Did that need to be said? Well, yes. Too many BHPH dealers simply do not grasp that concept.
There are a lot of BHPH Owners who have the attitude that all customers are liars who are all actively looking for a free car. One dealer says: “They ALL look to get out of making payments, so I sell these thieves the cars that they deserve.” (Actual quote) This is the guy who removes Check Engine Lights and Airbag Warning indicators as long as the car is running, and puts used oil in cars when they are low. There’s more than just one, and they justify it by pointing at a poor payment record of their average customer. “They won’t pay good, why should I give them a good car?” Is this you?
I met a BHPH customer once, and I asked him to honestly tell me about his payment record. He admits it isn’t great. But he points at the car, and tells me that he had to replace the alternator and battery on it the day AFTER he bought it, and the mechanic found the cooling system full of gunk that was an attempt to hide the leaking radiator and heater core. To top it off, both lower ball joints were at the point of falling out. He says the dealer just laughed and told him that As-Is meant he was “on his own” for this car. Eight hundred dollars later, he isn’t in any mood to make an on-time payment.
But the dealer will use these late payments to justify selling this kind of junk. Some dealerships seem like they are gearing up for battle with the customers. These customers, seeing the battle armor, suit themselves up, as well. They really do not see the vicious circle they are creating.
Conversely, I met a dealer, we’ll call him Tom, now retired, who made sure all his cars were in the same condition as one he would put his own family in. In the first 30 days, he would take care of most issues. He changed the oil for free as long as you were under contract. Finally, he only charged 16-18% APR. The result was an overall payment record that made his friend at the local bank almost jealous. He could show that almost 80% of his business was repeats and referrals. He had customers who wrote him personal notes apologizing for being a day late. He had one other tool in his belt: He hired a person in the office who had an accounting degree, who would sit the customers down that were struggling, and help them work out their home budgets. If this person told him to cut the car payment to fit, he would, no questions asked. If he ever caught you lying to him, though, it was over. Tom only asked that if you were going to be more than five days late, you personally called or came by and talked to him. He respected that.
These customers wanted to make their payments on time. They wantedtheir friends and families to also buy cars from him. They knew that this man wasn’t their enemy to be fought with. Tom didn’t need to ask who was on the phone before answering it. He didn’t dread talking to a customer.
I shared this with one dealer who just chuckled and told me it wasn’t realistic. He said you can’t be good to customers, because they will just use your good nature to get over on you. Tom disagreed, and had the good will of his community, a great reputation, and a nice retirement kitty to show for it.
I agree that there are people in this world who are materially dishonest, and yes, they seek out the Toms of the car industry. But the Toms of the car business know who to look for. Even the banks get one of these characters once in a while. This is where credit reports will help you. Learn to read them, and learn what to look for beyond the score. Learn to manage the receivables, and learn when to cut someone off. Tom gave back less than 5% of repos. Once he decided to pick up the car, he was pretty much done with that customer.
Understand this: Most people will not pay for a car they are not happy with, and certainly don’t want to pay you if they can’t even drive it. To be honest, if most dealers would take off the battle armor and extend their open hand, they just might find one willing to shake.
BTW, Fair warning: That oil change idea I mentioned, stay tuned for our next visit.