March 2009

Cover Stories

- 10 ratings

Franchise Guys Love BHPH - Must Read

Peter Salinas - page 10

Over the past 30 years franchise automotive retailers have struggled with some huge challenges. There has been: an Arab oil embargo in the mid and late 1970s; skyrocketing interest rates of 21 percent in the early 1980s; factory quality issues; at least three recessions; the Gulf War; September 11, 2001; the War on Terror; the Iraq War; and now, the financial industry meltdown. Despite all this turmoil, there has been one irrefutable truth, franchise dealers who have set up well-run, buy here-pay here operations have been able to not only weather these storms, they’ve made a ton of money.

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- 35 ratings

A Wake-Up Call to Whiners!! - Must Read - Featured

Dave Anderson - page 14

If you still don’t believe that we’ve devolved into a society of victims, whiners and wimps, the buzz of bawling and babbling in the Big Easy during the recent NADA Convention would have convinced you otherwise. I am addressing this article to whiners. While you are probably not one, you most likely know one. If this is the case, please feel free to share these four points with them. It may not shake them out of their denial, but you’re likely to feel better as a result. In fact, it was therapeutic for me just to put these thoughts down on paper.

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- 5 ratings

Ahhh! Remember Retail Sales? - Must Read - Featured

Chris Gerbasi - page 30

A cash customer doesn’t walk into a car dealership every day of the week.

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- 4 ratings

Credit and Collections Set for May 27-28 - Must Read - Featured

Peter Salinas - page 34

SARASOTA, Fla. — Leedom and Associates, LLC, will host its industry-leading Fourth Annual Buy Here-Pay Here Credit and Collections Conference May 27-28 in Dallas, Texas.

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Our Point of View

- 11 ratings

Stay Fully Caffeinated! - Featured

Peter Salinas - page 8

By now most of you have heard about the “Rant Heard ’Round the World” by CNBC contributor Rick Santelli, who launched into a tirade on the floor of the Chicago Mercantile Exchange during a live broadcast of CNBC’s morning Squawk Box. If you want to see it, do an Internet search on “Chicago Tea Party.” Santelli’s rant regarded the as yet not clarified federal plan to alleviate the U.S. mortgage woes by allowing some mortgagees to refinance their “upside down” mortgages, lower their monthly payments, and generally get a better deal using borrowed U.S. Treasury dollars to subsidize the program.

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Corner Office

- 4 ratings

Spring May Make Us All Feel Better - Featured

Chris Leedom - page 4

Well, spring is just around the corner. Thank heavens for that. I really think we’ve all had enough of gray skies, dark clouds, cold, wind, and bad news. Some sunshine, some warmth, some positive scenarios might just brighten up the place. Having said all that, here is our perspective of what we see happening in the marketplace in the near term.

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Human Torch

- 11 ratings

The Only UPS on the Lot is Big Brown - Featured

George Dans - page 38

Too often you hear the most misused statement in the car biz: “We don’t have enough traffic coming in.” You can bet on that one. Why are the customers not coming in like they used to? Yes, that credit criminal who has stolen about 100-150 points off of most customers FICO score is nasty, isn’t it? Banks are scared to loan money, and the rest of why ups don’t come in is easy to figure out. They aren’t coming in because most dealers have a progressive ongoing follow up and marketing program in place.

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Financial Insights

- 5 ratings

BHPH: Slow and Steady for 50 Years - Must Read

Dr James Garvin - page 6

Okay, okay, okay, it’s not okay, it is just what it is, a mess created by the same people who brought you your Social Security benefits; my own personal favorite, the Internal Revenue Service; the Government Accounting Office; and, by those who have been elected to the House and Senate ad nausea.

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Buy Here - Pay Here

- 24 ratings

Collections Paramount to BHPH - Must Read

Chuck Bonanno - page 12

The car business is a funny business. The buy here-pay here business is a nutty business. While it’s true that buy here-pay here is associated with the car business, it is not “really” a car business. Yes, you sell a car to start the ball rolling, but you don’t make any money until customers make payments. So keeping that fact in mind, the business is actually a finance and collections business. More to the point, your money will be made from quality collection of the note far more often than from good underwriting or good selling. The car is just the security and the instrument to make a loan.

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Guest Columnist

- 13 ratings

You Are the Dreamweaver! - Featured

A.J. Ager - page 18

Tell me this picture sounds familiar. A customer walks on to the lot talking about how bad his or her credit is. They had repossession, but it wasn’t their fault and they gave it back voluntarily. Their mortgage company screwed them. They would have perfect credit except they had a boss who cost him a job a year ago, and he couldn’t pay anything. Child support is not their fault, credit cards were charging too much interest, last dealership took advantage of them, couldn’t afford to fix their last car, and so on. How many times a day do you hear this?

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- 5 ratings

Understand the ‘Power of the Purse’ - Featured

Jody DeVere - page 24

For the past several months, you haven’t been able to turn on the TV, glance at the Internet or flip through the pages of a newspaper without seeing a story or two about the dismal state of the auto makers and local market dealerships trying to survive or not. The auto industry is struggling to gain ground with cash-strapped consumers and is looking for ways to once again become a relevant part of consumer’s daily lives.

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- 4 ratings

LHPH Has High Profit Potential - Must Read

Randall McCathren - page 18

Today’s environment for franchise dealers is being called by many pundits “survival of the fittest.” However, a more accurate description is “survival of the most nimble and creative.” It will not be the dealerships with the greatest financial strength that weather this sales depression, it will be the dealerships that find new ways to hold on to or even gain financial strength when the old methods no longer work.

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- 11 ratings

So What’s Going On Out There? - Must Read

Wayne Herring Jr - page 22

I called Peter Salinas, editor of DBJ yesterday, and he asked me if I was going to write an article. I told him that I had been out in the field calling on dealers with my sales consultants and hadn’t had time. During the course of the conversation he asked me what was going on “out there” and I started to tell him. Peter said that I should write about that…dealers love to know what is going on “out there.”

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- 4 ratings

Duck, Duck — Goose! - Must Read

Alex Kurkin - page 36

This is my second time writing this article. The only person that will read the original version is the individual that broke the rear passenger window of my vehicle and stole my laptop (which apparently was not sufficiently hidden by my jacket). While I have heard of this happening to others, I never thought that it would happen to me. Misfortune or bad luck does not care about charm, good looks or brilliance. (OK, maybe I exaggerate a little). It is all about statistics.

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Hudson Cook, LLP

- 9 ratings

What’s in YOUR Dealer Agreement? - Featured

Thomas Hudson - page 26

(Thomas Hudson wrote this article in conjunction with Dan Laudicina, who is a partner in the Hudson Cool, LLP law firm.)

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Compliance Corner

- 3 ratings

Watch Out for the Little Things - Featured

Emily Beck - page 28

I’m a horrible speller. I always have been. Determined not to be the first eliminated in the elementary school spelling bee one year, I memorized the spelling of the biggest and most complicated words that were on the second grade syllabus. I quickly met my fate, however, by misspelling a little two-letter word that any first grader would know. (Give my mother a call if you want to know what that little word is. She’s already told everyone else, and she’d be happy to tell you, too.) I guess you could say that I learned the hard way that getting all the big things right isn’t always enough, especially when getting little things wrong can take you out of the game.

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