#319 - Tax Wrap, Negative Equity, Cybertruck

This is the Independent Dealer Podcast, Education.

By Dealers for Dealers. Now here are your hosts, Luke Godwin and Jeff Watson.

Hello, and welcome to the Independent Dealer Podcast, brought to you this week and almost every week for the foreseeable future by Buckeye Dealership Consulting.

They may. They may fire us once, you know, you say whatever you're going to say today, Jeff, talking about Ed and stuff like that.

Yeah, they. Luckily, they do not own us. But, guys, it's been a great. Luke and I are burning the candles at both ends. We're at the tail end of tax time, and it seems like when there is one headache, there are multiple headaches.

Yeah, it's. It's been a. I'm not gonna say a headache, though. It's been a really good tax season for us. We are four cars away from hitting our goal, Jeff, and we're just plugging right along.

Yeah, for some reason, I mean, I say that because when. When I got some balls or plates spinning, there's a lot of plates spinning. And, you know, I can tell that by how often my wife threatens to divorce me. I can tell that maybe I'm spread a little too thin between the dealership and all the other commitments. But. But seriously, Luke, how's your tax time then?

So, you know, we started out in January, very slow, Jeff. We had projected to sell a certain amount of cars, and. And we. I mean, we just didn't do even close to that. And I was like, oh, my goodness, it's going to be one of those years. Buckle up. I've got more inventory than I've ever had. What's going to, you know, what's going to happen. But then, you know, we made it past January, we kept our heads down, we kept doing it, believing that tax season was going to come. And Tom and February, we. We beat our numbers, made up for what we missed in January. Our goal was to do 55 this month. And, you know, recording this right now, we are at 51, and we've got four deposits that should. Should end before the end of month here. So that puts us at 55. That's if we don't get anything else. So.

And that's good for you.

55 is good for me. We. That was our goal, and you can't do any better than. I mean, you can do better than your goal, but that's what I forecast, and I really believe that that's what we're going to get. With the amount of inventory I had and with what I thought the money was going to be like this Year. So, yeah, we did it.

Yeah, that's great, man. That's good to hear. So I'm, I'm tracking right about what I did last year, maybe a little bit better, depending on how the next two days go. So. So yeah, I would say 2024 for me has been a little. A bit of a stronger March looking at our tax program. You know, we did 12 solid tax max deals to the tune of about 27. About 27 grand of deferred tax money, which was about on par for last year, actually a little teeny bit better than 2022, but not as good as 2022 the year before. So 2023 was not as good. So I would say lukewarm, you know, luke. Lukewarm.

Lukewarm. And, you know, tax season has never been as great as it. As it was, and I think we all need to understand that. But I do believe we sell cars better throughout the year than we used to. So I, I don't know. I think you have to go into tax season understanding. Is, is it going to be as good as you remember back in 2014 or 15 or whenever? Probably not. But I believe that you set your expectations, you manage to that goal, and I think you get those goals.

Yeah. Your mark, your April, March, May might not be as good, but your June and July are maybe better. Right. So you're. Maybe you're kind of spreading those out throughout the year instead of trying to take them all in a couple of months, which I appreciate.

Yeah.

What's interesting to me is, you know, for those of us in buy here, pay here, and I've had mixed reviews from some of my other buddies that are in the buy here, pay here, lease here space who really did struggle this year, and their tax time was not very good. Talking to a big lease here, pay here, that's a buddy of mine, kind of a little bit low from what he anticipated, which puts a bit of strain on the portfolio, you know. And so I look at myself and my growth in, in the portfolio, I'm doing okay. And that's pretty important from a buy here, pay here to have some stability and. Or growth in your portfolio. Because when you're going backwards in your portfolio, that's. That. That can be a dangerous recipe.

Yeah, very dangerous. So I had a, I had a portfolio goal for the end of the year, and we are actually within 10 accounts of that portfolio goal at the end December 31st. So we hit bottom and we're. And we're coming back, and that's really what I Wanted to see. And I think our charge off is going to be a little higher because maybe we're taking a few more chances. But I think this is the time you can take a little more chance in years past because people out there with better credit trying to buy from us, they used to have to buy from other places. So I think there's a little more chance to be given.

Yeah. What I find interesting, the difference in 2008 and now is back in 2008, we had good people with bad credit, right? They had bad credit, but they still had good incomes. Now we have good people with bad credit and tight incomes. So it's a little bit different when they come to you. It's not that they're trying to get out of their 900 payment into a 700 payment. They got to get into a 400 payment. Right. And even that's tight. So it'll be interesting to see what the next few months pan out.

It's funny you say that about those payments, and it's something everybody out there needs to be concerned with. We saw, I think, three people last week with payments over a thousand dollars a month.

And.

When we hit them with a 570amonth payment or $610 a month payment, they were relieved at our payments compared to what they were paying at that time.

Yeah. I read an article this morning that said 20% of all new car trade ins. You know, if you're buying a new car and you're trading in a car, 20% of those people are upside down or have negative equities. Are you seeing that?

Oh, yeah.

A lot of negative equity, folks.

There's a lot of negative equity in our portfolios right now. People may not to. People may not want to talk about that, but the prices from 21 and 22 have buried consumers. And you got to decide what you want to do. Yes. A buy here, pay here, store, you can absorb some of that negative equity. And if they're a great customer and you want to roll the car. Right. The countdown, we have the ability to do that. Unfortunately, when you're a retail dealer and a customer walks in and what we had the other day is somebody owing, you know, $30,000 on a. On a $10,000 car, there's not much you can do about it. I read an article earlier, too. You said roughly 20%, the amount of that 20 negative equity has more than tripled in the same amount of time. So, yeah, it's. It's a double whammy. It's not that there's more people with negative equity. There's more people with gross negative equity.

Yeah. Be interesting to see how many of those people are willing to walk away from it. That'll be the real a bunch.

And that's what we've seen. We've seen that in the last two months. People walking in with good pay history, with paid autos, decent credit score, you know, and that's that 6, 7680 range with those huge monthly payments that cannot pay them anymore. And you know, they're not telling us they're turning keys in. I got a feeling they're turning keys in. And we grade them as they're turning keys in as well.

You're putting their $400 payment on top of their thousand dollars payment, Hub.

Thousand dollar payments going away.

Yeah, that's for sure. So with the negative equity and one thing I did at the end of last year was I bought a VSI policy on all of my buy here pay here accounts. Right. And I'm going to do that every month going forward, not only to help my tax burden, but also to put some money away for my buy here pay here accounts. And VSI is a vehicle single interest or vehicle something interest. I'm not really sure what the S stands for.

I'm not. Yeah, I'm not either. But our insurance is vehicle something insurance. Anyways. It's a product by Buckeye for. From Buckeye.

Yeah. It's a Buckeye product that is an insurance against your loan going bad. So say you have a skip, just completely gone car, which we all have. That is an insurance policy that's going to step in and help cover those types of incidents where the, where the loan just goes completely bad, goes south, disappears. There's no insurance money to recover. There's no, you know, other things to tap into. So that was the strategy. We did the Buckeye product that was presented to us, which actually helped a lot with my tax burden. Right?

Yeah.

Kicked it down the road. Yeah.

We had that same situation arise at the end of 2020. We had such great year because of COVID and other things. I was like, hey, Jason, I got a problem that I need solved. And luckily Buckeye was there to really help me out with my tax, my tax problem and actually give me a product that. That's really helped me too. Because we all lose cars and have other issues that go bad that we need to need some protection from.

Yeah, yeah, absolutely. And it helps to put a little bit away from every loan. Right. It's like that forced savings account that Forced insurance, like we talk about with so many things, even for our customers, it's nice to have that little bit of discipline every single month that adds up to help step in and cover some of those situations.

That's the service contracts are. I mean, they're not presented that way, but that's what they are.

Yeah. Luke, you're doing something unique too. You're picking up. You're going to grow your portfolio, take a little bit of a jump, right?

Yeah, we're going to. We're essentially growing our portfolio by 10% in one day. We're buying, we're buying some accounts. This is, this will probably be a recurring segment as to, to what to do or what not to do. And we, there were, we had an opportunity where a business that's been, that has been around a while had. The owner was getting older and he, he was done. So he, he shut down sales about two years ago and he's been collecting them out. And he'd gotten down when we first started talking down about a hundred accounts. And through tax season, he's gotten down to about. I think it's 75 accounts to look at just a second ago. And we're taking them all off his hands. And so we shall see. Our buddy, Steve Levine is helping on the attorney side of this for me and, and walking through on what to do and, and how to do it properly. The due diligence. Our friends at Pastime. I'm. I'm getting all the logins. You know, it's, it's going to be a lot of work over the next, over the next, maybe 15 days of getting the actual deal done installed into my dms. But it's going to teach us something. I don't know. I, I told our staff today in our managers meeting. There's, there's three, there's three options here. Yeah, we, we trade the customer. The customer pays off or it repo or it reposition.

Right.

That's the, that's the only three things. And the first thing we're going to do is try to trade every single customer. Okay. Because we feel like if we trade them into our cars, then they're, they're more our customers. And so if we can trade them, we can trade them. If not, they're going to keep paying. And if they don't pay us, they're going to repo. We're going to, we're going to use a bunch of marketing materials to reach out these customers to make them feel like they're part of the Godwin Family and man, I'm, I'm going to tell you what, within 30 days I'll tell you how this is going.

Yeah, I can definitely see the potential landmines of something like this. Right. I mean you're picking up a customer you don't really know that doesn't have a relationship with you, that doesn't know how you do business, your policies. You don't know if this other lender, you know, was, was just completely lax with everything and let them do whatever they want. You don't know the real quality of the car. So yeah, there's a lot of unknowns in these situations when you're kind of marrying this, this bride sight unseen for the most part.

Yeah, you know, it's one of those things. It's, it's a little scary, Jeff, while stepping into the unknown, but I think every time we, we expand business or do something that's different than what we've been doing is scary as can be. I don't have that filter. We've talked about it before. Some of these car dealers out here are just, they're cowboys and they just go at it and I respect the heck out of them. You know one of my favorite people in the car business, Steve Greg and, and we've discussed him before and he just, he has this ability to not worry about the negative, focus on the positive and off you go. So I'm trying to do that this time but it's, it's, it's getting difficult.

He doesn't have that pullback reflex, that, that self protection type reflex that some of us might have in those situations. Luke. So the, the we obviously know the potential upside. Right. You portfolio, hopefully you bought this thing at 50 or 60 cents on the dollar or something. So you've got the upside to the loan, the principal plus the interest. You're capturing a bunch of customers that could be great. Repeats referrals. So yeah, we all love to get there as quick as we can and some of us try to get through organically and maybe we have the money to get there but we just can't get the sales to make it happen. So that's a great way to leapfrog it. But any other potential downsides or structural issues of recommendations you'd give guys who are listening that might be thinking of this.

Yeah, it's not your portfolio which is the biggest pitfall. And so the way you've been collecting people is different than the way these people probably being collected. Right. So I think it's going to take some time to marry their concept to our concept. Hopefully it's seamless. It's not going to be. So I think you really need to, to, to take a breath, take your time. When it comes. You, you probably can't be too quick to repossess because we want to make sure we're really paying, we're really paying for customers. We want to make sure that we do our job properly. And that's communication. Communication. Communication.

Yeah. You're paying, you're paying for the acquisition. Definitely that lifetime value of that customer that may buy two, three, four cars from you.

Yeah. Because we all know that there's so many, there's so many folks out there that, that we, that we've kind of just. I don't, I don't know exactly how to say it, but what I'm saying is it, it's going to be hard, but we can't, we can't let the, what they're used to affect the way we do business and we can't let the way we affect business to make a bad account. Yeah, if we can understand it.

I can. I like what you said about trying to get the trade in because if you bought this at say 60 cents on the dollar, you can very easily bring these customers in and give them an amazing offer on their trade in. Right. Because you Already know your 60 cents back of what their payoff is. Just to get them out of that car and get them into your car. Now it's your policy, your paperwork, your underwriting, your vehicle, your everything. And you could take that car and then recon it and put it back out or sell it or whatever. But you're, yeah, you're grabbing that good customer and getting them restarted. So I could see you being able to be really aggressive on this trade in offer. That'd be a really cool idea.

Yeah, that's the first thing that went through my mind. So we are paying a certain percentage of the, of the portfolio. So we can look at their principal value and say, okay, the principal value is X. This is what they owe on the car. But it's actually why for us, because it's, it's whatever the percentage is that we're paying is the principal value is that as their trade in. So we have a lot of opportunity. We're going to bring them into our service department. We're going to give them a free oil change to get started to make sure everything's going on, introduce ourselves to everybody. We are going to at that point try to trade them. If we can't, we're going to keep collecting them. We're going to make sure they all have cpi. And if they don't have cpi, they're going to have it before they leave. And, and Jeff, we got to get them signed up on blitzpay.

Yeah.

Making sure they know what they're doing.

That's interesting. Those two points are both crucial because you don't know how this guy was really operating his insurance program. Right. Who knows what their coverage limits are and if they have excluded drivers and nonsense. But the mostly you can get them switched over to your CPI product, which is huge, and then get them onboarded into your Automatic payments with BlitzPay. Right. Which is really a seamless product. You guys know I switched over to Blitzpay recently was very, very easy. My customers adoption rate was so simple and we had so many comments from customers that were like, wow, that was really easy. It's, it's super simple to add new payments. It's super simple to get on and make my payment. It's like three clicks and you've got your bill paid. So, yeah, it's been super easy.

It's so funny. That was one of the things. He had sold some accounts to another, another bulk buyer out there. And, and he was complaining about the customers complaining to him about their ability to pay. He said it was a disaster. And that was one of the reasons he didn't want to go back with this company out of Florida was because he felt like they just weren't. It wasn't easy for his customers to pay. And, and he was getting recourse and all this. And he said, you know what, I just, I don't want to deal with that again. Yeah, well, let's. Pays to make it easy for me.

It's the same with me, man. I'll tell you what, if I go to pay a vendor and it's a headache and I got to jump through hoops or their portal is broken or something, I'm just like, fine, I ain't going to pay you. Send me another invoice, send me another bill. Maybe I'll pay that one. But if you guys do reach out to Blitzpay, make sure you're mentioning that the podcast sent you. You're going to get three months of the software and three months of the Cash network for free if you mentioned that the podcast sent you into them. So make sure you're mentioning that. Yeah, Luke, I want to get your opinion on a couple other things before we wrap up today. When we talk about those values and those car Values and tax time. I have not. I mean, I haven't seen a large, large spike in vehicle prices this time of year like we typically do. And I haven't checked the data for MMR retention, but I'm guessing it's not climbed as high as it has in years past. And I don't know if that's because of the economic conditions. You know, we read the article that, you know, vroom went out of business, and so they had to liquidate their inventory, which went fairly smoothly. I didn't see the cars at auction, so I don't know where they liquidated them, but I don't know if some of those supply demand dynamics are there. What are you seeing?

I saw a small uptick in MMR value. And the way I noticed this was. So I keep cars saved in my workbook if they don't sell, right? And. And I, I can't memorize a lot of things pretty quickly, so I can. I said, okay, this is what MMR is. This is what we're going to pay. And then this past week, the refresh, MMR jumped a good bit. And so it happened. It happened this week, sometime during this week. And so there's definitely been an uptick. But I think you're. I think you're correct. The uptick is not as much as we've seen in past tax season. The broom thing, there's not been a room sale on Manheim in, in months, so I think those were already gone. So I don't. I don't think anybody cares. One of the worst title issues I've ever had in my life was with. So I decided at some point I just wasn't dealing with room anymore. But anyway, what I think it says.

Is how quickly the market can absorb, you know, what a half million vehicles, right? Or whatever they had in inventory at the time. It's really kind of funny how we.

Freak out about a half million, but.

Yeah, yeah, yeah, a couple hundred thousand, so. But the same point is made with these Hertz evs, right? So they're selling all their Teslas and bolts and ionic fives and all these other things, right? What was really interesting is when they first hit the market, I was picking these things up in the upper teens, right? 100 with 80, 000 miles, right. Base model? Model three. 20, 22. 18 grand. Now those have all changed, man. I cannot find one sub 20 grand unless it's out of warranty, you know. Over a hundred thousand miles. Over 20,000 miles. It's really, really interesting how those have kind of flipped around, and now the market's flipped. I'm looking at these on the wholesale side, and I'm like, wait a minute, you want 20 grand for that? There's 15 of them listed online for 19 grand from all these guys that bottom up two months ago.

So I read. I read an article the other day about how EV demand is spiked over like 50% in the last 30 days. It was due to price drop. So it's. It's super interesting. I think you were afraid there were a couple of things, but when. When they just started flooding the market with these things, you're like, oh, my gosh, are we at the bottom? Can we keep buying? Are we going to get flooded? And all of a sudden it switched because EV demand went up so much. What you can buy for a Model Y for right now. Holy cow. And you want to talk about a great car? We drive one every day. That's. That's a great car. And they are dirt cheap. And I've seen one in the last two weeks.

You know, problem is, I still got to find them under 25 grand so I can do the EV tax credit. And I have a hard time finding a model Y under 25 grand right now.

Yeah, I doubt. I doubt that exists, but there's plenty of them under 40 grand and I've got customers for those, so.

Yeah, well, good for you, man. Not me. Speaking of Luke, are you going to be a buy here? Pay here United? I'm not sure. I haven't heard you say you were going to be there.

We're going to be there. You and I both. I've already booked my plane ticket. I have booked my rooms at the Bellagio. Super great deal. I think it's still available through Friday. Is that correct? And, you know, flights are what they are. 700. You can probably get there from about anywhere. And we're going to wrap up every session at the end of the day, go over the acronyms you didn't understand and answer any questions that you may have. And it won't be us answering. It'd be people in the audience. But we're just facilitating it. So I can't wait to see everybody there.

Yeah, it's a great time, guys, for these types of questions where you say, hey, someone like Jeff, right? I mean, I'm looking at the EV market every single day. I don't know why it's stupid, but it's an obsession of mine. So you can ask me these questions and I can give you my opinion of what I'VE seen, you don't have to go out and do all the research. Right. So same with Luke. You know, if you guys want to know how to buy some portfolios, buy a loan, buy a 80 or 90 accounts from a guy down the street, you can grab Luke and say, hey man, how did you do it? What should I look out for? Who did you talk to? What lawyers did you, did you get what accountants? How did you bookload these into your dms? It's just such a great opportunity to get some real tactical advice from dealers who have been there before. So definitely, definitely recommend you get signed up if you haven't already. Now is the time.

Now's the time we're going to be there. And I told some folks I'm gonna be out there on Monday if you want to hang out Monday. I think we're gonna drive some cars. We'll be at Neo's deal on Tuesday. And yeah, there's a lot to learn. There's a lot to learn. So let's go.

So, funny thing about Vegas too. I wanna, I wanna run this one past you as an idea and get your opinion some. Adrian, my number one here, my general manager, he is heading down tomorrow at 2 o' clock to pick up his cyber truck.

Dude, that's so awesome.

Yeah. So he's picking up his cybertruck. It's the foundation edition. Probably be like maybe the third or fourth one that we have here in town in the county. We've seen a couple rolling around.

I've not seen one. I'm so giddy. I hadn't seen one.

Yeah, so it's, I'm pretty excited because I think he's gonna let me drive it.

Oh yeah.

But what I want to ask you about is my idea is this. I partner with him, he's got it, he's. He's handling the purchase, doing his own thing. But is there a situation where you would see me as a buy here pay here dealer, Go to him and say, hey man, I will pay for the wrap. Let me wrap your Tesla with some four season logoed stuff, make it look cool. Because everyone knows these cyber trucks have to be wrapped. The stainless steel just is a headache. And I will get some advertising and I'm gonna pay you monthly, some fee for you to drive this around, park it at the car lot, have it as an attraction, take it to the car shows and that'll be bang for buck for my advertising dollar.

I don't think there's any bang for your buck for that advertising dollar.

Really?

I don't think so.

You don't think it's a spectacle? You don't think it's a scene?

It's, it's going to be a spectacle and a scene for a month? If there's that many art in your town, I, I don't think it's worth the amount that a wrap cost. And if you're going to pay a monthly fee, I, I just don't see where it's worth it. What I do think is worth is parking it on your lot. You know what, what's so great about your lot? Great visibility from the interstate. So stupid amounts of people will see it. I mean, stupid amounts. And you already sell evs there. So what happens is they come in to see the cyber truck and you try to sell them an ev. But I don't think driving it around is going to be that much of a benefit.

Interesting. So, so yeah, my philosophy is that is, it is a, it is an attraction and it will be for the next three to six months, right? Until kind of everyone's seen one, everyone's touched one. Obviously. Just like with any dealership that goes out and buys a monster truck or a lifted Hummer or a stretch limo or some other kind of monstrosity that they want to put their name on and get attention, you know, that kind of happens. We do that all the time. Right. What do you, you have like a rollback and you threaten people to come pick up their car or something?

I don't.

What do you take to the car show?

Nothing. I, I just, I, I don't know if that really brings people in. I haven't seen one yet. I haven't. And I would stop at your lot to look at that thing, I guarantee it. But I would, I don't know, that'd be a buy here, pay your buyer this one.

That would be one catch. Yeah. So my brother in law, he's taking delivery of his in Florida and he says he cannot leave a parking lot without people stopping him. And it's mostly kids dragging their parents up to it. He says he has neighbors stop and knock on his door to check it out. So it is a spectacle and will be for a minute. And I understand maybe it sends the wrong message as a buy here, pay here dealer. Right. This is not a car that's obtainable for you. And maybe a little offensive that we have it here. I don't know. So I do worry about that part. But, but I think for the three to six months where it's a real draw, could Be a pretty cool thing.

I, you know, I, I really want to see one. I'm so geeked. I have one on order, but I'm, I'm way down the list. You have one on order?

No, no, I did not. Nuh. I'm just going to beg him to let me drive his and get it out of my system.

What's your overall, what's your overall thoughts, people probably turn the podcast off by now, but what is your overall thoughts of the situation we got here?

You know, it's probably like any unique or cool car. I think there's definitely some novelty to it. The price point probably wears off pretty quickly. You know, for me, it's kind of a utility to price thing. I don't really geek out over really expensive cars. You know, like, I'm not going to get a lot of excitement out of driving a 69, you know, Chevelle convertible. Right. Like, it'll be exciting for me for like two weeks and then I'll get bored with it. I have just as much fun in an $18,000 Tesla Model 3 that I drive to and from work as I would, you know, an $80,000 brand new one.

So I'm a, I, you know, I, I love cars and what I found that I, I don't love cars as much as I thought I do. And it's, you know, it's, it's fun to have flashy cars, it's fun to drive fast cars, but I only want them for a short period because I get bored with them really quickly. Yeah. So I like just to drive a car off the lot because it's, I can switch them easy. So I always buy something that we normally sell, which I've gone back to that I'll buy something that we can sell and to me that, that gets, keeps it fresh and people don't look at me like, oh, look at him, he's driving, you know, $100,000 car. Because I don't, I mean, is it fun to drive a really fast Porsche? Yeah. But where I can only go 85 miles an hour on the interstate. I, I can't really go any faster. What the heck.

Yeah, we definitely have different levels though. No, I, I do not appreciate driving home the $5,000 Ford Focus kind of be on that.

I will not drive.

Yeah. So I do buy things that are outside of our norm. You know, we keep four or five nicer twenty to fifty thousand dollar cars or maybe a couple Teslas because yes, I like to drive those and I enjoy that. I don't want to cruise around in a Ford Taurus, you know.

No, I get that.

Not my stick. What I do see this doing though, and just to wrap this up with one more point, I wanted to mention our consignment program here is picked up. Well, we're pretty aggressive on the Internet. We've got, you know, our Utah car buyer website where we buy cars off the street, street. But we also do consignment program here. So I have a kind of a little stack of forms. We bring people's cars in and we set them up on consignment because I have some space, right. I'm not really bursting at the seams. And we've actually done quite a few, you know, I think we maybe did four or five this month. We've got a couple and there's some unique cars. You know, it's typically something that we wouldn't carry. Like I said, I'm not consigning the, the $5,000 Ford Focus. You know, they're Teslas and NVS and Land Rovers and nicer cars that we're hoping bring in traffic but also bringing a good trade in. Right. We can facilitate that transaction. We make a couple bucks selling it. Hopefully we make a couple bucks on the loan or selling some back end products. So do you see any downside to having a strong consignment program?

Well, one I would see how my insurance policy thinks of consignment cars on your property. That would be, you know, I would make sure the liability of if something happened that car would stay with the consumer that owns the car. I don't know how to do that, but I think that's a, that's a downside. I don't like when people get mixed up and so like on your lot, if they walk up and they see this, this car you have on assignment, well, can I, can I buy here, pay here that car and you go, well no, it's on consignment. Well then they're confused. And so then we, then we have to overcome that obstacle when we're selling to about here, pay here customer. I, I think it's a good business model for retail, for retail dealers if they have it set up properly. I don't know how much money you make on a consignment. I don't know what it's. Consignments are illegal in South Carolina so you can't do them. So it goes way back anyway. But it's, you technically can't do them. And so I just don't know I, I, if it's on my lot, I wanted to be able to be financed. And that's kind of the way I look at it.

Well, here's the thing. So my rebuttals to that would be yes, the customer keeps their insurance. It's titled in their name. They keep their liability insurance because yes, if my car lot gets wiped out by a hailstorm, my insurance will not cover their car, it's owned by them. So I'm very explicit. You keep your insurance. They sign the document that says they're going to keep it. Obviously when it's on a test drive, the person driving its insurance would be the first one to step in and then the owner of the car would be the next one to step in. The other side to that about not being able to finance it, guess what? I tell that to my customers every single day. Yes, I know you walked in here looking at that 15,000 Dodge Ram. Let me find out what I can get you approved for first. It might be my thirty thousand dollar wrangler that's sitting out on the point. I don't know yet buddy, but for sure. So my guys are very, we always train them to not talk about the car. So it doesn't matter if they got to step around a consignment to get to the 05 Ford Focus because that's what the customer got approved for. So I don't see that as as much of a headache. The only headache I really see is yes, the 05 Ford Focus looks like an even bigger dump sitting next to the 2:20, 24, you know, charger.

What's, what's the profit do you make on a consignment? I, I'm asking because I don't know.

It'S none of your business. Typically, you know, our policy is we just say, hey, we charge the buyer a thousand dollars. So if a seller comes to me and says, hey, I got a Tesla, I want to get 20 grand out of it, I say, gray, we're going to put it out on the market for 21 and we'll charge the seller $1,000. You'll still get your 20. Cool, cool. Obviously we have some back end products that we hopefully sell. You know, maybe we get some points from the bank if we do the financing and hopefully we get a really good trade in.

Yeah, I mean if you get trade ins, there's, there's good options there I, to me a spraying damage. So, but you know, you do what you, you do, you, you do you.

My brain's already damaged, man. So I'm good. Guys, thank you for suffering through this very long rant of a podcast. I know we went off on some great tangents here, so hopefully we brought you guys value and something good that you can take and put into your dealership today. Luke, you good?

I'm good, man. I'll see you next week. Thank you for listening. Please leave us a review. We'll catch you in the next episode.