#67 - Kerri Watkins - How They Built This

Hello, and welcome to this episode of the Independent Dealer Podcast. Continuing in our series of How I Built this, we have Kerry Watkins with us today.

Hey, guys, how are y'? All?

Luke, what do we get into?

I tell you, Kerry and her husband's success is just. It's amazing. They're in Jackson, Mississippi. They started with no knowledge of the car business, and now they have a huge portfolio of Buy here, Pay here. They're selling 100 plus cars a month in a huge dealership. Amazing story. Sit back, relax, take some notes, figure it out.

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.

Kerry Watkins, thank you so much for joining us again. I'm going to put this out there so Luke can't make fun of me during this entire thing. We did this whole interview last week with Carrie, and somehow somebody who was in charge of hitting the record button did not. So we're so gracious for Carrie giving us another morning of hers to record with us. It was such a great, great podcast that we did, or that we attempted to record that. We've got to have her back. So, Kerri, tell us, what is your background? How did you guys get into the car business? What led you to where you are today?

Okay. In 2005, we started a business with Steven's uncle, who was a former CFO of a large retail store in the Northeast, and he wanted to invest some money. And none of us at that time had any car experience at all. My background is a CPA, and until 2008, I continued working as a CPA outside of the business. And so we started out in a really small lot about 15 miles south of where we are now, trying to be a cash flow lot, only not doing any buy here, pay here at that time and quickly realized we were going to starve to death if we try to stay on that route, especially selling the price cars that we could afford at that time. So in 2007, we switched over to Buy here, Pay here, introduced it in, or actually a little bit before 07, and then 08, we hit the ground running when we moved our locations to just down the street from where we are now. And at that time we kept two locations running.

So you've had. So you're at a current location now. I know we'll get into that in a few minutes, but prior to that you had two other locations. One you start at and then a little one a little bigger lot. Is that the case?

Gary.

That's right. And the one that we started at did not have a shop. And the one that we moved to in 08 was in a primary location. That was great for our demographics of what we were chasing with the Buy youy Pay Here. And it did have a shop, so it allowed us to do more recon on site.

Can I. Jeff, Let me take some real quick. So I think something's very interesting that you said in 05, you started out, and of course, a lot of people that get that started this business, we're trying to sell cash cars, and next thing you know, it's not working, right? The people who are trying to come in, they can't get financed. You're not selling as many cars as you think you should. You're not making any money. And then. And then you jump to the buy here, pay here. Now, the reason I want to go down this road is my dad did the same exact thing, but back in 85. And that's how we got into the buy here, pay Here business, because we couldn't get these cars financed. Talk about that a little bit, Carrie. And how long did it take you to realize that? And what were your numbers like? I mean, of course you got to have all this cash to buy here, pay here. How did you. How did that look? And what, what did you do to finally get into the buy here, pay here business?

Okay, well, my uncles that invested into the business, he had a little bit of experience with buy here, pay here as far as a friend that could give him some advice. But we were primarily buying the cheaper cars that people that could go somewhere else and get financing typically weren't going to buy. But it was the middle of the road cars where they weren't going to pay cash for them. So they needed some jump with the financing. But then again, may have higher mileage than what the typical retail customer would want, so they wouldn't go to their bank to get financing. So we realized that to stock our lot with the number of cars we could put on it, we had to make some changes or either we had to put less cars on the lot, which we have found in our experience, the less cars you have, the less cars you sell, and just the more variety you have, the more people that are going to come shop. So we started researching it a little bit, and being a cpa, I was very hesitant about going after it just because I knew I was still working. We had a construction business at the time also, so my husband was still working in that just the time that it was going to take accounting wise to get it set up, manage it, have someone there that we could trust to do everything legally, that sort of thing. So like I said, sometime in the end, between 06 and 07, during those times is when we really started, started it full fledged. And my uncle of course had to invest some more money. We had to go after a little bit of conventional financing, get lines of credits and that sort of thing to finance that side of it. Of course, the cash outlay is great in the beginning. We're not in a market where we can get, you know, 60 to 70% of our down payment of our cost and our down payment. That's just not feasible.

I don't think, I don't think anybody's in that market anymore.

Yeah, that's a great world to be in. But I mean we could if we were buying cars that weren't going to last the term of the lawn, but of course that doesn't do you any good either. So like I said, in 08 we opened our second location and that's when we really, it really jumped from, you know, selling minimum. We sold a fair amount of cars in 08. When we moved locations where we could recon, we jumped up a lot. And then again when we moved to our new location of 14, we really jumped in the buy here, pay here. But we've been doing buy here, pay here primarily has been our sole business since 07 until this year. We started introducing a few more option cash options, the CAC.

What was the structure like for those years from 08 to 14, how many cars were you doing? Like what was kind of your volume or what was your goal for sales and growth?

We know we jumped a lot when we moved. We call it the Highway 80 corridor, which is where a lot of the car dealerships in Jackson are. So we made from Byram, which was outside of our target demographics. It's, it's more higher income than what we're in now. So we still sold a fair amount of cars down there, you know, 400 a year probably. But then when we moved up to Highway 80, we were hitting the 600, 700 cars until 14 is when we opened our big location that we're in now. And we sell I think right at 1400 that first year we were in.

This location so doing about 100, 100 and something cars a month right now.

Right.

Wow. And what's the breakdown with buy here, pay here and outside financing?

Well, up until August we've been primarily buy here, pay here, trying to introduce some CAC. And when we did that, we would maybe sell 10%, 15% CAC or outside financing. August we hit our target, which was 50, 50. We're trying to move to more of a 50% buy year pay year, 50% outside financing or CAC, our cash sales. So in August, I believe we were right at 45, 55 on that.

That's great. I think I know the answer to this, is that the biggest reason to do that is to generate some more cash, right?

That's right. Quick cash to turn into another buy here, pay your deal.

Okay. And so are you, are you now still trying to build your buy here pay here book or you want to kind of level it out?

We are still trying to build it. One reason that we are trying to generate more cash is we have a $5 million line of credit with the local bank that we are trying to get paid off. So it's going to be difficult to continue to grow that portfolio while making large principal reductions to that line if we don't introduce some outside financing sources to bring us quick cash on that.

Sure, let's. Now that you brought that up, you know the big line, the bulk line that all buy here pay here stores, not all, but a lot of buy here pay here stores need to to finance that big outlay of cash. Can you kind of walk us down how that came about and the best ways you found to work that line of credit to make it make sense for your business? And for most buy here pay here, you being a CPA, I think would enlighten a lot of people on that.

Sure. We started out with the local banker that we have known for many years. She had financed our real estate and other dealings that we had had. So we started out with $100,000 line of credit and it's grown tremendously since then. The benefit of going with the local bank, and I'm not knocking the Spartans or, you know, primal ends of the business, they're in it for a reason too. But you know, we started out at a four and a half percent interest rate. So when you can borrow money at four and a half and lend it back out at 24 to 28, you have a large spread there. We continue to grow that line. The thing that I can recommend to everyone is we are on a 60% of principal balance. One to 30 days is what our advance rate is. And that's been great. It's worked well with us. But finding a bank that understands the buy here pay here business is very difficult. It's Typically not the Wells Fargo's of the world, it's the mom and pop banks that are local. And it's not so much that they understand the buy here, pay your industry, but you develop a relationship with the bankers, with the board, they understand you, they understand your business, that they trust you to run your business. So our local bank was actually bought up by a regional bank that does not really understand our business. That's us. They're putting the pressure on us to move it, which we are in turn just going to pay it off. Currently, because of the prime increasing, we're at a seven and a half percent rate which still has a large spread. But talking to Spartan and some of the other guys, that's big in the industry, you know, they want a 13, 14% rate and borrowing bases done weekly. And if you fall outside the borrowing base, you pay it off immediately. Whereas with the bank we get a borrowing base done monthly. So at the end of the month we report where we're standing on our one to 30 days of principal. Which if you're a weekly pay customer, if you're a weekly pay business and all of your customers pay weekly, it's great to have a weekly borrowing base. But we do not take weekly payments, we take only monthly payments so that we would have to restructure our business in order to fit their business model. Now we have talked in Lance to Spartan about going with them if the bank forces us to do something else and they are willing to do a lot to work with us. They've been really helpful in trying to fit their model to our model so that there are some good lenders out there that are higher rate. But if anyone's looking for traditional conventional financing to finance on a line of credit, I definitely would try your, your local regional banks that, that you can.

Educate and I would definitely say local hometown banks if you have them in your area are it. And I have the exact same experience that Kerry's had. We started with a local bank, they got bought up, we got kicked out, we went to another local bank, they folded and went under our line of credit, went to the fdic, then we had to refinance with a new local bank and just recently they got bought out by a regional and the regional board comes in and says what subprime auto loans, no thank you. And they don't want to renew suddenly. So yes, always be aware and have a plan B.

And I think Kerry, you made such an important point was that y' all developed a business with them through real estate and People out there, if you don't realize that these banks, they love real estate, they'll lend money on real estate all day long. And sometimes you have to maybe borrow money on something that you may not need to at the moment to develop that relationship. So always remember that if a bank's willing to give you money on something, it's probably a good time to take it because that will start that relationship. Kerry, one thing I want to address with you is it's got to be a scary moment when that bank comes to you and says, hey, we don't really want to be in this anymore. What should dealers look as a contingency plan for when this happens? Do you tell the bank, well, oh, well, call us and amortize it? Or I mean, what do you do?

We have, it's been one year and they've ever since they came in and said, look, you know, you need to move it. And not saying that they're in the upside, in the worst position here, but when you have 1100 accounts, almost 1,200 accounts on the books, a traditional bank does not want to call it. They do not know how to collect on our notes. And where we're collecting, you know, 80, 85%, our customers just are not going to go there and make their payments. They're not used to it. So it's going to change the terms of the loan tremendously if they have to call it. And so we've been working with a broker out of New Orleans who is very knowledgeable in the buy your, pay your industry. And his dad actually owned a car dealerships before he became a broker. So he's helped us a lot. I would just always try to maintain relationships not just with one bank either. If you can spread it out and have multiple lake, multiple banks you can do business with. And as you said, talking about the real estate, getting a lot of credit on a real estate that you can, that you can even loan the money over to the car dealership and use your real estate as equity and to secure that loan as collateral is great. And that's what we started with when we first started the business. We got a lot of credit on the real estate that we own and use that to put into the business at first. So always knowing also that you know, you're compliant with your borrowing base. And so if you had to take it out with another bank, what does Spartan want to look at? You know, what does Primaland want to look at? What are they looking for? And I do know that they like to stay around the 55% principal balance, which they will go out to 45 and 60 days on some of theirs. So that kind of helps. But structuring your business where the bank doesn't have their hand on you at all times, and that's one thing that we have kind of faced is having a 5.5 million dollar line. It has not been easy to move it. We have understood from talking to other banks that once you reach below the 5 million, the feds kind of look at it a little bit differently. And so if we can get there, which we will be there march, that it kind of becomes more attractive to another bank at that time.

Yeah, that makes sense.

How much principal do you have out right now? Over 10.

Over 10.

Okay. Yeah. But when you get stuck in the middle with your line of credit, you're not so big that you can get the attention of a Wells Fargo or someone else, but you're not so small that it's someone's going to be able to, you know, take you on without some serious scrutiny or headache.

That's right. And we actually talked to a bank in Ohio, but they don't want to look at anybody that doesn't have a $15 million line of credit in which, you know, my answer was, well, give me a 15 million and still advance into that rate. Let me get there.

That's weird. Funny, as I always heard that once you got to the 10 million doll, that it opened up a lot more doors. Even the bigger banks, BOA and Wells and I know First Tennessee and places like this, I thought would start to look at you when you had that. But maybe that, maybe that was before some of the banking crisis and some of the regulations came.

Yes, we talked to First Tennessee and I think they have recently gotten burned by buy here, pay here. And so they're very picky about who they'll take. And we are close enough to Memphis that they can have somebody to put their finger on that three hours. But they really don't like to lend outside their market, which we are not. And the bad thing about Jackson, Mississippi is we don't have a lot of large banks here. Most of our banks are regional or are local. We don't have a, you know, the Wells. We have one Wells Fargo branch, I think, here and that's it. So we don't have a lot of the ability to go to someone like that that has a local person here.

Terry, tell us the story about how you found your current dealership. I find that so interesting. Just, just you tell us, tell Us the timing serendipity there.

Well, if y' all haven't seen this thing, make sure you go on Google and. And Google up. Watkins Auto Sales, Jackson, Mississippi. And it's got some awesome pictures. This place is huge. To talk about the evolution from your other store to here.

Okay. We were just about a half a mile down the street. We had two bays that we could do recon in. And so we were looking to expand. We were selling more cars than we could put on the lot at that time. We were running out of cars at tax season. We still had money that we could spend with the floor plans, but we just had nowhere to stock them and to put them. So we started looking to expand and we found another dealership that just down the street from us that my husband looked at. But at that time, I was still here a good bit by myself. And it's not in a great location of town. So we were headed back to our other location after we looked at it. And we had passed this Ford dealership that we're in now every single day that we went to work. And I had called when we first started looking. Our first moved over to Highway 80. And they wanted 1.7 million for it at that time. So as we passed going down the street that day, I noticed a new real estate sign in the front of the building. So I gave the man a call and I asked him, I was like, how much are y' all asking? And he told me and he said that we have someone looking at it tomorrow from New York. Well, at that time, they had brought the price all the way down to 450,000.

Okay. So it was listed originally at 1.7.

That's right.

A couple of months later, it gets foreclosed on. It's now bank owned. And what year was this? Oh, a couple of years. So it was up for sale for a couple of years.

Right.

Wow. So it sat empty.

Well, the Ford dealership that was here when we first moved down the street, they got bought out by Landers McCarty. And Ford decided that they didn't want any more Ford dealerships in this area. So Ford forced them out. And then the bank obviously got building back soon after that.

And what year was this?

I believe that was.09 to 10. And so for three years with it being bank owned. And so we took it all the way down from. I guess it was the owner that had IT listed at 1.7. Once the bank got it back, I don't know what they listed at originally, but that I talked to the realtor that day. And I told him that if he would let us in the building that day, as long as the building was sound, that we would have an offer on his desk with. Before the guys from New York ever got on their plane to get here. Yeah, that was in November. And the key for the bank accepting our offer was that we had to close by December 31st to get it off of their bad debt for the year. So we made an offer and closed on it for 350,000.

Wow. That is. And I assume at that point, since your husband being in construction as well, how much money y' all spend upfitting the.

The dealership to begin with? We didn't spend a lot. We kind of tried to keep it as minimal as we could. We did move our mechanics down here before. The business moved about a year before. So we were able to recon everything here, lock all the cars up in the fence and that kind of thing. So we had, like I said, two bays there. So we moved those lifts down to this location. And I think at that time, we purchased six more lifts. And so we didn't have a lot of mechanics at that time, I would say. And I have to check the numbers to be sure, but we've spent less than probably 150,000 on it since we've moved in and putting the lifts. We were able to buy some used lifts from some of the dealers around here. So that's helped. But we've been able to utilize, like I said, the construction business. And for a little while, we ran the construction business out of here as well. So we had those guys up here all the time in great shape. It had all new electrical, all new H vac when we moved in.

Wow. What. What. So moving. And I've moved locations as well. Jeff, I guess you've been in your same one the entire time.

No, we. We moved. Yeah.

Okay, I tell. Let's talk a little bit about how you can increase your business by moving. I mean, you move from a lot. You've. You've moved three times. I've moved once in 35 years. Talk about how it increased your business. We saw almost an overnight jumping cars. How about y'?

All? We actually moved in in January, so our first tax season here. We sold a little over 200 cars in February. But we are on one of the busiest thoroughfares of the south. We connect Highway Interstate 55 and Interstate 20, which is your north and south, east and west corridor. And you can see us from the bypass. And of course, where we spent A good bit of money was lighting up the lot and putting a huge on that you can see from the interstate. So if you come by, you definitely know there's a car dealership there where there wasn't one to begin with at that time. We tried to keep our second location in Byram open, but what we found was our customers would go down there, find a car that they wanted, but they wanted to buy it from the big fuel dealership, the one that felt like a big dealership, so they would want to drive it to Jackson and purchase it from us. So one thing I think that has set us apart because there's a dealership right beside us and dealership right behind us. I think what sets us apart is it does. It makes the customer feel like they're going to, let's say a true dealership, you know, a bigger dealership, where they're treated a little bit differently and the facilities a little bit nicer.

That is so important. And I. We see, you know, I see a lot of dealers out there, and I'm not going to downgrade a dirt lot and this, that and other, because that's. You got to start somewhere a lot of times. But what you're talking about, when we moved from our original location back in 2011 up to this location, this was a old, new car store as well. The caliber of customer changed overnight almost. And I mean, don't get me wrong, we still have a lot of old customers, but they want to come do business with us because just the aesthetics of the building, it's amazing how that happens. And, Jeff, you have a beautiful new building, so I'm sure you. You've seen the traffic you get as well is a lot different, right?

Yeah, yeah, it changed. I mean, we came from a. It wasn't even a car lot. We were in an old building. It just wasn't even anything. And I know you guys can relate to that. And part of what I think is it's not just that you've got to have some big, shiny building, but if you have a dirt lot, keep it clean, keep it nice, replace your signs every so often, make sure your light bulbs work, upgrade to HDI or LEDs or something. Like, spend a little bit of money and just go out and rake the rocks and pick the weeds. And I'm very, very, I would say, particular about that. At my place, I don't want to see trash in the parking lot. I don't want to see my rocks kicked all over the place and my weeds overgrown. Like, just. Just have Some pride in whatever level of dealership you have.

Yeah. And budget some money every year to, you know, make the place look better.

You know, fresh coat of paint on something.

Yeah, budget that every year.

Keep.

Kerry, let's talk about y' all sell a lot of cars. How do you source that many cars?

Well, we have a full time shop in the back. Also paint and body. We don't take anything outside the building except for car seats. We don't actually take the car to the upholstery shop. We just take the seats out. So the key that we found is getting what you can buy quick, get it out of the front line quick. We do give a 30 day warranty on everything that we sell, the cash cards and then we offer a service contract as well. So sometimes, especially during tax season, you have to put it out there when you don't really have it completely ready and you know that it's going to come back. But you know, if you're going to have to, mechanics are going to have to spend three or four days on something. It may be better just to go ahead and kick it to the auction, resell it and then replace it with something else. So that's where we've had to really tweak our business. And my husband looks at all of that himself. He looks at all repair sheets and he approves all repair sheets. Because if it's going to cost a lot of time and money, he weighs what we can sell it for. Is it worth our time? Is it worth time at the shop? Or do we try to move it and replace it with something that we don't have to spend much time on?

So let's talk about that. So your husband is the only buyer there. Right. And he at one point was traveling to Florida at least once or twice a month, buying a lot of inventory. You were a single mom at home almost. What. How has that changed over the years?

That has changed recently in the year, in the last year, really. At that time, his uncle also traveled with him because it was hard to stock a lot our size with just one buyer in Florida, even twice a month, three times a month. So his uncle would fly out with him and they would go to Florida and they would hit, you know, seven or eight auctions in a week, hitting two a day some days. So trade Rev and ACV have become pretty much our best friends in the last year. I know they get a lot of bad publicity, a lot of good publicity. But it's been fortunate for us that he's been able to purchase A lot trade rev has decreased in the last month and a half, two months where that's where he primarily was buying to begin with and more acv. But that has allowed him to buy cars sitting in his office, which a lot of people don't understand exactly how much that impacts the business. But when he's here, things just are better just by him sitting. It may not be that he ever comes out of his office, he's buying cars all day, but just his presence of he's able to see the light, he's able to see everybody from the front. And that really impacts the employees. It impacts the customers. They like coming in to see and know that he's in there and they'll pop in and speak. But it just makes things run a lot smoother when he's here and not gone half the year to buy cars.

For sure, when the owner is on the lot, it works a lot better. It seems you and your husband work together daily and Alexa and I work together daily. We share an office. So I'm sure there's a lot of people out there that are in that situation. Can you speak to that as a woman? I can speak to it as me. But let's talk about your role in the business and how well you and your husband work together. And what do you think makes it doable?

Sure. Well, one thing that makes it doable is we do not share an office at all.

And you see this is Alexa's desk right there.

Yeah, we tried that for a little while at our other location and he has to have everything perfectly neat stacked up. And I'm not the typical cpa. My desk is a total mess. But I can send my office manager in here if I'm not here and say, look at my office, on my desk, the third file from the left, about halfway down, there's going to be a picture of paper with a pink sticky on it. I need you to tell me that what that says. So that didn't work well for us. He would try to get me to organize and I would not. That just didn't work. So the one thing that we've learned, we are very different in personalities. He is very laid back. Takes a lot to get him upset. But when he is upset, you better be aware, I am high strung. I want things done perfectly every single time. I don't. So we balance each other out in the business. I'm usually the one raising hell and he's usually the one trying to calm it all down. When that happens, the one thing that it's almost impossible to do. But that we try to do is we do work a lot from home during the week, but on the weekends, we try to leave everything at the office. We. You know, we. It's hard to do, especially when you're sitting at dinner and you want to talk about what happened this week and everything. But if you're gonna work together, you have to isolate your personal life, your marriage, your children, even from the business. At some point. We do try to take. Like this week, we took a mini vacation and went to Margaritaville and watched the parade on the water of the Christmas parade. You know, we left work here. That was our thing. We were gonna take off Friday. We're gonna leave work at work, and that's what we did. So just learning the balance of how you can work together and make it work. Everybody's different. Every family's different. Every marriage is different. We've been married almost 20 years, so we've learned that. We've learned how to navigate around each other. And there's just days that he just knows not to my door, and I just know not to. Not saying it's easy, but it can be, as long as you learn how to make it easy.

Let's. Let's talk about. And I asked you these questions the other day, so maybe you've got a little different answer. But what is the worst mistake y' all made?

Probably the worst mistake we've made is floor plans. And I wouldn't say it's a mistake, but the costly mistake that we've made. Now, we couldn't start our business without floor plans. You have to have some way to finance your cars when you get them. But that's the mistake that are. The decision that we hope that we can get out of soon is to buy off the floor plans and not have to keep using those over and over.

Yeah. I don't think people realize that. They don't calculate always the fees, the carrying costs, the curtailments, all these things that come with those. So, yeah, if you. If you can find a solution outside of that, or if that means slow growth or that means a line of credit from something. Yeah, you know, go that route as a first option.

Right, Definitely. And we're looking at between 150 to $200,000 a year that we're spending floor plan fees and interest, which, of course, if we had a bank doing our floor plan, we would still have the interest probably at around the same rate. But, yeah, sell as many cars as we try to sell in a year, sometimes you have to buy them, you know, 90, 120, even 180 days out before they get fixed and hit the front line. Well, every 60 days you have a curtailment fee that hits on top of your interest that you're paying. And especially when tax season was the great tax seasons that we've experienced in years gone by where, you know, we can sell 225 in February, we would start buying these cars in July. And so we would hold them on our lot so we could get the big down payments in January, February and March. So floor plans, they're I guess a necessary evil to most of us in the car business. Unfortunately, unless you have a self finance business at this point.

Yeah, yeah. You're independently wealthy. So Kerry, what, on the flip side of that, what would you say is one of the best decisions that you guys have made as a dealership or you personally over this 10, 12 year run?

I think definitely the decision to move into this location that we're in has really made a difference. I don't think we would be where we're at today if we were at any other location in the city of Jackson. We just, it was luck that put us here along with passing it every day and that kind of thing and just, and having the contacts with the banks to get us in here as well.

Was there any hesitation when you moved into that? I mean, were you scared, were you nervous or did you just know, hey, this is our trajectory, this is where we're going, we're going to make it work.

We were not nervous if there was any decision that we felt confident about. And that's. I never made a flying decision as to make an offer in one day of seeing anything. I'm the one that weighs all the odds.

Yeah.

Has to look at what is it going to cost us to get into the building. But we were looking at paying about 250 to 275,000 right down the road from us. And it was just a no brainer to me. Building that the city says is worth 1.3 million on the tax rolls or 350. I knew that worst case is we sell it again to somebody else. You know, we get in here, we put a dealership in here, somebody else.

Clean it up, lease it out, and you've probably got 2 million of equity now.

Well, not quite because on the corridor of Highway 80, which is not the most desired location in the city of Jackson, but we definitely could get some money out of a quick side to.

Roll and that's so important. To own your property as a dealer. And we've talked about this. Jeff, you and I have gone back and forth. I think when we had Eric on talking about opening up a second location and even Dan, that a lot of these things are real estate plays. And it's so important that you own your. Your property and you pay that rent to yourself. Because in the end, if you have an issue and you need to borrow some money, you can, you know, once you get it paid for, it's. It's paid for. That's. It's just a great thing that what y' all did there was amazing. Let's talk about. Y' all have your own shop. Do you have. Do you do outside work or just recon?

We do not do any outside work for any other people other than our customers. We will. If the customer has something that they need done, such as the transmissions going out, it's not covered by a service contract that we can do, we will let them come in here and we'll do it. We'll add it to the back end of their note, finance it for them. But we don't do oil changes, tire rotations or anything like that for our customers, only in the recon stage of the car.

And how, how important is it for you to have your own recon facility?

I think it's very important. Number one, for us, when we were sending stuff off site, you have no control over how long that takes to get it back. If you were the dealer and you negotiated your price and you're paying less than the consumer is, it's coming in, you're probably going to get pushed to the bottom of the day to get it fixed. So having your own recon staff, number one, where you can pinpoint how much it's going to cost to fix a car, you're going to be able to watch the labor hours that are put into a car. That sort of thing has been very important for us. We also do our own paint and body, everything like that here. And we are able to make the decision, how much of the paint and body do we want to do? You know, you send it off site, they may do more work than you want to have done, then you've got the bill to pay before you get it back. So just being able to have the staff to manage. And like I said, my husband appraised all repair orders, so having his finger on it at all times has been very helpful in managing our cost side.

That's. Yeah, I like having mine in the house. I'm glad we finally got to all that in the house.

Not always easy to do because you've got so much equipment, you know, that you have to invest in. If you guys are doing paint and body and I mean framework, do your own alignments, it sounds like tires. I mean, that is a lot of equipment that you got to invest in.

We've got probably close to $200,000 worth of equipment. So it gets fast, quick.

Well, we were fortunate a lot of the equipment was here too, because it was a formal Ford dealership. So we already had the paint shops.

Oh, yeah.

Oh, geez.

Well, because, I mean, we. Oh, man. I can't even tell you how much our paint booth costs. I mean, it's just like, I mean, wow, that's. You even got a better deal than I thought.

We were very fortunate for sure.

So, so Kerry, Kerry, what do you. What do you contribute all y' all success to? Luck or hard work? What is it?

It's a combination of both, actually. Luck without hard work wouldn't get us here, and probably hard work without luck wouldn't get us here either. Without luck, we wouldn't have the building. Without luck, Steven would have married a CPA thing. And hard work is definitely. You can't be in this business unless you want to dedicate your life to it. At night we sit there, we work on stuff. You know, at night we getting Facebook messages. At nighttime we try to answer everything that we can. So being dedicated to it, of course you have to put boundaries also and take. Step away from it at times. But this business, if you're going to run it yourself, is something that just you're not going to be able to run, especially buy here, pay here. Luck's not going to get you anywhere and buy your pay here because luck is going to be riding down the street. You're not going to get it back.

Cash gets you somewhere by here. Pay here.

Yeah, that's right. That's right. Comes from very hard work.

Sure. What is the. So if you. If you could go back now and tell your 2005 self one thing, what would you tell them? What should you be doing?

I might tell myself to stay in the secular world at cpa, but I would. I really don't. There's so much I would probably tell myself. But the one thing that we have found to be true for us is for us in the buy here, pay here world. Watch your terms on your loans, watch your rates, keep everything that you can. We found shorter terms. Don't try to get into the higher priced cars that you have to finance longer because just like I get tired of a car, customers get tired of a car.

In other words, don't do what I'm doing.

Yeah.

Oh, I don't know what you're doing, Link.

That's funny. That is true.

So true, though, below 48 months. Also, you know, one thing that we've learned and Steven and I had battled back and forth is, you know, sometimes he wanted to fix things on cars that I didn't think needed to be fixed. And, well, you know, keep the cars running. A customer is not gonna pay for a car that's not running. So treat your customers the way you would want to be treated and just establish relationships with your customers. You know, we've had. We have customers that we've sold seven, eight cars. That's the key. You can't treat a customer as they just bought a car. They're gone. You have to develop a relationship with them. Because the number one point of advertising that we have is customer referrals. I mean, that a mad customer is going to tell a lot of people and a happy customer tell a lot of people. So try to balance your relationship with your customers so that you keep them for life. And that's one thing that we do is we offer a trade in policy. After 24 months, if they've been a good customer, you know, they're near in the middle or the end of their term on their loan, we want to get them back. We want to buy their car back from them and get back, get them back in another loan, secure them for another 48 months.

That's funny, Jeff. That's Jeff's big thing, Jeff, is he wants to see how many times he can get that car through. Right, Jeff?

Yeah, yeah. I mean, I think it's great. You got to restart that loan, but something you said, and I think something that we do, we lose track of, especially as Buy here, Pay here. Dealers are subprime. And I think dealers can fall into the trap of almost, I don't know, degrading or down talking these customers or being angry that they're dealing with them, or these cash offers that they get on Facebook and they feel offended because someone offered them $2,000 for their $20,000 truck. And it's like, I mean, big deal. Like, what you don't understand is these people, they're deciding on whether they keep the power on in their house or they make their car payment. And they choose to make their car payment because they want to keep their car. And that allows you to have the lifestyle you have when you're sitting beachside in Cancun with your family this winter, that's only possible because this person skipped out on their power bill, you know, or skipped out on buying their kids some new sneakers. Like we. You got to keep that perspective as a car dealer, man.

For sure. You do. Sure.

And going back to that, too. Also get involved in your community if you can give back. I know that you both have been very involved in charity events, too, but we have found that brings a lot of people in if you can. We're doing a Toys for Tots. We just did a food drive. We gave away eight turkeys at Thanksgiving. You know that that helps and that that tells the community you not only care about them as a customer, but you care about them as a person. And it's amazing the things that we got, the generated feeds that we got off leak off of Facebook just off of giving away the turkeys. And what was amazing to me is we know some of our customers that are in need, but instead of them recommending themselves for the giveaway, they recommended another family that was in need. So it was very humbling to us during that time. So, you know, as much as we can, I think getting involved in our. In our local area and letting our face be seen, not just in the dealership, but out on the streets as well.

Yeah.

It's so important. It's so important. Something I heard yesterday, you know, a measure of a man or woman is not when they die, what they have is what they've given away. Right?

That's right. That's right.

Jeff, you got anything else?

That's awesome. Kerry, thank you again so much for joining us. This has been great. I appreciate Take two with you. I've learned even more than I did the first time. And we just really appreciate your time.

All right, thank you, guys.

Thanks, Carrie. Take care.