Across the nation, independent dealers like Gustavo “Gus” Camacho are capitalizing on a strong used-vehicle market spurred by longer-lasting vehicles, younger and thriftier buyers and competitive subprime lenders. As the president of Camacho Auto Sales and, as of this year, Camacho Mitsubishi in Palmdale, Calif., Camacho says there are obvious differences between the used- and new-car segments, but the goal is the same. “Selling a vehicle is selling a vehicle,” he says, “and taking care of a customer is taking care of a customer.”
Auto Dealer Monthly met with Camacho and two other independent dealers to learn how they got into the business and how they operate. Each has his own methods, but all three are heavily involved in day-to-day operations, making most, if not all, of the major decisions in nearly every department. From pricing trades to deciding which vehicles to stock and repair, they know their businesses inside and out.
The Auto Express Way
Much of Nathan Buche’s workday is spent on the task he says he enjoys most: inventory. He carefully plans which auctions to attend in each season, which cars to buy and how much to pay. “I like buying cars,” says the owner of Auto Express in Lafayette, Ind. “Getting a new car is fun, and that is my main job.” The dealership takes about 50 trade-ins per month, but the vast majority of the inventory comes from auctions, where Buche personally buys 90 to 125 cars each month. “I search every avenue to get cars in our area. … I do a lot of it, honestly, when my evening is done. I go lie in bed and search vehicles for an hour before sleeping. And then I spend about half of every day here doing it.”
He reviews each vehicle’s Carfax report and manages the reconditioning process, which includes a full inspection and cosmetic makeover. “Every car has to go through detailing, and
most cars get new tires and a lot of general touch-ups. We check everything on the cars before we sell them. … I spend a lot of time researching the vehicles, more than the competition, so I get them at a better price. Then we do a phenomenal job reconditioning the vehicles and getting them ready for the lot. There is no cutting corners here.”
Buche acquired and resold his first vehicle at the age of 14. He saved up $3,000 and bought a Ford Probe he found in the newspaper. He fixed it up, made a profit, and he was hooked. He then started buying two or three cars at a time until, at 18, he rented his first building. “I started with about six cars on that lot. It was very slow for the first five years — I never made a lot of money on that lot.”
In 2001, Buche decided to take a break from the car business. He started a pressure washing company that grew to include eight employees. But after seven years, he decided to sell the business and go back to auto retail. He founded Auto Express and asked a former employee, Rob Jones, to join him.
“It took some convincing on his part,” Jones says. “There was a reputation about the used-car business, and when he came to me and said, ‘This is what I’m going to do,’ I said ‘You’re crazy.’ … But he convinced me, and from Day One, it’s been a customer service job, not a sales job. We hold that true to the core — everyone we hire is very customer service-driven, not sales-driven, since we don’t want to talk anyone into buying anything.”
Today, Auto Express averages well over 100 units per month; in March, they set a new record with 166 vehicles sold. In 2011, they moved to a new lot that can hold 160 units and has room for expansion.
The King of Trucks
Yves Belanger started his auto retail career in much the same way, buying and selling cars as a teenager in his native Canada. He exported cars to the U.S. for several years until new regulations made the process unwieldy. He decided to make the move to Sanford, Fla., near Orlando, where he started his first dealership in 1995. He quickly realized that trucks were his best sellers and decided to specialize. Today, Gibson Truck World sits on a 14-acre lot and averages more than 150 sales per month.
“For cars, the phone wouldn’t ring, but for trucks, the phones would ring,” Belanger says. “And for diesel trucks, they would go crazy. … We went headfirst and we fully concentrated on that business, and became the King of Trucks.”
Belanger is a self-proclaimed perfectionist. He personally ensures that every truck on the Gibson lot is up to his own exacting standards. “Once a potential Gibson Certified truck makes it to our dealership, it is given a full, 135-point inspection, diagnostic tests and frame-damage check,” he says. “We spend more than $250,000 per month inspecting and servicing our trucks. Additionally, we spend $15,000 to $20,000 per month for our warranty program, including warranties to our out-of-state customers.”
Some units will undergo as much as $7,000 of mechanical and cosmetic repairs, including work performed in Gibson’s in-house upholstery shop. Belanger includes a 15-day return policy on every truck he sells and offers a one-year, bumper-to-bumper service contract. “If you don’t do that, you can’t sell them. They are not Cadillacs, or something people pamper. They will need maintenance. If the [owner] pulled a trailer or had large loads, things get worn out quickly.”
Belanger starts his day by going through the auction presales, telling his buyers which vehicles to focus on and what prices to pay. He also prices every single car or truck that comes into the dealership for trade. “The inventory, that’s my blood. I eat with my stock sheet; it’s the first thing I look at in the morning, to see what we sold the day before. … Service, body and detail also all run by me; I have managers, but I am in there all day long. I’m pricing, buying and then servicing the trucks, because if it’s not done right, it doesn’t matter how good the sales team is, they won’t be able to sell it.”
Best of Both Worlds
Gus Camacho’s father started Camacho Auto Sales in 1988, and he says he remains an independent dealer at heart. The used-car store represents the bulk of Camacho’s business, but he has high hopes for the Mitsubishi store, which took the place of a former Saturn point across the street this year. Camacho bills himself as the “King of Credit” and serves customers in every credit tier, including buy-here, pay-here. He began looking for an opportunity to add a franchise after years spent sending former BHPH customers who had repaired their credit to new-car dealers. The move has paid off so far: Camacho has already added about 35 new Mitsubishis to his monthly average of 275 used cars, and he sees room for improvement.
He has picked up on some of the nuances of new-car sales, most notably the checks and balances that come with a factory partnership, as well as the need to drive high CSI scores. Camacho says he never struggled to find financing partners, but Mitsubishi added new options.
“Because we were a large independent dealer, we already had 90% of the lenders,” he says. “But opening the Mitsubishi franchise, we were able to add on 10% more. And the programs changed as well. It was an aggressive independent program, but they were able to switch us to the new-car program with a little bit better terms.”
Camacho has been an activist, contributing time and funds to a campaign against new regulations on used-car dealers (“The Battle of Sacramento,” March 2013, Page 20). He believes that some of the old misconceptions about used-car dealers remain popular, making them an easy target. “The government is creating a lot of regulations that aren’t necessary,” he says. “Unfortunately, a couple of bad apples will ruin a barrel, and I think that’s true in our industry. There has been a recent increase in regulation and compliance in the automotive world, and I think a lot of it is a waste of taxpayer money.”
Camacho sees more changes coming. He has taken the added step of appointing a dedicated compliance officer who will work in both dealerships. “We have always been very customer service-oriented, and having a compliance officer isn’t going to make that big of a change in the way we do business,” Camacho notes. “It is just a lot more paperwork, things that need to be in writing, and then monitoring the changes in the laws.”
Independent dealers embody the hands-on spirit that continues to drive entrepreneurs into the auto business. No matter what path they took to get there, a passion for vehicles and attention to detail drove these dealers to success.
Toni McQuilken is a freelance writer with expertise in automotive retail, F&I and agency operations. [email protected]