#7 - Car lot security

Hello and welcome to the Independent Dealer Podcast. Today with your hosts, Luke Godwin and Jeff Watson, we are going to talk about Luke's top five tips for car lot security. Right, Luke?

That's it, Jeff. Let me tell you this, guys. If you haven't yet had a problem with security in your dealership, own the lot at your dealership or in the cash department at your dealership, you're going to. Let's get prepared.

Oh, that's sad. That's scary. All right, let's get into it. Welcome to the Independent Dealer podcast, the podcast for auto dealers to learn, learn and grow together. Here are your hosts, Luke Godwin and Jeff Watson. Today we are going to discuss Luke's top five tips for car lot security. So, Luke, let's jump right into it. First off, give us like the background. What makes you the pro at this?

Well, unfortunately, the reason I'm the pro is because we have had break ins, we have had vandalism, we've had car stolen, we've had, you name it, it's probably been done. So that is the reason I'm a pro at this.

Now, are you, are you downtown Compton? Where are you located? Right in the heart of man.

You know, unfortunately, you know, in the 80s, car lots were, most of, most of your new car stores were downtown in these cities. And unfortunately, you know, during that time you had all of the, everybody moving to the suburbs. So a lot of the cities just became a mecca for, you know, projects and just housing developments. And unfortunately, when all the new car stores left to go out to the, to the suburbs with the other, the people that left to go out there, I had to stay where we are. And I love, I love my neighborhood, I love being downtown. But unfortunately, it's not the best part of town. Now we're, we're a mile and a half from the, from a really nice part of town. But yeah, that's where we are and unfortunately, that's the reason we have crime.

So setting this up in context, I mean, I think about this and, you know, I kind of know where you're going with this conversation. And I can be honest with you, man, I am probably the worst at this here at my car lot. I don't think I follow hardly any of these five tips. And is it a situation where it's like you've learned through hard knocks? I mean, we all need to do this because it doesn't really matter whether you are in the worst part of downtown or whether you're out in the suburbs of Happy Valley. It's probably going to happen.

Sure. It doesn't matter what neighborhood you're in. There are thieves among us. And they target car dealerships because One, they think car dealerships have a lot of cash on hand. Number two, car dealerships have things that are very valuable. Wheels, radios, navigation radios, catalytic converters, tires. They have all these things that are super valuable to thieves off the street that aren't traceable a lot of times. Now, some of it is traceable, but a lot of it isn't. And there's a black market for these parts, you know, locally and on ebay and things like this. So very easy targets. And if you are in a bad neighborhood, what happens is you end up getting targeted just for, you know, just for someone, unfortunately, that's down on their luck maybe and wants drug money or this, that and other. So it's a little. There's two phases. One, there's, you know, just your petty thief and then there's one that's professional, so you be on top of it.

Yeah, I think either way, there's people that are going to do it out of crime of opportunity because it's close by their neighborhood and they can just jet down and target your dealership. And there's other people who will put something together and they'll drive out to the suburbs because they know it's a soft target. We've all seen the videos of dealerships having, you know, 20 cars all up on blocks or, you know, like Cadillac converters all cut out of underneath the cars, brand new vehicles, you know, from franchise stores. So. All right, Luke, let's get into it. Let's go through each one of these five points and give us a little bit of detail on what you're thinking here. So what's your first one?

First one's pretty simple. Have a cash limit at your dealership and that, you know, some of you out there may not even take cash. You know, maybe you're waiting on funding from a subprime lender or prime lender, or people are bringing you certified checks. But in the buy here, pay here business, a lot of times you collect cash today in payments. You take your down payments in cash. And don't get me wrong, plenty of prime stores take cash down payments as well. So you need to set a limit. Now, if that limit to you is $1,000, if it's $5,000, if it's $10,000, whatever that limit is, your staff, your comptroller, you. You need to be aware during the day how much cash is at your Dealership. When you hit that number, you need to go directly to the bank. You don't need to stop, go. You don't need to collect another $200. You need to have, ding, ding, ding. It's time to go to the bank.

Okay, so if I'm understanding, you correct, you inside your dealership, you, your staff, whether it's just you're on your own and some customer comes in and brings you $1,000 down payment in cash, you know that, hey, that's my limit. I am not comfortable having $1,000 in cash sitting in my safe, in my cash box in my pocket. I'm going to take a lunch break, and I'm going to go deposit that regardless. Because that guy, whoever it was, whether him or it was another customer in the showroom or someone nearby hearing it, they know you now just dropped the grand into your cash box. Right?

Exactly. You've got to be aware of that. Now, a thousand might be on the low limit, but it may not be to somebody, you know. So you just need to set the limit that you are comfortable with. And when you hit that limit, deposit the money.

Okay, so that leads us into number two.

Number two is a hard lesson to learn. And no matter if you have a safe or not, you never leave cash in your dealership at night. Always have a night deposit at your local bank that you do business with. They'll give you a key, they'll give you the bags to make that deposit. You know, make it at a certain time during the day, make it again at night. No matter what, get the money out of your dealership and get the money. You don't need it at your house either, guys. You need it in the bank.

Don't leave it in your car overnight.

And definitely not in your car.

Yeah, so when we talk about that and we say, okay, well, you know, I'm sure a lot of us probably do keep cash in our dealership overnight. You have petty cash. You have, you know, maybe a deposit that came in late at night or some payments that you received. Is there a way for us to say, hey, maybe there's a limit? Is it just personal? Hey, what are you comfortable losing? What are you comfortable. If you got broken into and they tore open your safe that you think is secure or your cash box, you know, is it 500? Is it 5,000? You know, sure.

Yeah. And we. And we have, don't get me wrong, we keep change here, but that's it at night. And that change is hidden. It's not in. It's not in the, it's not in a safe. It's not in a change drawer. Not like that. It's, you know, there's a place for it and it's. I think it's 200 bucks, you know, so I'm willing to lose $200, right?

Yeah.

But the problem with these a lot of times is if they hit you one time and they get a certain amount of money, they're coming back. They're going to be back. So it's best just to have a policy of no cash. No, definitely no cash left in the cash drawer. And I'm not, you know, a safe is. Safe is fine. But guess what? I had a safe stolen out of our dealership before.

Yeah. Picked up and hauled off. Huh.

And it was a good size safe. I don't, I don't know how they got it out of there, but they got it out of there. So these aren't secure. Now, there are certain types of safes that are secured. You know, if you do have a safe, a hidden safe is best concrete or.

I'm looking at mine right now, and I mean it probably weighs 200 pounds when it's full, but it's. Yeah. I mean, I think if someone really was determined they're. They're gonna find a way to haul that thing off if they thought what was in it was good enough. And talk to me about, I mean, I do know some dealers that, you know, they may have two hundred or a hundred dollars in their cash drawer overnight, but they actually leave it open. They don't lock it up. And they leave their safe open because they think, hey, I'd rather you steal my hundred or two hundred dollars than bust up all of my equipment trying to get at the money.

And there's definitely, there is definitely reason for that. We leave all the cash doors open at night, so if someone does break in, they'll look and see that there's no money in there, so they won't tear things up.

What about going cashless? I know a couple dealers in my 20 group and buy here pay here. They actually converted over to no cash. And they said, hey, from. I don't have to worry as much about theft. I don't have to worry about employee theft. And most of them have reported it was fairly painless. Is that kind of depend on your customer base, your demographic, your area?

It's a great idea. And honestly, we are probably 90% cashless. And it's not necessarily a rule that we went with. It's just the way society has Moved. It's a lot easier to carry money around on a credit card than it is to carry money cash wise. Because you know, the general public still has the same issues that a business owner has that they can get robbed. And it happens. I have customers all the time that gotten robbed and people have, you know, their family members have stolen money from them. So yeah, cashless is where we are moving to as a society anyway. So probably not a, probably not a bad, probably not a bad deal to start evolving to.

Yeah. And that really was kind of leads us to a bigger argument of when you do have a large customer base, say you're a buy here, pay here and you're only taking online automatic ACHS credit debit cards, you start to lose contact with those, with your customers. You know, it's a very, becomes an impersonable transaction after that. Whereas I remember 10 years ago, yeah it was the other way around where I had 80% of my payments were coming in as cash. And I saw those customers every month or every two weeks. Saw them, I knew their names, I had large cash deposits. Now it is at the point where it's the opposite. You know, I don't, I only have 20% cash payments. I don't see these people. I don't have as much contact with them because I am pushing them towards automatic ACH credit card. You know, and then maybe that's a larger topic to say, hey, you know, what is the repercussions of that when you're not actually seeing the car, seeing the customers regularly?

Yeah, that's a whole other podcast, but sure.

Okay, so talk to me about what you're number three because this I don't explain it.

Okay. Having a good alarm system and have it a monitoring program with that alarm system. It's great to have your alarm going off. But a lot of times thieves don't care. They will, they'll keep rummaging through everything because if you aren't in the best neighborhood, neighbors aren't necessarily concerned about an alarm going off. You know, sometimes people turn, turn a blind eye on what's going on. So alarms good alarm with monitoring system is way better because police response time is typically, you know, anywhere from two minutes to 10 minutes. So it really would will help if something does go wrong. And also for that fact, you have panic buttons in your office. So if something does happen while you're here, you can hit the panic button and you know, then you've got response already and the perpetrator may not even know.

Man, I'll tell You what? And the reason why this one I get excited about is I do not. I mean, I guess I don't admit this, but yeah, we have security cameras. And to me, that is my security. We have probably eight, nine cameras inside, outside. Have never really thought about an actual alarm system. Putting sensors on the doors or the windows with having it linked to the police, having a panic button. You know, I've never even thought of that. Hasn't even crossed my mind. Where do you draw that line of cost benefit? I mean, you pay an annual monthly monitoring, you pay for the equipment.

You know, right now I probably have invested in our alarm system right now, probably five, six thousand dollars. And I'm not saying that it. Sorry about that.

It's going off.

I usually unplug that phone before we start something like that. So, you know, we probably have five or six thousand dollars invested in cameras, equipment, and there's still, you know, it's probably a $70 monthly fee to monitor it per building. And I have three different buildings secured like that. Wow. But I can tell you this. Lately out of the times we've been broken into, what happens is that, you know, the person comes in the building and as soon as the alarm goes off, they walk out. So there's a big benefit to it. Now, we did not have a security system up until about three years ago. And when we got, you know, we got broken into that night, it was a significant loss of cash and things. So if we would, you know, I'm not saying that if we would have had that monitoring system, that night would have been different. Maybe not, because we still weren't. We still weren't living up to the rules that I've put in place now. So, yeah, every time something happens, our security gets a little better. And that's probably the reason, you know, reason we're talking about today, because I.

Have a couple of hard knocks for sure. So let's transition to the next one. Let's talk about exterior security. What do you do on the lot for your inventory?

So this is the second lot we've been at. You know, we've had. The original lot was open in 1984, and from 84 until. I'm sorry, 85, until probably 2000, early 2000s, we didn't have a border. You know, nothing that would, would prevent someone from just driving out.

Like your lot was just wide open. You mean left to right, front to back, it was just like in the middle of a parking lot?

Yep. Well, one day, about halfway through our dealer liability insurance year, the Agent comes by and he said, where's your fence? Where's your barrier? So we don't have a barrier. He said, well, your insurance company is not gonna cover any loss if you don't have a barrier. And so, you know, we fought it for a bit, but, you know, we at that point installed a chain barrier that actually looked pretty good around our dealership. At that point, it really cut down on your thought process of something happening at night and a car getting stolen. Where we would probably have one or two cars stolen a year before, then it went to zero.

Hold on one or two a year.

One or two a year?

Yes. One or two cars a year would drive off your lot at night?

Yes.

By someone. I mean, is that a thing? Can people hotwire cars or would they come and bust in and take key.

No.

Back?

No, at that point, all the keys are going home at night. So they would just hot wire the car and leave with it. So. And typically you would recover the car a couple days later. But, you know, what's the cost of that, you know, a couple days later?

Man, I cannot imagine your insurance premium. What is going on out there?

Well, yeah. Oh, you didn't, you didn't file anything on insurance because it was useless. Wasn't worth it. Yeah. The bet, the best way to lose your insurance in our business is to file claims.

That's great insurance, but you know, but.

Then we moved to the, to the new dealership and they already had a barrier up. It was old Nissan store, so the barrier was already in place. We've, we've painted the barrier and it's a very, you know, it's a three inch pipe that they welded in and it's, it's secured with concrete to the ground and it's great. I mean, it works wonders. And we block every, every night we block with cars on the driveway, you know, and this is something that you need to do. Dealerships need to be barricaded at night.

Okay, help me out with this. Logistically, I want to understand this because this is something I feel like I want to start here at my place. When we have a driveway, it's probably, probably I would have to put two cars lengthwise across it. You block those cars in. How do you pick the cars? Is that something that maybe has more of a chipped key and is it maybe a little more fancy, less to be stolen? And then what do you take those keys with you? You take them home or you run them back in and put them back in your lockbox?

So I don't want to disclose where all these keys go at night.

What would you recommend for me?

So what I recommend for you is this. I would recommend at night. Now, you can't park the cars lengthwise, because what will happen is they'll just drive through them if they really want to steal something, which we had happened about a month ago. Okay, so what we developed here lately is if you park three cars side by side, it'll close both of our entrances. So we use six cars to close the entrances, and we put the parking brakes on. So if they do try to push one out of the way, it's really gonna take some time.

Right.

So that is what we've. That's what we've come up with now. But every night before we go home, we use six cars to block our entrances.

Wow. And then in the morning, you gotta come back, move them all.

Move them all. And, you know, you can do what you want to with those. With those keys, you can take them home. And that's fine if you're the one.

As long as you know you're gonna be the first one back into work in the morning. That's right.

If you're the first one there, the first one to leave, take them home. If not, have it, have a secure. Another secure location away from your other keys where those cars are.

Incredible. So that leads us to point number five. Luke, talk to me. I've done a couple of things lately with my key storage, but what's your tip?

There's plenty of ways to do it. We spent 20 years taking every key home every night. That. That is time consuming, but it's definitely a good way to do it. Number two, get a key machine. That's a secured key machine. Now, that's a little higher end, and most new car stores have this, but it definitely a really good way to do it. Lock boxes on the car. That's what CarMax does. You know, that's what a lot of big dealerships do. So that's a good system. You can't get in one of those boxes. And no matter how hard you try, it's almost.

We had a dealer across town that had. Had a Tacoma stolen from them three months ago because someone came busted off the lockbox, took it home for four hours, got into it, came back later, and took the car. So it can happen, but it sounds like it took a lot of work.

Yeah, it's a lot of work. But if you have key fobs, you got to have a Faraday box inside of the lockbox anyway.

That's true. Your key fob is just going to open the car right up. Right, right.

So, you know, backfire. Yeah. Then you've got more logistical nightmares. What I suggest is either a key machine or a secure room where only keys are left. And that secure room should have a metal door with a metal frame, a thick metal door, or a thick wooden door with the metal frame, and have a very secure lock that only certain people have the code or a key to.

Okay, so we use. I don't know if you've seen the GE lock boxes. They're like little metal lock boxes and they've got like eight little push buttons. And you push the button and you turn the little lever and it opens it up. And that's what I've used for all of my keys. When you say a key system, are you talking about, you know, the real fancy, like secure boxes where you punch in a code or you enter your little key, you put your key in and that allows you to take one key out. I mean, is it key management or key security or do you want both?

That's both there. You know, new car stores have key security and key management because you have so many cars in stock. You know, if you have. You have 100 cars in stock, 200 cars in stock, then you probably need that management as well. So you would probably invest in something like that.

You know, one thing I've just switched doing a couple of months ago as well is we now zip tie all the keys to the key fob and the tag.

Yep.

Because I've heard of stories where people will come in and, you know, want to look at a car, quote unquote, and they'll swap the key out, your key for their key, and you won't know it because they never drove the car, you don't start it, and now all of a sudden they've got your chip programmed key and you've got a fake sitting on your key ring.

That definitely happens. And even. Even had customers go on test drives and have another key made during a test drive.

So, yeah, some of these ones that aren't chipped, that's super easy just to stop in any old store, Lowe's and get a key, you know.

Yes, yep. So that is definitely a good idea to do.

Yeah, that's. That's real interesting. Which I guess comes comes back also. I think for those of us that are buy here, pay here. One of our policies is every car gets. We do use GPS's. Every car gets a GPS. The second it hits the lot, you Know, and that's kind of been one of the steps I've taken as insurance to say, well, you know, hopefully the word is out that we use GPS's. Hopefully the word is out that all of our cars have them and we become less of a target because they know that if they take the car we're going to be able to track it down within a couple hours.

That is, that's definitely a great, a great thing to do. We do that as well. Unfortunately, we had somebody on Test drive about four months ago that decided they knew where the GPS. They ripped the GPS off within 15 minutes and at the start of the test drive, luckily the car had OnStar and we were able to recover it pretty quickly.

Man, that sounds like you're in a fun spot. Man, that's interesting.

I think and honestly I think most major, and we're not necessarily a major metropolitan area, but we're pretty, pretty big city. You know, I think there's just, that happens. I just think it's crime in general. So, you know, I just think you just, that's the reason you need to be prepared.

Yeah, yeah. I think I'm probably, you know, being here in the middle of Utah, I feel like I'm maybe a little naive to some of the stuff that goes on and been in it 10 years and knock on wood, no major issues. But give us a couple of maybe just some rapid fire tips. I know we did your top five, which are limit the cash at your dealership, never leave cash overnight, have a good alarm and monitoring system. Number four was make sure your perimeter is secure and you're blocking your cars. Number five is make sure your keys are secure if you're going to leave them at the dealership. What are some other just kind of off the cuff tips that we could put into practice today to prevent theft.

So, you know, a couple higher end things that cost a little bit of money. Lighting on your dealership, it needs to be almost daylight at night. So just make sure. If you're thinking about switching to LED lighting, do it today. Because let me tell you what the difference is. LED lighting will save you probably half to three quarters on your power bill and it will produce so much more light. It's just, it's amazing. So you could run more lights for less money. So I recommend that. But it's, don't get me wrong, it's expensive.

Light it up.

Light it up. The next thing is if you have any cars in your lot that you think, hey, you know what, if I was a thief, I Might would try to steal that, or I might steal the wheels off of it. Or it's got a really nice navigation system in it, radio system in it. Bring that car to the front. Bring it to a really well lit area that faces a major road. If you're on a major road or the closest major road you have, just make sure that it's out front so it doesn't get messed with.

Interesting. So that's almost the opposite you would think. Don't hide it in the back closest to the building. Keep it out on the front where road traffic people are less likely to steal the cars on your front line because someone's gonna drive by and see something going on.

Exactly what you're hoping is, is there's a good Samaritan out there that says, hey, I see something going on, I'm gonna call the police. Now, that doesn't always happen, but the chances of that happening with your car part out front, much better than it part out back.

Right, right, right. Convertibles, you know, some of these cars, like, you know, off my cuff, I'm looking at one right now that's gonna be pretty easy to get into, you know?

Yeah, it happens every day.

Okay. Anything else?

You know, if you have any issues, the best thing to do is call and talk to your local sheriff or your chief of police and let them know what's going on. Make sure you file a report every time something happens at your dealership. If you don't file a report, you think it's too simple. The police don't know to help. So help the police out. Also, they can set up property checks at night, and they'll come by multiple times at night and walk the lot and see if there's something going on. So don't be afraid to involve the authorities, because we pay taxes for a reason, and it's, you know, to get the help we need when that happens.

Okay. Get, get. Have a relationship with the local police or sheriff's department. Absolutely smart. Anything from an employee standpoint. I mean, internal theft. Do you have. Do you have employees that would make it easier for one of their buddies or someone they know to get at your cash or your cars?

Yeah. You got to be really careful with who you hire. Background checks. If you've got a weird feeling about somebody, don't hire them. I mean, that's pretty simple. Or if you got a feeling about somebody that's currently working for you, you know, I don't know what you do in that situation, but if you've got a funny feeling you know, go on. It's. You know, typically, feelings are there for a reason. Background checks are essential. Driving record checks are essential. Know who you're hiring, Know, you know, what's going on in their life. Yeah.

Well, one fun thing I'll do every so often is I'll throw an extra 50 or an extra 20 in the cash box when everyone's. When no one's looking, and I'll see if it comes out at the end of the day in the countdown, you know, and just. Just little things like that that you can do without. You know, you're not trying to bait them or trick them, but you're just, you know, oh, yeah, yeah, yeah. I had an extra $20 payment that I took in, and you can have a good reason, and they come to you and, oh, I'm over, or, hey, I'm under, you know, even another situation. But, you know, parts. I mean, if you guys haven't. If you guys have a shop on site, I mean, that's probably a whole nother podcast. We need to talk about parts security and shop management.

But that's, you know, another thing is there's places on your balance sheet that you can find lost money. So make sure you have cash clearing accounts and make sure that journal entries are only made by you or by your accountant, because there's cash clearings are there for a reason. If you take money in, it should sit in that cash clearing until it's canceled out by another transaction. So if you show up to work and your cash clearing accounts off by a couple thousand dollars, you need to figure that out that day.

Yeah. And so I think to wrap all this up, what kind of jumps into my mind is don't be so busy working in your business that you're not working on it.

You know, we're all guilty of it, buddy.

We're all busy, you know, and we're so busy just churning and burning. Hey, that's just the way it's always been. And yeah, a couple keys got thrown on the counter tonight, and someone didn't lock up the box. Someone didn't walk the lot and check all the doors. You know, this gate didn't get closed. This lights out, and I haven't got around to fixing it. Hey, I don't have a cash clearing accounts. I don't have a secure safe. I mean, just take a break, you know, take a day off, work on your lot, security. Spend a couple of bucks, you know, an ounce of prevention. Any. Any other words of wisdom you can leave us with today, Luke?

Man. That's perfect, Jeff. I think. I think we covered it.

All right, thanks a lot, everybody. We'll see you next week.

See you guys.