May 1, 2006 was not just May Day for Dick Walters; it marked the 50th anniversary of his career as a car dealer as well as his 70th birthday. It truly has not been a typical career.
Many years ago as an Oklahoma native and new high school graduate, Walters was working in a glass factory, living pay check to pay check. He wanted to go to college but had no financial support. He thought, “How can I do something I really enjoy to make the money I need to go to school?” The solution was easy.
Walter’s father was a mechanical genius, and he passed his knowledge and love for working on cars to his son at an early age. So, here was the plan: buy a few cars, fix them up and sell them to pay his tuition. It was going to take money in order to do that; consequently, he went to a small finance company in his hometown. After seeing his sincerity and determination, the woman running the finance company chose to give him a $2000 line of credit. He bought a car, fixed it up, ran an ad, sold the car and became a dealer.
After entering Oklahoma Baptist University in Shawnee, Oklahoma, he continued selling moving from one to four cars in his inventory. He found a small lot for rent and presented the idea of sharing the space with a service station owner who also sold cars. A bit unorthodox to share space with another dealer but they switched which end of the lot they sold from every month to make things fair. Walters kept this up and put himself through undergraduate school, graduating with degrees in education and business.
Teaching certificate in hand, he went for an interview with the superintendent of a small school district. Upon hearing the last name “Walters” the superintendent said, “Your grandmother was my Sunday School teacher.” She was and that garnered Walters a teaching position on the spot. He taught high school for one year and was promoted to principal at the junior high the next. With a young family to support and graduate school to finance, he continued running his dealership. Besides, he loved it.
Intent on pursuing his master’s in educational administration, Walters entered the University of Oklahoma and began classes while still working in the school district. However, after beginning that program, he suddenly lost all desire to continue. It was 1963, around the time of the assassination of John F. Kennedy and times were changing. Walters remembers being in the office at the junior high and realizing that he really wanted to go to law school – and he did – all the while, managing his growing dealership.
In 1968, a friend of Walters from Shawnee who was a car dealer developed serious health issues. He needed to close his business and decided he wanted to sell his remaining stock to Walters: 10 cars for $1,000 total. And with that initial purchase, he went on to build one of the most successful Buy Here Pay Here (BHPH) operations in the country.
From 1968 on, he has sought out good locations and employees to help him grow the business. It has not been an easy endeavor because operating BHPH dealerships is a unique process unto itself. Walters explained it this way: “First of all, it is expensive. Locating and buying good inventory is a costly venture. When I started you could buy a good, mechanically sound car wholesale for $500. Today, that figure is more like $5,000 to $6,000. Secondly, success in [BHPH] is a slow process. I tell people that you have to build one brick at a time. It is not the get-rich-quick business that some think it is. Most of all, it is difficult finding the right people to fill management positions. It takes a special person with the right skills to handle the job.”
As he continued to find good locations for his dealerships he grew the inventory to support four very large and successful BHPH dealerships in the state of Oklahoma for many years. Today, his Oklahoma dealerships have been consolidated into a single location, Super Sports and Imports located in Oklahoma City. It is located on three acres with 400 feet of frontage. He stocks 250 vehicles that include trucks, SUVs, passenger cars, classic cars and Corvettes. The showroom can accommodate six vehicles, and the service area boasts twenty full service bays. The records show an average of 55 to 60 units sold each month with 95 percent of them financed. He manages to accomplish this with a staff of three or four sales representatives. Walters is aware that having Corvettes at a BHPH dealership is unusual, but he said, “I have far lower collection and repossession rates with those cars than any other. It’s a status thing. People know we have them, that they are great cars and that they will get a good deal. They don’t want to lose them once they have them.”
In discussing the operation plan for a large enterprise, Walters said the key element for him has been having an excellent manager. He found that person, Rodney Harper, eighteen years ago and said, “If I could run him through a copier, I would, and then I would have 50 dealerships!” When asked what makes a top quality manager, he lists the following qualities: excellent mechanical skills, so they know a good car from a bad car; being a proficient buyer at auction; good sales technique; able to develop strong rapport with customers; keeps excellent records of all transactions; understands and implements the collections process when necessary; possesses good judgment on underwriting; and, most of all, have common sense. A tall order, but one that he feels is not out-of-line for the demands of the BHPH business.
In 1994, Walters again expanded his operations into an area that he loved, Phoenix, Ariz. While on vacation, he found prime property for sale that he knew would be perfect for a dealership and purchased four more pieces of real estate that he still owns today, using one for himself and leasing the other four. He related, “Car dealer property is pure gold in Phoenix. I wore out a set of tires on my then-new Chevy pick-up truck the first year I was here, driving all over looking for land that was just right for my business!”
In 1998, he and his family moved to Phoenix. For the first few years, Walters made the Arizona to Oklahoma trek once a month. Now, thanks in large part to the amazing manager in Oklahoma City, Walters only makes that trip three to four times a year.
His Phoenix dealership, Showcase Auto Mall, is in a prime location along I-17 and Camelback Road, known as the dealer row of Phoenix. Walters inventories 55 to 60 cars there, stocking the same types of vehicles as he in Oklahoma City, excluding Corvettes. He serves as the manager there with a sales staff of just two. Averaging 35 to 40 sales per month at his Phoenix location keeps inventory turning at a profitable pace.
Monitoring the inventory and managing all of the bookkeeping for multiple BHPH dealerships is no easy task. Over the years, technology has assisted Walters with some aspects of his business, but only to a certain point. This well-educated, multi-talented businessman uses some tried and true methods that have served him well in addition to his dealership management software AUTOSTAR Solutions. He uses AUTOSTAR for generation of accounts payable and receivable, tracking past due accounts and for inventory print outs, but he encourages his staff to do as he has always done – walk the lot regularly and know what is in stock and available.
Ledger cards have not gone out of style for Walters. Each and every sale is written up on a ledger card, and all transactions are written down on the cards. While computers have copies of this information, he protects this hard-copy system by storing all ledger cards in the fire safe every night. Trusting his records to anything that could potentially lose them just does not appeal to this customer-conscious man.
GPS based tracking systems may be on the radar for a future expansion project to assist with repossessions, but for now, Walters uses what has worked well for him from the beginning. Each customer fills out an information sheet that contains multiple resources that can be used to track them if the need arises.
At Walters’ Phoenix dealership acquiring financing is a multi-level process for customers that includes interviews with the sales person, finance manager, collections manager and finally, Walters himself in the closing meeting. A firm believer in operating on a case-by-case basis, he makes underwriting decisions based on facts uncovered during these meetings and the overall impression that was made by the potential buyer. Collections and repossessions are based on the individual and their circumstances instead of a strict regulated standard. He will allow a customer the opportunity to redeem a repossessed vehicle if the situation warrants it.
Payment plan set-up with Walters is simple: one payment is due each pay period. Simple and wise according to Walters for this reason – it is the easiest way to stay current. If a person is paid weekly and makes weekly payments and falls behind one payment, that isn’t a huge amount to have to make up. However, if that same person was making monthly payments and missed one, the recovery window is smaller. His other reason serves the customer. By coming in often, Walters is able to see how well the customer is taking care of their vehicle and how it is running. If there is a mechanical issue arising, he can find it and fix it before they experience a major issue. This service and care fosters the repeat and referral aspect of customer retention which serves as a primary source for new revenue for BHPH dealers.
Walters has served on numerous boards and committees in the automobile sales industry. The most notable examples are the Arizona Independent Automobile Dealers Association and the NIADA Board of Directors and Executive Committee, where he held every position on both the board and committee, excluding national president, which he declined to be a nominee for due to the excessive amount of travel involved with that position. Walters says, “My golf game is my dealership. I love being there!” His true passion lies in the process of acquiring new inventory – he attends three to four car auctions weekly where he obtains the inventory for both the Oklahoma and Arizona dealerships.
This clever and gifted man offers his advice to all looking to enter into the BHPH industry. “Be adequately capitalized, don’t try to get rich over night, build a strong clientele base, take care of your customers, and build your repeat and referral business. Most of all develop your sense of loyalty. It will take you far.”
Vol. 3, Issue 10
Swapalease.com’s latest report show U.S. lease approval rates improved slightly to 70.9% in October following a 3.9% dip in September.