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. Happy Wednesday, folks. Welcome. We have a little bit of a Delayed starts seem to be happening lately, but life's been a little weird to say the least. So we've got, we're happy to be here. We've got some, some news to talk about from the world of buy here, pay here. And of course on a white hat Wednesday, we really want to talk about that in a, in a white hat. I know that we also announcement wise, we had talked about that we were going to be at mid Atlantic and we, just with everything that's happened in our worlds, that we just decided that that was going to create too much of a pressure cooker for us right now. So we're like, yeah, we're not going to be able to do it this year. I was looking forward to it. I really keep trying to get to the Northeast for the changing of the colors, and it just doesn't seem to work out. It will happen someday, hon. I have to make it happen. Well, yes, but it will happen someday. Okay, good. I look forward to that. So I think that's disappointing. Obviously, we're looking forward to spend some time with Tommy and the whole crew up there. But yeah, that's news. And then on our V-H side, we've got our calendar completely set for September and October. For those listening, it's not too late to get in a V-H dealer group. And I think some of the conversations that we're going to talk about today, Michelle, are good examples of what people gain from being in size. inside a peer group where they can see some other stuff. And by the way, I've already established that Friday we will bring the data from August for repos because repos are the big topic in the success group. A lot of people are experiencing spikes in repos and charge-offs. And so not everybody, I mean, not everybody. So I think what we want to do is let's talk some real numbers on Friday. Let's find out why those that are not having the same issue, what is it that is different? Yeah, I've got some stuff and we can go through the thread to the extent that I didn't prepare to show it on the screen, but I do want to go through. There's a, a, a thread in the BHPH success group that was started by a dealer that we know in Illinois. And there's a lot of threat, a lot of comments there from both professionals and dealers. And so I think it's, it's, it's, it's a, it's real from the street. Now you, put a conversation from the street or, you know, a coffee shop among five dealers, that's not representative of the entire world, but it's representative of their world. And, you know, it's, it's, um, we just, you know, one of the challenges we have in our buyer payer spaces, we, we operate from limited information because our, our information is kind of fragmented across our industry. Well, and it's an interesting thing too, that you think about when buy here, pay here began back in the, I mean, it's like they're, of like official starting of that being a part of the industry in a section. It was like, what in the eighties? That's no, it goes back earlier than that, but you don't hear a lot about anything prior to the eighties. It's really been in the last. Ten to fifteen years that dealers all across the nation have access to information about what's happening within the industry on like real time. Cause you know, before that, They would have to glean what they could glean from the media and all of that. They would have to go to their Twitter group to be able to have a conversation. They would have to get the national publications to be able to have the conversation. They would have to make a phone call and do something with their state to have the conversation. We really are in a blessed position right now where it's, I think it also allows, because with social media and the internet, Um, and all of those things really are just such a blessing to the industry because everyone gets to learn in real time. And if they haven't felt it, that they can, they can, you know, maybe it hasn't hit their area, maybe whatever. And they can, they can make adjustments. You know, that's one thing about this industry is that everyone is there fiercely independent and you can. You can shift on a dime if you need to, a lot of them, depending on where their debt is lying and all of that kind of stuff. But it's so interesting to me as we watch the different things, CFBB, the stuff that's happening with Tricolor, how we just really are in such a different paradigm than dealers were ten years ago. Yeah. And, and what a blessing that is. And I want to, before we get really get started, I was looking through social media because you're talking about us, a conversation and success. And someone posted a thing around dealer, twenty groups and all of the benefits around dealer, twenty groups. And I'm like, yes, yes, yes, yes, yes. And, and, and I, you know, it was about staying connected. It was about, you know, peer, like being able to, to break down the things. It was about having high level conversations around the, the, the stuff it was, and you know, it just, and bringing, bringing in experts and having, you know, different conversations. And I just, I love the world that, that this industry is in right now, when I look at the past and V eight is, is a really big part of that as well, that we get to have these conversations more in real time. Um, you know, we're cause we're meeting monthly and because, and I feel especially blessed with the podcast. that we get to have it even in a more real time fashion of like, this is the stuff that we're seeing in V eight. This is the stuff that we're seeing that's happening in the, in the media. So I just, you know, I just wanted to just like express to everybody that's out there listening about how blessed we are today, even compared to when the two eight collapse or Oh eight collapse happened because people are able to really just get educated in real time. You don't have to go to a conference. You don't, you know, And because of, um, uh, because of social media that you can just tap in, kind of see what's happening, what the conversations are, and then get yourself involved in a dealer, twenty group or V eight or something so that you really can just love or have like really deep conversations around it. I've been waiting to share that. You're you're not wrong. that whole thing is a blessing. It's also a curse in that all those platforms out there where people are chatting and having these short conversations, some of the information that's being shared is incomplete. Some of it is not right for somebody else's business model. And so it's like, you know, you just got to be careful to measure. So I think this is why, yeah, this is why we like our VA platform is, you know, we like a peer group situation where you can get in and learn from other dealers and hear what they're doing. There was some comments in there, even from experts, you know, or people that are, you know, known specialists in our field and they express some stuff that, Two years ago, I might've said the same thing. And now with the benefit of being inside the V eight system and seeing data from other dealers who have, you can't argue with their success. Like there's different measurements of success, but you know, this is why, this is why Brent Carmichael loved the guy and have so much respect for Brandon and idea. Now he, uh, he he'd been on our podcast in the past. And when, when I would use the word performance or success, you know, it was like, by what measure? Yeah. And so this is where you gotta be careful. This is why, you know, everybody likes to share their, their thoughts about, you know, what they like about their model or their approach. And, and it's just not always right for everybody. So it's just like, so yes, very heard, heard, absolutely heard. So it's a double-edged sword. Yeah. And it's probably a good idea to, to, um, consider the, the, those that are making comments and, um, And George Spat, I'm glad you added that, Jim. Everyone appears to be an expert on social media. Thank you, George. I appreciate that. Well, and they like, most of us like our own ideas and our own strategies, right? And so I think this is, and now I think what we're seeing is, and this one thread alone, you didn't see it unless you saw it earlier, we didn't talk about this morning, but there is a thread where a dealer basically said, man, repos are through the roof right now. And so, you know, the reaction from and we'll find out, read a few that, you know, kind of talk about that. But I think That's kind of an ongoing conversation that we can continue. And I think we can dig into that one a little bit more on Friday when we can bring back some real data. Because I think when you can pull together at least a pool of data that is across multiple states and multiple portfolio sizes and look at some real, you know. Then you have something that's less anecdotal. Yeah. And we get to start to say, well, is it the industry or is it me? Is it my practices, my, you know, my model? Like, let's start to figure it out because some dealers are still having success. Yeah. And, you know, I, we, we've seen, we've seen dealers shift in and shift out of twenty groups and be eight groups. And it's because they're not able to accept it's me or that they, you know, that it's like my model is the correct one and everyone else should be doing it. And so part of the beauty of those kind of things is like, is the idea of keeping an open mind and keeping, being teachable. Yeah. Yeah. Yeah. That's exactly what I wonder, Jim. Okay. Yeah. So I think he's just, you know, wondering about the, the, how much of it's them, right? You can clarify Vic, but it sounds like you're just responding to the idea that, you know, how much is, is it the dealer and how much is it the, the industry or the local market, whatever. So I find this part really fascinating. And again, we can dig into it more on Friday because I think what, what is curious, we did a conversation through chat GBT some weeks ago around this idea that what's really going on in the economy. Like we know what the news feed news stations try to feed us or, you know, mainstream media, but like down here in the trenches, it looks like there's a problem. Yeah. Yeah. I absolutely agree. And I've kind of gotten to be a little bit of a skeptic around what the media says frequently, where it's like, If there's a big story that everyone's talking about and it's just taking so much time in the media, then you need to look at the things that they're not talking about. Cause it's like, it's, you know, it's like direct call to direct everyone's attention here or here because there's other stuff that's go. I, you know, that's, that's a little bit jaded, but it's like, it seems like that's, So, yeah, so maybe that's part of the reason why it hasn't been talked about because there's other stuff and it's just, it's this having this, let's redirect where people are looking so that they aren't afraid or that they, you know, for some reason, I think a lot of times bigger institutions, governments, IE banks, whatever, that they think that everyone is going to panic. if they understood really what was going on yeah I I follow that yeah let's um let's move over to this thing about uh tricolor because um you know what was it was america's was it america's timeline no what was it which would no which which one was it that just recently closed um I don't even know the name let's not say okay but I mean this is it definitely wasn't america so be careful about mentioning names yet um but The Tricolor is a well-known name in the industry. I mean, it is. It's one that most people are familiar with as one of the big operators in the buy hair, pay hair space. They've been extremely successful. Well, what's successful, Michelle? Exactly, because it's like, you know what? From a growth standpoint. When we talk to dealers and it's like, I want to be able to do X, and it's like, why? Yeah. What will it bring you? And, and so, yeah, it's like, depends on what. Let's let's let me, and throughout the show today, let's just be clear. We're not a news agency. We will talk about what we know. Okay. We can share a little bit about what we've heard. And sometimes the opinion is like really back with solid numbers. I'm going to give you real information about what I've heard from people who are in the know. But it doesn't mean that it's been confirmed in the way that news media would be required to confirm sources and all the stuff. So I've been out there looking for information. I've swept again this morning to see if there's any hard news. Coming out about what I'm hearing people saying, including a news agency out of Houston. If you'll share on the screen there, I put up a. So there's sixty five stores and five billion in loans. I don't know, George, the last number I heard out of that. It's been a while. It's been years. I heard that tricolor at one point again. anecdotal that they had about thirty thousand by your payer accounts and we're still growing. That was about the time they stepped into California. I think they were heavily in Texas and California, maybe a few other states. But this this article probably was like, what are you talking about? George cited an article. He said that they has sixty five stores. Yeah. Oh, yeah, I gotcha. So, yeah, the so what you can see on the screen for those who are seeing on video here that this is from this is from an actual news. It's a Spanish news station in Houston. And it says a well-known Hispanic used car dealership, which I want to come back to the thing about the fact that they call it a Hispanic used car dealership. But a Hispanic used car dealership chain is facing a dramatic banking intervention. Ninety percent of their staff have been on temporary leave and customers are uncertain about their credit and vehicles. So a lot of stuff in that short sentence. But the thing, can you leave it up for a second? I want to kind of break it down to different pieces of what's said. Banking intervention has not been confirmed. I don't find anything across the internet and even, you know, we've been doing some pretty deep sweeps and of kind of, you know, court records in this. Now I don't see anything, but you know, that's private stuff. So it may not be out there, but this news agency is reporting that it was a banking intervention. If you go to the news on Tricolor, you will see that as recently as the summer, they were raising more securitized funding, you know, which, I know we don't need to go into how all that works, but some large dollar amounts coming into the company, which typically is going to be suggestive of health, right? They're going to go through a vetting process before there's a securitized round of funding added. And so there would seem to suggest there are a couple of things going on here. It also says that some of the other articles refer to over a thousand layoffs. I think the question for me on this is when it says ninety percent of their staff has been on temporary leave is that ninety percent of their staff just in the houston store is that across see we just need to be careful here this is why from a white hat standpoint I think we we want to be careful about spreading rumors you know this is not it doesn't serve anybody right to just you know theorize and and start sharing stuff that's not based on fact and so I think we but we want to learn from whatever's happened here right we so we want to dig in and I said in social media I'll say it again here if anyone has credible information has access to factual information that they can confirm about what's happened here we want to be able to share that story and I will put in a little note here that I did reach out to daniel chu who is the founder ceo of um of tricolor um I'm connected to him on linkedin we've had conversations in the past about him appearing on the podcast and so I reached out to him and I did not get a response I think I reached out on monday And I don't really expect a response because if in fact he's in this kind of thing. There's a lot going on. Well, but he may be, his attorneys may say. No talking. No talking. So I think this is likely that we won't hear from Daniel directly, which means we're left. At least in the current. Yeah. And, you know, it would be nice to be able to hear directly from him what, you know, what's happening. But but and the invitation still is out there. But I'm certainly going to understand if he cannot appear. But bottom line is. we were going to lean on factual information and and so if we go by this new story that's being shared pretty widely in social media and I've talked to some people who have family members who were among those laid off like they they're direct you know second kind of second degree um situation here where people have said I have two family members who were laid off in that situation they went on to add what was being discussed. I mean, like, cause this is talking about been on temporary leave. Don't know. I mean, is that the same thing? I don't know. Probably. I mean, a layoff typically would have an opportunity to come back. Otherwise they would just be terminated. Right. So they would be permanently. Well, it's usually layoffs or you get your pink slip and you're in a nebulous status until the business decides to they're going to do so I don't know so let's not guess yeah right let's just let's let's let the information you know flesh out and we'll go with factual information but um I would just say that irrespective of what's going on there that there seems to be there seems to be a pretty heavy shift um there have been some pretty serious actions taken if in fact they closed two stores in texas at least that seems to be in news reports that they've closed two stores And I think you begin to, you start to ask the question, what happened? They were grow, grow, grow, capitalize, capitalize, funding, funding. And I've shared this story before, but when I see this, keep in mind, I've been doing this since the late nineties, really. Ninety-seven is when I got into the car business as a buy here, pay here manager. I was in the car business as a new car salesperson, sales manager before that. My observation of the buy-here-payer space has been we've seen ups and downs. I was a car dealer myself, a buy-here-payer dealer through the O-A debacle, right? And so I know what that felt like and what the experience was and trying to capitalize and all the stuff in those days. I also remember what Ken Shelson shared with us years ago. Those of us who used to attend the NABD conferences or read Ken's articles, he would say that You want to go back and double your charge offs. Look at what would happen to your business if your charge off doubled. And we're hearing a lot of people on social media this morning, just this morning in the BHP success group, people are talking about my charge offs are through the roof. Well, is that going to put us out of business? Like, I think this becomes the question is what, happens in our portfolio if we from an expense standpoint we can get into profit versus cash I think you know I'm a cash flow person first and foremost so I would want to know am I going to have enough cash to go through the next ninety days six months whatever you know based on if I doubled my charge off And there's some really great advice. I would urge people to go find the thread in the BHBH Success Group from Nick Morgan. And if you're not in it, look for BHBH Success. Find BHBH, ask to join. And tell them that Jim and Michelle sent you and Tommy will put you on the express line. No, you don't have to do that, Tommy. I'm kidding. So the idea is we'd love to have people be part of those conversations. And we just want facts, right? So you were mentioning as we were reading this, you wanted to come back to a Hispanic used car dealership. Yeah, this is and this is not so much a buy here, pay here subject. But I think, can we do that? Like when I hear that, I think, can you imagine what it would sound like on the news if they said this is predominantly white? you know, dealership group. I don't know. You know, you start getting into reverse discrimination stuff. It's fascinating to me. I just think it's. And it's, and it's not judging the thing, but it's just like, it's just so interesting. It's a question. The world that we live in and how. But I've seen tricolor from the beginning, but to say they're Hispanic focused. you know, that's one thing. If you put up your marketing and you're trying to attract a certain audience, that's one thing. But to call yourself a Hispanic, it sounds like you're saying Hispanic only, which that's why I kind of was a tangent for me, but it's like, it's a, it's a curious thing. Cause you were like, I come back to that. And I'm half Spanish by the way. So, so just be aware. I'm just walking that line and watching the news. And when I first started hearing about that, it was a curious thing. But anyway, then the banking, the word here is banking intervention. So, you know, we, we just came out of this, this paradigm and we're still, we still have a foot in it. If Vic, thank you, Vic. This is, I assume it is Latin. The guy who owns it is Asian. He's Asian. Yeah. It's interesting. Yeah. I don't know what that, you know, it just was a market. They identified a market. Really, really. They've leaned into, they've really leaned into. And that's fine. I mean, that's fine. What, who's Whole Foods market, right? You know, it's like, you know, you can name it a market. Yeah. So, you know, we, we, we're coming off of this, this thing of the big bag boogeyman was the CFPB. And that's kind of like, for the moment, it's been, shelved differently. And, you know, people are like shoe. Um, and every attorney out there is going to say, don't shoe it right now. It's just not out there. This is not CFPB. This is banking. And, and so, and, and we know as we're talking to dealers and all of that, that there is also a constriction happening in banking in, in the, in the capital world of, of, um, by your payer. I mean, it's like a lot of people have been feeling that where it's covenants for being, you know, we really have to abide by these things. We're seeing more and more of the, of the capital providers within our space constricting. And I can name at least one that is expanding. So what would that say? That says something about their health and their appetite for risk and their long game approach. Okay. right so I think you just gotta be you gotta take all this stuff for what it is and I think when you talk about constricting let me back up and for anybody listening who's not seen those ebbs and flows because we've talked to a lot of people who listen to the podcast are new to the industry right so let's talk about that across across my time in the industry and I've known a lot of people have been around longer than I have and you see this at this ebb and flow so what typically have I seen You see capital. Let's talk about the large capital, like Wall Street kind of money coming into this sector. So what happens? Wall Street goes looking for returns or looking for ROI. They identify a sector. Oh, look at the interest rates over here and buy or pay here. We could invest over here and get a nice return on that risk. And how can we mitigate the risk? And we'll dabble in that. And they do that when there's ample capital, there's surplus capital to invest and they're looking for solutions. They'll, they'll stick a toe in that and they'll, they'll play some millions in there and billions or whatever, but, When it's been my experience that, and this is really just a farm boy view. This is not an analyst, you know, perspective. I mean, I live in the, I live in numbers and analytics, but, but I'm not looking at data on the, and this will be a conversation for Alan Keith on our, our Capital Watch, right? When we get that resurrected here, we need to get those conversations out to our audience. But, but for Alan, who's somebody who's been around that, and we can find others who can also speak to this because When delinquencies spike and we're seeing that even prime or near prime delinquencies are spiking. Yeah. Filings, that kind of, it's like, it's on the rise. Let's keep it general. Like what happens in terms of what happens when, when those shifts happen in the market, delinquencies start to rise, charge off, start to rise. Then what happens? Those people who were in the business of protecting their investors or shareholders, they pull back. They go find other places to put the money. And it's not that they're scared. They just stay fluid too. I mean, a lot of these investors, it's like they are watching the markets and they're ebbing and flowing in and out of different markets that are making them money. I could say that's out of some degree of fear. I mean, they're capitalizing on opportunities. Yes. And they're fearful of loss. Yes. And they're like their clientele. Um, is it's like, they, they want to return, they want to return. And so there's a shift in like, where are we going to put the money? Where are we going to put the money? And, and buy her pay here has had its ebbs and flows and it's, and it does usually I'm like, cause there was an, uh, there was an ebb around. Oh, wait. Um, so, you know, back to what you were talking about in your, in your time that you've been in here. You've seen them come in and you've seen them go out the ebb and the flow and it will happen again. And where we feel it will. And where we feel it is when a dealer's out there shopping for a line of credit, you're going to find that, you know, even if the person they're sitting across from the desk from us likes us and likes our business, if the people behind them are scared of our segment, then it's going to be hard to get a line of credit. It's too risky because the economy is not strong. Right. Yeah. Right. So it's like, this is what happens is the up the chain, the capital. And, and you know, I've seen, I've been in some meetings with some pretty big banks where they talk very specifically about the different silos of money where they have, they've, they dabble over here and they dabble over here and they will kind of spread their portfolio right so that happens but I'm just saying the appetite for this subprime segment comes and goes right so this is a time where it seems to be retracting to use your word constricting and so I think this is it's important for us to recognize that that seems to be the situation that we're in there are some lenders that are actually stepping in and and some of the people in that same social media thread that I'm somehow referred to opportunity that exists there's opportunity as that happens and people constrict and now you got somebody over here who's happy to provide money who would they be providing money to if they're coming in at a time when there's a void they would be able to cherry pick the dealership they would be able to identify those dealers who are healthy so what's healthy look like right so you know you know it's interesting to me when I think about like some of the conversations we've had over the last few years You know, the dealers that have been around for a long time, they know to play a long game for the most part. I mean, it's just, we see a lot of, it's like, this is, it happens, it comes and goes, all of that. I mean, Triclor, obviously, they've been around for a long time, so this doesn't fit with them. But we've seen dealers, it's just like, they recognize what's happening. I think it's the dealer, this is, My hypothesis is that dealers that have watched this come and go have been seeing signs that this is going to happen. And they've been talking about it the last couple of years of like, are you paying down your debt? Are you, you know, I like all of these things. It's like, I know that everything is high on the hog, everything, you know, like go, go, go, grow, grow, grow, borrow, borrow, borrow. And there have been voices out there over the course of the last couple of years that are like it during the time of plenty prepare for the next dip. Cause it will happen. It just does. And here are the things Ken Shulson, if you can't survive a double of your, your charge offs, then, you know, then, then you, then you need to do some restructuring, figuring out what's happening in your business so that, and, you know, like you said, I've quoted Darla, and Darla is obviously quoting Ken Shilson, of, you know, this is kind of like a really easy, you know, just a measuring stick. It's like temperature, okay, where are we at? Are we okay? But there are plenty of dealers that have been saying for the last couple of years, you know, just it's – Be prepared that stuff's going to happen. And as we watch what was happening with COVID and we're watching all the things, it's like, it's great. And. It may not be great soon. Yeah. Be prepared. Yeah. I think, you know, obviously with White Hat, we advocate for a long game. We talk about it all the time. We think it's important to have a long game approach. And we talk about this infinite mindset, you know, that you want to bring to any business. And I think our buy here, pay here space is Certainly one where you can expect ebbs and flows. And it's got its challenges. It's got risk, which means we can expect to see some, you know, modulation or whatever in our charge off numbers or whatever. But I think the thing, too, that I would I would. like to kind of bring forward. So there's a lot of opinions and a lot of theories about why. So some dealer says, my charge offs are double. And they just say, well, your charge off wouldn't be double if you did this, this, and this. And I'm thinking, I don't know if you can know that because you don't have enough information. Like most of us are doing around a three-year contract. So we just need more information. I think we, I've been challenging our people everywhere across this podcast and social media. Let's move beyond opinions. Like that's the frustrating thing about those threads to me. Everybody's got an opinion. It's like, they don't have, they're not operating from a lot of facts. As we offer our opinion. Well, it's like we're trying to base our things on fact and we're trying to share what we've seen. Right. And so this is a little different thing. I think we, we see that, um, what people are, we need more information. When you say a dealer's experiencing spike in charge-offs, well, are they charge-offs from the last twelve months? Are they charge-offs from prior to that? Or are they, did we change underwriting? I mean, there's a lot of variables to consider in determining why a dealer might be seeing an increase in repos and charges. Yeah, and to kind of wind in and thread through this tapestry of buy here, pay here, the White Hat way, is when times are harder for a business when you have relationship equity with your consumer base and they know that they can trust you you you know that that there that has we're working really hard right now to to like have the solid numbers have the solid and there's lots of ancillary stories of you know people handle their stuff this way and they're in connection and all of that. It can't hurt to have a great relationship or at least a active relationship with your consumers. And it doesn't have to be just, you know, collection calls, but having that active relationship. And so you can, in a time when, when repos and charge offs are on the rise, that's a, you know, hopefully you've already built that relationship, but it's a great time to just like, how are things going? What's happening in your world? And so that you can, you can shift and you can, you can, if you have to restructure or you have to, whatever it is that you have to do, it's that whole thing that Brent Carmichael talks about, collect the cash, not the car. Nobody in the consumer or the dealer wants to, experience a repo yeah I think what we're hearing here though is dealers are saying they don't have the cash like they're also saying it's affecting sales like in these threads you're hearing dealers say we can't get a customer with any down payment of late like they just there's no cash and so is that a new thing like again anecdotal we we don't know for sure but I think go back to the tricolor thing for a minute I think what we want to watch is as the news comes out on this and and listen you know I've been through a situation I've shared my story in the past about my how how my small little buy here pay here a lot tanked you know in the late after the two thousand eight thing. And so there are a lot of factors now with little history and retrospective, you can look back and say, OK, there were a lot of things that contributed that I made some management mistakes and and did some things poorly. So you can't you can't necessarily pin them up. But when we watch this tricolor thing, I think it's interesting because It's Keith Thacker won't mind that I share that. He said something really profound and I acknowledged it. He said he offered, you know, these are, there's opportunity ahead for dealers who will be efficient and, you know, on top of their business. And the thread that he said was don't scale chaos. So I hadn't heard that. That's so profound. Don't scale chaos. Now we've got to be careful about creating the, the, connection between that and tricolor. But if we see what's happening with tricolor, what we know is they grew very fast and they securitized through conventional or even sophisticated channels of capitalization. And in their fast growth, it will be interesting once we can piece together more of the story of what happened there, because I think it's important for dealers to know. There aren't very many examples. In my career, there aren't very many examples of dealers dealership groups who have gone down a franchise model or scaled to multiple locations successfully. There's not very many examples of people who are out there. We've talked about America's Car Mart. They're one of the ones that have been around since the eighties and know there's kind of a history of that group going way back and so it can be done I think what you what you have to what as the analyst in me wants to learn from this tricolor story and see what is what what went off the rails here if anything there's still a lot to learn here but but if this is true that the banks are stepping in and that that suggests a failure of the for me it first and foremost suggests a decline in the performance of the portfolio. My outside looking in, we don't know that, but you begin to say the portfolio started to tank. Because the rest of the machine should be fine as long as the portfolio is doing its thing and supporting its debt and the capitalization. The rest of it should be okay. You should be able to make adjustments. But if the portfolio starts to tank, that's where the banks would step in, I feel like. But could there be more things happening here? Of course. This is just outside looking in. And again, we're kind of offering, you know, kind of professional perspective, I guess you would say. Yeah. Yeah. What do you, do you think, you know, when they say that, that the, uh, that the clientele was predominantly Hispanic, it was Hispanic, um, owned that, that some of the current, um, things that are happening in the country could have, Could. Yes. Here's what I can tell you. We have one dealer in our V eight group who also has a heavily Hispanic business been around for many years and their business is suffering as a result of heat. And the dealer says himself, the deportations are hurting us. So that just says that you've got, and I think it's both direct and indirect. If your customer gets deported, they probably can't make their payment next month. And so that's the customer. But if your customer's husband gets deported, then obviously indirectly that can also affect the family and the income and a lot of the things. So it's like there's a lot of things around this. But based on one dealer's story, he would definitely say the deportations hurt his business. And it's a substantial business, multi-million dollar portfolio. And been around a good while, generating very consistent cash flow. I think the other thing we want to look at here is let's come back. When we look on Friday, let's look at across the dealers that we have data and we have most all the August data and I'll be putting those numbers together in the next few days. Then let's look at what is, what is the cash in one, our charge offs up right across a trending period. And if they are up, what is the impact on cash? So, you know, because in near term, typically dealers experience a little bit of a surge in cash when they have repos because the cash value is higher than the payments that would have been made. But then what's going to be the impact past that? And next week, Michelle, I don't know if you know this yet, but next week we're having a V eight plus session within our group of our members that are plus subscribers. We're having a couple of sessions around things that will be of merit here. One is kind of a strategy. session where we're moving into strategy around and accountability so that we're going to be able to work with dealers to create business plans. Another one is cash flow is like top ways to improve cash flow. So this is where you get into these things about this portfolio spiking. It certainly has an impact on operational It creates operational stress when you have repos. It creates demands on the operation. It has an impact on profitability. We're going to write off those accounts, and it's going to hit our bottom line. We need to look at the cash side. What is it doing for us cash-wise? Because if you repossess a hundred cars this month, and you can recondition those cars in a short period of time, and you have buyers available to finance those cars next month, then maybe the impact will be a hiccup. Yeah. If you don't have a place to go with those cars, then, then that's a different thing. So this is the part we want to start to analyze and start to figure out. Cause I think we, when we say repos are up, well, does that, does that mean the sky is falling? Does that mean the end of the world? It will for some. Yeah. And, and the other, the other thing that you mentioned earlier is that down payments are down. Yeah. Down payments. One, one dealer. Okay. So that, do you guys, do you, um, We have the data. Yeah. So what are the down payments right now? We can look at that. I think for this Friday, I'm going to focus on charge-offs. So we can come back and look at the sales side of things. But I think, yeah, for this week, I'm going to focus on... Because that down payment question, if you're repoing, reconditioning, and putting it on the lot, are you trying to do it from the same model? Or are you creating something that it's easier for... what would normally be your customer base that can't do the down payment on the other things on your lot to be able to get into so that you can keep, keep the, keep the wheels turning without, you know, the, without like it's, it's almost what I'm, I guess what I'm, I'm suggesting is having a secondary model in your business to handle. Let's just, you know, try to figure out how we keep these things just, moving instead of sending them to the auction lot if they're repo or if they're reconditioned worthy that maybe you have another subset of cars that people that you're seeing that don't have the down payment you're saying no to the nice prime stuff it's like hey we can help you with this though and I have dealers michelle that have been in business a long time been very successful and they will say I wouldn't change my cost of car in that scenario Because their model leans more on the success of the car than it does the success of the customer. So this is something that's different in my way of thinking than it was just a short time ago. So in other words, you could do that. So certainly as we break down next week with our VA Plus members, what the cash, ways to improve cash, you can certainly adjust cash flow. near term by adjusting cost of car in your example to get to a down payment. And I was a proponent of that sort of thing for a very long time. My own dealership was a low ACV model, right? So I've been a proponent for that. It can work for some. It's just that when people see that what performs better longer term is this other model, then why would I choose to invest in a model that doesn't perform as well? So this is all part of what can be discussed. I think it's just, it's really a question. I think we're in a market correction. And I think when you're long-minded and this, you know, we talk about it in customer relations, the tenure approach, I think dealers who, if they bring a tenure approach to their own management and business planning, then you would be prepared to weather these kinds of storms. And one of the things that, you know, Chad Martin, I think said, and maybe some others in that thread, those who don't know, Chad Martin's a CPA in this space, been a specialist in buy here, pay here, lease here, pay here for a long time. And he said, and I think this is always, always going to be part of my advice too, is check your overhead, check your overhead, because you can, that whole Ken Shilson thing about doubling your charge off, I think you're going to find, you go back and look at that. If you're, if your overhead's in check, you can probably weather. Yeah. Charge off spike. That's really a whole nother, um, whole nother topic on that. And, and you, when, when things, when you're fat, when things are fat, you, you, um, I've, we've seen dealers like, well, my daughter's in college. And so we need to set, I'm going to send them money every month. And, know the this and the that and that you're supporting more than your dealership and your own household too and that's that's a big thing too that you know when you're fat it's like I have the extra I'm going to to do all of this and in times like this it's like it's it it um it it is a constriction you know you're you're working that that's what happens and so there are there are also as you look at overhead you're looking at um you know that that constriction trickling down even more um so you know if you're heavy on staff right then someone's gonna likely be let go or you know if you're heavy on on on drains on the income because you're helping to support this and you're helping to support that it's like mom may have to move into the house for a while right And so that we don't have this, this extra expense, but you know, there's nothing wrong with learning how to tighten our belts and, and, and you learn, you learn an awful lot about, about, you know, how you operate in your own household and your business and all of that. And it's like, it's time to tighten belts and we can do it in a really, um, judicious and, and, um, uh, uh, not reactionary kind of way, but, um, you know, the markets and you know we've seen dealers that have had for their own reasons that kind of constriction tighten your belts figure it out have come out on the other side okay it's like oh we weathered this storm but don't wait until it's too late yeah to do that yeah yeah I tried to tighten my belt on but I know we've been having a conversation right like that one burrito away from exploding I can't read. We live much too close to an ice cream shop. Says the man who brought me ice cream last night. Thank you. It's my favorite. So anyway, as we watch this thing, I think, again, I'm going to send an invitation to folks to join us in VA. Because the conversations over there are much like this. We're digging into the stuff that really is most important. And I think you don't have to hear it from me. You can hear it from other dealers who live there. And you can see what's working for them. So please join us in V.A. and let's let's continue these conversations. Absolutely. Need help. Call or text directly. Nine oh three eight one six zero two one six nine oh three eight one six zero two one. And I'm a little behind on my follow up with some of these folks who are reaching out, but I'm talking to some of them now. So we'll catch up and we go. And thank you for the grace that everyone has shown us the last couple of months because it's just been. interesting in our world. I mean, we're all kind of experiencing our own like, Oh my gosh, what's going on. Um, but, um, so, you know, pretty heavy personal stuff. We've had some pretty heavy personal stuff, but, um, so yeah, please. Eight one six zero two one six. Or if, if you're connected to Jim on any of the social media platforms, please don't hesitate to reach out that way. And join us back here Friday when we're bringing some real data on reposts. And it is, again, not too late to join a V-Aid group. Thank you, Vic. V-Aid is the best. Yeah, it's good stuff. It really is. Great conversations. And it's like dealers need to understand they're not a lone island. It's a great way of getting some fresh ideas and different perspectives. So it's back to the thing about what Georgia and Vic were talking about. It's like It's a good way for a dealer to find out, is it me? Or is it the industry? There have been times that industry, we kind of have a finger on the pulse. But dealers, don't be so prideful that you can't accept the answer, it's you. Yeah. Yeah. Yeah. There's more to talk about. There really, really is. All right, everybody. Thanks again so much for joining us. We really appreciate you taking your time out of your day. Yep. See you. And we will see you on Friday. We're going to be talking more about this whole conversation. Yeah. And hope you guys have a great rest of your week. If you learn something more on track, let me know. Yeah.
