Wake up, Buy Here, Pay Here people. It's a beautiful day. Go grab yourself another cup of joe and say hello to Jim and Michelle Rhodes on the Buy Here, Pay Here morning show. Take it away, you two. Good morning. We got no audio. I can't hear you, so. Okay. I am, let me just... Oh, that's probably why. Okay. So you're probably hearing us out there. No, because I didn't have my mic up. So yesterday we did the broadcast for the Dealer Roundup. And so I'm like backstage doing the backstage-y things. And so messing with the board. And I should know better than that. You really should. Yeah. I feel like by this time you should have learned. Yeah. Well, you know, well, this morning, it looks like, too, that maybe some of this Facebook stuff actually went into effect or something, because we're having a hard time pushing to a couple of the places that we normally push to. So I did share because we knew there was technical snag this morning. I did share the. morning show podcast over in the success group. So folks can find it. Hopefully we'll get, uh, get it located over there. So all good. I think, um, any updates we have, obviously our, uh, dealer roundup happened yesterday. And so we've got that for those who were ticketed and could not attend, you will get, uh, the recording, um, you know, once it's available. Uh, so probably we have a busy week next week. Yeah. Turn that around quickly for you. Yeah, it is. Um, and, uh, Monday too, we're going to be talking about, um, uh, the texts, you know, uh, Yeah. Ben Goodman is going to be joining us and another gentleman. I can't think of his name right now, but we'll have that all out. He just recently wrote an article in the dealer magazine. So, so we'll, we have a couple of guests coming up on Monday. It's really about hiring tech. It's about hiring. Yeah. Thank you. Yeah. Yeah. Hiring techs. And then Friday of next week is our 300th episode. So here's what we're going to ask you all to do. those of you who are out there listening and listening when we will be reaching out to some of the people that have been on the broadcast do a quick video clip just you know like congratulations on the 300th episode or whatever and um just anyone out there listening if you want to send us in something um we'd be you know we'd be honored and um and so 300 is a big deal It's more than the last big deal. Well, you know, it's funny because I talked to some of our colleagues and ones that I consider friends and they say, you know, you guys are like consistent. That's a big thing. So I was like, you know, that's true because I think that we've only had just a small handful of reruns. since we started so that's um that's that's so should we call this our 300th episode or should we call it our 297th episode plus three reruns is that like what do you think we should call it Actually, shush. When I go into Kajabi, which is our platform for our broadcast, the ones that we've done that reruns before we hand it off, we have an assistant now that handles posting all that stuff. Before that, I didn't put the reruns as broadcasts. Yeah. So I think it's pretty accurate. It's not a hundred or, you know, 297. Yeah. Um, what else? Oh, next week we will be at, uh, on Monday as well. We will be at, uh, the new user summit. So Tuesday, sorry, Monday we're driving to Vegas. Okay. I should just stop talking. The calendar matters. So, yeah, we haven't decided. Probably Monday we'll do the broadcast from our studio and then head for Vegas, be there Monday night, and then be with the Neo folks for the User Summit on Tuesday. And then BHPH United starts the other cocktail thing on Tuesday night. And then the actual agenda of sessions is going to be Wednesday and Thursday. Yeah. And we will be having some meetings during the week with some of the folks who just happened to also be in Vegas. So we're working out some strategic planning meetings with some of our folks. And so looking forward to getting down there for that. Yeah, that'll be really, I'm really looking forward to. Some of those meetings. Yeah, I'm looking forward to some warmth, too. We had a little stretch of warm air here in Utah, and then it turned cold again. Yeah, it's like been coat weather for the last week. And it's like, I'm sorry, sun. Sun is out, but it's coat weather. And I'm... Yeah, I'm over that. We were doing some visioning and, you know, we're always about like, what do we see? Because it's, you know, it's mindset and all of that frequently. It's like, where do you see yourself in, you know, different times of the year? And so we were doing some visioning on that. And I can promise you that where we saw ourselves from the months of January, February and March, at least, was not in Utah. Yes. so yeah for sure uh yeah okay shall we get to our thing I think that yeah is acceptable yeah let's uh let's get into this subject of uh kind of what I've referred to it in the past as kind of thinking inside the box it's like you know our subject really is kind of thinking for the customer And I think most of us on the surface recognize this. And we do see, though, sometimes that we must lose sight of it sometimes because we see sometimes that salespeople have put a customer in a car with far too much payment. Somebody approved the deal. And so it's really a question of what are we overlooking? Are we moving too fast? Or what's going on there? Sometimes, and here's just the thing, you have... You have this need to produce sales as a dealer. Sometimes that need is pressurized by whatever your lending relationships might be or whatever the case may be. And so there's always the need to produce sales. And we have to measure that against our need to structure a deal that is going to be successful for the customer. So there's a lot of different layers to this conversation. But I would say, first and foremost, we have to recognize, and I think most listening today would recognize if they're in the buy here, pay here space, that for us to be successful, our customers have to be successful in these loans, right? Yes, absolutely. Unless we're in this small group of dealers who say, I hope they do mess up so I can repossess the car and sell it again. Or ones that just don't, you know, it's like, I need a whole bunch because I know the repo rate is X because they're just not writing good paper. And so it's like, in order to keep ahead of the repo rate, it's like sell, sell, sell, sell, sell, just, you know, fog a mirror, get a car, that kind of thing. Those are examples of... And, you know, there's dealers obviously always will be some dealers out there who are a little bit short sighted on this or they're feeling pressures or whatever. So those are all the reasons that we might find ourselves in a situation doing business in a way that's not necessarily about setting the customer up for success. So when we think about the customer success, it's easy to think of this in the first place to think is. payment like the actual payment amount or payment ratio to income that what we call pti so I think you could look at that we could also talk about the collections for today we chose mostly to focus on this idea of sales and of course we just a couple of weeks ago we brought this spreadsheet this this kind of calculation tool that I created to help kind of identify know what are the customers basic needs right what is it you got to have a roof over your head got to have food to feed you know family whatever and so now now what can you really manage in terms of car payment and insurance and this is where it really starts to cross into one of our jobs and and you know there are lots of dealers out there I've talked to over the years who who certainly live by this as well which is In a buyer-payer space, we sometimes have to wear a lot of hats. It might be a salesperson hat. It might be part-time mechanic sort of specialist. This might be a collector, obviously. Sometimes it's kind of a counselor. Like it might be a financial counselor. It might be a family counselor sort of thing where we're really just listening. We're not trying to be qualified counselors. But we do find ourselves in that position sometimes with our customers. And this is a position where I'm saying – We have a chance to help the customer and kind of help them think for themselves about what is manageable. I really like Candice Price's, what they are doing at their dealership in Nebraska. As they sit down, as challenges come up, the first order of business is to help them come up with solutions for those challenges. So it's like, I'm having a struggle with getting daycare or whatever. And it's like, I know who we can call. So let's see if we can get that. And that they're problem solvers. And that's that, you know, that financial advisor that, you know, whatever kind of, you know, whether it be the dealer or the salespeople or, you know, we've never been a real fan of calling themselves people anyway. Right. Um, but the, the person that is guiding your customer through the loan process, um, you know, the, the more they can help the better, but it's, you know, that there is, there is a level of, um, of thinking that, like you said, that we have, that we don't have to, but we have an opportunity to help them be successful by helping, um, and by doing some of that stuff. Yeah, and I think one of the things when we had our tip of the hat to Rick Reeves a few weeks ago, one of the things that we referred to, that material from the mid-'90s, which talked about that the customer will accept more financial responsibility than they can really afford. Mm-hmm. I've known that to be true throughout my career, that fundamental training that we refer to as the training that I received way back in the beginning. I find that almost everything about that is still fundamentally true. Some of the numbers change in terms of income and payments and those kind of things, but the fundamentals are still there. And really the part that is key here is you know you haven't been there to witness it but when a customer comes in they're in a tough spot their their last car got repossessed or it broke down or they've been they've been without a car for a long time they've been borrowing a friend's car but now the friend got a job and they're in a tough spot they got to get to work on monday which is you know 15 minute drive or whatever and they're in a tough spot they need some wheels and their credit's a mess and they don't have a lot of down payment and you know in that kind of exaggerated example if I had a customer who was in a tough spot really just you know I need somebody who will help me and I step forward and say you know let me see what I can do to help you and I say tell you what I can finance for you that you know that chevy cruise out there with your 500 down your payments will be 750 a month here it is sign here and you can take it right away And the customer will sign it, like $750 a month payment. We don't know their income in this story, but you get the idea. The customer, when they're in a difficult spot, they'll say, okay, with my $500 down, I can get in a car today and I'll get to work on time on Monday. I'll figure out the rest later. Yeah. Sort of the mentality. And so this is where I started to say, we have to kind of kick in. This is where we... have to think for the customer, and most of us do, right? But we have to think for the customer so that they don't step into a situation where we're setting them up You know, to fail. And that's just what we sometimes find ourselves in that place. So it's like we just have to slow the customer down. And while we don't look real hard at debts, you know, we do look we need to look at their other expenditures in the family, look at their situation and do the best we can. So, you know, that sometimes is about down payment, too. You know, we're talking about. payment amount and that's easy math like verify their take-home pay and now look at the payment relative to that that's pretty easy math the down payment is something that and especially if you extend it to deferred down payments like I personally come from a lot of success with deferred down payments and I think if they're structured right they can work beautifully When salespeople are trying to put a deal together, sometimes they can ask a little bit too much of the customer. You know, you're going to pay an extra $250 next week. Well, did they look at the fact that rent comes due next week? It's like, you know, it's like we have to think for the customer because the customer will agree to do it. They're in a difficult place. They want to get a car. They really aren't thinking far enough ahead on their own financial checkbook to think about how their bank balances are going to look. And so they'll agree to do it. And this is where we have to make better choices and help the customer think through those pieces. Well, you know, and when we've talked to customers, we've had the opportunity to do some surveying of customers. One of the things that comes up, I mean, there's like, there's a couple of things that the reason why they're in this spot, it can be life circumstances. It can also be lack of education. We've talked about the education gap an awful lot. And so, you know, that's, that's where thinking for the customer is, you know, you're, you're Um, we have an opportunity to help them experience success, but that they're not going to set themselves up for success. We have to set them up for success and guide them through success. This is what success looks like. This is what, you know, being, being, um, Uh, uh, being aware of like the, these are the bills and the things and the stuff and, and then helping them throughout that, that path, because, you know, we can teach them about budgeting, but until they experience success in budgeting, it won't stick. And, you know, so many of them, they were never taught how to budget, how to balance a checkbook. All they know is, is when I look at my, my account, I have $300 in there right now. And, um, not even thinking about, oh, that's right. I have, uh, um, a gas bill that is coming up or I have daycare or something that's coming, you know, those kinds of things that, um, that um you know they just see three hundred dollars yeah and it's like oh I have three hundred dollars I can give you for a down payment because I got it in my account it's like uh yeah yeah and this is where kind of the the thinking in the box piece comes into play because when we're when we're kind of playing the game that can be a little bit of whack-a-mole that is structuring a I love that game pay here deal you know you get the down payment right but now the term's too long or the price is too high whatever so you got this kind of this game that you're playing the thing whack-a-mole it's a very serious game obviously but it's I think, you know, as you think about this, you know, you've seen me present and do training on this down, I call it down payment worksheet. Initially, more recently, it's like a pre-app sort of little tool that we use to, to do some math with the customer. Like it's like a worksheet that we can do with the customer on the screen and it, There's a part of that where you present the payment ratio and you talk about PTI because we know PTI, but the customer doesn't know PTI, right? And so I didn't even know what PTI stood for when I first joined the same as I understand payment to income ratio. So, yes. So let's talk through that piece a little bit, because of the way that I would typically present that to a customer. is I would say, you know, when we set your payments, you know, because I'm typically listing their income and then it'll calculate about what the income percentage would be. It kind of gives a little bracket there, a couple of different levels for a guide. And now I can say to the customer while they're looking at that, you can see we try the best we can to keep payment ratio, your car payment with us today at no more than about 20% of your take-home pay. We would need to verify your take-home pay. But that's not a hard and fast rule. I mean, we've got a little bit of flexibility there, but we certainly are mindful of the fact we don't want to put you in a position where the payment's too much and too difficult. We certainly are going to want to see you get the payments in on time. So we try to set this payment, you know, as close to this kind of 20% range as we can. And the customer's great. You know, that means my payment will be 350 or whatever. Great. But the problem is now we have this other problem is fitting inside the box is to get to that payment. Now our contract length becomes super long unless we come up with $7,000 down or something. So it's like, and it also limits your, what would work best on your lot. Yeah. Yeah. If you're going to stay inside that box. And so this is the part that I'm saying is we have to help the customer understand. And a lot of times this is so difficult because I see it, you know, we've seen in dealers are dealing with it. It's BDCs dealing with it. Like the customer's asking questions about, can you get me in a car for 300 bucks? Like, There's a lot to understand about that, you know, about, and so we could say, no, no, I can't get you. But then reality with a large enough down payment of affordable car, we could, you know, so you just, you don't know, like there's a lot of helps. So this is back to that knowledge gap customers by, by even asking that question, you realize they don't understand all the things that have to fit in this box. Right. And so this is where the knowledge gap comes in. And this is why we want to try to educate at this level, but really it's about, um, just setting the customer up for success. And so in our session yesterday in our roundup, that session around, you know, salespeople and what kind of skills we're looking for with salespeople, you know, it did come up about this matter of, you know, working with customers to figure out a payment and helping and kind of selling them on why they need to choose this car instead of this car, you know, this, this, this simple car instead of this expensive SUV or whatever. So there's, there's stuff like that to navigate. Um, But I think it's really just mathematics. And when I say inside the box, it's like we have to kind of help the customer understand this. This is not this is not going to be a good situation for you. And if I say, you know that this we could we could look at stretching the payment a little bit, because as you can see at this payment, I'm just picking numbers today. But if it was a payment calculated 350 for your income, then this car that we're looking at that's priced at $12,900, your contract length would be so long, and that's just not going to be good for you or for us. So that's the phrasing I've kind of used for the customers. Like, that's just not good for you or for us. It's just not going to make sense to do a contract that long. The car's got a lot of miles. It's like, you know, it's just not a good recipe. So this is the kind of stuff where we have to sort of, you know, work with the customer and think through these things and think for them because, again, they'll agree to it. We have to make sure that we set them up for success and this is all part of how we do it. So again, you can imagine the same kind of conversations on a collection side. Customer is wanting to do something payment wise and we're trying to help them to be successful, right? And so we can save that conversation for another day, but it's all part of the same thing. Now the term of the loan has been kind of mapped out, but But now when we get over the collection side, it's more a matter of how do we, how do we help the customer, you know, make sure that they can stay on track, not fall too far behind. You know, there's all those kinds of elements to consider over on that side. One of the things I, I think it was, I think it was Brent that we were having a conversation with about, you know, the difference between retail and franchise and buy here, pay here is that, you know, you, you, you encourage them to be on the lot. in retail and franchise. Be on the lot, choose a car. Be on the lot, choose a car. Be on the lot, choose a car. And in our world, we really encourage dealers to get them off the lot. Get them off the lot because the sooner you can have that kind of conversation and education, the less likely they are to be disappointed in not getting the car that they want. Does that make sense? Yeah. So it's like get them off the lot. So they're not looking at all the shiny stuff, but they see there's cars. So, you know, there's a car here that, you know, you come into the, I'm buying a car today. But get them off the lot, get them talking about the program, you know, doing the budget thing. These are the cars that we think fit best. And then if they say, well, what about that one over there? Well, that one over there is going to require this and this. And unless you have more down payment or unless you, you know, we're not going to be able to do that car, but we can fit these ones in. So what if we were to do this? And then in, you know, a year or two, whatever you trade it in and we can do something, you know, a little bit different or whatever, whatever it is that your program is at your lot. But it, it, I, I, um, the psychology around, um, uh, helping them settle on a car that works for them and you is, is going to be helped a lot if you get them off the lot and get them in the building. Yeah, and we did a show several months ago around this thing about the timing of the application because I would get them away from the lot. I know what I hear a lot of people talk about is this idea that they really want the customer to be fully qualified. Like they want to take them through a whole qualification process before they even drive a car. that's not the project I would recommend like I I'm fine with them choosing a car that fits within a certain financial box or whatever but but because I don't really need an application on somebody's not buying a car you know like a car you know then then I don't I don't need the application and I already know I don't need their application no they have credit trouble so it's like yeah you know it's like I'll I'll save most of that for the later stage But I think, you know, in this context, it's really about getting away from the car so we can talk about this financial sort of structure. And that way we can have a better chance to go back and choose a car that is going to fit. And what their needs are. And also to set them up for success. That they can, you know, it's going to fit financially and that we can, you know, both, you know, enjoy a long relationship here because the deal is structured well. You know, so that's really what today was about. And we can wrap up. I think we covered the part that I wanted to really express today. Sure. So I'm thinking that we may put the recording in some of these spots that it didn't go to and figure out why and if there's something that we can do to work around. I think they got it because of the morning show. I shared the morning show podcast link. Absolutely. So hopefully they got it. Awesome. Um, so nothing else we got, we, we got, yeah, good. Yeah. Get them in, get them in the building, help them figure out how to let them up and help solve problems. Um, you know, that's one of the big things that we are blessed. to be able to do in this industry is help people solve problems not solve them for them but help them solve problems and so that's yeah it's it's uh like I said I love what candace price is doing because that's that's kind of their their credo and their motto there all right everybody thanks so much for joining us happy friday yeah okay we'll talk to you later thanks guys
