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The Car Company - Special Finance Dealer Of The Year: It's All About The Attitude

When Marlin Miller got booted out of his old job converting the front end of horse trailers into mobile living quarters, he could boil it all down to one reason: attitude. He hated his job, and it showed.

And when Miller went on to become a partner in one of the most successful special finance operators in the car business as a partner in The Car Company, a three-lot operation in northern Indiana, he could immediately explain why in one simple word: attitude.

He loves his job, and it shows.

“Everybody is proud to sell cars and proud to work with The Car Company,” Miller said, putting special emphasis on the pride. “It starts with us putting out the dream.” And it’s not built on trying to look better by bashing the competition. “We don’t allow our guys to talk bad about other dealers to our customers.”

For Miller, destiny appeared back in 1996, when he took his buddy Mike DeWitt out on the lake in Miller’s boat. Miller was selling trucks at a dealership in Fort Wayne back then and DeWitt – already in business with one lot -- started kicking around the idea of opening a second location in Goshen. For Miller, it was the chance of a lifetime. And when that second lot opened up, he was there.

“We had hoped to sell 30 cars by the end of the following year,” Miller said. “We sold 32 by the end of the first month.”

Was he satisfied?

Not a chance. It was also one of the few times either Miller or DeWitt would set their sights low. Eight years later, the two men run three locations and on their best month sold 437 cars – generally averaging 120 to 150 sales a month at each location.

Is he satisfied yet?

“Our goal is a lot more than that,” Miller said. It’s all part of the attitude. And the two entrepreneurs back it up with hard work, starting their days at 6:30 a.m. and often not wrapping up until 10:30 p.m. There’s no job title on Miller’s business card, and there’s no limit to what he will do: whether that means sweeping up the lot, cleaning a car, taking a turn with a delivery truck or helping out closing a deal.

But there’s also a well thought-out business plan that translates the attitude and hard work into success. DeWitt and Miller decided to cut loose from the traditional commission pay plan, tying everybody’s income to volume. The dealership intensely tracks and analyzes its numbers, carefully matching the right inventory against their customer profile. They sink about $20,000 a week into a big, local ad buy to keep traffic high. They’ve joined up with Dealer 20 groups to glean some insight into the successful workings of their colleagues.

Looking back, DeWitt can recall starting off in business with $100,000 in inventory. Today, it’s $7 million.

Changing the commission plan was key to their growth.

Paying on volume

Five years ago, DeWitt and Miller decided that if they were going to move the operation up to the next level, they had to come up with a new way of paying their salespeople. Commissions were out, and in their place reps were paid a flat rate based on volume – the more cars you sold, the more you made.

“They get paid on volume, and they get paid front and back,” Miller said. “If they don’t achieve certain levels, it can hurt them.”

It wasn’t a simple switchover, either. Most of the sales staff, imagining that they were in for a hefty pay cut, was miffed. Some threatened to quit. These days, no one wants to think about going back to the bad old days of commissions.

“I got one guy that will probably make $200,000 this year at least,” Miller said. “He actually has an assistant now. He’s 28-years-old, and he’s been with us six months shorter than I have.”

And it isn’t just the sales group that has tied their fortune to the overall success of the dealership – management workers also are compensated based on volume. If the group doesn’t hit their common goals, it can hurt.

As a result, everyone working at The Car Company is united in their goals. Salespeople aren’t trying to stuff a customer into the most expensive car on the lot in search of the fattest commission checks. Getting the right person into the right vehicle at the right price and interest rate not only works for new customers, it makes old customers more successful at meeting their note payments and encourages them to come back for a new car when it’s time.

“A lot of commission-paid guys just care about one deal and that’s it,” Miller said. “Not our guys. And it starts with Mike and me because we want people to come back.”

And they do.

“Our lots have 100,120 cars on the ground, and we sell 100 to 150 a month off of each lot,” Miller said. It’s the kind of volume that leaves competitors in awe. They just cannot figure out how we’re selling.”

To make sure he never loses track of the elements of success, Miller makes a regular practice of analyzing a host of numbers about repeat business, referrals, car prices, make and model on the lot, average sticker prices, profit and more.

“I track everything,” he said. “I want to know everything.” And by doing that he determines how to select the 100 vehicles he buys at the auctions every week.

Pushing better cars, ,lower rates
The bulk of the cars that go through the dealership are used, though the two dealers have added a Suzuki franchise that accounts for about 50 new vehicle sales a month. But as they increase their used business, DeWitt and Miller said it keeps getting tougher to move the loans.

“Personally, I think you’ll see some banks changing the ways they look at these,” Miller said. “I hope they will look at how they buy customers. Just because you have a bunch of stips on somebody doesn’t mean they’ll make payments.”

Customers will pay on a good car offered under the right deal.

“We help them understand how to rebuild their credit because we want them to come back.”

And they do. About 40 percent of the business is now from repeat customers or referrals, said DeWitt.

Both DeWitt and Miller would like to be equally persuasive with their lenders.

“At 21 percent interest, a lot of people can’t afford a nice car. Then they have maintenance problems, and then there’s a repo and the bank isn’t going to have much time to make their money back.”
And then they’ll pay for their car.

But that’s not always an easy case to make.

“It’s a lot harder to complete a deal these days,” DeWitt said. “There’s more hoops to jump through, more verification of employment, residence verification. But the biggest issue is that everybody is upside down; they have negative equity in their trade.” One way to deal with that is to stock up on used, current year vehicles that still hold a high loan value.

“A lot of times you can buy an ‘04 with 30,000 miles, and the banks will lend off of invoice,” DeWitt said. “So rather than offer ‘92 Tauruses with 110,000 miles, we’ll sell an ‘04 Buick Century with 40,000 to 60,000 miles on it for basically the same payment but a longer term.”

But, typically, DeWitt isn’t complaining. He thinks The Car Company can do more to make deals click.

“We’re missing a bunch of business because we’re understaffed. We have 80 employees, and we’re understaffed. We have customers that we can’t obtain financing for. I think some of the deals are tough. Wells Fargo has a really good program, but it takes forever to do a deal. If we had more manpower, we could pick up 30 or 40 deals a month.”

Not surprisingly, the two operators are planning to do just that.

Fewer repos, more business
“We’re building new buildings,” DeWitt said. “We already have the foundation to expand the office, adding 3,500 square feet just for F&I people.”

Altogether, DeWitt can count on about 12 different lenders to close a deal. Four or five of those lenders account for the bulk of the volume. And to keep the money flowing, he makes a regular practice of going out to meet the lenders face to face.

“Nobody else meets face to face. We’ve actually flown to Ohio to meet with Key Bank, and they said you’re the first to fly here. You have to have a relationship with the bank. You can’t send it to the bank and not care after the deal is done. If the customer is behind, the banks know they can call us and say “Bill Smith” has a problem. The less repos the bank has, the more they buy from us.”

It’s that kind of personal attention to fostering a close relationship that keeps the money flowing – a crucial point in an operation where buyers get a spot delivery of their car so they can drive home in a new vehicle while F&I closes the note. And as the banks get a better understanding of how The Car Company’s business is doing and what products are being sold, the institutions are more and more eager to buy their notes. It’s also a great way to encourage their acceptance of add-ons. Extended warranties and gap insurance offer additional income and the kind of added insurance that make lenders feel good about the notes they’re buying.

It’s also important to start working on each relationship when a new customer walks onto one of their lots.

The Car Company has a 15,000-square-foot service facility that helps customers with problems, DeWitt said, who originally trained as a mechanic. There are referral bonuses, free T-shirts and every customer gets a free weekly car wash – just another way to get to know them on a first-name basis and make sure that they know exactly where to head when it’s time for a new set of wheels.

“You’ve got to try and take care of people after the sale. You’ll have a break down, and even if it’s not a covered warranty, we’ll go ahead and try to take care of it.”

Wanting more
Along the way, the two dealers have created a track record that has made them the envy of operators around the country.

“It’s neat. We have people who come in and do work for us and say people want to hire people who work at The Car Company so they can figure out what we do. That makes you feel good.”

But there’s really no secret ingredient in the sauce, Miller said.

“Anybody could do what we’re doing if they just try harder, Miller said.

“Within the next couple of years, there’s no reason we can’t do 600 cars a month out of three stores.” In five to 10 years, the two may have to add to their operations, but Miller believes their numbers can rise to 700 to 1,000 vehicles a month.

“I want to be the biggest and the best,” he said. There again, it’s all about the attitude.

The Car Company was recognized as the Special Finance Dealer of the year at the 9th Annual National Special Finance and BHPH Conference in Las Vegas in October. Congratulations to the Car Company.

Vol 1, Issue 6


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