#346 - Takeaways From The 20 Group

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. Luke, you little, you look a little wet, buddy.

Are you wet, buddy? This has been a, a bit of a four or five day experience. You know, a lot of people know that the Carolinas was soaked with, with the tropical storm Hurricane Helene. It was, it's been a mess. It's still not over, so hopefully we'll get back to normal. We had a couple days with. Without power and cold showers. I was really smelly at the end of Thursday or Friday, whatever day it was Friday, Saturday, I don't know. Anyway, my days are mixed up. I was in D.C. at a 20 group with you as well. I mean just, it's been a whirlwind.

Yeah, it was, it was sad to have you leave. Luke and I both had our 20 group. We'll go through our notes today. We're going to share with you guys our key takeaways from this 20 group. It was a little unique. As you guys know. If you listen to last Week's episode, the 20 group program at NIADA is kind of in a transition period between our previous moderators who fell off the wagon.

No, no, no, they just, they don't anymore.

Moved in and our new guy. So Luke and I stepped in and that was, it was like, it was like herding cats. So Luke handled day one, I handled day two. Luke headed home to, to bail his dealership out of the water and, and I wrapped it up on day two. So we're going to share with you guys some of our takeaways. Yeah, you know, fun time doing it.

I had a great time doing it. I tell you, we have a great group. I think probably one of the best groups in the industry. I think we have 17 dealers now all by your pay here and just some really, really smart people in that group and one or two that aren't so smart, we'll name those. But, but you know, we focused it, focused it on. Focused on marketing for, for this event and marketing is not my strong suit. Jeff. People out there probably know that I'm more of a, a tactical less run business. Let somebody else worry about the marketing. But it was really neat to see what people were spending and what they were spending in on so we could. Because the composite will tell you, okay, this person spending X amount in advertising, well, it doesn't tell you what they're spending their advertising on. And that was really enlightening to me, and that was my biggest takeaway. Honestly, I didn't get to take a lot away because I was moderating, and I had a great time doing it. I love to do it. So. Yeah. Anyway, yeah.

The only thing I heard from day two was just how much better I was than you were. So I'm sure you are very enlightening. Know, one of my big takeaways, and this isn't directly from the topics that we had, but I want to talk about this. We had an episode a couple weeks ago with some dealers that were in the middle of a her. A tornado. Right. Got. Gotten stuff knocked out, or maybe it was another hurricane. I don't know. Some sort of natural disaster. You. Natural disaster. Right. We've talked a lot about emergency prep and kind of being ready. Like, what is your emergency prep plan for your dealership? You know, one thing that hit me was, I think it was a dealer maybe in one of the Facebook groups that's like. I mean, they just didn't have Internet. You know, they had no Internet. Like, and if a cell phone tower gets knocked out where you're standing, you have no Internet.

Right.

Right. So you could have a generator. You can. You can, you know, get power back up at your dealership, but if you don't have access to the Internet, you're. You're still dead in the water.

Dead in the water. And, you know, you brought up something that I thought was very interesting and that you had bought a Starlink, you know, Internet setup. And I'm. I'm probably going to pull the trigger on that, because I've been thinking, okay, I can get a Verizon box or whatever, but Starlink doesn't go down. And so the ability to have power and Internet are the two probably fundamental pieces of the puzzle. You have to have to run a dealership, and that's it. You know, if you. If you get Internet and if you get power, you can keep going. You keep collecting. And luckily, we were without power at my office very long, and we were able to get back up and going. But there's a lot of dealers out there, especially in North Carolina, that may be without power and Internet for weeks, and that's a big freaking deal.

Yeah, yeah. And whether it's a natural disaster, cyber attack, or what other kind of craziness. And I get it, guys. It's like your food storage or your ammunition or your. Whatever you're hoarding at your house, not likely you're going to use it. Right. Like, there's not a situation where I load up a wagon with food storage and. And freaking have to head out of town. But we do prep things and we're kind of ready. We have contingency plans just like we have employee overlap in case someone gets sick or fired or doesn't show up. These are just things that you do to be prepared. So that was one of my kind of side takeaways from being gone and being around so many dealers who were really having a hard time back home. You know, you left a couple other dealers didn't know if they were going to be able to fly in or get out with all the, you know, know, airport and flooding that were going on in their hometown. So it was. It's always a reminder.

It's. Yeah, it's something that everybody needs to just. Just have in the back of your mind. Because it could happen no matter where you are, Jeff. I mean, you're in. You know, you could have a huge snowstorm up there that really knock things out. And y' all can't handle much rain for some reason. Y' all got a bunch of rain that would make a mess around there. So, yeah, you got to keep it in the back of your mind because it's going to happen.

One other thing that was a takeaway of being around the dealers, and I know it's on a lot of people's mind right now is just the burden of. Of dealing with debt, your debt burden and the cost of capital these days. You know, we know a couple dealers who, you know, they're financing with some banks and they're probably on the adjustable rate. They are paying a really healthy percentage of their gross and net profit. Just straight over to the bank, man. Just. I mean, they're running some razor thin margins and a couple bad months or a downturn in the economy or some bad collections can really put them sideways if they're. If their leverage ratio is off because they've been servicing this high debt load for so long. So that's a really kind of an eye opener to me is you want it. Some people want to get into debt, you want to grow, you want to leverage up. You've got to just always keep an eye on it because it can very quickly eat you alive.

It can. And you know, luckily the rates have come down, but they move, you know, marginally, I guess you would say, and they probably will continue to move over the next little bit. But what happens, Jeff, and this is something everybody needs to have in the back of their mind at some point. If that Debt load gets too high, you've got to pull back the rains. You got to quit selling too many parts, you got to collect now. You got to stay in the covenants of your, of your, your credit lines. But sometimes the best way to move forward is to go backwards. And you just got to think that. And for those who, who get to a point, they go, oh, my goodness, what's going on? You got to think and you got to think hard about it and you got to make the right decisions because if you don't make the right decisions quickly enough, you'll end up on, on the, the upside down end of, of your business.

Yeah. And some, some of the guys, when you say not sell so much, I think you've got to caution it because you've got to run the model and have someone smart enough to say, okay, wait a minute, if I stop selling so much, that can be a problem too. Right. Because now you might be needing to put new, new loans on the books in order to get cash flow from your lender in order to just keep your doors open. Right. So we know a lot of dealers that are in that debt cycle where they have to sell X amount of cars a month so they can get an advance from their lender so they can even buy cars for the next month. So it's really, really, it's, it's a, it's a, you know, a fine balance of all those things.

It is. And you've got to know your business, got to know your numbers to be able to make that decision. Because at some point, if you're robbing Peter to pay Paul or you're trying to stay on that hamster wheel, it could get, get really mentally taxing.

Yeah. And one of the hot topics that we talked about was the interest or the attraction of doing retail sales. You know, I'm a big fan, a big proponent of retail sales. I think we're about 50, 50 this month of buy here, pay here to retail sales because of the quick cash flow that it generates for you. Right. So if I sold an extra, you know, 20 cars and they were cash deals and say I netted out two grand on each, you know, that's 40 grand to my bottom line that month to help cover expenses or use it to do more buy here, pay here deals the next month. So we talked a lot about kind of the ins and outs of that retail philosophy. Now, look, you don't, I mean, if you do ever do a retail deal, it's just kind of a side, right?

We do, we do I mean, I was just actually calculating numbers right then, Jeff. On a down month, we do 10% retail, and on a good month is 20%. So I, I think I could switch to cash. I think I could switch to outside finance tomorrow with my pricing model and be fine. But you're right. I mean, I tell you, it's nothing better than for us to. To be having a, you know, a bit of a cash flow crunch during a month, and all of a sudden you. You sell to $20,000 retail pieces and you make, you know, you make three grand a piece, and all of a sudden you got $40,000 back in the bank. That, hell, that goes a long way, man. So there's definitely a reason to have to have that portion of your business. We, you know, what we've been doing a lot of is sometimes our. Our repos don't fit into our program. Right. So what we've been able to do is to take the repos that are. The miles are too high or they have some cosmetic damage or they have some mechanical things that we don't.

Yeah, you decided doesn't fit your program. Like, we're on borrowed time with this car. It will need an engine, and these engines are six grand. I don't want to put it in my portfolio again.

Right. So what we do is we look at, okay, what's the wholesale value?

And if the.

If the wholesale value on that car is, let's say, $2500, but the retail value is 55, and we could spend maybe, you know, less than a $thousand dollars, maybe $600 in recon to make it a $5,500 car, which there's a big need for $5,500 cash. Cars in our. In our market, we sell them pretty quickly. And so we have a rule. If, if we believe the car is good enough to sell for cash, there's no reason to take it to the auction as a rebo and lose a lot of money. So what that does. Is want. Doesn't necessarily cut down on my charge off expense, but what it does is it creates cash and retail. Retail profit that we wouldn't normally have. So it does really cut down my. My, my charge off expense, but it's shown somewhere else because it creates retail income. It's just a different way.

Yeah. And the pros and cons of that, guys, so you can think through this, if this works for your own dealership, are obviously, like Luke said, the pros are, he's going to make five grand on the car instead of sending it to the auction and just getting 2500 bucks out of it. Let's say he's able to service a market of the. A segment of the market that he might just have to send down the road. Right? That real true. Hey, I need a $5,000 car for my kid. I, I just, you know, there's nothing out there myself.

Yeah, yeah.

And then you've got. The other situation is you have some, you know, I don't want to call them bait cars. But you do have cars where you're like, yeah, come on in here, let me show you my five thousand dollar cars that all have 180, 000 miles. Or you put that five thousand dollars down on this car that's got 80, 000 miles, make a couple payments, build your credit. So there are some pros to it.

Now.

There are also a lot of cons, right?

Yeah.

Man, that can be a headache, right? That 2500 car, even though it runs great and you test drove it and you would put your mom in it, it will break down in three days the second you sell it to someone. And now your reputation's on the line.

You know, so we, and this goes back to something we talked about a couple weeks ago. When you talk about training your salespeople with a we. Oh, right. And when you sell a car like this, you train your sales people to say this. I want you to understand, Mr. Customer, this is an as is car. As soon as you take the keys and give me the money, if it breaks into four pieces while you're pulling out on the main street, it is yours. All four pieces are yours. And you really have to be a bag. I'll give you a bag to pick it up. But we are not buying it back. We're not fixing it, nothing. It's all yours. And if you explain that to a customer up front, you typically limit a lot of your aggravation. Now, not to say that it doesn't ever happen.

They'll still be a bad review for sure.

Yeah, for sure. I. We sold one a couple weeks ago, and it was a 180,000 mile Honda Accord. And when we sell cash cars like that, we do a safety check. It's a safety check.

Oh, you should definitely.

That's it. Safety check. So that means that it's safe and that's. That's it.

Right.

And so a week later, the customer comes back in, has put 2500 miles on the car, and their brakes are completely shot.

Oh my gosh.

And we're like, dude, we told you you put 2500 miles on this car. What do you expect?

Do you, do you allow or, or insist on test drives and mechanical inspections?

100. 100. In that situation. And when you're not warrantying something, it is your, it is your friend to make them test drive and make them take it to a mechanic. And if they take it to a mechanic, mechanic says it's good, when they come back and complain, you go, you take it back to your mechanic.

Yep. And they're gonna, the mechanic's gonna say it's not good. And that's the key. And again, that's the point of these cars. Like they're not perfect. They didn't pass our inspection. You're gonna find problems. There are going to be issues, but you're getting a killer deal. So, hey, if this thing runs for 10 months, you're money ahead, you know. So, yeah, we do try to sell it that way as well now on our nicer units because we also have the other end of the spectrum on our retail deals, right? Oh, yeah, I will have a 20, 20, you know, Camry or something on my lot for whatever, 18 or 20 grand. And my salesman know that there's certain pricing numbers that I put on my cars that mean, hey, this thing cannot be done by here, pay here. I don't care if they have ten grand down. This is an outside finance only car credit union bank. I just don't want to carry it on my portfolio for whatever reason. Right. Like, I'm not making enough on it to carry it. I'm not. The markup's not there or it's just too high of a dollar. Right. So I do have those on the other end of the spectrum. And really what I'm trying to do with this is I just really want to capture everyone that comes on the lot at whatever point they are in the credit spectrum. Right. Like, I don't want to send people away because. Oh, I'm sorry, you know, I don't have something that fits you now that you've graduated my program. Yeah, I reported your Experian and now I got to send you to some other dealership. There goes our relationship. Right?

That's so smart to have that model. And, and that's the reason, honestly, why we've always been priced to market. Because I got in trouble at one point with, with having too high price column a lot trying to do two separate models. And that created a problem. But once we, we brought the, brought that level back down, which we don't have. Hey, this car is Only for outside finance. We don't have that situation. Yeah, if my car is on the lot, we will in house it.

Okay. Even if it's a $25,000, if it's.

A, if it's a $50,000 car. So I walked in with $25,000 down, which has happened, which has happened before. We'll do the deal if it makes sense for us. You just got to be careful with that. You just have to be careful in general to not segment your lot in a bad way. It might be the right way to say it so that you're priced properly and that customers don't get angry because they can't get in a car. You know, that you, that you're not financing. I guess it's the right way to say it.

Yeah, you do. You do have a bit of a problem. When they come in on the 2020 Camry at 18 grand, you send them to the credit union, they get denied and now you got to put them in your 2015 Camry. That's also 18 grand.

Right.

So yes, you do. There, there is a bit of a rub and an art to it. And it's trained at the point of salesman. And that's the one thing that we talked about in the 20 group was guys, that's why the very. The second question that my salesmen are trained to ask is, are you here to take advantage of our in house financing program or do you have your own bank or credit union lined up? Right. We want to know which track we are talking to these customers, right. Are they a buy here, pay here customer and I need to go down the credit approval track or are they a banker, credit union? And now, you know, we're going to discuss car. They've got their own financing going. Like it's really, really important you understand those two because it determines everything from the car selection to the process of the sale. A lot of stuff. They're two different animals as far as.

Actually, you know, it's what's great. I mean, Jeff, you know, you and I are actually going to be presenting that Buy here pay here summit which is coming up in November in New Orleans. And we're going to, we're going to be talking about this. It's going to be one of our, we're going to be doing sales in sales training. And this is one of the key things you're going to take away from that, is that you should have these key questions written down and you should train on them all the time to make sure your salesperson is Taking them down that right. That right avenue. Because like you said, are you in here take advantage of our in house financing or do you have your financing already set up? That is a simple question. And so, you know, once you make that the lineage, you can get to the customer into the right car. And it's so important to train on that.

Yep. And, and a lot of that. The other thing that really stuck out to me this week was the importance of social media, which sounds like the most contr, like silly, silly statement, right? Like, come on. Of course. But what we are, what we've fallen away from here at our dealership is being more personable with our posts. You know, having more video walk arounds, more personal interactions, more making us and our salesmen the celebrities online through our Facebook posts, through our. Whatever it is. But that was one of our big kind of rededications here, is that we're going to go back to kind of that, you know, mom and pop, basic advertising. Here's my salesman in front of a car talking about the features in our financing program and how just, just really putting your personality across through all your social media posts.

It's video. And that's one thing. Ron, our friend Ron Heider came and visited us at the 20 group and he, you know, he, he told us something we already knew and it was video, video, video for advertising. It's not, it's not a carousel ad on Facebook. It doesn't work. Y'. All, People buy from people they don't buy from. They don't buy because it's a 29, 2019 Camry LE.

They don't care.

That's not what they're buying. They're buying people. And I actually talked about a bunch of people, talk to a bunch of people. When we were going through our marketing, I pulled up their websites and what you would see is just the building as their front picture to their website. That doesn't do anything. People, I want y' all to know that out there, if y' all just have a picture of your building on your website, that's nothing. They want to see you, they want to see your salespeople. They want to see that about them. They want to see your attitude. They want to see your smiling face. So like Jeff's talking about that video that you can post on Facebook every day is going to come across as, hey, I want to buy from that person or I'm not going to buy from that person. Right. So make sure you're doing it right. Write scripts for your salespeople. If they're making a video, it's one thing Ron talked about because if you don't write scripts, your salespeople are going to come up with their own script and you probably don't want that. Yeah, video is super important and we, we just need to do more of it. I need to do more of it.

Yeah. What it, what it leads me down the road of, and it's something I've struggled with lately is, you know, I told you we just got set up. Blitzpay turned on the Cash Pay network for us. So we, I haven't like fully launched into it because we do push a lot of auto pays. Right. And I'm starting to lose contact with the customers. Right. They're not coming in as often. And now this next phase of saying, hey, you can make your cash payments out at any, you know, Walgreens, Walmart, Dollar Tree, Dollar Store, a whole bunch of different locations. You don't even have to come here. My cash payers don't even need to see me. In fact, I don't want you to come here because I don't want to collect cash. We start to disconnect and of course, you know, shout out to Blitzpay, Great sponsor. That's the way the world's going. They're doing what we want. So it's not like this is a company that's pushing customers out the door. But, and I feel like I want it, you know, I want to have that ease of collection. I want to make it easier for my customer to pay me whatever's most convenient for them. They don't have to drive from 30 miles away because they don't have a checking account. They can make the cash payment there in their own little community because there's dollar stores everywhere. But I lo, I worry about losing that personal touch, you know, that personal interaction with that customer and maybe just this, you know, be more active on social media myself, my managers is a way to, to have them feel like they're still kind of like connected with us.

I agree. Hadley and I walk into two stores in town all the time and we're not on. She and I aren't on TV as much as we used to be. But I mean, not, not a month goes by that we don't get recognized as, as the people from Gobble Mothers. Right. And it's because they've learned to, to see us and, and enjoyed. Oh, I love that little girl. I was like, she's not so little anymore. Right. But it's, it's really important to stay in front of your customers because really buy here, pay here, and car business in general, people buy from us and they, they want to know about you, they want to see you. And so make sure that you're continuing. It's a relationship business. Make sure you continue to do all you can do to get your. Your name and attitude out there.

Yeah. And that really leads us to. Into. As we get prepped for tax time. This was one of the other big, you know, topics. Hot topics we had in the group was what are you guys doing for tax time? You know, coming around the corner. Of course, tax Max gonna come on. They're sponsoring the podcast again this season. They always do. We use them quite a bit. Right. It hasn't been as successful as in years past. Nobody really knows how this tax time is going to be. It might just be kind of back to the.

I bet Bill says it's going to be the best one ever.

And good for him, man. I mean, that, that, that makes me think too. We deal with dealers all the time too, that are like, oh, you know, August, September's been horrible. August was horrible. Nobody's buying cars and you got dealers on the other side. They're like, hey, man, best September we've ever had, like in the books. Best September ever. So a lot of it is what you believe it is, and that's kind of how the tax Max program works too, is if you work it and your salesmen work is successful, you're going to pick up those extra sales incrementally. But also we, you know, they talked about, like, are you stocking up for tax time yet? Like, is this like an October, November time when you start buying and just being ready for. For tax season? When do you normally start, Luke?

We've already started, baby. It is true. And luckily, because of this big storm, who knows how many flooded cars gonna be out there. But, you know, we, we start wrapping our inventory because for one, it takes forever to get cars recon and, and back in the day. You could start buying for tax season on November 15th, I mean, or. Or December 1st, because you get the cars ready faster. Now it just takes longer. And so last year we got a little behind the eight ball. My plan was to have 105 cars ready to go February 1st. I think we hit that number. But I think this year, you know, we're going to probably try to have 120530 ready to go. And so I just felt like I needed to. To start a little sooner. And so what we've done Is we've got our inventory. That's another thing I'll talk about here and say we got our inventory to that. That situation where we've got. We should have by the end of next week, 85 cars or so already ready to go. And if I can just start what one of my salespeople and I did, my manager, we decided to start building. Marshall talked about this today. But our actual inventory matrix of exactly what we want. And so what's great is we've been able to identify all the models we're going to buy, the percentage of each model. We won't own our lot at any certain time. We know we need 60 ready to sell our. Our 45 or so cars every month. And so we've already started to dial that in. So what we're going to be able to do is just replace an add on. And so I think that we are way ahead already. And I know we're talking about tax season on, you know, on October 3rd or 2nd or whatever it is, but guys and gals out there, if y' all really want to take advantage of tax season, it's all about inventory. And we had this discussion during 20 group. Jeff, if you look at the one thing that controls your sales more than anything, more than advertising, more than personnel, it's the availability of your inventory. If you have a big month and your inventory drops off, you're going to have a crappy month the next month. The only way to fix that is be very consistent with your inventory. And it starts. It starts with inventory plan. And if you're going to be successful in tax season, you got to be ready to go now.

Yeah. The hardest thing I have is I go out and I start gearing up for tax time, and I'm buying these cars. And of course, like the cream puffs are the ones that make it through the shop the fastest and make it to the front and they sell that. Course they all want to sell them. And I'm like, no, you cannot sell the third row all wheel drive SUV until tax time. Like, I just want to hide those and not even bring them out until people have six grand in their pocket for a down payment because we end up selling them on slim deals. And then come tax time, all I have left is the, you know, island of misfit toys out here. Yeah.

Yeah. Well, it brings up another point, though. You should be out there looking at what you have and figuring out a better way to get rid of that stuff you don't need and replace it with things you do just always be buying. Right?

Yeah. One thing too is we're going to implement, which we've never done, is the required down. I think on those ones I may start tagging them in the system and say, hey, you know, if it's a real hot, hot car, it's got to get X amount down. I can't have you put it out there with a thousand or five hundred down. Even if the payments work for the customer, we just, we can't give this one away. We will be able to get a healthy down payment on it because it's a desirable car. Right. So I'm going to try that. I don't know if I'll regret it or not, but I just, again, it's like getting geared up and getting, getting more cars ready is a big, big issue. And so all the, it's just, yeah, all the good stuff goes out and is gone.

I used to, I used to concern myself with exactly what you're talking about. Why'd you sell it for that? We can get another thousand down next month. And I, I don't even worry about it anymore. Just sell what we have. If you're selling the new stuff, I need to look at the old stuff, Reprice it, get it out of here. If I, if I have a car that's been a lot over, over 60 days, it drives me insane. So I keep a real close eye on that. Oh, I'm not saying I don't have any. I don't say I don't have any cars every 60 days, but if I see one and if it gets close to 90, I'm freaking out.

Yeah, I don't work, I don't worry till 360. And I'm like, hey, that thing's, it's about to get a birthday. I don't want to have to buy a cake or put it on health insurance. So let's get it gone. One other thing they really talked about too is we talk about tax time, but the other side of tax time and the income tax and getting prepped now for the end of the year. Right. We have what, three months left. So they were talking about reinsurance products. Right. And of course Buckeye, they're the guys to go to for your reinsurance company. If you don't have a set up, get it set up now. And if you have the ability and the cash flow to fund this thing to a strong amount. There's a lot of products out there that I don't take advantage of and I don't know if I'M in the place yet to take advantage of them. I don't know if I need to get into that, but I mean, I don't, I don't reserve for Gap. I don't put away Gap. I just, I give it for free. It's part of my value sell, but I don't even reserve for it. So that's silly. Not, not only am I not charging for it, but I'm also not funding my reinsurance company for the free gap that I give everybody.

Yeah, I mean, I love reinsurance. Everybody out there knows that. They listen to me talk about it forever. We're, we're 14 years in. It's. It just creates so much wealth. It is, it's a game changer. Taxes are real. Actually, I was on the phone with Brandon this morning. We're going over when we're going to do our tax prep. We're going to do it the last week of October. We got some other stuff coming up too. So we're kind of looking forward to figuring out our whole tax liability bill. But yeah, you need to be doing it. You need to be worried about taxes. Head into this, this fourth quarter, it's, it's amazing, Jeff. This, this year is gone, but it's gone.

Do you do, do you do a PSI? Do you reserve for a PSI on every car? Yeah, we talked about this.

150 per car.

So there's, I don't do that either. There was another product they talked about and one of the dealers, they buy their own warranty on used engines and transmissions. So that's kind of interesting. Like normally you would buy an engine from say LKQ or some scrap yard and you can pay the extra couple bucks to extend the three month or the six month out to 12. Right. Parts and labor warranty. So they do it on their own. They have their own reinsurance product that extends. That's warranty.

So, so the only thing I'll tell you there that is so small, that doesn't move the needle when it comes to tax prep. That's just cute. That's just being cute. I know that they do have something. Buckeye does have something. This is not a continued advertising Buckeye, but where you can, you can reserve for attorney fees or, or something like.

That and they can prepaid legal.

Prepaid legal. It can be a huge tax advantage. So these are the things that, that I haven't done like that, those big numbers that maybe in the future I have to look at. We have a really good year, one year and need to Protect ourselves a little bit.

Yeah. What is that? You put aside a couple bucks for every deal in case there's a litigation issue. It's a prepaid legal fund.

I think so. And I think it's like it could be hundreds of thousands of dollars. So I think it could be, I think it could be a real, a real tax savings. And there's ways to, there's ways to fund it that are, that are some accounting circus acrobats. So. So there's ways to fund it so it doesn't suck the cash out of your business. But, but sometimes it's real because you have to take advantage of the tax code that's currently written because if you don't, you're in trouble.

Yeah. And I did that at the end of last year. I pulled out a VSI policy on every car that we had. We hadn't done it all year. We were able to fund it in time, before the end of the year. And it was a large dollar amount. Right. If I fund a vehicle, single interest on every single buy here, pay here account I had in the portfolio, it was a big dollar I had to fund. And then I borrowed it right back. Right. As quickly as I could, I borrowed it right back from my reinsurance company at a, at a reasonable interest rate to use for, you know.

Yeah, we did that. We did, did that end of 2021, because we were about to get just kaboomed over the head. And, And I mean, it's a real savings. I mean, it was 6 or $700,000, which is, I mean, it's a big number.

So the real deferment you're going to.

Pay that eventually you're going to pay it, you're gonna pay it. But time value of money is huge, especially with interest rates at 8, you know, 8%.

Yeah.

It's saving you at least 8%.

So any other takeaways you want to leave with everybody before we sign off?

The last thing, it was all about marketing. And Ron, just a really good guy, he brought up this thing called Google Max Performance. We don't, we don't do any SEO or, or we don't do clicks pay per clicks on Google. And look at everybody's spending. I think we need to, we're talking maybe two grand a month, 2500amonth that we probably need to invest in this. But this Google Maps performance was, I mean, it's just incredible. It goes across all Google platforms and Google, I mean, essentially you tell it what you want to pay and the AI back End of it optimizes all of your video, I mean, all of your ads that you put in there. I mean, it just, it looks incredible. And what's awesome about this is the more information you're feeding it, the better that AI gets. And then the Google is feeding it back AI or, you know, back information. So it's just optimizing your spin to get it to the right people and for you to spend the right money. I. This is a game changer. I'm not smart enough when it comes to advertising to. To tell you more about it, but Google, Google Max performance ads, get it set up and talk to your advertising agency if you're using one about it. It looks honestly simple enough to set up yourself. Not for me, but for somebody out there smarter than me. So check that out. I think it's a game changer.

That's funny. You know, it really does make me think about 10, 12 years ago, I knew all this stuff. Like, I felt like I could run my Google Ads, I could run my Facebook ads. I didn't have a problem with, you know, you know, my segments and marketing and boosting. But as it's gotten crazier and as my time's gotten more thin, it is a really hard thing to stay up on. Right. I can't do it. I don't know how to integrate, you know, inventory ads and do all this crap. So I have had to just be like, all right, sorry, I'd love to be the guru of this stuff. I'd love to know exactly how it's done, but I gotta just assign this out to someone who can do it for me. Now, if you're a small enough dealership, that's really hard, right? Because it can be expensive. And so, yeah, you kind of got to fumble through it yourself when you're small, figure it out here and there. You might not be able to take advantage of every fancy new platform or program or AI integration, but you can do something, right? You can figure it out, test it, try it, track it, fine tune it, and just kind of keep going.

Yeah. And tracking, tracking, tracking. When it comes to marketing, that was a big subject we talked about. It's hard to do. You really need to explain it to your employees how important it is when they make a sale to figure out where their customer came from. A little bit of information is better. No information. It just as simple as one of these things that were brought up. Tom. Tom Bowles, who runs a huge buy here, pay here store up in Chicago area, he puts out these signs Right. That say, hey, if you need financing, come to us. And he's like, oh, they're untrackable. I said, tom, put a c. I put a. What are those little things?

QR code.

QR code. Lost my mind there. Put a little QR code on it. So the customer does. All they have to do is click it, and for one, they'll do it. And two, you can put a landing page there, and boom, you can track it. He looked at me like I blew his mind, but. But there's all these ways to. To track, and you need to do it, because if you don't track, you don't know what you're spending. Yeah.

It's funny he mentioned that at dinner. He's like, man, I got right on the email. I. I emailed my marketing guy to whip up 200 stickers by the weekend, and we're gonna go add these stickers in the corner of our signs that he has all over town. So he's like that alone right there. Paid for the trip and then some. Yeah, really, really interesting. Cool, Luke. We're gonna let everybody go. That was a lot of fun. I hope you guys listened to the end. And we'll talk to you next week.

See you.

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