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Newbie needs advice
Replies to This Discussion
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Permalink Reply by Jack Stanton on -
ION gps, the best for the money, put it on every car... charge the customer 150.00 per unit and tell them when they bring it back after the last payment you will give them 75.00...you can reassign the unit over and over...They will pay for themselves in full with the second sale to a customer.
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Permalink Reply by Sheldon Wolff on -
Good for you David, and I must say thank you for all the participants giving you great information. Here is my 2 cents worth, since your a mechanic, be sure the cars are as good as they can be for the make model and year and should surpass your state inspection. If it aint running they aint paying. You change hats from a car sales organization to a collection agency. It does take a long time to build but can be profitable. Your cash flow or lack there of is one of the biggest issues, another is the capitolization cost of the vehicles today is much higher, so yesterdays 1000-2000 vehicle is now 3000 to 4000. The misguided cash for clunkers and current poor economy have changed the "good fit" for this program. This is a marrage for you and your niche of clientelle. I'll go out on a limb here and think in Texas you have many that will want a big SUV or pick up. We do a thumb nail of income & cash flow picture and fit the vehicle to thier ability to pay it back.
One thing that really disturbs me is the "hammering craigs list" attitude. having multiple accounts and other clandestine schemes just propergates the bad rap of a "used cars salesman" anything goes. Craigs list is free and they have rules and limitations. By circumventing this just shows what type of business model your setting up. Craigs is a great venue for advertising, and I'm sure you will want to be forth right with your clients and be honest with Craigs. I suppose we all have different moral values and business ethcis.
We use Northland RTO-LTO program and find them very accomidating, helpful and worth while.
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Permalink Reply by David on -
Thank you for the advice. I do try to make the cars run and look the best they possibly can before selling them. I try to go the extra mile and install a new bumper if needed, fully detail the cars, fix any mechanical woes, even down to balancing the tires so it rides well. It kills me to visit a dealers lot to look at a car and see that they haven't even bothered to vacuum the french fries out of the floor board, let alone service or detail the vehicle. Most of the vehicles I have purchased have been through individuals on Craigslist or at auction. Where I make out on the deals is that I purchase cars that need mechanical work, which I perform myself. This gives me an additional area to profit. I do not wish to scam Craigslist, but I would like to maximize the potential there by using templates to make my ads more professional appearing. I do have a website and I provide the website in my craigslist ads so that customers can see our inventory (small). I set up and maintain the site myself. It is pretty easy to do through godaddy.com. I do own the domain name myself.
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Permalink Reply by Josh Gardner on -
carsforsale.com can you give you several ad templets around 20 or so different ones so you can list the same car in multiple markets, 99 dollars a month and they will list your vehicles on their site also, it's cheap and you don't have to ink a contract. Also the dealermotion trend as a mentioned yesterday, they have a really good system, it's more money though.
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Permalink Reply by Mark Marino on
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Hi David. I'm sort of in the same boat as you... Sort of because I'm a few months further along than you. I myself have been in the car business for 5 years and just this June started doing advertising BHPH. I still do 90% cash deals but I've been able to put ~$20,000 on the street over the summer selling cars $4,000 and under with a majority of them being ~$2,000 on paper. So far it's going well. I don't know your financial situation but if I were in your shoes I wouldn't jump into BHPH right away unless the down payment covers your cost basis. Doing it this way is a good way to test the waters so to speak and limit your risk. As others have said Goldstar GPS is the best out there as far as I'm concerned when it comes to that. When it comes to advertising you have to post on Craigslist every single day. Get a website through Carsforsale.com, it's cheap and works great. It also makes posting to Craigslist easier as it gives you templates to use and using a nice template is key on Craigslist with the amount of BS and fake ads that are on there, it also helps with name recognition because it puts the name of your dealership right out front for people to see, as well as making you look more professional and trustworthy. It sounds like you're doing this business out of pocket without any floorplanning or anything. In my opinion that is the way to do it. The road is slow but if you're careful and work hard it's really not too tough of a business.
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Permalink Reply by David on
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Thank you for the reply and the great advice. I am having a hard time getting local dealers to talk to me. They don't want to give away all their "magic secrets". I am funding everything out of pocket. I don't want to go into debt just to get the ball rolling. Most of my cars I purchased cheaply enough that a decent down payment would cover my costs. I just don't want all of my capital out on the street. I do need it to purchase more vehicles, since I am funding the entire operation myself. I am going to try to do mostly cash deals, but sales are slow. I have my cars priced at private party values and still don't get a lot of calls. The sales price is a key factor. I have a few vehicles that will be priced less than $4000, but most of my vehicles are nicer and should retail for over $6500. I have them priced between $4700-$5800. Still not much action. Do you think that more advertising on Craigslist will help me move cars? I know that they will eventually sell, but I would like to move a few units a month at least. If I only sell one a month, I will just break even on covering my overhead. I know that I have to be patient. This is a new business after all, but it seems like I should be able to move more cars more quickly.
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Permalink Reply by DAVID WESSON on
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i have my own bhph lot with 100 cars on the street with $400k on the book. I finance all my own cars and I know we all have a limit on how much money we have. I've been open three years, my initial investment was $250k. I have in three years takin in $800k and I pay both my kids car and house payments out of the business. My youngest son works for me and I have a very honest office manager and shop/detail manager. We must focus on the amount of money on the book and a bhph car business can not survive on cash deals because the cash is not high enough to be worth our time. Last year at tax time I sold 80 cars. 40 were for cash profit of $1k to $1500. I could have put $180k on the book but I took $40k cASH. i WONT MAKE THAT MISTAKE AGAIN. It cost me $15k a month to operate, my receipts are $25k to $29k. If I don't sell a car for two years I have enough on the book to make it. Your best customers to buy cars are the customers u already have. When they get close to paying off their car offer them a great deal on another one.
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Permalink Reply by Frank LaGrange on
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I am in central Texas as well were are you at? I do not currently do BHPH and I am a cash only lot.
Thank you
Frank
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Permalink Reply by David on
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I am in Troy, just 2 miles north of Temple on I-35. Any advice on selling cash cars? Do you have to price them super low, or is there a trick to it? Seems most people can afford a $3000 car, but want a $6000 car.
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