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. Hey, welcome back. Welcome back. Take two. Take two. Happy Monday. We're doing a second recording with Tommy Brandes from the Monday morning slot because we had terrible audio trouble and the listeners were having trouble with an echo. And you know, Tommy's got great things to say and I would appreciate, I'm sure everyone out there would appreciate actually being able to hear them. Yeah, or without him sounding like he's talking. I mean, they're tired of listening to us. Monday, for those of you who listen on the podcast, syndicated podcast stations, we already let our people know, don't put the morning one on. We're going to re-record this. You'll be getting later on today, probably. This is a less than live. A less than live. The stuff was V8 going well. We still have room in the existing groups. We'll continue to grow as we grow. Jim put out there on social a couple days ago about We're looking for moderators for V8 groups, and those moderators preferably would be seasoned and either almost semi-retired or retired kind of buy here, pay here, lease here, pay here, dealer principals, the ones that... that actually sign the paychecks and make sure that everything's running so that the perspective can be from that realm with the dealers. Ideally, it's dealers talking to dealers. And so that's kind of what we put the word out. And I've already recorded some stuff to send out to all those people who were chiming in and expressing interest. So we'll make them aware of that. kind of how we're doing that. But yeah, it's, it's ideally is going to be retired dealers and, and they can step in there and moderate some meetings with an idea of mentorship. It's nobody's going to get rich doing it. So it's like, so that's kind of the idea. Yep. Absolutely. So thank you for everyone that has reached out and, you know, you can just let us know if that's something that, that you would be interested in. Or even in joining a group, a lot of our people that are in our V8 groups are also in a dealer 20 group or other things like that. So, you know, however it is, it works because it's a different conversation. Sure. So what else? I think that's it. We can get down to our business with Tommy. I'm looking forward to sharing the information about their update or their upcoming event. Oh, yeah, absolutely. Okay, so we're going to bring Tommy in, and everything is going to work so perfectly, Tommy. Tommy, it's working perfectly, right? I think so. I can't see you, but... We can hear you, and you can hear us. Yeah, I don't hear an echo this time, and I'm going to date myself, but everybody remember this? Is it live, or is it Memorex? Yep, exactly, or using words like Xerox. Is that even a company anymore? Yeah, I don't know. I always have to stop myself from saying Rolodex. Rolodex. Yeah, my Rolodex. Yeah, absolutely. All good stuff. So you young people can look that up. So, Tommy, glad to have you here. Looking forward to getting an update, of course, about you're the executive director these days with the Mid-Atlantic IADA. And you guys have your big event coming up in about three weeks. Correct. Yeah, we're super excited. It's our second annual convention and vendor tailgate. It's just going to be a blast. We're starting out Sunday afternoon this year with a three-hour comprehensive workshop called What to Do Now to Win in 2025. Nice. It's been wild. Bill Nyland from Taxbacks has brought together basically, we call it a pro ball team since we're on a football theme, of dealers and industry vendors to go through everything that you need to do to build a game plan to succeed in 2025, particularly the first quarter with tax time, but then moving forward, how it's going to just make a difference in your whole year. Yeah. That's, that's, I mean, that's just Sunday afternoon and we got Sunday night is the kickoff football party, welcome party. And then all day Monday is training. We have Michael York is our MC. He's going to keynote. Jeff Martin's going to be there. Tracy Myers is our main keynote speaker. And if anybody's heard Tracy, you know, he, you just, he, he just pumps you up. He's bringing his book. He's going to do a book signing and we got, Steve Levine from Ignite. Everybody's, I'm sure, seen the Compliance Unleashed, his own convention. He's bringing that convention. Oh, fantastic. With him to the East Coast. Yeah. We're calling it Compliance Unleashed in the East. And that's going to be awesome. That's a three-hour certification program. And then we got nine breakout sessions with everything else from, you know, it's just crazy. And then Monday night is the industry-only vendor tailgate football party. And you know what? Philly fans like to party a little bit. I've heard that. Yeah. Too bad we can't be there, Michelle. Yeah. You guys, you know, you're always invited. Well, that and, and, you know, we, uh, earlier today extended the invitation, you know, we're, we're, uh, pioneering virtual tracks it's like how do we do this how do we bring things to people virtually um and I love that you're trying to do something so that it's like it's the the quality of education like the national um convention but a lot of people can't get to vegas and so yeah that this has been this has been kind of like a dream of of the boards for god 10 plus years now bringing something to the East Coast. You know, the discussion is I can't get away from my business. I can't get away from my business. Well, I mean, to hop on an airplane, fly to Vegas from Philadelphia, train, you know, and then coming back, it's a whole day of just travel. So this isn't your typical IADA convention. Nothing against the IADA conventions, but It's more presented by the Mid-Atlantic IADA and not an actual Mid-Atlantic convention because all we're inviting everybody, you know, any dealers. If you're an IADA member, it's only 95 bucks. And we're going to bring a Vegas quality convention to the East Coast. Yeah, so it's kind of like a satellite convention for people. So it's more convenient. And yeah, super, that's really, really smart. I like it a lot. And again, that when we offer this to all of the different conventions, When y'all are ready to take part or all of this virtual, let us know. Well, we did spend quite a bit of money, but every one of our breakout sessions, we'll have a three-camera shoot. Uh, we will be videotaping the entire convention and then we'll decide, uh, it will definitely go out to attendees, um, who could make it and then we'll decide, you know, but we, but yeah, we will have it. Uh, our goal, you know, we've talked about it a lot is, you know, we want to build as much, you know, I think my new why is I want to, I want to give knowledge, education and training to as many dealers as, as easy and as inexpensive as possible. So, you know, we want to build a whole library where, where if you're a member or, or even I did just be a member and, and we'll open up the library that we're creating kind of, Both you and I have talked about it for years, creating just a place where you can go and get whatever you need. That's kind of what we're doing. Love what you're accomplishing there. I suspect you will have many dealers in attendance. Going back to the format, 2 o'clock on Sunday, and then you have a little football gathering Sunday night. Football gathering, food, adult beverages Sunday night. Hotel rooms are only $95.00. So $95 to show up if you're a member of any association. $195 if you're not, but we'll give you $100 credit towards whichever association you're going to join. And then hotel rooms are $95, like I said. So really, one night, I mean, if you have to get back, you train Sunday, you stay Sunday night, you train all day Monday, you grab some food and leave at halftime. And then, you know, most of us will be driving in. You could be back in your bed Monday night. Very good. How nice. So will there be any cold beverages available? Yeah. There will be cold beverages available. There will be cold beverages. Adult beverages. It is a Philly vendor tailgate. So, yes, trust me. And the best part about it is you won't need little tickets to get it either. Oh, very nice. Very, very nice. Sounds like an experienced convention attendee. Thank you. yeah it does it's like what are the things that I don't like you know that's what I've said you know and we've talked about it we had our first one last year with a lot less planning than I mean we had a whole year to plan this but uh yeah there's a lot of conventions in attend you know that have been attended between uh myself and the board and and really all the vendors I mean the vendors I have to reach out to to all of them you know they kind of get what we're doing here, you know, and they understand that if we all join together, we can really, really have something here. And that's kind of where we're going. So it's pretty cool. We promised our listeners that you were going to educate some on static pools here. And I didn't bring the material, the slide this time, but I can share with our listeners. We can put that out there with the broadcast when it goes out. Good, because I can't see the slides, but I know what they look like. You're the one that created the whole thing. So we can talk about just in the kind of format, like, you know, you were kind enough to share it with me and I looked through the thing and you have an actual sheet per calendar month for many years. I mean, you've been doing this for how long? I started in 2002 when I had both dealerships. I basically run an individual Excel spreadsheet for each location for each month. I do not have the technology on how to combine all that data and make one giant sheet, but you know, we would be looking at 20 years of static, of static pools, you know, mature. So it's, it's pretty awesome data. Talk to me about what you learned from it. Like why go to all that trouble to continue to compile it? You must be learning some good stuff from it. I guess the biggest thing you learn is, is when you close your pool, you know, I guess I don't even know what the really benchmarks are anywhere. We've always talked about 25, 30% of charge off. Um, you know, of, of frequency, uh, charge off, uh, you got, you know, you have frequency and severity, um, but frequency charge off 25 to 30%. So that when I created that, it was how many notes we sold that month, uh, what the gross, what the total gross profit was, what the total amount of finance was. And then as I went down over the next 24 months, as a charge off occurred, I put it in that month slot. Um, and it basically just showed, and I'm sure if you put it on, I mean, I can click through them all and kind of get a feeling, but you really don't, if the charge off happens before say month five. you're kind of wondering why. And then I stopped it at 24 months, even though we have 30, you know, probably 30 to 36 month loans now, all 36 month loans now. But I stopped it at 24 because once you're at 24, you broke even, you know, and usually the balance is pretty low. So I wanted to still track the, The frequency, but I wasn't too concerned about the severity at that point in order to make a difference. But what I noticed, most of them come in at the end of the day at around 40%. So we're just below what industry benchmark would be, I think. Yeah. And so I might just explain for our listeners the frequency thing. The frequency is the count, the number. Like if you had 10 sales and three of them charged off, that would be 30% based on the count. So that's the frequency. And then the severity is the dollar amount. So almost regardless of how many there are, it's based on the dollars. Typically a net charge off as a percentage of the amount of finance is pretty common. Got it. But basically what you're doing is you're trying to determine which buckets, you know, that performed better, you know, and trying to see and obviously learn from those that are charging off early. Absolutely. Yeah, we can. We usually pull those like I'll pull anything. Like I said, five months. That's that's pretty early. We pull anything that was 240 days before 240 days. And then we kind of would review that and see what, you know, if we could find a reason why it charged off. So do you, so obviously in my industry, that's called a post-mortem from tech. And so when someone charges off or if there's an event of some kind, you're like, everyone's gathering together. It's like, where did we go wrong? What can we improve for next time? Finger pointing. But it's, it's a, it's really in any business. It's, it's a good idea when an event happens like that. It could be a good one or a bad one, but it's, you know, an event. It's like, what is the, why? And what did we do well? What did we not do well? And all of that. So what are some of the things that you've seen as you've done your postmortems or if you've looked at those, if they charge off before that, that period of time that you're like, yeah, What, what are some of the reasons? That's, that's a whole nother topic. And especially when it pops up in success all the time and the, the ongoing discussion that down payment makes a better loan. Um, you know, uh, but what I think what we have seen, and I think it's been touched on in a couple other places. Um, usually it's, it's a, it's not just one thing. It's a, it's a group of exceptions. So if you take the top 10, um, you know, things in your underwriting. It usually is something that, that ties them all together. The biggest thing is, is distance from dealership. I think, um, then, uh, that that's number one, because if they're, they're, they're close, you know, if they're nearby, it's easy to communicate. It's easy to talk to you to come by. So that's probably the biggest one. When I do static pulls by zip code, um, which is, which is fun. Maybe I'm weird. You and I are both a little bit weird, but go ahead. But I mean, you can notice different zip codes. When I had two locations, my Allentown location, which is a city and my Sellersville location, which is more rural, uh, Allentown was 10 points worse charge off than than than Sellersville. So it's different things you can look. But distance from dealership, I think, is the biggest thing we look at. You know, when we talk about like like low down payment that usually falls in there. And then but then you look at it's also one of your cheaper cars or one of your oldest age inventories. That's a whole nother topic that we could go on for a week about. So I'm just wondering, you know, you're creating this, this spreadsheet. And so is everything then like the, it's kind of old school. You're, you're manually entering in all the stuff every month. And so obviously you are like the zip code, the down payment, the, the we don't I don't have what you see there is what I enter and then if we have a question then we'll go through it and we'll we'll pull all those deals and then do a whole another um exam on that that's just that's just to put it out there like like you could track um and Jim's probably can explain this better than I can, but you can with, with the way a dealer runs and over time you can track how your portfolio is going to perform. Just looking at past performance with the static pools. Right. And you start to project that some dealers do that and they'll do it like almost from inception and you start to watch, but obviously you, You're extrapolating, you're projecting based on information that's not yet known. Where most, where static pool is used the most is when the loan is resolved and now you go back and measure it. Obviously that's like, like some say, that's like getting your, it's too late. Like you already got your report card. You're already in trouble with mom. Like, you know, so this is kind of the thing about, they used to talk about, you know, kind of getting a midterm report is like, it kind of lets you know what's going on. And it lets you maybe make some tweaks and some things. It's too late to change your underwriting. The deal's already booked. But I want to cover something, Tommy, and I know you're right. These are different tangents and we could spend all day here. But I think if listeners heard you say that the distance from the dealership was a factor, you can communicate, obviously. You can pick up the phone and still reach somebody. Even if they live three states away, you can text them. So what's your experience tell you that why is it that those loans don't perform? I obviously have my own experience. Um, perception on that, but what is it that you see? Well, I think number one, you know, if you're, nobody thinks you're going to come get their car, you're definitely not going to do a door knock. I mean, when we used to do door knocks, you know, Christ back in the day, you know, you had a five or 10 mile ending radius. Mm. And you can go out and knock on the doors and see people. They drove your payments in. So now, you know, with ACHs and online payments, there's less communication with the customer. So the further away, I think they just feel a little safety. They don't have to pay on time. They don't have to be as accountable. They can ignore you. And then the biggest thing I think comes down to if something happens with the car, even if it's covered under warranty, you don't have a shop, you know, 40 miles away, 50 miles away. And then you send a tow truck and it's $350 or $400. The time invested in trying to collect and service an account that is more than an hour away is very difficult. And support. Like you said, the mechanical stuff. Even if you're communicating with them, your ability to support them at that distance is different. Yeah. Right. You're not going to do what you can, but you still have to be able to find that. So that's what I kind of expected to hear you say was that the ability to support them, at least mechanically, can be a limitation as well. So have you changed or, I mean, do you still underwrite the same way just knowing that that is a real possibility with anyone that is that far away? Or do you say, we really don't? If we're out further, we want to know why they came to us. Mm-hmm. you know, there's other dealers around, especially, you know, an hour from me. And then does the deal make sense? You know, why are they here? I am definitely not going to, I may underwrite a SSI monthly payer that's in the apartment complex behind me, but I'm definitely not going to do that at, you know, that income level and lack of stability that's, you know, 50 miles away. I think people are new to that. You don't know how many years you'd have to be in business to really realize the difference and why Tommy would say that. I think people can connect the dots there. You keep talking about being subjective. There are factors that you can't program into a scoring model. But the attorneys don't want me to be subjective. Right. The good thing is we're recording this, so if I said anything, beep it, please. So my apologies to Mr. Levine. But, you know, the thing is, is that, well, and Steve would probably say, he'd probably say, if it's not within what your norm is, is just make a notation and, you know, put it in the log. And if it happens more often, then change your norm. And it's just about keeping track of those kind of things. It really comes down to, and the people who have been doing it a long time, doing it before the internet, we're selling just as many cars today as we were 30 years ago. And we were in a 10, 15-mile radius then. So it's almost like we're not putting enough time and enough work in our own backyards to generate sales like we had to back then. We had to do door hangers and apartment complexes and things like that. And times have changed, of course. But it's almost like we're just as eager to sell a car to somebody who's an hour and a half away as the one that's next door. It's... I don't know. It's, it's one of those, it's just, it, it, it boggles my mind, I guess, you know, that, that, that if we're 50 miles out, we have a 50 mile radius. We should be doing 10 times the business and we're not. Yeah. So like back in the day when it was mostly within 10 miles of your dealership, would you have booked a deal that was 50 miles away? No, we wouldn't even think about it. I wouldn't even know how somebody 50 miles away would find us at that point. You know, the penny power only won't so far. So I think it's funny that you just used the phrase back in the day because Tommy calls himself a back in the day guy. I'm the same, but now we got Michelle doing it. Hey, I'm old too. So sorry. Sorry. Sorry. Not old. Wise. There you go. Wise. Yeah, all good. Well, Tommy, we should probably let you get back to your work over there. You guys got your event coming up. And I'll remind everybody that kicks off. We're recording this on Monday the 26th. You guys start on Sunday the, was that the 15th? September 15th, yep. September 15th. Okay, so folks, if you hear this, you got time to hop on a plane, get your flights booked. Or just drive. Yeah, plan to drive on over. Get your room. Very economical. Atlantic City. Economical, yeah. And so, yeah, this is great. Yeah. So look forward to hearing how the event goes. And as Michelle said, we wish you lots of success. We're happy to support from a distance anything we can do. And know that you guys are offering a ton of great education over there. Oh, absolutely. Awesome. Thanks so much, guys. I really appreciate you taking the time. We appreciate you and just how much support you've been. We were talking this morning, which was supposed to be a rerun, almost like that was a dress rehearsal. Tommy's been a big part of The Morning Show since its inception because he agreed to let us broadcast live back when Facebook would let you do such things that we could broadcast live into success. And then Tommy was, I think, our first guest. Sure. Yep. Yeah, that was fun. You know, and that's it. I go back and I look at all the people that that I leaned on that took the time to help me. Yeah. Over all those years. And now it's like, OK, the only thing I can do is give back and. How can I give back? And I think the greatest thing is being able to take this role as the executive director. It just gives me a platform where I can take the vision of what the board has had for so many years. And I think the vision of a lot of vendors and the same as you guys, how do we get education out to the masses and make it readily available? And buy here, pay here success is one of them. And and the conventions and things like that. So it's just how can we do it, you know, and how can we help the next generation, you know, elevate all boats rising, high tide raises all boats, something like that. What do you guys think? Everything floats when there's lots of water or something. Yeah, when there's lots of water, the boat floats higher. Let's keep going. Now, success for those of you who are listening on podcast stations, Tommy is the person, he's the one that started BHPH Success and Facebook. And so you're at how many members now? It says 5,600 members. 5,600 members. And I know for those of you who are not already in success and are in Buy Here, Pay Here, that's a really great place to go. There's lots of great questions that are asked. There's lots of opportunities, different people that are posting educational content and also being able to reach some of the titans, not just Tommy, but there are other titans. Yeah, it is. It's great. I love it to see so many guys and girls giving back to the industry just with a quick answer. It's fun. Some of those I read, I'm like, yeah, I'm not even going to say anything. It's already been said. It's great. I love it. It's so rewarding to see that. Yeah. So thank you so much for all that you do for the industry and your support. Thank you guys. If you want to just hold back for just a second and we will say proper goodbye in just a second while we wrap this up. Have a great day, everybody. All righty. What else? That's it. That's it. I always love having Tommy come around. Oh, my goodness. There's just so much experience there that I think young dealers, new dealers just need to be able to hear from more dealers like Tommy so they can better understand this. A lot of this stuff is not new. Dealers have been figuring this out for a long time, so you don't have to reinvent this wheel. Yes, and it may be like a new generation and a new whatever, but it's still the same kind of challenges and opportunities and all of that as it was back in the day. There you go. Back in the day. All right, everybody. Have yourself a great rest of your day. Thank you so much for making us a part of it. And we will be back on Wednesday where we're going to talk about divorcing your DMS. And the custody battle can really get messy. I mean, you know, because, yeah, we're now divorced. Some things. I don't know. We're relationship counselors. We're relationship counselors. Okay. Have yourself a great day, everybody. Thanks again for joining.
