#328 - Dealer Panel Day One BHPH United 2024

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 by Buckeye Dealership Consulting. Tax season's over. We've been going like chickens with our.

Heads cut off all over the place.

Time to take a vacation. Luke, you're heading out of town? Where are you going?

Yeah, yeah, we've had a international student with us for 10 months, so we're heading to Spain to take her home. And so a little break from, from the monotony of being a car dealer for, for the first quarter and a half of the year is much needed vacation. I'm sure everybody out there understands that.

Yeah, yeah. I'm heading out this week to go do a week long cruise Eastern Caribbean with the family. So pretty excited to take some personal time, go have some fun, unwind, come back even more excited to be in your dealership. So this week we're going to bring you a recording from Buy Here, Pay Here, United that we were at a couple months, a month and a half ago down in Vegas. This was our dealer led roundup session.

Or wrap up session you could call.

It, where Luke and I hosted and we answered questions from dealers. Right.

What else did we cover?

Luke?

Yeah, you know, it's, it's, it's kind of the, the wrap up of the day is kind of bringing all the things that you learn in those sessions back to the forefront and getting questions answered that you maybe had during those, you know, those sessions. So a lot of good information here, a lot of things to talk about.

We talk about AI a lot.

I know it's on the, on the forefront of it, of everybody's mind, but there's all, all kind of good information. Talk about finding, you know, money and, and things like this, but make sure that you check this out and, and then when you do go to convention, which there's one coming up very soon, an IDA convention in June, about two weeks, write those questions down and go ask people, go ask other dealers, ask vendors, ask people in the know. Because if you go there and you don't get these answers, then you really have not done anything. It kind of keeps you in the dark. You don't know that.

Yeah, the other great thing is when we're there, you're able to interact with the vendors and of course this is a great time when you're at convention, talk to the guys at Buckeye, discuss your reinsurance plans, how you're making back end profit, how you can increase your CPI coverage. And also, you know, we chatted with the people at blitzpay and we talked about their cash network coming out. We talked about, you know, some of the ways that we can increase our auto pay penetration, get people moved over. So going to convention, having your questions answered by dealers and vendors is, is just. It's the best way to really tweak the things in your dealership that need to be tweaked. Right?

Yeah. And, and one of the good things about the NIADA convention coming up is that pretty much every vendor will be there, so you can really get a lot of questions asked and you need to support your association. So please get out there if you have time, make that your vacation. If you're not able to take other vacations and, you know, learn from other dealers and, and learn from the people that, that are experts in our industry.

Cool.

Well, here goes. I guess we're just going to have the same outfits on, huh?

It's okay. Nobody cares.

Hello and welcome to the Independent Dealer Podcast brought to you by Buckeye Dealership Consulting. Luke and I are still on vacation, so we are bringing you another session from Buy Here, pay here, United 2024 happened down in Las Vegas just not too long ago. So if you weren't there, you do have this opportunity to hear a session that Luke participated in, right?

Yeah.

It was led by our friend Russell Moore from Conroe, Texas, and it's about purchasing accounts. And now everybody out there may not. That may not interest you, but what we found during that session was a lot of people who sell accounts are also sitting in that purchase session and they were trying to understand the mentality of someone like me. Purchasing accounts or Russell purchasing accounts. Interesting topics. I come in on the. On the latter half of it, you know, and talk about my purchase that we just made, you know, less than two months ago. And by the way, Jeff, it's performing at about what I thought it would perform at, even during a hard month like May, that's hard to collect. I'm sure everybody out there sees that it's. It's really doing well. So hopefully this is something that we look forward to doing more in the future.

Cool. Yeah. Again, this episode brought to you by Buckeye Dealership Consulting, as always, and Blitzpay, our good friends up there at blitzpay. So if you need help processing your credit cards, you. You're buying a portfolio or selling a portfolio. Getting those customers integrated into your automatic payment system is crucial. And like Luke's done, getting them integrated into his CPI System his product. And so those are two avenues of integrating a new portfolio into your current portfolio. Say you're buying a competitor or you're buying some notes from some other finance company. Having the ease of getting those people into your systems is super crucial. And of course, Buckeye and Blitzpay do it.

Excellent.

So hope you enjoy the episode. Here it goes.

All right, so this is a dealer led open forum and the idea is to go over whatever you have questions on today. And if there's something you didn't have answered today, you need to ask Jeff, how are we going to go about?

So the best way to get your question answered is to go into the Summit app. You guys have the app go to this session, submit your questions through the app. We're going to answer those and we're also going to take some directly from the crowd. So if you have a question, bring your hand up. Luke and I will come down into the audience, we'll bring you a mic, you'll ask your question. Now, the way this is going to work best, everyone, is we have a panel of experts up here, right? And Luke and I, we always say on the podcast we don't know everything, but we do know someone who does know. So we're going to rely on you guys from the audience to answer these questions as well. Because I guarantee you, if you have a pain point or you have a problem in your dealership, somebody in this room has experienced it, someone's overcome it, someone's figured it out. So if you do hear a question that you are qualified to answer on, raise your hand. We're going to bring you the mic. This is all about dealers teaching dealers, right? That's kind of our whole entire shtick is we are the experts. We've done it. We can help each other get through this. So let's start with some quick intros.

Yeah, we're going to do just very quickly. And they're just going to say name, where they're from, how long they've been in business and their favorite color.

Maybe.

Okay.

Tommy. Tommy Brandis, Quakertown, Pennsylvania. Been in business since 1992. Favorite color is purple.

Purple.

Well, you fit in with the group.

Americana, Harlow, A and d motors. Arab, Alabama. Been in business for 28 years. My favorite color is green. It's the color of money.

Very nice.

Allen White. Been in business 20 years. Henderson, North Carolina. Carolina blue. Carolina blue.

Go Romero. Been in business 15 years out of Gainesville, Florida. And favorite color is Bandera black.

What?

Where is it? There's a difference.

Very Specific, like I like it, I like it. And I'm trying to copy Govinda's hair and I'm getting, I'm getting jokes about it for some reason.

Always will.

Always, always will. All right, what we got, Jeff?

So as you guys think about your questions, we're going to take some questions from the app, we'll take some questions from the audience. So be thinking of what your questions are if there's anything you feel was left unanswered from one of the great education sessions that we had earlier. So the first one I'm going to ask is self serving. This is my question that I put in the app. So I'm going to ask this of the panel. If you guys feel like you have cracked this code or figured this thing out or if anyone in the audience has some suggestions for me, I would love to hear it. So my main concern is kind of in the age of online payments.

You.

Know, even cash payments are not being taken to my office bank. Very soon. I'm going to switch to that completely. What are you guys doing to make sure you keep contact with your customers and keep that kind of raving fan? Right? That's what we all talk about. We want someone that's gonna tell their friends, they come in, they chat with you and back in the day that used to be the case, right. My customers would come in, they make their payment on time, they'd spin a little wheel and they'd win something silly. We'd have our customer appreciation barbecues. We did these things to kind of keep top of mind. What are you guys doing? Do you have any suggestions for me?

Who wants to take it? I know somebody wants to talk.

Is this for the customers are they're paying on time and we don't speak with them?

I, yeah, my on time customers are hopefully the best ones. But what I want is I want them to stay in contact with me so that they will refer, refer their friends and family. Right. I want to keep that face to face base bond with them.

So I would say for me, I just, we're texting all the time, we're doing Facebook lives. Anything that we can do, I may randomly just pick up the telephone, honestly and just call some of my customers. Hey, you know, if I see them posted on Facebook, I'm constantly, constantly just messaging them.

Things like that go vendor.

What we do is the salespeople.

We.

Run a report for the following week whose birthday is going to be there and we'll go to supermarket and buy a few, a few cakes, small cakes, and then we call them and tell them, hey, can you swing by and pick up your birthday cake? We have a cake for you here. And then we sing a happy birthday for them. So every week, you know, there's, I don't know how many customers, but a.

Lot of them don't show up.

So you're not. But just the fact that you called them, left on that message and told them, I have a birthday cake, they make somebody happy. And we had people cry.

I love it. It's a cool idea. That's really neat.

Anyone from the audience have an idea along those lines? Anything you're doing unique or different to keep customer happiness retention.

Say it loud. So Seth said that you do a monthly raffle, Smart TV or something for. For all your customers or just the people who paid on time? On time. Okay, I like the idea a lot. That's pretty interesting, Jeff. I pose, though, does that really matter anymore? People are so busy. Do they really want to come to your office all the time? Back in the day, I think part of what buy here, pay here, a lot of the things we did was we wanted people in our office so we could see the car and we could do this and do that, but we really don't have to do that anymore. Is there a different opinion that do we need to do that? Anybody want to take the opposite side?

I guess not.

Moving on.

Oh, we got one over here. Jeff, how fast can you run?

I'm not going to make it there.

No, you see it way over there. I can sing if you want me to.

Not really restate the question.

So we know what we're answering here.

So does it really matter? Does that face to face with your customer matter anymore? In our business? And you say yes, and we've heard some really good ideas of how to do it. Does it matter?

I definitely think it matters. I think the big thing that I think we as owners, operators, managers, whatever.

It happens to be, we forget a.

Lot that we're not our customer.

So you might be too busy to go to the bank, withdraw the cash.

Take it into auto express to make your payment.

But sometimes that's all they got going on that day. That's all they got going on that week.

And seeing Matt's smiling face when they.

Come in and give him a high.

Five, that might be all they got.

You know, they don't have, you know, kids that they can afford to have and five different sporting events, and they.

Gotta drive back and forth across town sometimes.

That's all they got. We got a lot of customers that.

Come in and we're really all they have.

Yeah, that's, that's super interesting. I, I do see that. And I was going to argue the, the opposite for no reason. Jeff, you got a hand up behind you. I really, I really think it is important in our business because that's really what differentiates us from Cap 1 or Santander is that we know our customers by name and we're able to. Or our collectors know them by name and face and they're able to make that connection.

I was just wondering if there was anybody in the room or on the panel that have ever offered customers any debt consolidation counseling or any budget counseling as an incentive for our customers.

So, Jeff, I can't hear very well up here. So is anybody offering debt consolidation?

Yes.

Is anyone offering the Dave Ramsey course at their dealership?

Dave Ramsey, you said that's not what he said. No, no, no.

Debt counseling, debt consolidation, budget counseling. Yeah. Like, has anyone beat their head against the wall?

Has anybody tried that up here?

Not professionally.

Not professionally. That, that's funny. Not professionally. Now what we've done, we've actually, we've actually done this. Not us, but there is a, there's a non profit in our town called the Cooperative Ministry and they're just right down the street from us and they actually have on staff a debt management professional. And so what we tried to do and it did not work all that well, but what we tried to do, people who were continually behind, we got them signed up on these free courses and talked them through it. Some of them went, some of them did. And we tried to, even if you were getting to redeem your repo to send them there, didn't work.

Jeff, he likes to talk.

So I'm going to keep, I'm going to keep him on track.

Okay.

We have a question in the app. It said, I would love to hear about talking on debt or fundraising with investors to increase capital or to get funds for Buy here Pay here. They currently have no debt. They are funding all their Buy here pay here through cash and retail sales. Things are tight. What have you done? Let's ask the panel if anyone up there has raised debt to fund Buy here Pay Here. What would be some good advice for a dealer who is currently debt free and looking to grow their portfolio?

Is this specific to private investors or banks in general?

We can probably both. Okay, what's your experience?

Who wants to start out?

Thank you.

I would say one of the things that. So I'm with a larger lender who's who's pulled back in the industry like a lot of the larger lenders. But I was able to get my loan renewed for another three years recently after being told that I wasn't going to get it renewed after I understood why they were pulling back. And they use the term full wallet. And a full wallet customer is a customer that takes multiple products from the bank. So if you think about a lender like Texas Capital or Wells Preferred or BMO or any of the larger First Nationals, and I think this translates even further down the chain, when you get to your smaller banks in your community, you need to go in and the conversation you need to be having is around the full wallet, which means what else can you bring to the bank? You know, if all you're doing is going in there and talking about, I need to borrow 500,000, I need to borrow a million, I've got this tranche of business that I can give you. I think you're going to, in today's environment, going to get a no. You need to be talking about bringing your checking accounts. You need to be talking about bringing your business credit card accounts. You need to be considering merchant services. And I know merchant services is tied in, tied into your DMS and all, but at least have those conversations with them. I was able to get my, my deal renewed because I was able to check five boxes and even one of the boxes was an interest rate swap. It's kind of out of the picture of what we talk about here a lot of times, but once I was able to become a full wallet customer, I was able to get my line of credit, which is a large line of credit, renewed. And I think that translates pretty well even when you're going into these community banks or small banks that you may be dealing with.

That's really, really spot on. We had a podcast about this a week or so ago, and that was one of the major, major points was you got to take that business to that bank because they will return a favor. Anybody else have anything to add to that?

Well, I want to know about private investors. Has anyone in this room gone to retail type investors? Private, you know, the guy down the.

Street or your aunt or your uncle or whomever that you tried to raise some money from. We got, we got some hands up over there. Jackson.

Yeah, I would love to know the insight on how you approach that, because so much when you go out to get private money, all they hear is, oh, hard money loan. Okay. You know, and I'm not 50%. How do you present that to someone where it's an investment. You're investing in the buy here, pay here, I can give you a healthy return as opposed to I need your shark money, you know, because I'm desperate.

So what I did. The first person I spoke to regarding raising capital was my accountant. And she was able to see my cash flow. She was able to see my profit and loss on my balance sheet. And that was the first person who trusted us and gave us money at a very low rate at 7%. And this was within the past 12 months. After that, I went to my best friend, and she also gave me money at 7%. But because she sees that we've been growing, she sees that most of the time or in the past years, we've been traveling a lot and having quality of life. And basically the businesses have been supporting us. And now with JP who is our cfo, we are approaching a group of investors from Catalog University. And the ticket is going to be 100,000 per investor, and we're trying to raise 3 million. And what we did is we show them our portfolio, our projections and their return, and that's where we're at right now.

I love that. Going to your CPA or your accountant who knows everything. And a lot of times your CPA and your accountants know people with a lot of money, right, that. That need to get it to work.

That's a good point, Luke. Knowing people was a lot of money, right? Your network is your net worth. And unfortunately, guys like me who come up through the used car industry, I don't have a. I don't have a club account. I'm not at the local, you know, golf course like Luke is, you know, clubs next to millionaires. But. But as you grow your network and you have those conversations with the people around you, you know, whether it's a social club, a religious club, a golf club, you start putting those feelers out there, that money will find you. Because as buy here, pay here, we can pay an attractive interest rate, right? We. We do. We do. Okay. And. And we can give people something that can beat the market.

Is that.

Dan.

There'S an organization called the Angel Capital Network. Just Google it and it'll give you groups of accredited investors in a neighborhood.

Near you for whatever it's worth.

And, you know, these are sophisticated, accredited.

Private investors who, you know, are generally making investments in high risk, I call it. They don't see. They see big returns, but not returns.

On everything they make.

So. So they're accustomed to risk, and they're good with that. But again, Google Angel Capital Network. You'll see all the angel groups that are in the country and you can find one near you and engage in a conversation.

That is great advice. We've got one more over here.

One of the things that I did in particular was contact the sba. The reason why is because I'm the actual owner of the business. And when you're female minority, they actually have money to give to you at a low interest rate. So that's where I got my funds.

Did. Did they do it as a buy here, pay here? Did they know that's. Or were you doing a purchase of a car lot or a purchase of your flooring line?

I just asked them for a line of credit. As a female in business, I would.

Say don't use the word buy here, pay here. When you go talk to them.

It didn't make a difference.

They were more.

They were more interested in seeing that I was a female minority and they went off of my P and L and based off of that, they gave me my line of credit.

Yeah, that's great, great advice. And then I would say to piggyback on that is when you do find these private investors or these groups, run these contracts past the network of professionals here, right. Steve Levine, JP and those guys, you know, make sure they're not presenting you with a contract that is completely one side thinking that you don't know any better. So questions for the group? We have one here. Okay. Stand up. This time we want everyone to be able to see you, if that's okay.

I'm glad Jeff can run. I can't run anymore.

Question for the entire panel. If you can go back to back in time to the beginning of when.

You started your business, what advice would.

You give your younger self? Either do earlier or don't do ever.

That's. That's always a good question. Let's start with Tommy.

I think. I think mine would be, instead of opening the second location, I would have opened a service center and learned service. 32 years, I do still do not have a service center.

Mine would probably be to start reinsurance a whole lot sooner.

Amen.

Cpi.

For me.

That was going to be mine. So I'm going to come up with another one on the fly right quick. Absolutely. I'd do it again and I would probably grow with a little less debt.

That's always smart, always work.

I probably would have had maybe two mentors of somebody have very successful and, you know, paid them or see if you can get it for free or whatever the case is and just have hold your hand for at least the first 24 months from you starting. I think he'll help you accelerate much quickly, not lose as much money, not do a lot of trial and error and will save you a lot of time and money. And whatever it takes you 10 years to get with two good mentors there, you can do it in four or five years.

There's a lot of great mentors in this room. And if you are here and you're new, find one of these guys who've been in the business for a long time. And if you don't know who they are, ask around. Somebody will tell you and they'll point you in the right direction because there are dealers here that have forgotten more than I know. And I think I know a lot.

Yeah.

And that's again, the plug. If anyone was at Steve Jordan's session earlier this afternoon, he had four great panelists and it was similar. You know, biggest mistakes or smartest decisions they made. And so many said, start my reinsurance earlier. Start my CPI earlier. Join a 20 group. The recon. You know, having your own service center was kind of in and out. You know, Eric said something really great. Take care of yourself. He wished, you know, taking care of yourself mentally, physically, you know, dealers, we were burning the candles at both ends, right? That's what we do. We have all the answers.

We.

We can do it all. We're there 12 hours a day. Make sure you're taking care of yourself. So that was a great one.

What else you got?

Anyone from the audience have an answer to that question? Because this is where we get the wisdom from. Things you wish you would have done 10 years ago.

Okay, moving on.

Someone's got a good answer to that.

I know they do. They just don't want to speak up. If you have a good answer, you can send it through the app as well.

We'll.

We'll say it out loud if you're too shout. Okay.

Any other questions for the group?

We're not going to let you out here earlier, so bring the questions.

Yep. Just wondering, what's the ACV and what CPI premium do y' all charge?

We.

We really wanted to stay away from that because it's such.

A.

I think we're going to stay away from that question.

I'm sorry.

Are we going to stay away from that?

Luke's crushed it. Your ACV and the CPI you charge. We could run through it real quick.

You think so? Okay. Yeah.

I mean, your reinsurance company will tell you based on the math. There is a Certain set. But I'm guessing we're going to be 130amonth. 130amonth. 130amonth.

130Amonth.

Your CPI, what's your. I just, I don't. There's no need for that.

That's my mom.

Great. Do we have any other questions that Luke will shoot down from the audience? We have one back here.

I'm really sorry about that. It's one of those pet peeves of mine. What's your acv? I don't care what your ACV is, honestly.

Hey, real quick, I have two questions.

First one, it seems like every time I talk financials with people or whatnot they have, they normally seems like dealers care about certain things. You get 10 dealers together, they all care about 10 different things. I'm curious, what is the KPI that you're most concerned about? Second of all, on the birthday cake.

Thing, does that work for repost?

That's funny. Yes, of course.

Here's your cake and you're walking home.

So that is actually. That is actually something that's super, super important. Key performance indicators. And if you go around this room, there's probably a hundred different answers. So let's start on the panel. What is the key performance indicator?

I think there's a big echo.

Big echo. It's hard to hear up there. That's the reason I came down here. So I'm gonna walk back up there. You're good. Okay. Key performance indicators. Start here. The one, the one that you care about the most. Cash collected. Cash collected.

Mike.

Delinquency.

Delinquency. And. And you're looking at one day, one dollar. I'm sorry, one day, one dollar. Delinquency. Okay.

Delinquency.

Delinquency.

I mean, I would say charge off, but maybe another one that I like. I guess one charge off, then charge off.

Okay. And really that's all collections, right? What we just discussed is all collections. Who has something in the audience that's a key performance indicator. That is not all collection. We are all buy here, pay here. So I do understand. Is there something other than what they pointed out that's a key performance indicator that, that goes along with collections? Not everybody raise your hand at once.

The other one's going to say in underwriting is, you know, however you grade your customer, how many high grade customers are you putting on the books? You know, because you know those are going to perform much better.

Key performance indicator is net income. And I'm always surprised how many dealers cannot produce a financial statement.

I 100% agree. A lot of people don't understand how to read financial statements and they need to develop that skill. Net profit is a great keeper. It's great KPI, but you got to know the other things before then. So what is something that you, that you look at? Jeff, Jeff, walk back. What is what, what leads you to that debt income?

Well, all these other numbers they said are key performance indicators that you're looking at. And as long as you're not playing games on a Gap financials, that will tell you whether or not or not you're really cash flowing and profitable. What most dealers don't even realize is if you're running at a 30% net charge off ratio, but you use a 10% reserve rate, you're fooling yourself. You're, you're probably losing a lot of money that you don't even understand.

Be real.

Know the number.

Know what your net charge offs are and that's your reserve rate. That's your Cecil. So when I, I'm a gap expert by the way, and that's what I've been doing my whole life. So net income tells you whether or.

Not that is your scorecard.

Either you're doing well as long as you're using the right numbers and not pretending. And that's. But my, my pet peeve in the industry having been a commercial lender in the space is nobody can produce a financial.

You don't even know what the scorecard is.

You're measuring one thing or you're looking at delinquency, but you have no idea. Are your expenses out of control? Because you could, you couldn't be collecting the cash. You can be having net charge offs low, but your expenses are out of control and you're still losing money.

That is your scorecard.

I was, I was that dealer not long ago where my, my KPIs were perfect. But my expenses got out of whack. And that is very, very smart to deal with expenses.

Who knows their collateral recovery rate? You guys all track your collateral recovery rate, right? If, if you don't, what happens if your collateral recovery rate is lower than your cash in deal, you're going out of business. That's what he said. So get those two numbers. Collateral recovery rate, cash in deal. Do that ratio. If that's a negative, it's probably.

Unless you have, unless you are very good at cpi.

We're putting CPI in a different basket.

Okay, where were we at?

Where did I see you at?

Awesome. I guess I have a question in regards to Financials, we have a pretty decent sized operation, pretty good at moving inventory. However, when it comes to being able to track every little expense, it's always been a huge pet peeve. You watch Shark Tank, you watch all these shows and they say, know your numbers. For me it's just almost.

It'S a.

Full time job trying to keep track of those. And if you outsource that to or even somebody in house, what I found is I'm a control guy, I want to know every last metric. And so if I pay somebody to do it, they might account for something wrong. And then on top of it I have a, I don't know how, how.

Everybody else does theirs.

But for instance, this might be a write off. And how do I track those personal business expenses versus the business itself? And maybe what systems are you guys using? Are you paying accountants? How are you accounting for, you know, $3,000 a month in gas on 30, 40, 60 different cars and keeping everything in track? What, what tools are out there to.

Be able to do that?

Did y' all hear the question? Okay, can you simplify that question, Jeff?

As I'm going to summarize for Tyler, what I heard so he said, if you guys can hear me, was what are you using to track expenses.

And.

Are you using someone internally as a controller to track those? Any systems or advice around tracking your expenses?

I'll start with that. We use just general expenses. We use. We switched all our credit cards to ramp. And Ramp is a credit card that allows you to instantly take receipts and then take a photo of them and it pushes it through QuickBooks, organizes them for you, allows you to shut people off instantly if they don't do a credit card receipt, that really helped from an internal control perspective on people going to the gas station. And to charge me in $36 instead of $33.18 because there was two drinks on there or something like that at the end of the month. When our CFO puts together our financial reports, we it specifically highlights the variance. So it's month over month variance and then year over year variance. So you know, if I see a, anything more than a two and a half percent spread there on something like gas, and you know, gas would be an easy example because you can mentally kind of think back to what gas was then. But then the third one is, you know, being involved in the 20 group because, you know, I can look at my stuff and look at variations between the two. But getting away, going to a 20 group and then benchmarking yourself with other dealers, that Are similar in size, really helps you shine a spotlight on. Wow, I really am off in this specific area like data processing or merchant services or some of these really, really large items that you just think, well, I can't do anything about those. So being part of a 20 group really helps shine a spotlight on those specific issues. And then also gives you an immediate access to someone that can tell you what they're doing and you can immediately fix it.

Yeah, for sure. That's how I found out my expense problem.

We have a question from the audience that I want to hear the audience's input on. Any experience with hiring an outside collection agency versus doing collections in. In house, which I think is what most of us probably do in house collections. Is anyone successfully outsourced their collections?

I'll take that one too then.

Okay, well let's. We're going to let somebody from the audience go first and then because I know several people in here have it, so I may have to call on people.

Yeah, we run 10 locations, about 8,000 accounts. And we, we found Lewis, who's here. So you might want to ask this guy, he ran a company, a servicing company that started from zero to six billion in five years. Assets under management. So he collected on that. We found that he understands buy here, pay here well. And he helped us reduce the losses by about 20% within four months. We were not expecting that level of commitment to. To us. So you might want to ask that guy there.

Who are you pointing at?

Lewis.

Raising Lewis. Lewis is right here.

Lewis got a plug. Lewis is going to collect your money. He looks like the kind of guy that will break your kneecaps if you don't.

Louis Soprano, Alan.

So during pre Covid, we had 12 collectors all in the same room, call center type, set up in the middle of COVID We sent everybody home, made the decision to start bringing in outsourcing. Right now we're 50 50. So we have. Through attrition, we've worked our way down to 5 US based for Mexico based collectors. We've had a very positive experience with outsourcing. We found a sourcing or a staffing agency down there that also collects for Westlake credit acceptance, some of these other really large buy here, pay here style accounts. And so when I'm. When I say I need a new collector, they'll send me 10 applications. They know more about CPI than anybody that I can bring in. They know more about how the warranty works. They know it's been a very positive process. The idea that, you know, you're Going to hire somebody in another country that doesn't have any experience? No, that's not what this is. I mean, you know, if you're going out there looking for outsourcing, you're really finding the talent that you're looking for here. It just happens to. To be in another country.

And I do know that. Mike, didn't you just do this?

Mike?

Not Mike. Anyway, Mr. Anderson, I'll say that about that. You just started doing it, right? Jeff, can you head back? And you're in the Philippines, right? Not. You're not in the Philippines?

No, I'm here today.

I'm here today, gone tomorrow. Yeah, we just started with outsourcing on both the lead development and collections, and.

We'Re three weeks into it.

So it's young, but it's already changed.

The atmosphere in our office. We're a pretty small company, about 700.

Accounts and family was doing a lot.

Of the collecting and that stuff went home with us and we talk about it.

And you don't have a very good date night when you're discussing delinquencies and in the future.

And then she buys you. That jacket is punishment.

That was funny, Jeff.

I let my wife shop for me once.

That shirt that shows your guns. So there was another question that we'll kind of modify it a little bit. Jeff, there's been a lot of discussion about having everything kind of online approvals, online shopping before they get to the dealership. I know everybody's doing it, but what is the overall feeling? What's good, what's bad when it comes to starting everybody online and finishing online? Guys, let's. Alan, we're gonna not let you start this time.

We're gonna let go.

Mendes, repeat the question. The process of application, online approval and selecting car before they get to the dealership. What's good, what's bad about this in your dealership?

I mean, different customers are in a different stage of buying, right? Some haven't chosen their car yet. They're kind of an idea. So we gotta. We assess first. We're in the funnel. Is the customer in the process of buying that vehicle? Meet them at that stage of it and then, you know, get them, get.

Them in the store.

Or if someone's a little further away and they don't want to drive here or pre qualifying before they come, you know, make it a good experience that when they come, it's a much fast track path to get them. Get them in a vehicle. Sometimes they come from far. You don't pre qualify them a little bit. They get mad but you may don't drive all the way there to deny them.

I think I've finally gotten to the point where I'm okay with approving an application online. It's been a while but as for picking out a car ahead of time, now I think I'm at the point I'll prove the application bring in and we'll discuss the car.

Jennifer.

We do actually do the online approvals. Usually we have a list of cars and they can come in and just shop from whichever one you know that they qualify for. But we will go ahead and pre approval.

Alec.

We want you to come in. We want you to come in. We want to talk to you. We, we sell enough cars that way we feel like we get a better customer. Customer. That being said, I do believe that two, three, four years down the road, it's a must. So we spend a lot of time collecting data. You know, we score everybody. We scan in every poi por, we run credit reports through our scoring system so we're collecting as many data points as possible and have been for the last five years in our scoring model so that we can perfect our scoring model to eventually get to the point where we can do a full online credit report. But at this point I think that the scoring models are, I kind of view them as, as sort of like buy your payer websites, they're always half as good as every other website on the planet. And I think scoring models are a little bit like that. There's, they're just old and they're not good enough. And so if we start trying to grade our A, it's, we're using technology and data that the big companies have had for years and we're, we're just chasing something I don't think we can achieve yet in my opinion. And so I'm a big advocate of, you know, selling the program, selling why we're the best for our customer, selling our brand, then letting them, you know, come in and do it the old fashioned way.

I think that there are two great ways to do it. Is there anybody in here not approving any customers before they get to the store? Jonathan, you raise your hand but you said no. Okay, so we try to get them approved before they get to the store. Jeff, how about you?

I, I'm starting to sing a different tune. I think during COVID everything was about remote retailing and getting them approved, fully approved. Come on in, pick out your car. I got you done. And I'm going the other way now and I'm Saying get their name, get their phone number and get an appointment old school. Get them in front of you. Let's sell them on who we are. Let's sell them on our program. Let's sell them on the why buy? Let's make them our best friend. And then after that it's easy.

I think that's, I mean that's the buy rider model, right? Is to. Yeah, there's a bunch of really big buy riders in this room today. And it's get them, get in there, interview them, make sure they're the customer.

We won't.

And I think there's a lot of money made that way.

I don't know. I'm going back. If I'm going to go, I would have been the other way.

I'm going the other way. That's unusual for me. I'm using the 18 technology.

Only.

Because you don't know how to use it.

That's exactly right. And we got a hand up way over there.

Oh yes, excellent.

Why is Jeff going back?

Why am I going back to wanting to sit in front of the dealer, the customer? Part of it is character. I feel like that's very important in the underwriting process. You know, wanting to meet them, talk to them. And then the other part is just, you know, my approval doesn't mean anything to them. They're going to go get another approval from the next dealership. Cars are cars, they're all commodities. What I need is I want them to fall in love with my program, my salesman, and then they'll buy the car we tell them to buy. You know, almost a little bit jokingly, but you know, it's more about selling us and less about the car. And I feel like an approval is just selling a car, selling a dollar amount. But that's my opinion, probably wrong.

Jeff, there's another question that came off of that question.

Maybe.

I don't know if that's the one, but I like this one. Has anyone tried a third party BDC to manage Internet leads and had success? I know a lot of you have. Who is using a third party BDC to handle their Internet leads? Maybe we could ask this of the panel. And who is allowing AI to interact with their Internet leads first off and maybe bring that lead down the sales funnel to some point with artificial intelligence? Anyone on the panel able to speak to that?

So BDC was huge. Third party or outside BDCs were huge for a bit. I think they've gone down, is not gone down, but I think the use of that is Less and less. Anybody in here using a third party? Bdc? Jack Carter is right here.

Jack, tell us about it.

We're using a. We're using a company that's. That's instantly responding to leads. Right? It starts off as AI and then it goes to a person. I don't really know how successful it's been yet, because one of our staff members needs to take over that conversation in a very short amount of time, meaning I've got to have the manpower to do it. So we've kind of just started tapping into that.

We're gonna.

We're gonna work on that some more. But we are currently engaged with that a little bit. I don't know that it's been a big deal for us yet, but just in the infancy of it.

Anybody use the AI bot to start this conversation? Other than Jack, maybe? Is that a thing yet? Jeff, you should know, I don't know anything about AI. I always thought that was Allen Iverson, and now I just figured out I wasn't even older.

No, I mean, I think no one's really using it yet, huh? Nobody to any degree that they're confident to stand up and say they use it.

I'm right here.

Look.

Okay, here we go. So I love this. Somebody raises a hand and says, you got to answer this.

Anyhow, what do we want to know?

AI.

AI.

All right.

Probably about three months ago. Probably about three months ago, we did get involved with a company that offered the AI. I was very reluctant. They had great salespeople. They did actually prove to be a wonderful asset. I do believe that it keeps the customer engaged very quickly. I've had customers that has actually came in and said that that got them there. They didn't get a chance to actually check into our company or search for.

A car till after hours.

It kept them engaged, got them to my salespeople, and I'm highly impressed.

I love that after hours because how many people shop after hours?

A ton.

And if you can somehow control control, that sure helps. Anybody up here want to add anything?

Hold on, hold on. What was her name? And people are going to want to ask her questions afterwards.

Lisa. Lisa with DND Motors. She's going to be around. She has her answer.

Question hall, booth 300. She'll be selling.

She's gonna get a couple free months from that vendor.

Yeah.

Russell has a question.

Guys, I'll add something. So probably about.

Hey, Lisa, what was the name of the company that you're using?

Hammer.

Hammer, yes.

However, I will add to that that I just Was told by podium that they are bringing their AI, which I.

Didn'T sit in on.

There. There are. We'll just say there are multiple companies doing this and there are several doing it. Well, are we good with that? And there's some really big companies doing it.

So I will add too that. So I started about three or four months ago doing it. I lost a salesman and I had one salesman left and I didn't want to hire another one, so I turned on the AI. We use Neo. So I turned it on.

I didn't want you to mention these, these people's names, Ross.

Okay. I'm not using them. So I turned the AI on and I haven't missed a beat. It is handling the flow and it's. I use it as a sales assistant now. So it's basically allowed me to use one salesperson to sell for me and it's working fine for me.

Okay, anybody on the panel using AI?

I don't use it.

No. No, me neither. Okay, one more. Ali. I just wanted to make a comment about the after hours leads and engaging with them. One of the things that I think you should measure as a dealer if you have the system capability to do so, is when that lead comes in after hours, how many of those customers actually apply, actually get approved and what is the grade of that customer? We have founded our dealership as an example. Sunday leads. We get a lot of them. We get a lot of applications. They turn into poor deliveries. If I look at the static pool. Just a comment to make. That's, that's, that's interesting. I never would have thought that. And I know y', all, y' all do enough deals to know those numbers.

And you need to know, guys, these lead providers that promise you more leads, quantity and quality. Right There is a quality. I would rather have less leads that are higher intent than just flood my CRM with a bunch of leads. Because you're just bringing me a bunch of trashy Facebook form leads, right?

Yeah. More leads don't always mean more sales. More ad spend doesn't always mean more sales.

Along those lines, I want to get to this question. I wasn't going to at first, but interesting. What are some things that would make you say no to a buy here, pay here application even if they had the right, quote, unquote, write money down.

And we're gonna go.

I want to stop that real quick, Luke. No, I want to point that out. Quote, unquote, what is the right money down?

Let's say big money down.

Is there a down that will make a successful loan as his chuck and her place is in the back.

One lump sum.

Full cash price.

Full cash price. He said that is a successful loan. Give the guy a prize.

So that's a, I mean, that's something that, that we all talk about. So is there something, Is there one thing? Let's go down the line. Is there one thing that if someone even had half of the money down the car, you would still say no? Commenda. We'll start with you and walk online.

Half of money at the sale price or acv.

Half of the money, the sale price.

I don't know.

It would take a lot.

That's, that's my pedophile.

Yeah. Half the money. No, but much less than that. It would be distance from the store.

Distance from the store. That's because you worry about skips or not able to service it properly.

Jennifer.

I would say no on some of them. Yes. It depends on their attitude. You know, if they come in there with a sense of entitlement or something like that, and it's like, nobody I want to work with, then I'm just not going to sell my car.

Yeah. So some customers aren't worth anything.

Right. Yeah. Jen's right. I mean the attitude, you're, you're selling the car today, but you're calling collecting over 36 months. So it's who you're going to deal with and who you're going to really subject your, your team to is the bigger, bigger picture.

And what I want to clarify is down payment. The size of the down payment does not indicate the success of the loan. Right?

Correct.

It's not like suddenly they got to 30% down and now this loan is going to be successful.

Right.

What you guys were talking about, those would apply whether they had 500 debt.

Right.

You know, it doesn't matter if. And we talk about the priority.

Right.

Like what's the most important thing for me, I'm a small buy here, pay here. Proximity to my store is the number one thing. Right. I know that repos become exponentially more expensive once they get out, away from me. Right. It's just not worth it. Right. And then you have stability, character for me. So that's what I wanted to point out was we focus on down payment. It's not always about down payment.

Well, and I'll argue down payment matters because it lowers the pti. So I'm going to say down payment does matter.

It matters. But it won't make a successful loan.

It might if you get enough down that they can afford to payments. I'm just arguing the opposite side of it.

Right, but that's pti. Now you're arguing a good pti.

All right, we got someone over here.

For me, and I'm in a. I just go a couple towns out, so I'm here. He asked, what is the radius from your dealership? For me it's 50 miles. I don't. You know, obviously, guys, no one in here picks and chooses based on zip code or neighborhood. So we set up a very formal 50 mile radius.

We have five minutes remaining. So this is the time to really get those questions in. Is there any.

Any.

Is there any session you went to today that something was said that you didn't understand? Then maybe we can get a clarification on anybody you want to raise their hand and say that that was a bad question, I guess. Jeff, you got anything else?

Yeah, let me answer your question. Is there anything I didn't understand? Yes, there was a lot of stuff I didn't understand. A couple other takeaways I had from some of the sessions I went to, and maybe we can get some people to chime in on some of these. One thing that drew my kind of I circled was we as dealers and as owner dealers, we are firefighters and we are carpenters, right? So our job is to find the fire in the dealership, put it out, and then rebuild it so that we don't have another fire. Right? That means if you have a fire in your dealership and you're getting phone calls right now from your staff back at home, that means you have a broken process. That means they don't know what to do, or they're scared to do it because you haven't given them good guardrails or a good process to complete the thing that's staring them in the face. And so right now it's a little smoke and, you know, a little hot, and then they're going to ignore it. And when you get home on Friday, it's going to be a full scale fire.

Right?

Your fault, not their fault, your fault. Do you guys experience that? Anyone on the panel have anything?

And how do you. How do you fix that?

I've experienced it. I mean, you know, culture kind of starts at the top, and sometimes they look at their ringleader to lead them in the right direction. And sometimes you just fail at doing that. You just got to try to do better the next time.

Somebody said today in one of the sessions that sometimes you have to build a process as you go. The first process you build doesn't work.

Right.

Yeah.

And I think we all experience that, that you just have to rebuild the process every time something breaks. And you do have that problem because, I mean, you're going to get a phone call, you've got to refine it, make new rules, set the process back.

Up and go again.

And that's what I find interesting. If you guys look at the poll question that we asked in this session, it says, what is currently causing you stress? If you guys have time to go on the app and look at that, I really thought we were going to have a theme. I thought I was going to ask a group of dealers what is causing you stress and we would have a theme. Oh, we're all struggling with, you know, ACV or affordable cars or finding mechanics. It's all over the place. It's literally everything. These answers are the entire dealership operation. So really interesting to me that everyone has experienced, you know, some sort of headache or issue, and it's all over.

And don't feel. Don't feel ashamed to ask the question because somebody has dealt with it before for sure or is dealing with it right now.

Somebody said their biggest headache was you, and I assume that meant you. You.

I guess I don't know who did that.

Yeah.

So maybe, probably, maybe his guy shut down the question.

Sorry about that.

I feel like if you have a. A good manager in every department and you have good, sustainable KPIs that you meet in a weekly and a monthly basis for each of those departments, when there's a fire in that department, the manager will take care of it. You don't even hear about it.

Right.

How many fires happen in a week? You have KPIs and you track them. You pay on performance based on those KPIs, and the manager keeps involving and getting better in managing that department, and those fires won't.

They won't go up for sure.

You got to hold people accountable, and you got to make sure you have people that are capable of doing their job. Sometimes we hire people because we like them, but unfortunately, they're not capable of getting the job done.

Jeff, we've got a couple more minutes before we wrap up. Anyone have a burning question that they want to get in before we finish this Macarena? Yes.

There was a speaking session where you guys mentioned something about late fees in the state of Florida that you cannot charge more than. I think it is a 5%. Can someone clarify that part, please?

Somebody from Florida knows about late fees. Steve Levine, Is he in the room? Steve, can you Answer that. Steve does not know that off the top of his head. He can look it up, but I'm sure he can get you an answer. Raise your hand, Steven. So Marc Reno will figure it out. Okay. Another question.

Any question works.

Okay.

I want to share some of the results from our poll which you guys can get into and look at. And we're going to do this again tomorrow, right? We're going to have the same wrap up session. So please submit your questions. Think of your questions. This is the whole point of these conventions, is to learn these things that we don't know. But I also want to get the attitude of the panel here before we wrap up. So we asked the question, what is your attitude towards the next 12 months? How many, how many of you guys think the attitude was good? Yes.

Thank you, sir.

Gentlemen, Enthusiastically.

It was every.

We think it's good, guys. We think the next 12 months are going to be good for buy here, pay here dealers. They are going to be good. Part of it is this. We love predictability. Our whole business model is based on predictability, right? So when we know interest rates are going to be meh, probably where they are, no big cuts, maybe no big leaps, we know that unemployment is going to be pretty darn good.

Right?

We know cost of capital is going to be where it is. And guess what? We know that cars are now back on a normal depreciation curve. Right? You guys all seen MMR retention. You know what they're doing? We love predictability. Kind of like we love our spouses, right?

We love them to be predictable 100%. Right.

You know, you don't want the up.

And down, big mood swings. Mood swings are bad. Yeah, yeah, yeah.

Same with your employees. You like them to be very even killed and predictable. So I think our next 12 months could be some of our best panel. Wrap it up. Specifically, you're looking forward to.

Let's wrap it up with the next 12 months. Yalls assessment of it and then we'll call it a day and cocktails will be served.

I think things have finally, for lack of a better term, stabilized. Cost of car may come down a little bit delinquency. I don't think it's going to fluctuate too much. I think everything's kind of finally calmed a bit. So we can now sit and just kind of figure out where we're going from here.

Crank it out.

I agree with Tommy. I think everything's stabilized too. And it's, it's going to be a good 12 months.

It's going to be a good 12 months. Competition is going down and our customer base is growing.

Yep. Go, Vin.

If you keep working on your processes, being more efficient, organized, it's going to be an amazing 12 months.

It's.

It's.

You control the next 12 months.

Yeah. It's the perfect storm that the interest rates are high, banks are pulling out, employment is good, prices are coming down. It's. It's a success. Let's go.

Thanks, guys. Thank you for being here.

We'll see you tomorrow.

Thank you for listening.

Please leave us a review. We'll catch you in the next episode.