to us, you know, all along the way.

That's. Yeah, I agree. I mean, let's. Let's go back in time a little bit there. Did you start out as in. I mean, as. As Internet being the focus of your sales? Because I. I doubt that was the case. How long did it take you to evolve and what was the first thing you did that really got traction on the Internet?

So in the very beginning, like, People like I started in my hometown, people knew me, people from the other town, like there was, there's a town like 10 miles away. Those people, you know, knew me. So I got a lot of drive by traffic. Hey, there's in the car business. I had my first little lender cac and so we were doing some subprime. But in the beginning we started our Facebook page. Like from our Facebook page has been up and active since like 2012 or 13. And you know, we got 25,000 followers and all of those are organic. So when somebody liked our stuff, we just continued to invite them to follow the page. We didn't pay for any likes, we didn't pay for any followers. And Craigslist was big. We just all along the way there's been a different medium. Even from the beginning that we could post our cars and drive traffic. Like even in the beginning when we had a grass lot and we told people to wear their mud boots if it was raining because they were going to get their shoes muddy in the grass. You know, in the grass and the mud, we tell them bring their mud boots. Hey man, it's, you know, it's muddy out here. But you know, eggs are cheaper in the country. You know, we'd always say that. And you know, we, we, we got people from Little Rock to buy Honda Accords in desert just because we outworked. In the beginning, we outworked and on a no budget marketing plan to, to get people to drive to us and do business with us. That's what started.

Was there anything, I mean, did you have anything go viral? Did you, did you do things that you were hoping would go viral or is it just being, being there?

It was not an overnight success at all. I mean it was just a literal grind every day. Just. And so many times in those first five years. First five years was tough. I mean, you know how it is. One day you think you're on top of the mound, you sell three or four and you're thinking, oh man, this, I've got this figured out. And then you may go a week without selling one. And so in those first five years it was tough. It was a grind. And it was a lot of times I thought what did I do? I made a mistake. You know, I wanted to do something else. I wanted that 9 to 5 job, you know, like I've often dreamed about. Sometimes we all dream about our self employed guys. And so no, literally it was a grind. We had nothing go viral. It was just every day we stayed on it, we stayed Consistent to the message. We stayed consistent to the Facebook postings, the Craigslist postings, the marketplace postings. We never, like, you know, we never gave up. You know, even when we. It was looking, you know, pretty bleak. We just kept going to work.

So how did. When did you get to the point where you started selling 100 cars a month? I mean, was it. Was it 20 and 40, then 60 to 80, or is it just kind of a steep. A steep jump at some point?

Yeah. So great question for. Even in the beginning, I worked so hard where it was just me and my controller. That's been with us since the beginning. She started out just as a bookkeeper. Even in the beginning, when I was doing everything detail and selling everything, I was selling 15 to 20 cars. You know, I would try to sell two or three cars a week through CAC, and I was selling 20 cars a week through CAC in the early beginning, and it was predominantly CAC. I would be what you would call the Prodigy CAC dealer, where they sign me up and I sell 30 cars a month. And the lion's share of them were CAC. And we were closing the pools. And we closed 17 pools, Luke, in five years. Like 17 and five. Just a tremendous amount.

Wow.

And. And so 2016 rolls around. Early 2016. I'll never forget it. I wake up and I'm broke, man. I've sold all these cars on cac. I've done all this business, and I'm broke. You know, I'm like. And we're selling 30 cars a month. We've been selling 30 cars a month for the first five years. Just like clockwork.

And so the reason. The reason I was because your checks that weren't coming in from the pools or.

Yeah, sort of. Yeah. And. And this is what I would caution. It was a learning lesson for us. I think CAC over advanced in. In 15, 14 and 15. The. The PPE checks, we were relying on them to, you know, basically we were relying on them to pay our bills every three months. And when we missed one. So the. The trick was we missed one by a couple of deals that we were banking on. And then all of a sudden that business model is like, oh, there's that 30 grand didn't come in. And we're struggling. I mean, it's. It's getting dire. It's going to be another 45 days before we get that 30 grand. And so that's really where I made a decision. Okay. And I was. I was. I was on my way out, and again, I Was like man, I, this is not working. So I'm like okay, we have got to make a decision either to increase our quality or do something different. I was searching for board. Like we got to make money on every deal because we, we would lose a grand on a CAC deal to, to build a pool. And that is not the right strategy. Usually when you lose that grand, you, you end up losing on the back too for those CAC dealers out there, you know. So fast forward to 2016. We had 2000 or late 2016. We, we, we decided to really buckle down. We went and bought a new facility which scared us to death. We, our current facility. And when we got service and we started going to 20 groups that changed the game. We went from 35 to 40 to 50 to 60 and just every, every group meeting, every day, we took something back. Now we got 32 employees here, you know, selling 80 retail a month, moving 100 cars, you know, 20 wholesale of our trades and stuff that we don't keep anymore. You know, we don't keep 150,000 mile truck anymore. We send that to the auction. And so we've really fine tuned our retail business where it's almost franchisee like in our, in our pre owned operation. And it's. I tell you, it's a lot less headache, man. It's really been a, the last five years have really been a joy and a pleasure to be in the car business.

I'm not, I don't even know what to say. I think Luke and I are both like dumbfounded. Like what the last five years have been a joy. That is, I think we all need to move to Ben Armpit, Arkansas man.

And.

You know, you know what's, I mean what's interesting there is, is that you talk about service and you talk about 20 groups and, and that anybody that's listening to us long enough know that I'm a huge proponent of service department and both of us are a huge proponent of the 20 group. No matter who you're with, it's a great way to bounce things off of people and learn how to get better from other people. Let's dive into the service portion of it. Why did service all of a sudden make that much of a difference for you?

Service changed immediately. Let me tell you why. So we get one service guy that knows and this is a funny story about him, my service manager. He's my service manager today. He just started out as a tech. Like he was driving an hour to Little Rock and he lived in this small town because he had to because of something with his kids or something. And so he drives by this, this, this building that I'm opening up, it's like, hey, you got all these bays here, you know, do you need a tech? I'm like, yeah, man, that's, that'd be great. And so immediately, that first day, he added value to the dealership. I talk about value all the time with my team and my customers. We want to add value to everyone's life. That's part of our mission statement. Immediately had it. He added value to the dealership in the deal because if an engine light comes on on the test drive, he can, he can take care of it. He can advise the customer that, hey, we're going to fix this. We know what it is, we'll take care of you immediately. You can take care of your customer instead of sending him down to a third party shop where they may or may not have your best interest at heart, depending on how busy they are. No matter how great of a customer you are, they have other customers. And so I think just being able to control more, I talk about this all the time. Control, control, control. We want to control as many pieces of the buying, selling, recon process as possible. When it goes to third party, we lose control, we lose that ability. And so I think immediately that's what it was.

Hey, guys, real quick. Buckeye Dealership Consulting, you know, they're a great sponsor of the podcast and the great place to go for your reinsurance.

How many times we said it? Reinsurance, reinsurance, reinsurance, cpi, vsi, vsi, vsc, all these things, all these acronyms that sound like you're in the army. Yeah, but you're not. You're in the car business and it's kind of like an army, but not.

Really talking about putting the money away for a rainy day fund. You know, we've discussed that in the newsletter the last couple weeks, is that you need to have CAPEX expense. You didn't have money for those unforeseen things. Hopefully you own your property or if you need a down payment for your property right there, your reinsurance company is a great way as a forced savings account, put it in your reinsurance company and lend it back to yourself.

You lend it back to yourself, take.

The tax deduction when you buy the reinsurance insurance when you put it into your company, and then lend it back.

Tax free at a pretty good rate.

It's crazy.

Yeah. So reach out to Buckeye. They'll take care of you and we'll see you Soon.

Is that really tough when you're where you're selling cars from such a far distance away to service the vehicles? Maybe, you know, shortly after the sale, something happens and you're trying to, you know, do some goodwill or keep that reputation. Is that tough when they came for an hour, hour and a half away?

Sure, it's an issue, but it's an issue that you have to overcome. And as much as all of us hate it, we do loan our cars. We have two rollback tow trucks. Oh, we, we, we, we go the extra mile to make sure that our customer, our pretty mid prime to prime customer who could have done business anywhere, came to do business with me. We make sure we take care of that customer. So yes, it is an issue. And yes, we do way more loaner cars than I wish we did. And I know it's a, it's a risk. None of us like to hear the word loaner in the car business, but it, at the point where we are in the volume that we're doing and our reputation that we have, we have to do it. I don't, I don't see another way to not to do.

Yeah, that's definitely one thing I found is you talk about more sales and you know, last month for us, we had a record month, but it's like more sales, more problem. Because this month I've got a record month of goodwill and warranty claims. You know, so it's like when you start selling more, you're like, oh man, this is just more hassle, more headache.

If you're gonna sell that, if you're gonna grow your sales, you better have the back of your, the back of your barn beefed up to handle the incoming traffic that you just talked about.

Yeah. Not only recon, but then the goodwill, the warranty. Yeah. Like you.

Absolutely.

Yeah. It has been an issue. And my shop this week has gotten out very few recon because we're so bogged down with customer and warranty. So it's a, it's a tough deal to balance.

And let's go down that rabbit hole a little bit there. I mean, you're having to recon 80 to 100 cars a month plus, plus policy work, plus warranty work. How do you balance that? How does your service bar balance it?

Well, we. Order of importance. Okay. We just had, we have a service meeting every Monday morning. And the famous words are, can we get this in? Right now they're signing papers. And so all the texts kind of know. And we, we're taught, we teach our Advisors. We have two advisors. We teach our advisors and we teach our salespeople to kind of feel the, the temperament of the customer. If, if we just sold it, we're going to push recon. You know, we're going to push recon back, we're going to push some other stuff back. If it's been a month and it's, you know, we might put that customer loaner, we might try to see if we can hold them off. We manage that schedule and it's a day to day thing. It does. It's not something that I have a magic formula on, but. And then we have two dedicated inspection lube tech guys where we're getting stuff in. And if it needs something minor, go ahead and throw that on the Internet, throw it to parts hole and rapid recon and then come back and work it back in. You know, it might be something that we could sell on a. We o. And we just manage it. And I think that's what you gotta do.

I'm glad there's no magic bullet. Cause I hadn't found it either. And I think order of importance is kind of the way I, I've been handling it for years and it's just right.

And another issue we've talked about is customer pay. I don't know how much customer pay you. You do. Luke and J. I know we do 30% customer pay off the street because we have a. And we have a strong service department. And some of that stuff we've had to turn away when we get really bogged down with what feeds the dealership, which is sales.

Yeah, same. Same problem here.

Yeah. Look, I think you cut off your retail pay.

We had to. But yeah, back in, during COVID and Darryl know what happened with y' all in Covid, but I mean we had a bunch of tax leave because, I mean, because they were getting paid better somewhere else. Better hours. Is that another. And I, at some point I had to cut off everything but recon. I had to start subbing. We had no customer pay. We had to start subbing all of our warranty work out and all. We were doing recon and policy stuff. And I tell you, it, it got scary there for a bit during, during that time.

Yeah. Darren, I want to talk to you about sourcing inventory. If you guys are on the YouTube channel, you can see dare has like a. It's like a NASA like space shuttle launch system in the back corner there of his office. I don't know if he's. He's like doing some rocket launching and Recapture. I don't know what he's got going on there, but I've never seen so many screens. Is the money made at the buy still is?

You know, it still is. I mean nothing's changed since I started. When you make money, when you buy the car or the truck and we're constantly looking for those pieces that we can buy back of, of book and, and be as soon as we get it online, we're at the top of the market and we still got a nice spread on the front end. So yeah, nothing's changed on that part of it. You know, we've just done everything more digitally than we were accustomed to before. COVID Covid really inspired me to get these screens and all the craziness that you see back there.

Do you buy it anything in lane or is it all online?

So there's a little independent auction that I go to on Wednesdays and if I would just be honest with you, I just do it to get out of the office. I might, I might pick out one or two that I like, but it's.

An awesome free hot dog.

Yeah, it's my very first auction I went to. It's the one that I just, you know, it's just kind of an escape on Wednesday morning just to kind of break the week up. Otherwise we can do everything right here. We've done a good job on our trade ins. We've done a good job on Facebook, Marketplace. We've done a good job on marketing. The fact that we buy cars over the past two years. And so it hasn't just come from those screens. It's, it's, it's, it's come from, from everything that we, we made like a thousand signs over the past couple of years that say we buy cars and we stick them all around on the weekends. And we've just had to get creative on how we acquire that inventory. So I want to talk to you.

Too about that same category. I know the price point that you're dealing with. You know, a twenty to thirty thousand dollar truck probably not moving in price as much as the 50 and 60 thousand dollars trucks are. But how important is that turn time to you? Is that something you track like religiously? Are you getting cars out after they've been on the lot for 48 hours? Like what. How anal are you about that religiously?

Especially the last 60 days, it's proven so vital. And I'm going to be honest with you, there's, there's people that are in a lot worse shape than me, but there's people that have done a better job than me. I mean, I'm going to be the first one to tell you. I, I saw it, I saw the market turning in June, but I wasn't as vigilant about, you know, getting your lungs on top of our turn times. I've still got 30 of my inventory over 60 days right now. And it's stuff that we bought that we were just selling. I mean we were selling the kitch sink over here, stuff that we don't usually sell. And so, you know, the last two months we've really driven down and bought. Hey, we're going back to pre Covid. What do we do best? And that's really where our mind's having to go. But we're watching our rapid recon times. Our we're still 10 days time to line from the time I hit the button to the time it gets on the website. Could it be better? Yes. And I tell my guys all the time if we get two days on the front, it saves us two days on the back. And you know, so it's something that we are, we are watching pretty heavily.

That sounds like a pretty tightly run ship. I think a lot got into that. We started like you said we could sell the kitchen sink. So we started getting into these, you know, I know even for me, I started buying like you know, four door Jeeps and I've got two 12 passenger vans sitting out here because I could just sell anything and then that kind of turned off overnight. And I'm sitting on some of those weird little, you know, econo vans and odd, odd little ducks that you, they're just slow turners.

Yeah, that's right.

You're buying, are you, are you buying all the cars?

I'm buying everything. Now we do spiff our guys, you know, especially when we, when we do the sign campaign and we do, you know, we spiff our guys on buying cars. $50 a car. If they, if they work the deal, if they come to me and say, hey, this is okay there if we give this for a truck or whatever salesman because a lot of times they'll come on a phone up, you know, because they know our reputation and maybe I'm out of the office and they book it out and you know, the sales manager buys it or something. So we spiff those guys on that.

That's a lot of cars you buy from one person. And, and you mentioned something while we were off air. You talked about you're a registered importer. What does that mean? How does that help you buy cars?

Well, we, we. The national quality deal of the year 2019. I don't think he, he'd mind me saying this, Mr. Otto Hahn, if you ever get the opportunity to pick his brain on importing, he is like the wizard. And he kind of mentored me on the exchange rate and the Canadian cars because I was just like you guys. I was scared to death though, and, you know, scared of the rust and whatnot. But he's like, there, you know, you can save some money if, if you figure this thing out. And so we just, we went back to school on this thing and we got our importer's license where we could actually import the cars. We could buy the cars and we could import the cars from Canada and keep them right here on the yard. Most people that are buying in Canada are using a registered importer where they may sit hours and hours, maybe states away from where their lot is. And they own those cars, they paid for those cars, but they can't go out and touch them. And I said, you know, if I'm ever going to do it, if I'm ever going to get in this thing, I want to go out and put my hand on the car, even if I can't sell it yet. Because in, when you, when you import a car from Canada, you have to wait at least 30 days. So I want to make sure that I have to put, I put my hand on the car and it's not somebody, somebody else's lots. And I'm gonna tell you what we have found with the Canadian trucks, especially the two and three and four year old trucks is the rust is not that bad. You know, there's some surface rust here and there, but the miles, the miles are better. And I don't know if I'm giving away my secrets here on the podcast or what, but, you know, hey, nobody. We're all in this together. The mammals are. The miles are better in Canada on some of those trucks is the. Did the warranties transfer Ford and GM Dodge Note Ram? No. Jeep? No.

Why, why, why is that?

That's specific to the manufacturer. I, I couldn't, I couldn't tell you.

But, But a four, a Canadian Ford truck is same exact. Okay.

Yeah.

And they show miles, not kilometers and all that.

So like on a Ram, do you lose that, you lose the powertrain warranty.

If you buy 20, 23 RAM right now, import into the US you lose the powertrain, lose everything. Whoa.

Sure. That's crazy. Yeah, we see a handful where I'm at that come down and obviously, my price point is way different, but, yeah, there are people bringing them in, wholesaling them, you know, selling them at the auction. But, yeah, of course, for me, Rust is. Yeah. A deal breaker all the way around.

Sure. Yeah, it is. But, you know, you just have to pick and choose what you buy up there. Just like everything, it was a. It was a learning curve. And I'll tell you this, real tidbit, real quick. When we first started, it was like I was pushing the button, and I was like, man, I'm getting that $10,000 cheap. You know, like, this is. This is, like, amazing. And so what I did was I bought a load of trucks that had tariffs on them. And so in 2016, President Trump signed the U.S. mexico Trade Agreement. Right. NAFTA ended. And so everything with a 2 or a 3 in front of the VIN, either it means it's made in Canada or Mexico. Even though it's a US Domestic vehicle, if it's imported into the states, there's a 25% tariff. And so I was getting those things, like, super, super cheap. But I wasn't bidding against anybody in the U.S. anyway, I ended up leaving that first load in Canada and having to wholesale that first load. But I learned a valuable lesson there.

Ah, interesting. So on the normal cars you bring in, you have to. Do you have to pay a tariff on those? I mean, why is it.

No. If it's made with a 1, if the VIN number has a 1 or a 5 in the first digit. So that's a US made vehicle. Even if it's a doggone Toyota, it. It was assembled, at least in the United States, and there's no tariff on that vehicle. You can bring it back to the US Free of charge.

Okay. I knew about the two and the three because, I mean, there's some brand new cars here that are twos and threes that came from there. Right. But as long as they were sold.

Here new, it just means that they were originated there and the parts were put together there. The. You know, a lot of these. All these Ram Cummins trucks, I would love to bring those in from up north, but they were all assembled in Mexico.

You know, they were assembled in Mexico and shipped to Canada.

Correct. Or the US doesn't make any. All of your Dodge. All your. All of your ram 2500s start with a three. All of them.

Interesting. So what the hard and so when you get them back, obviously they're all digital odometers. You click them over to miles. Right. But how do you get the. Donut smell out of the Canadian cars, the ice.

Skates. I'm gonna tell you what, there is some chain smokers up there too. I mean against them guys up there, like they're super, super nice. Like they're. And they love hearing us talk from the south. But there's they, they can smoke some cigarettes up there. That's been the issue is, you know, we'll put an O2 machine in on most all of them to. Oh my gosh. A little bit, you know.

That's so funny. So, so moving forward, what is your, what is your outlook or your game plan for 2023? What would you say is, is going to be your opportunity this next year? So if you need a line of credit or you're looking to get financed on a property. Yeah, the guys at Primaland great bank to go to to talk to you about your capital needs.

And the great thing about Primalin, you're not trying to educate them on your business because guess what, they know what it's about. They can even help you get your, your finances in order. We've talked about that. It's hard to talk to normal bankers about what we do as buy here, pay here dealers. Primal in knows what we do. They lend on that type of thing. So you need to reach out to Primal In. Todd Yates, good buddy of mine, he's the, their head of sales and all that good stuff. Reach out to him and he will take care of you. And they're just good people over there.

Back to the podcast.

So everybody's freaked out about a milder session. You know, severe recession. We hear it. If we, if we watch the news, we're going to hear two different opinions on FOX and cnn. So, you know, whatever you're, whatever you think, this is the car business we're going to, we're going to be around and the good dealers are going to survive. And we're looking to grow. We're looking to beat 22's numbers. We had an amazing 22. We had an amazing 21. 22. Beat 21. And so, you know, that's the thing is we're looking to grow our business however we can. But the good dealers are going to survive. The good dealers are going to find a way. They're going to, they're going to innovate away. They're going to find new marketing ideas, they're going to find new markets. And I'll tell my guys all the time we're excited about a recession. It's going to move some of those bad players out and the ones that are standing, we're gonna, it's gonna be a land grab for more deals, for more sales, to, to bring more value to customers lives. And so that's what we're. Well I say bring it on, you know what I'm saying?

You, I just, you have, you have 80% of your deals using prime outside banks. Have you seen any pullback from them or how is this higher interest rate affecting you?

We've had a few customers, I would say we're 90% finance penetration. I'm going to say that's moved down to 87% over the past 60 or 90 days just because maybe a guy has a relationship with the credit union or something. But most of our banks and credit unions that we have in house are keeping up pretty much. I mean we, we, we can still get somebody financed in the fives and 6%. But everybody knows when you buy a car, here's our great word track. Now you guys are welcome to use this is the cars are cheaper, the interest rates higher, but the cars are cheaper. So you're paying less principal. And I would rather be in a situation where I'm paying less principal and being able to pay it off faster than in a situation where, or possibly trade it. We're in a situation like we were two years ago when interest rates were at 1 or 2% but we were paying 15 over MSRP. And so that's just the word track. You have to be using it, you know, knock on wood. It hasn't been an issue yet. We've still seen our back end penetration, our finance penetration stay really, really high.

I definitely think we're going to see that as lenders pull back and you hear those stories of lenders pulling out and dealers and I mean like you talked about washing out some of the less fine tuned operations. Hopefully none of us and those of us that are listening. But just today on my way here I drove past a dealer and it always seems like the first, second, third of the month. I look at all the dealers in my town to see who shut down shop, you know, who, who got evicted on the 31st of last month or the 5th this month when they didn't make their rent payment. And sure enough one of my, a fairly average sized dealer here in town, dead empty lot.

So great entrepreneurs strive in these times and we haven't seen you guys, we haven't seen this guy that's down on his luck and not that I wish that at all. But you know I used to make my living in the repo lanes. I used to like my living on finding a guy just that needs to get out from underneath something. And we haven't seen that for whatever reason, but that's coming back. And I would just encourage anybody just to keep their eyes open for those opportunities because they're going to be everywhere coming up. You're going to be able to buy boats and RVs and Raptors and all kinds of stuff just because the payments and the. The market is going to catch up with them. And that's when you have to be in a good position as a dealer to capitalize on those situations.

Luke, Luke loves a good carcass, man. He loves to just find. Just find a dying animal and just.

I have a. I am a bear, you know, I just. I'm a bear market. I like to. I like to make money when everybody else is scared because it's. It's, you know, it's. It's easier to do. In my opinion. That bullshit, that bull market, when everybody's, you know, keeps pushing those prices up.

Scares the heck out of me.

Sure scares me.

Well, you got to be able to weather the storm, right? And we. That's what we talk about. Being in a cash position where you. You're okay when things get tight or slow down for a minute or you're in a place to take advantage of those, you know?

Right.

Yeah. If you think prices are low right now and you can buy now or make offers and snag some of this stuff, maybe you have to sit a little fatter on your inventory because you have that faith or you're willing to take that risk.

You know, you stay in the. Stay in the power position. Okay. Like right now I feel like we're going back into the power position where if you're a good dealer and you know your market, you can go out there and just buy what you want. Go to the auction, say, this one's mine, this one's mine, and this one's mine. And you know, the. The other guys are going to get scared because they know that if they can't turn around and wholesale, that rig get their money back or even close to their money back. But if you know your market and you know that you can retail that feast, you go to the auction and buy what you want.

Interesting. So I want to talk about that before we let you go dark. You seem like the kind of guy that uses technology, right? You've mentioned a couple things like V Auto rapid recon. Is that pretty crucial? Or would you say you subscribe to leveraging technology to make sure your dealership is running and maybe give us a rundown on what some of your favorite ones are.

So it's not crucial if you're selling 40 cars a month. I didn't need it at 40 cars a month. Okay. I thought the people that described the V auto and paid $2500 a month were silly, right? I'll keep that money in my pocket. I'll do my own research. And I did. And you can. At 40 cars a month, you cannot. At 80 cars a month, you cannot. When you're moving 100 through recon a month, you, you can't hire enough managers to do what the technology can do for you. And so I, when I first started going to 20 groups and I started hearing all about all these products and I subscribed to it for you, and it didn't seem like it was helping me. Well, I was, I was only selling 30, 40 cars a month. And I think that's really where the break. When you start selling over 50, over 60 and keep, continue to push that needle up, you have to have a tool that will help you keep track of your inventory. Because your inventory, that's your, you know, that's your, that's, that's how you make your living. Right. And so to manage that successfully every day, day in and day out, is the dealer principle. You have to have those apps at the tip of, you know, my, my daily routine, I get up at 5, I go for a run, and then I have an hour of quiet time before my kids get up. Right. And so I'm looking at those markets, I'm looking at my positions in those markets, and I'm doing a lot of my pricing early in the morning, you know, decreasing prices and making sure that, that my numbers are lined up. And I think if you're on top of your game right now, you're not going to see those older, you know, those 60 and 90 day units. As much as somebody would. It's just kind of sleeping right now, man.

That's good advice. Great.

Goodness.

Yeah. Yeah, it's super interesting. I don't think we always realize that, that it's, and especially guys like us that are in the buy here, pay here industry, right? It's like that car will sell eventually. Like, I don't have to reduce the price, I just have to sit on it longer. There's a but for every seat, but there is an intersection there. When you can, you can be a little too stubborn.

I, I argued that it matters to buy here, pay here Too, Jeff. And maybe because mine's a little higher acv, but we had, we had an avalanche sitting. This is just an anecdote. We had an avalanche sitting for, for 90 days and the avalanches don't ever sit right. And so all of a sudden I look and we're, we're out of market where it just didn't make any sense because I hadn't been studying like bears talking about every, every day looking at that stuff. I reduced the price by two grand and we sold it the next day. Yeah, sure, those things matter. And even, even, even in whatever model you're doing, it always matters.

I would say even in buy here, pay here, those guys, you know, they don't want to feel like they're getting their head ripped off. I mean, they're still looking at similar things on their phone. Even the guys way out here in Podoc, Arkansas have a phone and they can Google 2000, whatever, Avalanche, and see that you're maybe a little bit out of line. They don't mind paying too much. They don't want to pay 200% too much. You know, I agree.

Before we let you go, I mean, so much great stuff in this episode, but any final words of wisdom for dealers that are listening to this that you know, are building or want to build to that hundred car a month area or maybe that don't like anything that's just really. You feel like turn the tide for you?

Well, I'm going to say that I, I have always, I've always enjoyed the business. I've always enjoyed buying and selling and trading. It's exciting to me. Okay. I can't wait to get up the next day and to see what we're going to trade for to what we're going to buy. And I would, I would say to a dealer who really wants to be successful is just to, just to stay in love with the business. It can get to be a grind and it is. And anybody, you know, I kind of practice a stoic type mentality every day. And it, it's, it's just that consistent push of doing things. Once you have a recipe for success, that consistent push of doing things the same because the ratios will work out. If we got 20 leads today, maybe we didn't sell a car, but we got 20 leads and we know that eventually we will. And so staying on top of your lead count is important. Ratios are important. You know, I read a thing, gosh, it was about, I think Stephen Curry, like, he always feels like the ball is going to go in and if it doesn't go in. It was a fluke, right? It was a fluke. And so we may have a couple of bad days, a couple of bad weeks in the car business, but just when we get down and we're not selling cars and we're not making money, hey, just, just stay with what works. It's going to work next year, it's going to work the year after that. And just stay in love with the car business because it's, it's so much fun if you realize why you got into it in the beginning.

Well, there you go, Jeff. I like it.

Yeah.

Excellent word wisdom, man. I'm, I'm, I'm excited. I'm ready to freaking get at today. Make it happen.

So. Yeah, man, I appreciate you guys having me on. It's awesome. Yeah, I always love to share my wisdom, or lack thereof, you know, so anytime you guys need anything, I'm here. You can share my information. I'd love to help anybody. I'm a proponent to the independent dealer, that's for sure.

Yeah, I agree. And if you see Darren convention, walk up and say hello.

He's got a lot of wisdom to share, always.

Thanks for being here, Darren.

Thanks.

Appreciate you guys.

Yeah.

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