Owen Motors Focuses on Helping Customer
He expressed optimism that 2009 will be a good year for Owen Motors. “The banks have tightened up on credit ... we haven’t tightened up,” he said. “There are 127 million people today that have tainted credit that didn’t have tainted credit two years ago, and that opens our market up—big.”
When Owen arrived in Sarasota, Fla., from Endicott, N.Y., 20 years ago, it wasn’t his intent to open a buy here pay here lot; he simply wanted to open a used car dealership. Used cars were not new territory for him. As a young man in the mid-1940s, he had two uncles in the used car business. A year after Owen’s service in the Navy, his $20-per–week stipend from the government ran out. To make a living, he went to work at one of his uncles’ businesses (oddly enough, not in car sales). However, he soon discovered firsthand how easy it was to turn a profit on a vehicle and realized he’d found a better way to make a living. “I bought [a car] for two and a quarter and sold it for $475, and I said, ‘Hell, this is the better way to do it,’ so that’s what turned me on to the car business,” he recalled with a laugh.
Now, at the age of 82, he sits at his desk in the middle of the Owen Motors showroom every day and carries out his duties as the dealership’s director, which includes interviewing almost all of the store’s customers, staying on top of collections and making decisions on repossessions. Owen jokingly, though inaccurately, described his role at the store: “I’m just an innocent bystander who sits in the showroom and causes commotion.”
His wife of 63 years, Janice, has been the president of the dealership since its inception in 1988, which was something the two agreed upon before ever opening the store. “I was president up in New York and she made the remark, ‘When am I going to be president?’” he recalled. So, he turned the title over to her and today she continues to keep up with the dealership’s day-to-day operations. Business partner Pat Elia, with whom the Owens founded the dealership, serves as one its vice presidents. The other VP is the Owens’ son, Don Jr., who sold cars in New York while in attending law school and served in the Army before joining his parents in Sarasota.
The senior Owen and his wife started selling used cars out of a gas station lot in 1949. Eventually, he decided he wanted to be a new car dealer as well. In the early 1950s, he approached General Motors about acquiring a local, underperforming Pontiac store. With GM’s blessing and a $10,000 loan, the Owens entered the world of new car sales. Over the years, they have also owned Toyota, Mazda, Jaguar, MG and Chrysler Plymouth franchises, but used cars were always the focus. “Our prime interest in all those years was to sell a new car to get a used car to sell,” he said.
It wasn’t long after establishing Owen Motors as a used car dealership in 1988 that the veteran dealer noticed a segment of the local market with a very specific need that was not being addressed. “I found out very early that a tremendous amount of lower income people needed cars, and the higher income market was not for us. At that time, the new car dealers were heavy in late model used cars, so we got into the lower income,” said Owen. Owen Motors entered the BHPH business in 1990 and that’s where he has stayed ever since.
The dealership’s related finance company finances 96 to 97 percent of all sales. Financing terms are short, of course, anywhere from 12 to 24 months. Owen expects to be paid when the customer gets paid, whether that’s weekly or bi-weekly. As a convenience, customers can simply bring their paychecks to the dealership, have them cashed and make their payments.
The remaining three or four percent of sales are cash, credit union and the occasional bank. “Finance companies have all tightened up in the last year, so we don’t even bother calling them,” he stated. “I have private individuals that fortunately have plenty of money and they will bank us whatever we need … we’ve had no trouble getting funds.”
While funding is not an issue for the dealership, Owen did cite one area that he saw as a potential problem. “There’s one thing that’s going to be hard this year, and that’s buying the right cars, because new car dealers are having a hard job selling their new cars. Consequently, they need the profit, so they’re holding onto their used cars more and selling [them].”
“We buy pretty choice cars,” Owen said. They don’t attend many auctions. Their primary source of inventory is a new car dealer in their area who owns more than a dozen franchises. Owen said they attend an independent auction every two weeks where they purchase a number of that dealer’s fresh trade-ins.
While they don’t have strict parameters for their inventory and look at cars on an individual basis, they try to keep their entry-level cars within a certain price band. “We start customers off with a $500-down car, and for $500 down, we want the car to be $2,995 up to $4,995, and we keep moving them up,” he explained. “I’ll buy back in the ‘90s if it’s a nice car, decent car.” They typically don’t purchase cars over 100,000 miles.
They get Carfax reports on everything they buy and inspect and service every car before selling it. Owen noted their average spend on reconditioning is between $600 and $800, which he acknowledged was high. “But remember, when we sell that car, it’s going to be out on the road for a year-and-a-half to two years and if it doesn’t run right, we’re not going to get paid,” he explained. “So we do it right ahead of time … We’re pretty proud of what we do in putting a car out on the road and making sure it’s safe.”
All service work is done in the dealership’s own service department. While Owen Motors has always had its own service department, the few bays on the store’s present site did not prove to be enough to keep up with business. They acquired and renovated the building across the street and now boast a 10-bay service department. Now they can handle about any repair their customers need.
“We sell everything with an as-is statement, but we repair almost every car the first 30 days … just as a goodwill gesture,” he stated. If there are problems down the road, they will still give customers a discount or let them pay for repairs over time. “If we’re the lien holder … what’s the difference?” he said. “We want the car running. The minute that the car’s not running, they don’t make their payments, so we keep it running for them.”
In the last two-and-a-half years, Owen Motors has started using GPS and starter interrupt systems on all vehicles. However, Owen said they refrain from using the starter interrupt unless it becomes absolutely necessary. He said having the GPS on each vehicle makes him much more comfortable with taking a risk on a customer who’s had a previous repossession. It’s also made repossessions considerably easier.
Most repossessions, he said, “are done as a slap on the wrist so you get their attention.” He went on to explain, “You bring the car in and they come in and redeem it, pick up the payments and realize that they can’t drive for free.” Another reason many of the cars are picked up is due to customers failing to keep their auto insurance.
In fact, Owen cited insurance as one of their biggest problems. Many people will drop the insurance after getting the car licensed. He estimated that one of his employees in collections probably spends 50 percent of her time on the phone reminding customers to keep up with their insurance payments in addition to their car payments. Letting their insurance lapse means their licenses will be suspended and the car must be picked up. “They’ve got to keep insurance; the state requires it and we require it…customers just do not realize how important that is,” he said. However, Owen is still willing to help people out when they’ve made a mistake. He has assisted several customers in getting their insurance and licenses back, often getting some of the penalty fees waived. “We have insurance companies that, the minute we call them, will run right in and take care of the insurance,” he said.
Owen oversees collections with the help of a collections manager and two employees who answer the phone, take payments and make calls to customers. Owen spends every day staying on top of collections. “It’s laying in front of me right now, and we stay right on it … I get to know the customers’ names better than I know my own.”
Owen emphasizes to customers that if they have a problem, they need to come into the dealership and talk to someone about it so something can be worked out before things get out of hand. “That’s why I sit in the middle of the showroom,” he said. He added that they gave over half their customers some kind of break over the holiday season.
Giving the customer a helping hand has always been important at Owen Motors. Their slogan is, “Home of the good guys,” something Owen’s son came up with based on his father’s way of doing business. Owen firmly believes that personal relationships are 75 percent of being successful in BHPH.
“I get more people [who] come in here and give me a hug, literally give me a hug, and thank me for helping them get a car … it’s very rewarding to me,” he said. “Even when we repo a car, we don’t have a lot of people get mad at us. We try very hard to keep a relationship.” Owen said it’s important for everyone at the dealership to remember that the people who come through the front doors are their bread and butter, and that they should be treated nicely, no matter what the situation is. “If we repo a car, the first thing I do is tell them, “We love you; we want your business. Get straightened out and come back and we’ll take care of you.’”
From Owen’s perspective, his customers deserve some understanding and a little bit of faith on the dealership’s part. “Sometimes you’ve got to depend on the people. You also have to understand their part of the life. A lot of these people work from paycheck to paycheck and any emergency that comes up throws them off,” he said. “You’ve got to understand their way of life and you’ve got to feel for these people … You can’t lose sight of the fact that other people have to be helped too.”
That’s not just talk. For the last four years, Owen Motors has hosted a Christmas party for 600 children of low-income families as part of their support for Second Chance-Last Opportunity (SCLO), a local nonprofit organization that offers educational training, youth programs and other support for low-income families, at-risk teens and the homeless. More recently, the dealership donated a car to be raffled off in February, with the proceeds going to SCLO.
Staying active in the community is also a great way to keep the dealership’s name circulating in public. With money getting tighter, they have cut back on their traditional forms of advertising. “We did a lot of TV last year; I think we spent too much. I don’t think it was necessary … we’re going to keep the dollars where they’re needed, right here.” Both television and newspaper advertising have been trimmed. Owen is pushing his people to make more calls to their customers to thank them for their business and hopefully generate some more referral business.
“Right now, 90 percent of our advertising is referrals,” he said. They pay their customers $100 for every new customer they bring in. He mentioned that one customer brought him four new customers within a period of about 30 days.
Owen Motors also sends letters out to customers to notify them of the dealership’s income tax program, which allows customers to have their returns prepared and purchase a car in advance of their refund. The dealership works with another company to file customers’ tax returns and retains the refund when it comes in. Consequently, January and February turn out to be the dealership’s busiest months. In fact, by mid-January there were already 62 deals as a result of the income tax program.
With 2009 off to a good start, Owen has a positive outlook on the coming months, an attitude he makes sure to project within the dealership. “I’ve got everybody convinced around me and I just have to keep going that way,” he said. “This is going to be a good year for Owen Motors.”
Vol. 6, Issue 3