Auto Dealer Monthly Magazine is the daily operations publication serving the retail automotive industry. This automotive publication serves dealer principals, officers and general managers with the latest best practices.
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owners are late on payment. Many dealer-controlled finance operations also employ GPS tracking software to keep tabs on their collateral. Nikki Munro Walters' business is fluid. His minimum down payments required vary depend- ing on the deal, and he has been forced to alter terms due to changing laws out of the Tar Heel statehouse in Raleigh which cap the interest rate he can charge. That is something dealers across the country already are facing or could be facing as states enact so-called predatory lending laws that govern interest rates. Walters has adjusted, and admitted he will do just about anything he can to get The key to survival is simple—collec- tions. "You want to collect like hell in this business," Walters said of BHPH. Dubois' seminar on collections showed dealers ways to best do that while avoiding pitfalls in the BHPH/LHPH business. "There's no right way or wrong way," he said. "There are proba- bly as many ways to operate buy here pay here as there are buy here pay here dealers." The key, he explained, is to take time to analyze your business. "Success in buy here pay here is managing risk." Leasing has also become popular, not only with new cars, but at lots specializing in used cars. "There are significant differences and a lot of misinformation out there," said Auto Star Solutions' Allen Dobbins, who led a session on the $375-billion leasing industry. "To me, pay-here is becoming a dinosaur. Today, people are looking for short-term commitments, so leasing is an advantage." customers in a car. "If you've got $3,000 down and spent the last two nights at a Quality Inn, you're stable enough for me," the colorful speaker said during the panel discussion. The key, panelists agreed, is the down payment and use of technology like starter-interrupt devices that dealers can use to disable vehicles whose Untapped Potential With any subprime operation, selection of vehicles is an integral part of suc- cess, said Goebel. "Inventory continues to be the biggest glaring problem," the special finance guru said in one of eight sessions he led at the summit. Whether special finance, BHPH or LHPH, dealers are failing to study the demographics of their communities and are stocking inventory that doesn't move, thereby leaving thousands of dollars on the table and lots full of unwanted vehicles. Among other topics discussed in detail at the conference were implementa- tion of programs that appeal to Chapter 13 bankruptcy and military markets, two very specialized niches. "Bankruptcy customers are very thankful," said Mike Anthony, a finance specialist at VanDevere Chevrolet in Akron, Ohio, of the joy of helping credit-challenged customers into vehi- cles. "We treat them no differently. Nine of 10 of them are here because of a significant life-changing event (loss of a job, disability, divorce, etc.)." In fact, helping the disadvantaged was a theme that ran among many dealers at the Subprime Conference. "I feel like I'm taking care of my brothers and sisters," said Kevin Thomas, a speaker at the convention. His Hinesville, Ga., dealership caters to military clientele from Fort Stewart, many of whom are on their own for the first time or sim- ply have a poor credit history. More on financing to the military sector can be found on page 20. As an outsider looking in on dealer- ships, one thread Radigran picked up on at the convention was reinforce- ment of something he's believed for some time—auto dealers tend to be impatient. "They're like crows, always looking for the shiny object," he said. "If (one practice) doesn't work immediately, they tend to scrap it." So, his advice until next year's summit? "If you find your niche and become very good in that particular niche, you'll be successful. Whatever you focus on, you tend to do best." Alan Ram 27