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Volume One, Issue Three August 15, 2008

In this Issue: • DSC Corp Move • Message from the CEO • DSC offers End of Summer Incentive • Dealer Focus • Tools and Tips: 60-Day Floor Plan • Adventures of Hank

DSC Corporate Headquarters The new 26,000 square foot facility, located in the Carmel City Center, is sized to accommodate today’s headquarters staff of 74, as well as anticipated staff growth for the

next few years. “We built DSC on a philosophy of excellence in customer service, so we must be in con-

venient locations to meet the financing needs of our customers,” says John Fuller, CEO.

Tough Times Never Last, but Tough People Do! From the office of John Fuller, President and CEO To all our customers: I would like to personally thank every one of our dedicated customers for the staying power they have displayed in our current economy. The old saying, “When the going gets tough, the tough get going” certainly holds true for the dealers who are still standing during the worst financial struggles our nation has faced since the great depression. Small businesses today have been surrounded

and drowned with problems originating from the mortgage debacle and Wall Street’s incessant desire to make more and make it faster. We know that you are facing very difficult times with rising prices, tougher regulations, and a disintegrating base of consumer paper purchasers. But true to form, there you are, with sweat on your brow, determination in your heart, and a “never give up” attitude as you face the challenges daily. DSC is

working diligently to design programs to help facilitate your current needs and help your businesses be successful. This has become difficult as the pressure of the financial markets to enhance our risk profile and to be a more stringent lender prohibits us from instituting some of the programs we would like to offer. “This too shall pass.” In the mean time, keep up the great job you’re doing!

—John Fuller, CEO

DSC Stands with Customers By: Rich Coutu, VP of Sales and Marketing

DSC remains as committed

as ever to providing the greatest level of value and service to our customers. We

www.discoverDSC.com

understand the challenges that the independent dealer encounters on a daily basis. DSC’s promotional campaigns are designed to help you increase your purchasing power, improve cash flow and save you money. As part of our commitment, we kicked off a few national promotions that our dealers can take advantage of, which recently began on August 1st. Already in the first few days

www.discoverDSC.com

of the End of Summer promotional period, we have seen a tremendous response from our customers. The feedback that we are getting is extremely exciting! These promotions will last for the next 60-90 days; we encourage you all to call your local DSC office for more detailed information. Thank You for Your Business!


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DSC SHOP TALK

60-Day Floor Planning Offers Advantages By: Eric Hurst, VP As we all know, cash flow is the key to your survival. It has been proven that the single largest expense for a used car dealer is inventory depreciation. When you keep your inventory at a 60 day turn, the profit margin and available cash flow increase drastically. .

LET’S GO OVER THE BASICS .

If a dealer keeps a 90 day supply within our system they will pay down the unit 2 times for 17.5% of the original principal.

• 10 units a month sold • 30 units in inventory • 10 units will be reduced for 7.5% and • 10 will be reduced an additional 10% • 10 sales x $1500.00 gross profit = $15,000.00 gross profit • 10 units at 7.5% curtailment avg. ACV $6,000= $4,500.00 in principal curtailments plus $650.00 fees. $440.00 interest • 10 units 10% curtailment avg. ACV $5,550.00= $5,550.0 in principal curtailments plus $650.00 fees $401.04 interest $15,000 -$5590 -$66. $9410

Dealer Focus: The Auto Outlet By: Lee LeGrand, GM, DSC Des Moines rough Dave Easter is the President of w e r e The Auto Outlet in Des Moines, enough, but I had Iowa. As many dealers have to do it.” Recogexperienced this year with the nizing this is truly economy, he has suffered a re- his business and duction in sales. To add insult to livelihood, he has also limited injury, his dealership was a vic- the delegation and is doing the tim of the Iowa floods. “You work he once paid someone else have to be on top of your game. to do, spending much more time I was fortunate to have some at his dealership. “I have my warning; we took measures to wife come in to assist with many move all of our units to higher things these days. She is truly a ground so instead of devastation trooper! This is a huge sacrifice for us because our choice is for it was a mere inconvenience.” This is the way in which he op- her to stay home and raise our three kids, erates his entire but without “DSC has always been business. Instead of the busidoom and gloom, there for me in good ness, I canhe is operating his times and bad.” not provide dealership in true for them. business form, takWe will see this through and ing action to predict the future come out stronger than ever and rather than reacting later. “I be better people for it.” have had to cut a few employees which was a tough thing to do “I have always liked my share of but a necessary evil to secure my ‘toys’ on the lot. It draws more business and those to whom I attention and sells more of my owe money. I truly feel for those inventory once we sit the cuslarger organizations that had to tomer down and find out what let go of so many because three he can truly afford. I had a larger • $2809.00 is the available cash flow remaining to pay the rent, lights, sales person and repair vendors. Using a 60 day supply rule $15000 -$5590 • $9,410.00 is the available cash flow to handle the business demands.

It is fairly clear at this point that keeping a 90 day inventory supply can have drastic negative impacts. Speaking as a former dealer and as a VP of Risk Management, turn and burn is now more attractive than ever. By maintaining lean inventory supply while servicing demand, today’s small or large pre-owned dealer can conquer the local market place and survive for

Thank you for your business!

reserve of cash, rainy day fund, no pun intended, and could take those units to the sale for a hit because of the extra volume it generated and revenue it indirectly brought to my dealership. I have had to cut back on that too, but again, in this market, you can throw your hands in the air and quit, do things that will disintegrate your integrity or assimilate and adapt. I have chosen the latter because I am a fighter, the Tito Ortiz of the car business!” “DSC has been an angel in disguise.” Dave realizes the benefits that DSC can offer to keep his cash flow moving because where as profit is the ultimate goal, when in survival mode, cash flow is the name of the game and “DSC has always been there for me in good times and bad.” the long haul. We find that dealers wishing to create this fast moving environment are buying at a local auction but reselling in the online medium with a far greater success than returning to the local auction and trying to re sell the unit in the same location. Whenever I am presented with the opportunity to encourage this, I am all for it.


DSC Quarterly Newsletter Issue 1.3  

DSC Quarterly Newsletter Issue 1.3

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