Hey, You’re in the CAR Business!

I have many conversations with other dealers regarding the future of the car industry. It didn’t matter if we were talking about inventory sources, marketing ideas or employee problems, the topic always seemed to turn to the buy here-pay here (BHPH) industry. Every dealer wanted to know what it took to be successful in BHPH.

My answer: The right frame of mind.

I was in a Leedom Twenty Group meeting a few years ago when one of the members, also a friend, made this statement. He said “we all need to realize that we are in the CAR business, that’s the Create A Relationship business.” At that point I realized that all those big BHPH questions about; RFCs, PORCs, ACVs, GPs, ROIs, CIDs C/O ratios, pay plans and the biggest question, capital and where to get it, didn’t really matter. That was the “easy” stuff!

What I mean is that you have to be able to relate to the customer and you have to hire and train employees that can relate to the customer to be successful, period.

Some may think of a typical BHPH customer as a (fill in a derogatory name here), while I think of that customer as a survivor. They provide for their family and survive, paycheck to paycheck, on what some of us may spend on a nice Saturday night dinner. You have to be willing to immerse yourself into their culture. You must become a part of their life. You have to be willing to help them with their problems. You have to understand that they will not pay on time, not because they don’t want to but because sometimes they can’t. You have to treat them and their family with respect. That is, if you want to be successful.

A BHPH sale is not like a typical car sale. A typical car sale ends when the customer drives off the lot. This is why “car guys” typically do not make good BHPH employees. “Car guys” are only interested in today. Once the deal is signed, it’s on to the next sale. In BHPH, selling the car is the easy part. Once the deal is signed, that’s when the sale begins. Your employees must be able to begin to Create A Relationship with the customer within the first few hours of meeting them. You need to hire and train employees who also have the right frame of mind. Your employees must be willing to listen to the customer’s problems then help them work out a plan to keep them in their car and paying.

When you think about BHPH, you can’t think cars, you have to think people. I have been fortunate enough to be a BHPH dealer since 1992. I remember the first loan I made. It was for a 1985 Chevy Celebrity. I gave the young couple’s three small children popcorn and soda to enjoy while mom and dad signed the paperwork. Now, 18 years later, I still get to see the entire family. They come in every week to make their loan payments, while enjoying popcorn and soda.

That’s the CAR business.