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. good morning everybody hi from the studio in north ogden our uh home for a while longer some of you know that we're uh expecting to relocate you've got a whole thing I do it's like notes but I don't think you can like actually read it but um yeah we uh we are pretty um known in our intimate circles as someone that we have little like massive sticky notes everywhere. Cause that's how we gather our thoughts and all of the things. And you get to kind of see some of that inside the war room. There's no war. Yeah. So a couple of updates. We've got a V-Ape meeting starting next week. There's still time for our V-Ape folks to get in the group. And I think what you're going to see in some of the data today is part of the reason that folks really want to consider getting in these groups so they can have some real information and have a good idea of what's going on in their business. So we'd love to have more folks over there. We just added a member this week onto our newcomer group. For those people that are zero to one hundred accounts, Brand spanking new. Yeah. And we would love to have more folks over in there because that is a good spot to get in there and kind of understand the metrics that we track and kind of get. We graduated a couple of members out of that group into our larger groups recently. But we like to start folks there so they can get familiar with our summary report and all of our metrics. Yeah. Um, uh, I wanted to just take a second if that's okay. Um, uh, and I don't want to get emotional. I won't know if it's okay. It's well, thank you, honey. Um, uh, today is a pretty emotional day. Um, and it, I just, I want to, um, to recognize and honor that it's a heavy place that everyone on this planet is in right now. There's a lot of just heavy, high emotions, just really, there's a lot of just heavy emotions. And I woke up this morning experiencing that, and I have been practicing for quite a while grounding, and so it's just... like getting out of my head and just letting whatever it is, it feels heavy, just shoot it down into the planet, you know, just that kind of like grounded and getting out of my head. And I was doing that a bit this morning because I woke up just feeling really just heavy and more so than normal. And I got in the shower because it's the shower. Jim knows is kind of like my that's where I meditate. That's where I, you know, center myself. Water bills outrageous. It is because I empty the water tank every single time. And I just, I felt inspired, turned on some happy music and danced and just moved and, you know, like expressed through movement, just joy and love and peace and all of that. And it helped so much. So, you know, I, for what it's worth for those that are listening, um, if you're feeling heavy you know just weighed down with the the things of the day of the things that are happening in our in our worlds and the things that we are just experiencing a lot of fear or anger or um all of those kind of things around um I just really encourage you to help lift your your um Lift your soul. Dance. Find some happy music. Get out there and just move. And even if it feels disingenuous, just move. Just get it all out of your system. And it really will help because it's pretty heavy right now. I couldn't help but think about, you know, as you say that, is it possible that people are feeling this heaviness and negative energy on the planet because you're shooting all of yours into the planet? Probably. Are you just sharing a lot of your negative energy with a lot of people? I don't have a lot of negative energy. Okay, all right. So, yeah, but that's the thought for the day. Because I kind of think that a lot of people, I think a lot of people would benefit from just turning everything off and just grounding and just dance, move for a minute. Sure. Yeah. Got it. Shall we move into our subject of the day? Yeah. Jim usually has a joke to alleviate whatever he feels is heavy. And so he already did. He's like, you know, maybe that. Yeah. Yeah. But, and I appreciate that because he, he kind of pulls me out of my burp thing and wonderful. Okay. Subject of the day repos. Well, yeah, let's show that tile. Yes. First, that green tile from the Facebook post. I put this on Facebook a couple of days ago and it's, So for those that can't see the screen, it just says collections is greater than underwriting, which is just a short way to say collections is more important than underwriting. Am I wrong? Oh man, there are a lot of people that are going to land on different sides of this. And I ended up finding it amusing. It is. It's something you look at our industry and people feel so strongly about their stuff. And it's like, I think, you know, it's like, it's okay. I look, you can, obviously everybody can have their opinions and that's part of what Facebook is for. Right. But it's like, when I look at the stuff, I think, well, what basis do you have for, you know, your opinion? You know, you, so this is why I'm just challenging our entire industry. And we're, we're trying to live by it ourselves and, and, and model is like, Let's get factual. Let's do the best we can to lean on actual numbers. And so that's part of what today is about. But I think before we move into our actual numbers for the day, I would say that I could have written this differently. Let me think about how you could say someone who's very good at collections can overcome more success than somebody who's only good at underwriting. Yeah. And I can think of numerous dealers that would say, you know, you can underwrite any way you want to. And if you've got great collections, and I'm not talking straight line, I'm angry, or, you know, bring your payment in kind of collections, but... where you're engaging and you're, you know, you're there and you're offering opportunities and you're offering assistance, all of that, that a good collections policy, a good collector can overcome almost any underwriting that was, it's just they, not any, but you know what I mean? Yeah. There's a lot of dealers out there that believe that. And I think for this morning, I won't even render my opinion. It's like, I don't even, it's not about opinions. I think it's really about, I think when I look, when I see this data, It's... it's kind of like I almost can see a difference in what I would call a D plus customer and a D minus customer. So let me explain what I mean by that is when you think about in our segment over the years, I've heard it described as, you know, a paper is premier paper, top credit scores, B's are got a few glitches on their credit, but they're still strong. And then C is marginal. And then D would be this kind of unbankable customer that we finance. And it's been my observation across my career that, um, a D minus customer we'll call them. And maybe the reason they're in a D minus segment is largely because of income, right? They just really struggle because of income perhaps is one of the factors. But when I think about a D minus customer, I feel like they require a lot of handholding. So even though we might've written underwritten the deal correctly at the time, um, based on all the information we had at the time, the truth is across the three year note, this customer is going to have a roller coaster. Yeah. George spat. Love you, George. You, uh, you're just such a solid listener to, um, and he said to me, this is like saying repos are more important than sales. Yeah. I think George is our only listener, honey. Sometimes. Thank you, George. Thank you, George. You just, you stroke our ego. Time for the George, time for the morning George show. Yeah. So no, we, we do appreciate you hanging in Georgia and offering your, uh, contributions because, um, We do, you know, we do this because we know there are folks out there who can benefit from this information. I'm going to show you some really specific information this morning that I think you can give folks an idea of what's what's real and what's like I said in some of our conversations the other day, it's like. I think dealers need to come to grips with the fact that some of what they're experiencing might be industry-wide and it might just be them. And I'm going to show you only six dealers today and you'll see that they vary. They're not all experiencing the same thing. So I kind of want to just, and I don't know if I completely understand the question or the statement that George made. And it's almost saying that collections is the same thing as repos. But I understand, and again, the underwriting is like a sales function. Collections is a, I can kind of see that. And repos are what we're experiencing right now. And so are we experiencing a lot of repos because we have poor underwriting or because we have poor collections? Yeah, so obviously this post that's on the screen is wide. It's very vague by intention, right? It's just really trying to zoom way out and say, which to you is more important to the success of your business? I hope that's what people interpreted from that. And I know from my perspective, and again, I'm not a subject matter expert. It's just an ancillary, it's a... perspective of all the different things that I've, that I've listened to and watch is like this, this class that's coming up here pretty soon from NIADA, from Brent Carmichael, he's teaching the class, collect the cash, not the car is that it's, it's not a, it's that, that, that repos are not, what we should, that's not the focus. That shouldn't be the focus. It should be, how are we making it possible for people to be able to pay? Okay. Yeah. I mean, again, this is, it's open to interpretation. It was intentionally, it was intentionally, you know, a wide net. And, but if I just look at those, if you think of those as a department, most dealerships are small enough. They don't have at least most people who listen to this podcast probably, they don't have a separate underwriting department. They don't have dedicated underwriting team. And we really encourage a lot of the people that we've worked with is it's if they don't have a separate underwriting team that they include collections in the underwriting process. Like the manager or the director or the lead in collections somehow in that process. I think that's a subject for another day. I agree. I think that's something we definitely encourage. And I think before we move away from this, I would just say that I'm really just trying to β let me just reference somebody I've referenced before. I know a dealer who's been in business for decades. Mm-hmm. They're nearly as much analyst as I am. Like they're deep in data. So you guys get all nerdy together. Sort of. I mean, the dealer shares with me what they have learned across decades in business. Okay. And they've experienced two different kinds of business models in their decades in business. in the buy here pay here industry okay and they've shifted their business model and they have a very different model than where they started okay so when I listen to this dealer I yeah I believe that they're speaking to me based on factual information based on their own data yeah right yeah so they've interpreted their own data this is not just opinions and guesswork And what this dealer says is, and this will make some of the underwriting software people unhappy, but what the dealer says is, I've looked at it all kinds of ways, and I cannot find anything about the consumer that is predictive. So based on that, when we say underwriting, there's a lot of things to underwrite. And if you look at some of the different deal systems that do our underwriting tools, then they typically look at the consumer profile. credit score, whatever else, probably income. Right. They'll look at the customer's credit profile in that. Yeah. They'll look at the deal structure. Okay. How the deal is structured. And I don't have that in here. Some people would lump underwriting into her deal structure into underwriting, but yeah, And then the third element would be the performance of the car itself, the collateral itself, like how well will the twenty thirteen Camry perform on a note? Right. So it's like that part. Yeah. So what this dealer says is these other elements are predictive. You can find the car, you can find trends in the structure of the deal. But in the consumer, he's just not finding it. And I feel like once a customer kind of steps off of the unbankable step, you know, they step into unconventional financing. Then I think it's been my experience broadly. I haven't studied this in any depth, but it's been my experience that there's not a lot that's predictable over there. Yeah, you can lean pretty heavily on income. I think a lot of people say ability and stability are important, but I don't see any hard data behind that. Yeah, it's funny because, you know, we've β you β I've jumped on the bandwagon as well. When people say, well, our customer is different. It's like, no, they're all unpredictable. And it's, it's, you know, with when you, when I, it's be interesting and I'd love, love to see another sub subject for another day. When you say that there is, you can predict how your portfolio will perform within certain standards. You know, as you're, as you're looking at that and how, how that overlays with what this dealer, because I think I know who you're talking about, what this dealer has experienced. It's like, does that still play out for his portfolio? What I can tell you about this dealer's portfolio is that it's performing quite well on the new model in comparison. And the dealer did not change the kind of customer they financed. They simply change deal structure and type of car. Okay. So that much I can share with you tonight or today. And so then just be aware that that's kind of where I'm leaning here is I think that I think it just kind of, the reason it amused me is how people chime in and they're so assertive and they're so, you know, emphatic about their own position. I think, I don't, what are you basing that on? Like, you know, how do you, what do you back that up with? um so so I think um it's just for me it's like it's a fun part of it and again I'm going to continue to challenge everybody bring your data when you come and you make a present a theory yeah you know or a hypothesis let's bring some data back so let's move into our own data this morning let me get it shared first michelle and you can put it on the screen so let me let me kind of talk to you about what I did and I regrettably um I was only able to get data pulled together from six dealers who have a meaningful pool of data to work from. So one moment, Michelle, I'll get that shared. Okay. I think this has got it. So let me share with you what I've done. I have, you're seeing the screen now? I am, but I'm going to change the way the screen is laid out. Let me also try to see what I can do. And we're going to go like right here. Okay. Okay. I'm going to also try to zoom in just a tad for our viewers. So let me, and I've got this, there's tons of data that this sources, but. And this is, this is multiple dealers. Is the dealer that you were referring to in this as well? No. Okay. Not yet. They probably will be. And let me also share for our listeners that I think because repos and just portfolio performance and economy and the market at large is such an ongoing kind of hot button thing. I think what you can expect to see until further notice, this will be the subject of our Friday podcast for the foreseeable future. It's what everyone is really, really challenged with. And I hear people say, how do you do collections? What's happening with your... It's all in the same... umbrella. Same umbrella. So I think what we'll do is we'll kind of stay in this lane and probably bring some dealers and some guests to this conversation because we have lots more data to be able to build on top of this. But let me just share. First of all, everything that you're looking at today is is actual data through the month of August. And all we're looking at today is a six month rolling average. So I didn't look to see how August was different from July or any of that stuff yet. All I'm looking at is a six month rolling average, which we already have baked into our V eight, you know, summary report. And I have six dealers because these dealers are out of the portfolio size that are one hundred to five hundred accounts. That's the dealers who meet this coming week. That's the majority of dealers out there are right around that. Yeah. Well, it seems to be. I used to think that, but I would say right now we have about as many dealers, at least in our V-H system, we have about as many dealers that are five hundred plus. Okay. Back to this, like this data is really just from dealers that are, um, one hundred to five hundred accounts. And I chose these six dealers quickly this morning because I have data for them all the way back to January of twenty twenty four. So that gave me more of a trend to look at across six months of a rolling average. And all the data that you see here on the screen, I have most of it charted. So I'm going to go into charts. But let me just show you what we're looking at and how these things are calculated. So let's look at this first one, this dealer NC one. When I say that June, twenty twenty four, their charge offs were two point three percent. What that means is from January through June, they averaged charging off gross, the gross principal balance of the account at the time, whatever the customer owed gross principal at the time that the account charged off. That's the number, but it's compared to the amount of principal in the portfolio at the start of the month. That's a number we lean on pretty heavily in V-A for our metrics. And so this is what you sometimes have heard me call in the past a conversion rate. In this case, this money is not ending up in our portfolio. We're not converting it to the bank. But we, but what it says is we charged off this dealer in that six month window charged off two point three percent of their principal, of their principal balance of what was in the principal portfolio at the start of the period, start of the month. Okay. So let's, when I, so let me ask you just like simple math. You have a, um, million dollar portfolio it's basically you've charged off two point four percent of of that from the the principal in your portfolio that's how much you charged off and that month so that would be right like ten well I don't know what we're gonna do I use spreadsheets for math okay so yeah yeah but no it's look at me trying to do math on the fly So it basically would be that percentage of the, it is, it's the percentage of the principal that's in the portfolio at the start of the period. As a whole, as an aggregate. And that's the most useful because now let's just get a sense of, well, if one dealer charged off fifty thousand, another dealer charged off fifty thousand, that's interesting. But if one dealer has a much larger portfolio, then obviously that's a different thing. So that's why we lean on the percentage of the portfolio. And not per account, but this is like in general or in aggregate for your entire portfolio. Gotcha. Gotcha. Yeah. So what you see there, let me just jump to the graph because I'm very visual and I think most of our, our viewers would be as well. So if you're, if you're catching us on audio, you might want to find it on YouTube and always, you know, subscribe when you get over there so you can catch this stuff on video. But I think, I think the best way to look at this kind of thing, and let's back up and remember what we're looking at, what we're trying to determine here. Dealers are out there saying, you know, you could look at the threads in some of these Facebook groups and you can hear dealers saying, man, my charge-offs are through the roof. They're the worst I've ever experienced. This is just as awful. The sky is falling kind of thing, right? So I just think by showing some real data and making it over longer trends, we can see, is it reallyβ¦ Is it really changing a lot? On these six dealers, there's a bit of disparity in the way that their numbers look. So let's click on this first one, which looks like, according to the legend up there, is the dealer in Iowa. Theirs have been quite stable. And then dropped. They're actually down. They're down some. Okay. So just one dealer. But this dealer across the last six months is actually lower. So it's like they're the dealer that's piping and saying, I'm not having a problem. Yeah. And I just think it's important to recognize that. And this is just the first dealer. Some of these other dealers are up. But this particular dealer, again, keep in mind, we're looking at gross charge off. This would have been the gross write off in your portfolio. This dealer in Florida is up. Certainly you can see that they, they, their average topped four percent. But they're, they're trending, they're trending down. Well, not trending, you know, down a little bit from July. And so they're, they're lower than they've been since April. Okay. About when you look, when you look at the numbers. Yeah. Yeah. So I think that's, um, so, you know, you can tell this, this is your, your legend over here or your X axis is four percent. So, you know, there's quite a bit of difference, right? Some of these dealers are up five percent, but that Oklahoma dealer, holy crap. What is there? Yeah. Very consistent. Very just, yeah, this, this is, this is what happens every month kind of thing. They're a low-volume, low-charge-off operation. Been very stable for a good while. And so there's a lot to explain there. But I would just say that, you know, clearly they're not experiencing anything dramatic. Yeah. Right? They're pretty stable. Then the next one, let's see, this kind of a medium green is going to be, they're relatively I mean they've had their ups and downs but they're about where they started from yeah yeah that's true just kind of like yeah we have a poor month and we have a good month and we yeah And you can see that their charge-offs, keep in mind when that number dips down, that means their charge-offs are lowering, right? So you can see that. So like the trend is down, downward. Yeah. And they had a lowering back in like February. Yeah. This is the interesting thing is like you get these dealers in a room, a virtual room, and they're like, What did you do? Yeah, yeah. What's different? What's different? I mean, you know. How come yours are so stable? Have you changed your underwriting? Have you changed your whatever? Why is it so stable? Why, you know, what is it that's changed? It's great conversations. And there's a lot of things to look at. Like back to the guy in blue, like their charge-offs are so stable. It's like, what are you doing? Only allotting two charge-offs a month. So your delinquency is going sky high. Like, you know, what's happening? So that's why we have to have all the data. Yeah. right so now this dealer is certainly experiencing an increase you see the trend going up for sure and so yeah there's definitely some important things to analyze there and based on my legend I'm not seeing the colors great but Is that our, which dealer is that? That's Texas. Okay. Is it Texas? Yeah. And it looks like they've kind of doubled almost their charge-offs in the last, um, eighteen months, did you say? Yeah. Yeah. So, yeah, so this runs, um, well, no, actually, there, this is a six-month window. A six-month, in the last six months. Right. Um, well, it, it, the, the date's on the bottom, um, show a year. Okay. But, but what I'm saying is when you look at August, you're looking at a six month number. So we've got roughly, you know, eight months or so worth of data here. I guess not quite that much, but, but you get the idea. And then our Pennsylvania one, um, there is a fairly stable, fairly stable increase since April, pretty steadily increasing the six month period, but they haven't doubled. No, their six month period in April was pretty good. Best they'd had since the prior July, but now they're trending up and the first time to be above two percent, you know, of still lower than most everybody else. Still lower. That's a good point there. But I think, you know, in this simple illustration, one of the things that will happen and we stay on this conversation for the coming weeks, we have more data compiled. I've got out of the larger groups, we've got data coming in that, um, We'll also have data back to January. And so we'll be able to build in more data and have more kind of case studies to look at here. And I think this is part of why we want folks to see that. Let me jump to the net side. Okay, remember what you've been looking at is gross charge off, which is the amount the customer owed on the account, irrespective of what we recovered in repos, the value of the repo. Yeah, and it's an aggregate, the entire portfolio. correct yeah so now this is net charge off and this is after they've they've collected whatever it is that they've been able to do with the repo that's right okay so whatever and of course there's always a degree of subjectivity there I would say that the dealers that are listed here I'm familiar with and they're consistent in their practice you know the method that they use for arriving this one trends going down or trends going up or better Well, I would say that we want net charge offs to be lower, right? But I think the reason I wanted to illustrate this is now we bring in the repo value, you know, with some of these dealers and you can start to compare, you know, what are our repo values, right? And we had a conversation on this some time ago about when when charge offs are up, sometimes bank accounts are up because our repo recovery, we're recovering cars instead of payments. So short term, we're going to see more cash. if especially if we're just liquidating those cars right but if we're even if we're recycling we have to spend less at the auction because we're we already have the car to have the car so you're going to see a um an increase in bank accounts temporarily so that's why I think when you start to look at a net charge off number and one of the things I look forward to bringing is the interest coverage um because I think that's a better test of we've talked about that before and And so I think this is, you know, we've got that data. We've got it for this group too. We just didn't build it into this information for this morning. But let's look at these dealers line by line. You got, this is the dark green. So I think, what is that? Our Texas dealer? That's New York, North Carolina. Isn't it? Is it? I really remember. Oh, it's Texas. Sorry. It is Texas. Okay. So after you factor in repo values, this dealer's net charge off was low, but clearly it's much higher in recent months, even after adjusting the repo values. Right? So let's look at the next one. I'll choose this one. And that looks to be the dark blue. That's the North Carolina dealer. And even after repo recoveries, they're clearly the highest in the group at the close of August. After factoring in the repo recovery value, then we've got... we've got the highest net charge off in the group and there's clearly trending up. Okay. Let's look at this purple one. The purple one, I realized after I loaded it, it was missing some data from the front end. We were missing a few months at the beginning. So I started theirs in September. But clearly you can see that, you know, they were their net charge offs were up. Then they had kind of improved and now they're up again, but not. It was higher in twenty twenty four. Yeah. Right. Yeah. So it's it's an indication of what's going on there. Then Orange is our Pennsylvania dealer. And clearly based on their net charge off, they are trending up. they are seeing the highest net charge-offs that they've experienced. And so for some of them, they would say, yeah, repos are, at least across the last six months, is the worst six months we've experienced, right? But it's just one dealer who's having that particular experience. And then the blue is Oklahoma, again, quite stable. That's the one that was just very flat. And it looks like they've actually improved what they're recovering from. Um, I would say that's true. Their net, their net charge off is, is up a little bit. Um, so that, that's going to be true, but it's, it's lower than it was when all of this started tracking. True. Yep. Very true. And, um, and we'd like to think that V eight would be a contributing factor there. And then Iowa, uh, This dealer in Iowa is quite stable. Their net charge-offs are very stable to improving. They're low. We want to see gross charge-off and net charge-off below. All we're doing here on this number is we're allowing for the repo recovery. Then I'm going to go back to the data screen with all the tables of data because there's one more number that I want to introduce. I didn't get an opportunity to chart it. But we're looking at repo recovery. as a percentage of total yield. And what I mean by that is all cash yield would be, what kind of money would we bring into the bank deposit from our buy here, pay here operation each month? That would be principal that we collect, interest that we collect, and repo value. I'm not counting down payments because that's on the sales side. That's just how the customer pays for the car. I'm talking about yield on the portfolio, okay? So when we look at this, we'd say the... You can see this first dealer, they were at twelve point two percent. Their repo amount of the total bucket was at about twelve percent back in June. Now they're at twenty two percent. So clearly they're much higher now. Repos are accounting for a bigger part of their quote bank deposit. now than they were back then and if we look at the next dealer pennsylvania same thing their their repos account for yeah they're both of them are almost double yeah and now the next one texas is pretty maintained I mean it's a little bit of movement but it's about the same it's slightly lower yeah then um the next dealer half Yeah, it's cut in half. And then the Florida dealer, this is. A little bit up. Actually, I'm going to remove this because I don't know that we can rely on this data from this period. Okay, so I'm just going to remove that. But they were at seven point four. Now they're back in September. And there's been a lot of movement. But yeah. Yeah. Then you look at Iowa and it's like, okay, we're. They're better. It's like, what are you guys doing? Yeah. And so they may be feeling it in their bank deposits because they're not recovering as many repos. Now they're growing their portfolio. Obviously, they're seeing more payments because they don't have as many repos. So this is the interesting part that, you know, we are always working to try to analyze and help dealers visualize, you know, what's happening in their business. But this dealer very well could be, you know, you know that clearly their portfolio should be growing if they're seeing fewer charge offs and so they're going to experience cash flow from that but they they're not going to enjoy the the short-term cash gain that some of these other dealers would experience as a result of the repos so so go ahead yeah well I'm just no I didn't have a question I was I was like I I'm yeah I'll I'll get it to it later Okay. No, that's cool. So that's all we wanted to just kind of introduce. And so I think this is part of why, you know, it's important to, let me just double check one quick thing. Is there any, is there any, you know, I know a lot of people listen because they're trying to learn and this, this is not, this is just looking at trends. Yeah. And their trends may be completely different. But are there any like nuggets that that dealers can can walk away with to be able to have a little have more stability, have more more feeling like that they're they're they're able to to buffer. some of the storms of the things that are happening is there anything that we can draw from this that I I know these are just charts and so we're not looking at right now at their their underwriting and you know uh the type of car that they're buying and deal structure all of that kind of stuff So here's what we know. If we're experiencing a spike in charge-offs right now, first of all, you know about me as a coach. I'm not super reactive. I tend to be pretty steady, and I play a long game, and I want to try to solve problems today in the most permanent way possible. And in life, that is just really a great way to approach stuff. I hope so. The hard times, the ups and downs. It's what makes sense and works for me. That's why I like my husband so much. Thank you. Yeah. And I like you too. I would just say that what I'm trying to get to here is that in the interest of not being super reactive, let's look at what we can't fix. We can't undo the deal structure. It's already done. We can't undo the underwriting. We already did that, right? So what we're faced with is in order to reduce charge-offs, we, the first thing we talked about this in a podcast weeks ago, it's like, we got to communicate with our customers. We got to know what's going on with them. Right. This is like, so yeah. And not as, uh, as punishment. Right. Yeah. It's, it's the, the, the communication we, it's everyone's hurting this. So you want to, you want to solve some of your charge offs and it may not happen tomorrow. It may spread out, but if you want to see your trend line improve, Make time today to start communicating with your customers before they're past due because we're just being reactive. When we're reacting to delinquency, by then it's too late. The customer's in a hole, and they're going to have a hard time digging out of that hole. And so we know about our customers. If the economy's tough, and it might be tougher than what the news media is trying to tell us or some administration. Our conversations are like, man, you know, what we're being told and what we're seeing are different. So I, you know, I, cause people, people, uh, I was just talking with my kids, with all the kids in town and all of that. Um, uh, this last week, it's like, um, how is your money spending? Right. And it's like incomes haven't changed, you know, all of that. How is your money spending? And it's just, it's, it's hard for everybody. It seems to be, it seems to be difficult. There's some indication. I think you said, I didn't see the study, but you referenced a study a while back that said that even near prime customers are the, that nationally they're showing more delinquency. Super prime. Super prime. Super prime customers have like the highest that they have seen in sixty to ninety day delinquency in a very long time. OK, so so it's even affecting that. It's happening across the board. OK, so so let's go back to how we help our dealers solve anything today. Again, you know, we're not saying this is an overnight fix and you're going to cut your repos in half next month. But by starting a practice to be proactive and communicate with your customers and find out from them, how is this economy or whatever else? How are you getting along? How are you getting along with your car? Is your job going okay? How are you feeling with the money crunch? We're all feeling the pinch. And so we're really, really aware that no one is walking away without feeling some kind of squeeze. So how do we work together? Yeah. So we're going to not do what, you know, our description of the show. We said we're not bringing hopium to the podcast. No hopium. Okay. So I love that. We're going to be clean on that. But we're going to give you some real hard facts. If you want to have a chance to help a customer, and this, again, goes back to kind of where we started. Mm-hmm. When I think about the difference between a D-plus customer, I'll call them, and a D-minus customer. My view of our D-minus customer doesn't mean they're a worse individual. It doesn't mean they're any less than. It just means they probably have less income, they very well may have less education, and they very well may require more handholding. The end. And, yeah. So we're going to have to talk to them. In order to solve a problem with them, we're going to have to talk to them and know what the problem is. And, you know, it's a really great place to layer in compassion. Right. for everyone's experience. And I love Candice Price, a really great dealer out of Nebraska. She's an honorary White Hat Way dealer from a couple of years ago. And one of the things that I see in their practice as a dealership is they're about solving um bigger problems for the customer rather than I mean and because you know we can get so tied up in our own little bubble and all we're trying to solve is the problem of I need our payments but they're they're out there trying to solve the problem that is why are our customers feeling the pinch how can we help them feel less of a pinch not just with the car and so you know it just a thought for all of those of you out there. If there are organizations in your community that help help solve problems for people that are our customers, lean in with them too. It's like how, you know, we're, we're, we're in there at where do a fundraiser, do a, you know, do a drive, do a, we're here to help. We're combining efforts. We're trying to help your experience be lighter because imagine, you know, like leaning in with those that are helping and, and how, you know, how that builds such a deep level of trust for those that are suffering. Because there's just a lot of that that's happening. So, you know, find ways in your community, find ways to lean in with helping your customers solve bigger problems. If you can... redirect some of that effort of that collections effort communicate with them all of that that's that's gonna that will pay in dividends um maybe not in your bank account at first but in people feeling like they can trust you in your, in your customer base and your community. It just, it will help. We've got some, we can't stop yet. We got something I have to clear up. I made a mistake and I recognized it in looking at this data myself. You made a mistake? Yeah, I know. And so I've got to immediately edit this podcast when we finish so I can avoid having to spread that misinformation. Okay. So the data, so let's show the screen again, if you can show the chart. It's not in there. Oh, okay. Let me get back in there. Can you add it to the stream? I cannot. You have to add your screen. Which one? The collections and the underwriting screen? Or the data screen? I don't have the data screen. The data screen with the graphs. Yeah. You need to reconnect that. Let me get back over there. Sorry, technical stuff. Yeah, yeah. Bear with us. So, here we go. Thank you for the background music. Let me get this shared right before you bring it back up. All right. So here we go. All right. So to the stage. Okay. See that graph? This is the same graph we just reviewed a minute ago, but I had the wrong header on it. Oh, okay. Oh, shame. Well, no, listen, the data, it's bad data. Like it's the wrong row of data. OK, so so what I'm saying is we we we weren't I said earlier when we were talking about it, that we were looking at net charge off numbers. We weren't we were looking at repo recovery as a percentage of the opening principle. So so I'm going to go ahead and explain that now so we can edit out the part where we talked about that before. And we'll and we'll we'll cover this part. But what it's different, this is basically looking at. the amount of repo volume that we saw and and this is based on coming back right this is based on the actual dealers um of course this depends on the dealer's method of valuing repos and man I wish we could get more consistent so so okay then a higher number is better Yeah, well, it's basically, I would say, it's just numbers. And you can decide. But what it's saying is, let's pick this dealer in green here. This dealer is experiencing more, like where they're higher, they're experiencing more repo recovery in that period. So you can say that repo values are higher or they're recovering more dollars in repo than during that period when they're higher. Do you think that has anything to do with the cost of cars leveling out some? Can't say, but again, this is part of the problem with most of the dealers that we have here are using a consistent method. Like if you're using average MMR or average Black Book or whatever you're using, we need dealers to recognize the importance of being consistent here. It's important that dealers... um settle into a practice and ideally that practice I'm not an attorney over here but ideally that a practice would be consistent with um you know ucc sort of um rules where we we're giving the customer a fair value there's a reason they call it fair market value of the repo go Create a system and be consistent in that practice. As a data person, it's like I can't offer a dealer something meaningful in the way of data that's comparative to other dealers if they're not consistent in the way that they operate. But if this dealer that we're looking at here in green is consistently using average black book, then what this tells us is that during this period of, you know, looks like in June, they were experiencing more repo recovery. Now, is that good or bad? Well, if you have a charge-off, you hope you're recovering some repos. That's all this line says, is that we recovered repos as a percentage of our opening principal again. This is looking, again, at our total portfolio, that it represented a higher percentage. So I needed to clear that up before we left the broadcast and make sure that people who stayed in with us can see that. And I apologize. We'll come back next week and bring both so that we can show the difference. So just those of you who've been listening audio, please go to our YouTube channel, Gemma Michelle Rhodes slash Buy Your Payer Auto Finance Coaches. But if you, you know, you can find Gemma Michelle Rhodes or you can find the Buy Your Payer Morning Show or whatever. Just don't put an E in Rhodes. There's no E in roads. We have a weird spelling of roads. Well, you know, that's, that's, and, and then also guys, again, if you need any help, you, you know, have questions, feel like you want to, to start joining the conversation and V eight groups, please reach out and let us know. There's, you know, there's room there. we may not be able to get your data in with all of the aggregate for this month, but we can get you in to, to observe. Yeah. I still have time to put dealers, depends on their portfolio size and when they're meeting coming. We still got time to put people in. So I would say anytime you can get in there, we, we have got some new practices on how we let people in. Yeah. Nine Oh three eight one six Oh two one six nine Oh three eight one six Oh two one six message Jim there. And it's Friday and, What was that sigh about? That sigh, I tell Michelle, that sigh was a six point seven. He Richter scales them all the time. It's like, because I'm sitting here going, oh, we're, you know, those of you guys know that my mom passed away. Her funeral was last week. And today, this weekend, we're dealing with the estate and getting, you know, all of that. And so that was like a. As we wind down the podcast, Michelle's like, oh, back. That's what I heard. We really appreciate you being a part of, um, our family and, um, and, and those of you who are catching this late, listen to the beginning. And if you need to do a little dance and release some of the tension of the day, cause it's, uh, you know, we, that's, it's really good medicine all the time. Yeah. And hop into BH success and tell us, yeah, BHP success and, um, and tell us which is more important underwriting or collection. You tell me. Yeah. Yeah. That's a good conversation. All right, everybody. Thanks again. And we will see you guys on Wednesday with another white hat Wednesday topic. Have a great day, everybody.
