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ILLINOIS
Gordon Tormohlen, owner, Tormohlen’s Good People Automotive, Freeport, Ill.:
“We are slightly below our forecasts, but we are steady.
“We did not get the typical February peak, it was more level throughout the month. Year to date, I think I’m down about four units.
“Profitability-wise, we’re up about $20,000 over last year.
“We haven’t had a losing month in about six years.
“We’re a low overhead operation. I used to be a Chrysler dealer for 20 years, peaking at three locations with 72 employees. I sold that in 2003.
“The portion of the dealership that I kept – because no one wanted it – was the buy-here, pay-here dealership.
“I also have a service operation that is a very brisk (business) because we picked up a number of my old Chrysler customers .
“My service manager is the same person I had at the Chrysler store.
“We keep about 60 units on the lot. A typical (sales) month for us is 15 to 20 units. We don’t push it real hard.
“This year, we’re
getting what I’m categorizing as a ‘wiser
customer.’ The folks who say, ‘hey, I got a tax
refund so I’m going to buy a car,’ are not around. But the ones that realize they need an automobile for work, and they don’t want to overextend themselves, are coming out here.
“Althoughour rates are somewhat higher than a bank would charge, when they look at the total interest charge of our two-year program, they see that they are saving money.
“Our delinquencies last year, at this time, were running 8 or 9 percent. We’ve been running 3 to 5 percent so far this year.
“We’re at the auction every single week. I typically start buying deep sometime in early- to mid-August. Given my volume, I try to fill my lot and then still have an additional 20 to 25 cars behind the building. This year we had about 17.
“It’s afforded me the opportunity to just walk away when the prices get too loopy.
“I attend Greater Rockford Auto Auction.I’ve gone there since the mid-1970s. I know all of the significant players at that auction. I’ve actually had situations where guys have waved me off a car when they know it isn’t the kind of car I want to stock.
“We have GPS units that we’ll put on particular vehicles. We have an internal scoring system and (if a customer doesn’t pass the scoring system) we’ll still sell them a car, but we’ll put a GPS unit on it, under the proper circumstances.
“Also, if they are more than 20 miles outside our market area, we’ll put a GPS unit on the vehicle.
“We ended up restructuring a couple of years ago. We wrote a very
extensive business plan and hooked up with a SBA loan, refinancing everything. Since then, we’ve been just working on getting debt-free.
“We’re trying to get out from under our floor plan. We have a significant number of buy-here, pay-here accounts and those cash flows sustain the business. We’re currently retiring debt at about $6,000 a month.
“SUVs are very popular right now. Trucks have slowed down for us and economy cars aren’t doing much at all. My mix is probably 85 to 90 percent domestic, because they’re easier to fix and less expensive to repair.
“We sell quite a few Chryslers and we do a lot with Tauruses. Durangos are extremely popular.
“The last sales on my sheet were a 2003 Jeep Liberty Limited, a 141,000-mile unit which sold for $9,850; and a 1995 Caprice, with a leather and chain-link steering wheel, which sold for $7,040. It had 140,000 miles.”
SOUTH CAROLINA
Norman Stuckey, owner, Central Motors Inc., Columbia, S.C.:
“Right now, we’re pretty busy. We’re normally busy this time of the year. It’s tax season.
“We have seen a lot of people coming in with tax returns. The returns go out quick with these rapid refunds. A lot of the cars that we’ve sold recently are a reflection of that.
“The tax returns seem the same as they have been in previous years.
“The average down payment here is about $2,000. The average payment is $375 (monthly).
“Before tax season, business was slower than it had been in years before.
“Our economy is pretty good. We have the biggest university in the state and one of the biggest (military) forts in the country, Fort Jackson, in the town that I’m in.
“Buy-here, pay-here collections have been pretty good. We’re getting paid.
“Most of the tax refunds are going toward down payments on purchasing cars.
“We have one location and our average inventory is about 50 cars.
“Replacing inventory has been a challenge. We’ve gotten a little more aggressive in finding new ways to buy cars.
“Sometimes, I network myself with attorneys to buy vehicles through estate sales. We also advertising that we buy cars.
“For advertising, we use television and local trade magazines. We sign long-term contracts (with our television commercials to save money). We get a lot of repeat business.
“I have seen a little bit of a rise in the number of higher-income customers than usual.
“The last car we sold was a 2004 Ford Expedition. It had 93,000 miles and sold for $14,000.”
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