USED CAR NEWS
Used Car News 2 / 12 /2024
BHPH Dealer Exits into Marketing Biz
IN THIS ISSUE: • Finance News • Compliance Photo by Jeffrey Bellant TALKING SHOP: Kendra Brown (far left) joined several industry leaders at an NIADA Convention & Expo to discuss life as a buy-here, pay-here dealer.
By Jeffrey Bellant Kendra Brown, a second generation dealer and head of her own marketing company, has walked away from her buy-here, pay-here business. “We made that decision a few months ago,” she said. “We are in collecting mode only. We’re not selling cars.” Brown and her husband, Charles, who owned Brown Family Auto Sales, moved on to share another dealer’s lot in a nearby city, but strictly to continue collections on their existing accounts. Brown, who has served on panels at NIADA and other conventions, said with the rising rent on her Houston lot and the skyrocketing costs of acquiring inventory, combined with a need to sell more vehicles, it “wasn’t working.” She said even though Houston is a large market, the competition is
fierce. Another problem was when she and her husband tried to move out of Houston to a new city, they weren’t allowed to transfer their dealer license. In the end, however, it was just the right time to call it quits. One of the areas where Brown was a stickler in her business was debt, a topic that draws differing philosophies. She said someone in a dealer Facebook group once asked whether debt can be good. Dealers typed into the discussion to say, “As long as you can manage it,” or “as long as you can do it right,” Brown said, “In the past three months I’ve seen those dealers who piped in saying that kind of stuff – they’re out of business now.” For Brown, debt was the crux of the matter. She tells a story about a time in 2018 when she and Charles went to a Texas dealer conference. Each at-
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• Retail Markets Kendra Brown loans. That’s why their score is low tended different sessions. “He sat in on a dealer panel that because it’s unpredictable. It’s high was all about how to get inventory,” risk. “So that’s why I say, figure out Brown said, “and I sat in on a panel your risk appetite.” that was all about how to get out of Brown said it’s hard for her to give debt. advice because everyone’s business “So, the joke afterwards was that style is different. Her business had I was in the panel on how to get a very low floorplan and an unseout of debt and he was in the panel cured line of credit with very low about how to get into debt.” interest. The strategy for dealers who And that’s another one of the reawanted out of debt was to close losons why the couple made their cations and get smaller. exit – higher interest rates. It wasn’t “It was a process of de-leveragwhat they enjoyed eight years ago. ing,” she said. She would advise dealers to make Brown would tell future BHPH sure you know your numbers and dealers to take a hard look at their vet your lenders. stomach for the business. “If anything, be disciplined in the “I would say before you get into financial aspect,” she said. the BHPH business, have a serious It’s not different than her customassessment of your own appetite for ers at tax time. The people who risk,” Brown said. “Never forget that want to come in and put their entire they are called subprime loans berefund checks down on a car are the cause they are unpredictable. customers who fail, Brown said. “You can’t predict when or how or “It doesn’t end well,” she said. “It’s UCNgoing Front Feb 12.pdf 1 2/2/24 3:23 PM why CAA-IAA they are to pay on their Continued on page 3