#64 - Brandon Bartley - How They Built This

Hello and welcome to this episode of the Independent Dealer Podcast. This is our How I Built this series through the month of December. Today we have Mr. Brandon Bartley with us of low cost cars in Circleville, Ohio. Correct, Brandon? That's correct, Luke, what do we cover in this podcast?

I tell you, Brandon's story is from riding horses or riding behind a horse. I still haven't figured that exactly out.

I don't know where he sits either. Under it maybe.

I don't know.

Maybe.

I don't know. Anyway, to have it in two locations in Ohio to sell about 90 to 100 cars a month. But he said something along the way in this that's really just a nugget for everybody just to remember. He said you can't assume everything is going to keep moving forward. And listening to his story, you'll understand.

Awesome. Here we go.

Welcome to the Independent Dealer Podcast, the podcast for auto dealers to learn and grow together. Here are your hosts, Luke Godwin and Jeff Watson.

Brandon, thank you so much for joining us today. Real quickly, tell us just a little bit about, I mean, how did you get into the car business? Where did you start? Like you just woke up one day and said, hey man, I want to start selling some cars or what's your background?

So I'm a third generation car dealer. My dad was a car dealer and his dad was a car dealer. So you kind of say that. I was bred to be a car dealer.

Me too.

Unfortunately, I didn't think it would exactly work out that way. We've always been into two things, racing horses and selling cars from a very early age. My brother got into working with the cars and I got into working with horses. Racehorses are one of my true passions. Standard bred racehorses, the kind that pulled a little buggy behind them. So from the time I was 11 years old, all the way up until right before I got in the car business in 2004, that's what I did. I drove and trained racehorses.

Let's talk about, let's talk about his racehorses real quick because I love horses, so I know what a thoroughbred horse is. They just ride with jockeys on them. Now you're a big dude, you're not going to get on the back of one of those horses, right?

So no. Standard bred horses pull a little buggy, they call it a sulky. Are you familiar with those type of horses?

I've seen the buggies and, you know, we've all been to Las Vegas, so I've seen people betting on those things. You just get in the buggy and off the horse goes.

Yep. Yeah. Yeah, pretty well. I mean, it's a little more complicated than that, but, yeah, that's the general idea of it. The only difference is a thoroughbred horse gallops. You know, they run out of the gallop where a standard bred horse trots or paces.

Huh. That's neat. I've never seen that in real life, but I've been up into that Kentucky area where there's all those beautiful thoroughbreds everywhere, so.

Yeah, see, unfortunately, the area you guys are in, there's just no. There's no standard bred tracks. But if you ever come up here, I'd be happy to take it.

Cool. So you get out of that in 2000, is that right?

2004.

Okay. So what happened? How'd you get there?

So. Yeah, so. So in 2004, you know, when we were racing horses, we didn't have casinos at the tracks like they have now. Now they race for big money, and the drivers make really good money. In my time, we didn't race for very much money. And you're working your balls off to make 30 grand a year. So it was really difficult. And I kind of got fed up with working the hours and not making a whole lot of money, so I just decided I was done. I looked for some other opportunities for a while. My father kept telling me, you know, you can make a lot of money selling cars. And I never wanted to work the car lots. You know, some from a very early age, I never wanted to work the car lots. But sure enough, he finally talked me into it.

So your. Your brother was in the business too, as well at the time, right, or just you?

My. Yeah, my brother was in the car business. My brother had been in the car business for four or five years before I even got in. And he started working the car lots as a teenager.

Okay, and so you never worked at the car lots as a teenager.

You.

You were out at the horse farm playing.

Yep.

Cool. I know it was a lot of work. Shoveling, shoveling horse poo. I'm sure that's a lot of work. So you come back, you leave. You leave horse racing. You're like, all right, dad, I'm coming home. Let's go.

Right, and this was about what time?

Excuse me?

This was about what time? What year?

2004. 2005.

Okay, great timing. And what happened? Where'd that lead you?

So I got into selling cars with very little training. I found out I was, unfortunately, naturally, very good at selling cars. It was kind of in my Blood. And I actually eventually started to really enjoy it. You know, it was fun selling cars. We were having really good times. You know, that time, 2004, 2005, 2006, were really great years. You know, everybody was selling cars. Everybody was making good money. Just as soon as we kind of got good at it, the credit crunch came. And all the guys that made it through that, I have a deep respect for them because many guys didn't make it through it, and we didn't make it through it. We were a business that was open since the mid-80s. We had up to five locations at one time and hundreds of cars that we owned outright and lost it all. Wow. Wow. Really?

So a lot of people that might be listening to us, you know, there's a lot of new dealers out there. And, Brandon, they don't understand what happened in that credit crunch. I do. And we were a buy Here, pay Here store. And honestly, our business stayed good and maybe got better. During that time, the people who weren't in the buy here, pay Here business or even some of those really, really got hit hard. Y' all had five locations, and you say you lost it all. What happened?

So it was a combination of a couple factors. Right around that time that I started selling cars, my family was introduced to the world of floor planning. We had never floor planned. We owned all of our cars outright, and we figured out, you know, hey, we could take some of this money that we're spending on cars and buy racehorses with it. We also had a huge book of buy Here, pay Here business. At that time, we decided we were going to go away from buy Here, pay Here, become a cash only store at every. At every store that we had. And we decided we were going to sell those accounts. And what do we do with that money we invested in racehorses?

Oh, my. Yeah, that's. Yeah, that would do it, wouldn't it?

So help me out there. I mean, maybe two lessons to be learned or maybe a lesson with a moral. But, like, why? How damaging is it for us as dealers to get distracted from our core competency or get distracted from what makes us money? Now, when you say invest in racehorses, was that also damaged by the economic downturn as well? So you took money out of one pocket to put it in another investment, which I assume it was a calculated decision which should have paid out. But how did that cause. Did the horses continue to succeed and the dealership fail, or did they both kind of falter because you split your money and attention?

Well, unfortunately, the year before that we had had really good luck with racehorses. We had a couple really nice horses and the car lots were doing really well at that time. So we didn't see any real reason that the car lots would stop performing well. But unfortunately the car lots stopped performing well. The horses we bought ended up not being very good horses and the car lots weren't able to dig them out of that hole.

You know, what's the ratio? What's the ratio of cars to horse? How many cars? How many of your current car? Well, with your current lot, how many horses would you would replace those cars?

How much do horses cost?

If I replace half my lot with horses, I could probably get 15, 20 more horses.

Okay, so an average horse is 100 grand?

No, no, they're not nearly that expensive and standard. Your average horse is probably $15,000.

15,000, okay.

But if you have a bunch of horses, that's a lot of money. And you got to stable them every month and this, that and other. It costs money.

Oh, yeah, yeah. Every horse that you have cost you anywhere between 2 and 3,000amonth just to keep.

Wow.

Boy. So you had a, you had a handful of dealerships. You split your attention to chase, to bun some horses. Both of them kind of faltered. What was the crux or what was kind of the linchpin that collapsed it? Was it being too leveraged? Was it slowing sales? Was it not seeing the writing on the wall? Like, what are the lessons you can point that you're looking for next time around? I guess that's what's super interesting to me right now. We're all doing the same thing. All the dealers are making a bunch of money. Everybody's selling cars, Everybody's invested in this, that and the other thing. But you know, what's the lesson from that?

The biggest lesson that I took from this, and it's the lesson that I'm happy to have been able to be there and learn from, was you can't just assume that everything is going to keep moving forward. You can't. You have to have some kind of contention plans in place in case things go backwards. Do you have some money sitting around that you can live on if these car lots stop selling cars? Do you have another business or another vehicle of investment that you can make some money on if we stop selling cars? Because, you know, any of you guys that went through the credit crunch, you know, that happened pretty well over a six month period of time. We went from selling cars to not selling cars in six months, you know, and it was extremely difficult oh, yeah.

I have tons of friends that were selling 80, 90 cars a month. The next thing you know, I mean, overnight, Jeff, they. They went to selling 10 cars a month. And you know, the first month you go, it'll be all right. And you keep that staff next month. Oh, it's gonna bounce back. It doesn't. You keep that staff. The next thing you know, everybody's out of business.

Right, exactly. And that's exactly how it was. I mean, guys were just closing their doors left and right, and we had sold away our buy here payer notes, so we didn't have that income coming in as well. So we kind of probably did time.

To get rid of them though, right?

It was.

He probably cashed out at the right time.

But like here pay here dealers made it through that time because they still.

Had accounts on books and nobody get financed. Yeah, yeah.

I remember being writing that down in, you know, 08, and I was only about three, four years into my buy here pay here and just kind of thought that was the nature of the beast, you know, and now looking back at it and I say, oh, that's why my loss is. Were so large back then, you know, and luckily we had the equity to make it through that. But to your point, what is our contingency? You know, what is our backup? What is. Do we have rainy day fund?

Exactly, exactly. Or another vehicle investment or some other way to put your money. You just can't assume that these cars are going to keep selling. We all hope that they do. And I don't wish that upon anybody. But you need to be ready for these things. And that's the, that's the number one thing I took from that whole experience was we just weren't prepared. We weren't prepared for if it stopped working. And like I said, we lost everything. We lost everything. At that point in 07ish, you know, right around there in the credit crunch time, I went back to sell or to drive and racehorses for a little while. Spent about a year or two driving again. It was two of the best years of my life. I mean, we had a really, really good time. We were doing really well on the track. It was a lot of fun. My brother was helping me as well. My dad was helping me as well. We were doing okay. I came back from my last session of racing in Kentucky one summer and my dad said, hey, we started a car lot out in Reynoldsburg. I said, cool, all right, sounds good. I'll check it out. To say our cars were shrapnel was an understatement. We started off with four cars. I can't remember the exact number, but I think my dad had somewhere between 2 grand and 2,500 in these four cars and literally had, like, a 91 Toyota Sienna van that had a bad transmission. We were trying to sell for, like, 599 Saturn with a bad clutch. I had an Astro van with a bad transmission. I mean, these were just junk. Junk cars that we were just trying to make a couple hundred bucks on to invest in more cars. And we did. We were able to sell them all. We were doing actually pretty decent. It was a small lot and only held about 15 cars. We kind of outgrew that lot. We moved to our Circleville location in 2000, 2009, 2010. This is the current location that I'm at right now. It was a much bigger store. It was a bigger opportunity for us. It was very different. We moved from the center of Columbus, which is a big metro market, to a more rural area. So it's a different customer base. Was a little bit of a learning curve there to kind of figure that out, but we were able to make it work. You know, we were.

And this is you, you, your brother and your dad.

At the time, it was just me and my dad. You and your dad.

Okay.

Yeah.

Okay.

Yep. My brother was still doing horses at that time.

Okay, your switch swapped.

Yep. All the time.

Things are starting to look up.

Mm.

You're starting to build up the portfolio again. And this is all cash sales, or were you doing buy here, pay here.

A little of each? We were probably 30% buy here, pay here, 70% cash sales stuff. Under four grand, were you.

This just cash from your horse winnings?

Well, we didn't have a whole lot of horse winnings at that time. We had some horses we were playing around with, but one was supporting the other. Every time, either the horses are doing good and they were supporting the car lot, or the car lot was doing good and it was supporting the horses. But it was very small time on both ends. The car lot actually ended up outgrowing the horses very quickly.

That's so. That's. That's so funny that the horses in the cars, they kind of went back and forth with each other. So. So what. What year are we in now? Like 2012?

13. 2012 ish. Yep. 2012 ish. 2012 ish is kind of when we really got things rolling, and that's at that. My dad died. He had a heart attack unexpected. It crushed all of us. It was hard. So at that point, our inheritance, me and my brother, was those cars and what we had left of the horses. We decided to sell off a couple horses that we had and invest our time fully into the car lot. Now me and my brother had worked the car lots for years at this point, but we really didn't have a whole lot of handle on the back end stuff, how to keep everything in the back end rolling. Because our father was just one of these, he could get it done guys, you know, he just took care of everything. We had our jobs, we did our jobs, he took care of everything else. So it was a little difficult for us getting started. We were just jumping feet first right into the pond to see what happens. We were going to sink or swim and we actually ended up swimming. We actually ended up doing quite well. Our style was a little bit different than our dad's. You know, he mostly wanted to deal in buyer payer and cheaper stuff and we kind of wanted to get into a little nicer stuff. By the little nicer stuff I meant we were finally getting into like five, six, seven thousand dollar cars instead of stuff under five grand. So it was a stuff with transmissions. Yeah, exactly. So we're getting it rolling. We're doing really well.

You and your brother?

Yep. Just me and my brother at this time. We're.

You guys are like oil and water.

Yep. We fight like cats and dogs. So it kind of got to a point to where it was straining our relationship as brothers and we decided that it would be better off if we just parted way. So we parted ways. I kept the dealership, he went on, started a dealership, did some racehorses, some stuff of his own. But I kind of took the reins from there. I learned some lessons with my pocket because I didn't have my brother there beside me. He was a little more conservative than me and it saved us a lot of money. I'm a bit more of a gambler. I like to swing for the fence and I paid some of those prices with my wallet.

So let's stop there. So I like to ask this, what's the worst mistake you've made? The most costly, worst mistake you've made beside buying horses?

Well, I've got, I've got a ton of big mistakes in horses. Probably the biggest mistake that I, that I've made in the industry is, I mean, realistically not staffing the way I should have. Um, I have held on to so many people for so long that have hindered my business and it's cost me years. There's no Doubt about it. That's cost me years by holding on to people that I should have let go and moved on from.

So people, maybe you. You had some. You felt some loyalty towards them, but they were underperforming in their job description or they weren't straight up cheating or stealing.

No, no, not cheating or stealing. Just people that don't perform. People that have got lacks in their jobs have got complacent, you know, people that I should have just moved on from. You know, money mistakes. We all have money mistakes. I mean, money mistakes are easy. You can get over that and just go on the one. The mistakes that you learn the most from are the ones that hurt you mentally, you know, and it.

So, so, so this. These mistakes are people you really put trust in, and they. They just didn't live up to their. To their potential, I guess. Right, Brandon?

Exactly. Exactly.

Yeah.

No, I mean, maybe they didn't have much potential to begin with, and I kept them just because of loyalty. Yeah.

So. So at this point, we have two dealerships, is that correct?

Just one. Just one at this point.

Okay.

All right.

Okay. So your brother went out on his own. His own. Not. Not together, but just in a different store. Whole new, new thing.

Yep.

Okay.

Yep, yep. He went off to do it. Do his own thing. I probably did it for. I think we opened our first. Second. The first time we opened a second store, we opened in 2000. 2016. In 2016, we branched out and opened a second store. It was in the heart of Columbus, you know, right in downtown Columbus. Right outside of downtown, at least. And that was going to be kind of like an outlet lot for me. It's a smaller location, held about 35 cars, and we were just going to sell stuff that was under 6,000. We opened up that store, and my brother at that time had decided he was done with his own store and he was done with the horses that he had. So he actually came back on board as a salesperson. And he's really good. He's one of the best I've ever been around. I mean, he has all the talents that I do, plus some. You know, he's very good at what he does. That store did great. It was a really nice store. We ended up outgrowing that store and moving to a bigger second store in 2018, and that's the second location that I currently have on the other side of Columbus. Both my stores sold about 80, 85 cars each.

And how many do y' all sell a month? You said about 45, is that right?

Yeah, we generally do 40, 45 at each store somewhere in that range.

How do you stock these lots, Brandon? Do you, you buy the inventory?

I buy all the cars myself, unfortunately.

Where are you finding them?

So the good thing here about Columbus is we have. I have six options that are within a two hour drive.

Yeah.

So most of the options I'm going to are physical. I was buying a lot on trade rev and I do still buy some on trade rev, but I took a couple hits on trade reps. I've backed off on it a little bit and then buying a lot more inlaid.

And are y' all doing any buy here pay here or y' all are just completely subprime or prime?

Yep, we're 100% retail. No buy here pay here at all. Okay.

And what lenders, how are you, who you focus on, what do you, who you find in most of your funding through?

I do most of my deals. We're probably 50% credit acceptance. We do a lot of credit acceptance business. We've got a couple local lenders, you know, your PFS's, those kind of banks. We've got Flagship, we do a little business with Flagship. They're okay. And then prime business. We've got two local banks here that we do most of our prime business with. We probably only do 15% of our businesses prime. The majority of it is deep subprime or just what you call subprime.

Yeah, that's neat. What's the average sale price of your cars?

About 10,000.

Okay.

Everything we carry on our lot is under 15 and our average sale price is probably right around 10,000.

So you know what's interesting to me is trying to source all those cars and especially where you are. And the rust belt I guess is what we'd call that. I mean, what are the issues that something like that brings into to our normal everyday car selling? I mean, how does that affect your recon and what you can buy and price on stuff?

Well, especially when you're dealing in trucks, they all need bodywork. It's just the way it is. They've all got rotted cab corners that most of them have rotted, rotted down along the skirts underneath the doors and stuff like that. And when you're selling a 10 to $15,000 truck, most of the time that's a truck that's going to have some rust unless it's a much older truck that just happens to be. Be really clean. And you know, anytime you're in the rust belt, you're going to go through Things like brake lines, a little bit more than normal. But the biggest part is going to be bodywork, you know, to sell trucks. Any of you that deal in trucks know, generally a truck has to be pretty clean to sell. You can sell a car that's beat up to a subprime customer or you can sell an SUV that might be a little beat up to a subprime customer, but trucks generally need to be clean. Body works, the number one thing, you just have to do it unless you want to buy much more expensive vehicles.

Do you source? I mean, do you recon in house? Do you have your own shop or how do you, how do you take care of this, this bodywork?

So my original store, my Circleville location, they have in house mechanic. So they actually got three on staff that do their mechanic work. They outsource the body work. We've got guys in Columbus that we outsource the bodywork to. So generally any of the mechanical issues go to my Circleville location because they have an in house repair facility. Any of the bodywork comes to my Columbus location where we outsource all the.

All the body work and wow, that's, that's a lot. So pretty much every truck you buy has got to have something done to.

It for the most part. Yeah. Pretty well pretty. All of them are gonna need some kind of body work of some kind.

So you are a part of these stores.

They're about 35 minutes from each other.

Okay, and what's the staffing structure at each. Do you have, you know, a handful? How many you're doing? About 40 to 40 to 50 at each store. What's the salesman, you know, mechanic type. What's your staffing structure look like?

So at my Circleville location, I keep two salespeople, I keep two finance guys, I've got two lot guys and then I've got three mechanics. At my Columbus store, we have three salespeople, we have one lot guy, and we have two finance managers.

Okay. All the back end kind of takes care. Takes place in Circleville, I would assume.

Yep, most of it, yeah.

What, do you own the property on both your dealerships?

We do not. We do not own either property. We rent our property.

Is that just a decision not to do so, or do you find that you're in such a great lease that you don't, you don't see a need to do it?

Yeah. So my Columbus store, the gentleman who owns the Columbus store would want such an egregious amount of money for that location. I'll never be Able to buy it. It's just. Unless he dies and his children decide they just want to get rid of the property, I would never be able to buy it. He would want such a crazy amount of money. The location, Circleville. I have a really nice lease. I don't pay. I pay next to nothing for that place. So I've never really had to buy it. Now, unfortunately, I think I'm in a position now where I have to buy it because the gentleman who owned it passed away and his estates wanted to be sold. So we're in the process of buying that here soon.

So you're just right outside of Columbus there in Circleville. Is that close to Kentucky or.

No, it's. It's probably an hour and a half from Kentucky.

Okay.

Yeah, it's probably. Probably about 45 minutes from Cincinnati.

Okay. Yeah, I've been up that way before. It's beautiful, beautiful land up there.

What? It's just. Just south of Columbus.

What do you. How do you pay for your cars? You floor plan?

Do you.

Do you pay for them all out of pocket now? Because I know you mentioned earlier, floor plan got y' all before. What. What do you do now?

Yep. So the majority of our cars we own, we pay cash for them. We just recently started with a floor plan company. I was actually talking to Dan Real about this, and I was mind blown at how expensive these things are because we never had one up to this point, how expensive it is to have one. But we're trying to start stocking a little bit nicer cars. And it does become hard to just pay cash for all those cars. Otherwise. You know, one of the things I talk to people a lot is I never have any money in the bank, Never. Unless we sell cars. And then I use that to go buy more cars. You know, that's. That's the hard part about it. That is the cool thing that I've learned very early on here about having a floor plan is it's nice to have a little bit of that cash flow. But the majority of it I do own. And one thing about the way that we came up in the business is we took very small salaries and reinvested all of our money. Just reinvested everything. Because if you can. The more cars that you can own for cash, the stronger you are going to be as a dealer, for sure.

Yeah, that's huge. I think if you're talking about taking an extra, you know, three or four or $5,000 in a salary every month, that buys you an extra, you know, one to Two cars every single month that you could have out front, you know.

Absolutely. And that's my, that's my gangster getaway bag those cars, you know, it all goes downhill. I've got 800,000 to a million dollars worth of cars that I can liquidate and move on to whatever I want to do at that point.

Yeah, and I remember those days that at the auction back in 09.10 when people tried to liquidate them and they couldn't. And I remember how that was. But you got to own your cars. So it sounds like you don't really have a shop for consumers. No customer pay, work, do you see? Are you happy with that or do you see yourself having a repair facility at some point?

Well, one thing that I try my best to do is I try to keep things simple. I would love to have a repair shop, one. I don't have the staff to run an outside repair shop. And the biggest part about it to me is if I can't do it properly and I can't at least have enough time to spend to put my hand on it once in a while, to actually sit in there once in a while, I don't want to do it because then I don't know where my money's going. So if the goal is absolutely goal for me to have one day, at this point we have a hard enough time to get our own cars done. You know, I don't know how I could possibly get anybody else's work done when we can't even get our own done.

Maybe I need to take your advice because it's hard for me, my cars done and I keep piling customer pay on top of it. So yeah, I know the feeling there.

That would be my question for you, Brandon, is you're buying, I mean you're personally buying what, 80 to 100 cars a month?

About 100 cars a month.

What is your structure in the dealerships when, I mean you're, you can't be there at all. I mean, I don't see how you'd ever set foot in the dealership when you're trying to get that many vehicles. What's the structure to make sure everything still runs smooth? Do you have high paid managers? Do you have someone else that's kind of got their hands in the day to day or are you just working 24 hours?

So I buy in lane three days a week. So I'm in lane buying cars three days a week. Otherwise when I'm at the lot, I may buy a couple cars online or something that Nature. But I'm really blessed with my top end manager. So in my store, my finance manager is a sales manager. Is your manager. That's your manager all the way around. At my Circleville location, my wife runs that store and she does a fantastic job. So they always have two finance managers in their store. At my store, my brother works with me and he's my sales and finance manager there. And he can handle it all. I mean, I don't.

Okay, okay, wait, wait, Brad. And I got to stop you. I absolutely got to stop you there. You have two stores and you have structured it so that you are working with your brother, the cats and dogs, and you put your wife 35 minutes away.

Yes, exactly.

Okay, okay.

That's funny.

You know, me and my brother, once we quit being business partners, we work fantastic together. We very rarely have any problems. Now that we're not partners, I guess.

If you're making the decisions, then he. You can't really fuss about a decision you make.

Right, exactly. But generally it doesn't even have to come to that because he's. He's good enough that he can run the store on his own, and so is my wife. They can both run the stores completely on their own with no supervision needed. And he has no issue how we.

Like to run it, not having any equity in the dealership at this point.

No, he's paid very well, and he's happy to be paid well. You know, he doesn't have any problems. Yeah, in honesty, that's exactly what I was getting ready to say. You know, you still make good money, but you don't have any of the stress of the responsibilities of being the guy.

Yeah, I understand that. So we talked about the worst mistake you made from staffing concerns. What's the best decision you've made along the way here?

The best decision that I ever made was to get into retail financing. I mean, it was far and away the best ever made. Credit acceptance pitched us three or four times, and we said, no, no, no, we're good. We like going by here, pay here. And then once we brought them in, that's when our business exploded. You know, I've worked franchise stores. You know, I worked financing a franchise store for a couple years, and I seen how much money you can make on financing there. I just never thought you could really do it in used cars, you know, selling cheap used cars. But when credit acceptance came in, they kind of changed everything for us. We were able to start selling better cars. We were getting our money up front, and it just all Kind of spiraled from there. That was, that was the spark for us when credit acceptance came in. That was our spark. That's what took us from being a 20 car store to a 40 car store.

You know, it's funny, I think if you asked Dan Real that same question, he'd probably come up with the same answer because it's funny. Maybe it's y', all's, maybe that area up there is just really, CAC is really strong up there. That's, that's very interesting. Very interesting.

Did he find an issue with staff, with, with, with having the right vehicles? I mean, it sounds like your, your ACV and your sales price is probably on the low end of what CAC likes to, to see, right? I mean, has that been an issue or do you have a hard time, you know, making, making the deals profitable up front?

Here's what I'm, here's what I'm gonna tell you about cac. There's no price range that works with cac. You know, a lot of people tell you, well, they like $15,000 cars. A lot of people say they like $5,000 cars. They like all cars if you can buy them back of average black book. Now, there's certain cars that they don't like, and these are just car classes, you know, like your Mercedes, your Lexus. Those kind of cars never work on credit stuff. But I'm gonna tell you right now, if you go buy a 2015 Nissan Altima and you buy it back of average black book, it's gonna be good on credit acceptance. How much money they give you is based on your dealer rating. So if your dealer ratings bad, you're not gonna get as much. But I promise you that car will be at the top of your credit acceptance list because that's more important than anything else.

Yeah, get a good deal on the car, don't over recondition it. That's one thing I kind of understood when I was with CAC for a short time. And then the down payment, you know, you got to get 12 to 1500 down. Is that what you said?

Exactly? Yep. Yeah. Generally I would say our average down payment on credit acceptance is probably $1,000, but it definitely works better the more down payment that you get. And also to one thing about credit acceptance. A lot of people, I know, everybody loves the pools, and I'm totally on the opposite side of that. But I do the straight zero 100 program. Zero 100 has been fantastic. Usually you get more money up front. You don't get any of that Money in the back end. But granted, I've never seen any of it. I know a lot of guys are getting big pool checks and if they are, that's great for. But that's another way that instead of taking a $900 deal through Credit Acceptance, you can take a $1,400 deal. Most people take a fourteen hundred dollar deal most times. Maybe you don't want to take a $900 deal, but that's a way to get involved with credit acceptance and not have to worry about just giving your cars away to get involved. Credit acceptance if you don't care about the back end.

So that you said it's called a Zero 100 deal.

Yeah, Zero 100 purchase is what they call. It's just a straight purchase program.

Okay.

They give you a little bit more money up front, but you don't share in any of the back end.

Okay, very interesting. And that's all you do? No pools, no nothing?

That's all I do. I don't do any pools.

I mean, I understand. That makes sense to me. No, Is there any recourse in that or is it just.

Nope. Zuri. Of course, it's just like their 8020 program. The only difference is instead of, you know, sharing some of the back end pools, you're getting a little bit more money up front. When I, when I did the numbers, I did it for the first year, I did the numbers on it and I was averaging a little over $500 a copy extra. Doing the purchase program as opposed to doing the pool program.

Yeah. When you have the volume you have. That makes sense. What do you have a reinsurance company?

I do not, but we just set one up.

Very good. I guess with Buckeye and from up there, right?

Yep.

Okay. What, what warranties are you doing right now? Are you selling warranties? You giving warranties? What you got going on?

So right now we're only selling warranties. We don't include anything with the vehicle. We're doing some AGWs, we do a little bit ASC and then, you know, we've got several lenders that make you sell their own products. But what we're selling, we're selling some AGWs, we sell warranty and we sell Gap. I don't have any additional products right now at this time. You know, we've had tire and wheel and I've had, you know, paint protection, things like that. The problem is when you sell older cars, getting, getting those companies to honor a claim is so difficult.

Yeah. What's your penetration warranty and gap Penetration.

Do you know gap penetration is a little over 60%, so we do really. We do really well on gap. Our warranty penetration is not nearly as Good. We're about 9% on warranty.

So you make a little bit. You're making a little bit of back end on all the cars, right?

Yeah, yeah. We averaged. Like last month when I did the numbers, we averaged $400 per car is what we averaged when it was all said and done.

That's not too bad at all.

What else you got, Jeff?

Brandon, I was just going to say, to kind of wrap this up, tell me, what are your projections? What are your goals for the next five to 10 years or things that you could share with us and those that are listening that we might try to emulate? You know, where do you see yourself going? Where do you. What do you hope to achieve over the next couple of years?

You know, if you'd asked me two years ago, my goal would have been to have a couple more dealerships, you know, to have a repair facility, things like that. Right now I would like to just hone in on the two stores that I have and have them lean, mean and efficient, and that's what I'm working on right now. I'm trying to add some additional staff. I'm trying to set it up to where we can get to a point to where me and my wife can step away a little more, you know, Right now we both work over 60 hours a week, easy.

Yeah.

If you got honest answers from any of the dealers that we know, I guarantee you we're in the top 1% of hours that we work because we're always working. So I would like to have the dealerships where they can run their selves. You know, that's my goal, is the dealerships to run their selves, and I can step away and play with horses or do whatever it is that we decide that we want to do. That's my goal.

Yeah, that's another goal.

I think it's a great reminder for a lot of, you know, dealers. We do. We get in the mindset of being wrapped up and we're putting in 50, 60, you know, hours. And you do got to remember you still got to live your life, you know, and you got to enjoy it while you're still mobile.

You know what? You know, you sit back and you look at it. My daughter's 11. She's never played a sport or anything like that because we never had any time to take her. You know, we got to work. We work till 7 o' clock and we come home and we go out to eat and then we come home and go to sleep because we go to work the next day, you know, and it sucks. It really does. To sit back and look at that. And that's one thing. If I could go back five years ago and see how important it is to actually take some time away for yourself, I certainly would.

Yeah, I agree. This business will kill you, which you do know. Brandon, what is. Let's attribute this thing. Is it luck or is it hard work? How'd you get here?

I would say it's a little bit of both. You have to have a little bit of both. One, if you're not willing to work, you're never going to be that successful. But you also need some luck along the way. Everybody needs some luck along the way. You hop in and you get the right lender. CAF1 stops on your door and they. And they sign you up or something of that nature. You know, those things happen and they help you out a lot. But you have to be willing to work. You know, there's tons of guys, we see them at the option all the time. The guys that are there to buy one car, you know, and they sell two cars a month. Well, okay, that's fine. And maybe they're making a living, but could they be better? They could absolutely be better. We all want to be better.

That's awesome, man. We really appreciate your time today. Jeff, you got anything?

Thank you, Brandon, really appreciate your time. Thank you for sharing your story with us.

I appreciate you guys asking me to come on. I'm super honored. So thank you, Sam.