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. Hello, hello, hello. Happy Monday. It's another week. It is the beginning of another week. Yes, it is. Welcome, everyone. 19th of August, Monday. It's a full moon. Tonight is the full moon. And it's like a blue super moon. So those of you who have clear skies, I know the last couple of days you've probably been able to see it. But it's officially the full moon. Not new moon, but full moon. And they're just... It's like that's the time that you go for an evening hike. Or something like if you've got clear skies. Because it's just... It's like having a nightlight on all around the planet. And it's pretty cool. And, you know, those of you who believe in cycles and all of that, it's a really great time for a new, you know, we're at the fullness and the, what do they call it? The new moon is the beginning of cycles. So the full moon is an end of cycles? The full moon is the fullness of a cycle. Okay. Yeah, that makes sense. I'm the one that's more woo-woo here. So, yeah, full moon is more of the end of the completion, the pinnacle of whatever. So, you know, those of you who set, a lot of people out there set goals based on cycles. Mm-hmm. And, you know, it's like New Year's resolutions, all that kind of stuff. And so that's just one of the things that's been around since the dawn of man, that there's a specific cycle. This is the culmination of that cycle right now. I'm familiar with the solstice associated with the sun, which is to me more significant. But that's not what we're going to talk about. Well, then there's the other thing. Full moon is when all the crazies come out. More babies are born and all the crazies come out. Or the crazy in someone comes out more on a full moon. Jim, I'm not crazy. Is that what you tell yourself? How? Yeah. No. No. Okay. All right. Yeah. Well, yes. I'm not crazy, but go ahead. Shall we get on to our business? Yes. What have you got? There's not an awful lot. We've got a busy week this week. And one quick thing I thought I would mention is not so much an announcement as much as an observation. And this is not necessarily anybody that I'm working with this week, but one of the things I've seen is that You know, we talked about this in the past, like dealers, I find are struggling to get to the information that they need in their DMS. Of course, we have this ongoing thing. And it's, yeah, it's every DMS. It's either non-education. They haven't like really been trained well or trained themselves well, or it's just harder. Yeah. In certain DMSs. Yeah. And I think the part that, you know, with this V8 thing, what's interesting is we ask the dealers for 24 numbers. The first month that they send in, they send in some close of the month stuff that we then use for the beginning of the month. So there's like six or eight numbers they give the first time that they don't give each month, get there after. But 24 numbers coming from like, you know, sales, receivables, collections, And it just baffles me how they're like, oh, I can't get the report. It's challenging to get. And it's not like I don't want to do it. It's just like, I don't know how. And I'm not even really talking about so much for VA. And by the way, this is a smaller percentage. We have dealers that are quite capable of all the stuff in their DMS. But they still, even those dealers struggle to get to some of the numbers we're asking for because maybe we're asking for it in a specific way or labeled differently than what maybe is in their system, whatever. But yeah, I just find that this is something that is going to be part of my work for the remainder of my career is just kind of helping dealers. And today is kind of an example of just pulling together numbers, sharing the stuff and helping dealers understand why this stuff is important. Well, and it's when you say your work for dealers, it's also your work as not a mediator, but like someone that can work with a DMS is to help them understand and some of the things that we're looking for. It's like that the thing we're working on right now, which is the principal balance at the end of the month. And so little by little, you know, we're just, it's working with dealers and it's working with DMSs and other providers just to, it's like, what are the things? And it's, you know, one of the things that I really, really appreciate that I've been able to sit back and watch, I'm not the subject matter expert, is that that Because, you know, you have the opportunity. You've been a dealer. So you know the stuff that you struggled with. I mean, so you've been the dealer. You've also been a general manager. I mean, like when I say dealer, I mean dealer principal. Like the buck stops here. I'm the one that has to sign the paychecks um you know whether or not we whatever is ultimately my decision dealer because I there's it seems to be lots of definitions of dealer out there but it's like the dealer principal you've been a general manager all of these things and so and with what the work that you do right now I'm praising you right now, so I'm on air or whatever, is that you get to get into so many different DMSs. Sorry. You get to get into so many different DMSs and learn and be able to identify things that are a struggle or whatever. You're in a really unique position. Yeah, I am. And then the thing that we talk about being agnostic, like not having specific alignments with certain parties that, you know, it allows us to, you know, speak freely about a subject, right? That we can be neutral and be able to get in here and speak about some of the stuff. And I think, you know, the DMS people have been very cooperative for the most part. Most people have been very receptive and helpful and have at least made a pledge to help because you know some we haven't seen some of the stuff yet but it's like they're pledging to to give the effort and uh and it tells me that they recognize the importance of what it is that we're doing but yeah that was kind of on my mind this morning working through these numbers I pulled together a reasonable pool I mean it's smallish but it's certainly many times more what dealers would get if they were just trying to learn this information by going to hang on do I feel like I have an echo let me see if I know something in my system no Well, not from this. I don't hear anything. Okay, good. Anyway, the thing I would just say is we see that there's, if I'm a dealer, the best I can do, if I'm not in a 20 group and I'm not a V8 group, the best I could do is, you know, I got a dealer buddy. I can call, Hey, how's business? Or how was, how was July or whatever, or I can bump into people at the auction, but that's still a very small sampling. And there's always the question of whether or not they're, you know, you bump into somebody at the auction, are they being on the level with you? I mean, people are generally speaking. Which is one of the things that dealers have said that they really appreciate is that, you know, with the V8 stuff, it's verified. Yeah, that we validate this. So I think that's an important thing about the numbers that I'm going to share today. I ended up doing analysis on three points. So I did sales of volume, June over July, or July versus June, rather. And then average down payment. And I did a number of charge-offs. And then receivables, like how much did receivables change? So you can share the screen. We can start to show what it is. I don't know what you, or did you do slides? No, I'm sharing the actual device. Oh, okay. Gotcha. Okay. So this is the information I brought together. And let me just kind of, for those not seeing the screen, the first section I'm going to look at is sales volume. And I have 15 dealers that I was able to pull the data together. There are a few that were omitted from certain numbers because their numbers were either incomplete or had some questions associated with them. So what you're seeing let's just go with sales volume sales volume june in column one there column d and then july and column e and you can see that their volume was up july over june they the well first go ahead not for everybody but like no no I'm not looking at individuals over overall the volume was up right overall the volume across these 15 dealers which is also across 10 states So it's actually 15 different markets. I mean, all these dealers are in different markets, but it's covering 10 states. So certainly it's, while it's a small pool, it's certainly a larger pool than the typical dealer who's kind of what we call being on an island. They're kind of just out there doing business and trying to figure out whether what they're doing is working and they don't have much to compare to. That's why I try to speak as specifically as I possibly can about numbers. We've talked about this. I want dealers to know exactly what it is and I want to be able to see the information raw. So that's why I listed the dealers individually here is that you can see that what we showed within these 15 dealers, they showed a volume of 397 units in the month of June versus 444 in the month of July. So same 15 dealers. Up 12%. That pool of 15 dealers is up 12% July over June. So that's item number one. Their volume was up slightly. Overall, yes. Now let's look at average down payment. Now in this one, we omitted one dealer, so we're just looking at 14 dealers. Their average down payment went from $1,415 to $1,396. So it was just down like one less, yeah, 1%. Yeah, it's marginal. Yeah, and there's not enough information. So it sounds to me like for dealers that are out there listening, just from the pool of dealers that we work with, the average down is right around here. this is what that's what it was and you know and you can look at the numbers here too because some of them get a lot of down and others yeah a little bit of down that kind of cancels each other out so when you look at that it's like on average it's around and I didn't go back and put on the labels there but that average down I used the actual average cash down at delivery I didn't factor in net trades which net trades are pretty insignificant yeah or or um uh deferred deferred not in there I don't count it I'm just looking when I'm looking at down payment I'm looking at risk at the time of delivery yeah so this is what we just want to know and I think most dealers I mean a high percentage of dealers when they're making their risk decision at the point of delivery it's about the down payment at delivery now if they've got real cash internet trade then that obviously that can be a factor but That's a low percentage, low count of the buy here, pay here deals that we see have a trade associated. And when they do, it's most likely an internal trade. They're trading their own customer. So obviously those numbers can get skewed a little bit. But it's low. It doesn't affect the number. So again, for down payments, that's what we're looking at. It's just down at delivery. So I also looked at charge-offs. And the group had 184 charge-offs in the month of June. And that same group of dealers had 210 charge-offs in July. So it was up about 14%. And we talked about that on Friday. And it's looking at things in a string of data over months. It's not anything to be too worked up about. No, it's not. And so it's definitely something that we want to watch and see kind of how this kid, I mean, for today, I just want to get specific, right? I want to make sure that whatever we talk about, we're just as precise as we possibly can be. Forgive me, I'm trying to fix a formatting thing and it's not cooperating. So this is where my friend Corey Morrissey could help me out. He's so good. Love Corey. Those of you who don't know Corey, Corey's kind of like a guru for making formulas and things talk to each other nicely. He really is. He's smart. Really, really smart. Yeah, so I love hanging around with Corey, but it does make me realize how... inexperienced I am in microsoft yeah yeah those of you go like I i know corey's usually at national or or some of the other things so if you ever have an opportunity to run into him yeah yeah he's a smart guy yeah and he's managing some data for uh a number of people and uh so that's part of our conversation was the idea of him getting involved in And we're exploring some stuff with the possibility of having him play a role in managing some of this data that's coming in. The next thing was portfolio change. So that's like overall portfolio. And it's kind of getting to the thing that balancing your portfolio report that we're working on so that dealers can run that. It's like, here. Here is where I started here. So is that what this is about? Yeah. And let me talk about this for just a minute. When you touched earlier on the idea of portfolio validation. So I want dealers to have confidence in what they're seeing here because these numbers, we ask our dealers to strive to validate their numbers to get to within plus or minus 1%, which, you know, some of these portfolios are 25 million. And so 1% is still a pretty big chunk, but yeah. Not only are these portfolios reconciled, you know, we make sure that opening principal plus new contracts added minus collected principal minus charged off principal, and there could be some other small adjustments. that's gonna give us a closing number. So when I give these numbers for the close of June and the close of July, these are pretty clean numbers. So while the pool might be small, it's very real, okay? So I think I want dealers to have confidence in what they're looking at. And this pool will grow. I've kind of formatted this in a way that I hope to be able to do this month over month thing kind of on an ongoing basis. But what I just really want people to have confidence in what they're seeing. So the closing portfolio balance, again, same 15 dealers. Closing portfolio balance in June was 99.3 roughly. I'm not seeing the screen. And then in July, they closed at 101.1. So an increase of about 1.8 or an increase of about 1.9%. So I think this is the part that you're kind of – I touched on – I'm touching on these because I think it's a reflection of what you're going to see me do in the work with V8 and my other work is to help dealers get to the place where they can see these numbers. They can see what's changing in their business and have a chance to have a good snapshot look at what's going on in their business and get a feel for it. which numbers are most relevant you know there's just um obviously strategies vary right but I think the actual information that we would use to determine if our strategy is working should be the same like I think we can find the key figures that are and we are I i know it's like some of our uh vendor colleagues um different people that we work with in this space It's, you know, we've talked about standardization and it's like, oh yeah, that's never going to happen. But there are things that we can learn that it won't, it doesn't change a dealership's business model, but there are some things that we can do so that dealers can feel confident that it's apples to apples, oranges to oranges. You know, and I know our friend Amanda Sanchez at Butler Sanchez, she's like, can we just do the chart of accounts? Can we just have, you know, so yes, the standard, yes. And that's accounting, and I think you'd come closer to getting some level of standardization with accounting. I mean, obviously, you know, in talking to some of these DMS providers, really dealers who've been looking at their DMS, The question really is, and part of the projects that we're working on with some of our clients is like, how does the data from the DMS come over to the accounting? Like what is the, how well synced are those numbers and what's, what's being pushed from the DMS to the accounting. So that's getting us a little off subject here, but I think this is important. Like this is the part that I feel like you should be able to get to a place where you're somewhat, when I say standardized, at least we can, um, have a language that says when the data comes over here's what it represents from the dms and then you can pull it into a standardized you know well accounting I mean you people can set up their own chart of accounts but ultimately uh and again off subject a bit but At the end of the day, the IRS, it's got to be, you know, there's certain things they're looking for. And, you know, so there are certain things that have to be a standard, but because these are the rules, this is the stuff. And so when I think about my own future in the buy here, pay here, whatever the remains in my career, Gap accounting is not part of where I'm going to spend my time. I'm happy to make sure that whatever work we do on the operations side of helping dealers get to the information, help them manage their business, I'm obviously happy to make sure that that correlates. We can communicate with the people who are doing gap accounting. But my main emphasis there is that we can create gap accounting, but that won't help dealers learn how to manage their business unless they know kind of what the key pieces are. So I think there's just some key things operationally that we need to be able to analyze that aren't going to, that gap accounting doesn't ask for. Okay. So this is why it's important, I think, for us to do this. And the last thing I've got over here, I just kind of threw this together mostly for my own benefit, but I'll share it since we got it on the screen, explain it. Net sales is my own phrase. I mean, I just, I'm looking at simple how many did we sell minus how many did we charge off if we sold three or if we sold 10 and we charged off three that's seven net sales okay so it's important to kind of think about that because sometimes we can be in our chest and say we you know we had a great month we sold you know 100 cars Well, if we charged off 99, and it's important to understand that obviously as portfolios grow, it's natural that your charge-offs would begin potentially to exceed your sales because the portfolio obviously represents many months of sales. And so this is not uncommon, but you can see with this particular group in June, They experienced an average net sale of 14 and they were at a net sale of 15.6. So 14.2 in June and 15.6 in the month of July. So it's, I think it's just, it's just information, right? And people can do with the information what they will, but I think it's, relevant to even the newest dealer it's relevant to a large dealer with a large portfolio it's just this idea that we want to we want to look at numbers that are and here we're just we're not drawing any conclusions as much as we're just sharing here's how july looked versus june with the same pool of validated dealers you know yeah um and I you know I uh A little off subject, but not completely. Small things, at that very end, the net sells based charged off what you sold. One of the things that we are working on and has a prominent place on our roadmap for the course of the next year is consumer education. and consumer education and a delivery system. I mean, how do we get that information in front of consumers? And it would be what we're designing is something that's through the dealer. And then we've created education that can be used in conjunction with a loan. It's like, yeah, here's some education about how things work. And if you can, through education, because it's one of the things when I've talked to consumers and done surveys and things like that, and, you know, asking people, why do you suppose people land in sub-subprime? And predominantly... predominantly, and I don't have the numbers in front of me, but I was just like, ah, is it's education. We were never taught, you know, and sometimes it's like, well, I was never taught, so I don't have to be responsible, but it is, we've never been taught how to And so, you know, you think if just, you know, taking the opportunity to educate as we go along, if you can move the needles for repos by 1% for the year. Sure. how much that actually affects your portfolio. Well, some of these portfolios are large enough that would be a big number. Yeah, and 1% is like, nah, we could probably do that. That's just one or two a month that we might be able to save through education for some of the bigger portfolios. My... From my own direct knowledge as a former dealer and working with a lot of dealers, I would say the target can be much higher than that. True, but I'm like, even if it can do a little bit, what does that mean? Yeah, what's it worth? What's it worth, yeah. What would you spend to be able to... To me, that real answer lies in communication. How can we effectively communicate? I think you and I have some answers on that, but it's a question of how do we deliver and communicate with consumers in a way that can really be impactful, that can really help reduce charge-offs and repos, right? So I think that's a good point, but I think then back to the net sales numbers, just like That's really, you know, when we're out there just selling, selling, selling, and we talk about this and we've talked about in the past, especially with retail people, there's a retail mindset that you have to kind of put aside when you step into the buy here, pay here space. And I think to just sell and not be able to reduce charge-offs or manage charge-offs and keep repos and charge-offs to a minimum is, then we're kind of, we hop on this cycle where you sell them and charge them off, sell them and charge them off. And like, that's, that's expensive. Like that's inefficient. And we'd like to be able to, you know, keep them sold as Ken Shilson said, you know, and it's like, we, we want to be able to get contracts in our portfolio. Like Brent Carmichael, his, the, the class that he teaches so famous is collect the payment, not the car. It's how do we keep people sold? We're trying to help dealers by developing tools that can help for education. And I see a lot of, really great products out there that other vendors have created like secure clothes is one way of like really being able to communicate and educate and that's you know at the time of closing and you know there's just there's there's really and great apps for payments and and you know reminder ways of reminding people and and all of that so it's just hats off to all the vendors out there that are trying to to, uh, to create things, not just to help dealer make more money, but create things to help it, make it help consumers stay sold. Right. Yeah. Sure. Um, one quick thing I want to mention before we wrap up is that, uh, we talked about Corey Morrissey at the top of the show at Corey, uh, many know Corey, he's been around the industry and he's, uh, You would see him in the booth. He's typically got a booth at these conferences and his company name is Seymour Solutions, but it's spelled C-M-O-R. So you can find Corey on LinkedIn. You can just do a search for Seymour Solutions. I'm sure you can find him if you need help with like a big data project or management of large pools of data. He's dealing with some larger pools in the segment. And so I would just say, if you've got that kind of issue and you need help, don't call me. I'm buried in V8 right now. And he's looking at me like, don't call me, honey. Yeah, exactly. I'm buried in VA. He actually went to the library on Saturday and worked from the library so that there would be like zero distractions. And that worked out. It was a productive stretch. But yeah, it's when I get into numbers, I'm just much slower than folks like Corey who have, you know, obviously he's got a team of people and then he himself has, he knows all the shortcuts and can move through the stuff a lot faster. Yeah. But that's not really the point. I just think if you're a dealer or a finance company or somebody in the industry who's got a large pool of data to try to manage, you know, Corey would be somebody to call. And, you know, we obviously have a lot of confidence in what he does and have known him for a good while. Yeah, I know he's busy. Yeah, and we've had some common clients. We've had some mutual clients where we worked with some of the same people and both of us had access to the DMS and were working through different projects. And I find that he's somebody excellent to collaborate with and just is very skilled. Yeah. Yeah. All right. Well, yeah. Monday's over. Yeah. It's a little bit, a little shorter today. But that's okay. It's great. It's great. I know, right? Yeah. Great content. Hopefully it's been helpful. Those of you who are listening on the syndicated podcast stations, please go to our YouTube channel so you can see the charts and graphs. We try to read a lot of the stuff, but... But primarily our podcast is, it's meant to be visual. Even though when we started, we didn't have cameras at all. But it's meant to be visual. So if there's some stuff that you missed on, please feel free to go to YouTube. And while you're there, like and subscribe so that you kind of get a thing. So thanks, everybody, so much for joining us today. We really appreciate you making us a part of your day. If there's anything that we can do to help you, let us know. There are still slots available on V8. Three of the groups are meeting this week, so not sure if that's going to happen for those three groups. I have time to get any account portfolio size. I can still get people in a V8 group this month. Alrighty. Okay. So everybody have a great rest of your day and we really appreciate you joining us. We'll talk to you later. Thanks.
