Sunday, February 22, 2009

The Golden Skate Award Part 2

Car sales reality imortalized in print by David Teves. Read on:

Back in the 70’s at Hayward Ford we used to have a kangaroo court. If you thought someone had skated you, you could ask for a hearing after the morning sales meeting. This happened a couple of times a month. These mini-trials were wildly popular if only for their entertainment value. Here you would have two impassioned opponents each ready for bear hunting but in this case instead of bear it was each other.

When the sales meeting was over the managers would clear out. They rarely wanted anything to do with this, but they agreed to honor the outcome. The salesmen would stay. We had a big crew so sometimes there’d be twenty or thirty Car Men in there, downing coffee, smoking cigarettes and ready for a show.

Two or three of the senior Car Men would act as judges.

The accuser would point out the guilty party and state his case. Both sides would tell their version of the events, most of the time wildly different from each other. If there were witness they would testify. Then the judges would deliberate. Keep in mind that the sales managers would only tolerate us being off the floor for fifteen or twenty minutes, so there was no Perry Mason oratory going on in there.

The judge’s decision was final.

Sometimes you won; sometimes you lost. (I always seemed to lose, but as stated earlier, I got all the spoons.) It was accepted that this was the end of the issue until, of course, the guy who lost managed to get the other guy back. Car Man justice!

It was out of this that The Golden Skate Award came to surface. It was quickly decided that Mike Aahl’s find would be given out monthly to the man who best exemplified not only skating, but also the spirit of skating. In some ways a Car Man who was a little out of control was admired. Sheer craziness, if controlled, was something grand to watch in a weird, sick way. Car Men were always into weird and sick.

Like the kangaroo court, The Golden Skate Award was given out at a meeting at the first of the month. A few days before, a panel headed by our salesman emeritus, Hank Mederios, would gather to choose the man they deemed worthy to be singled out for this honor.

The much anticipated morning would come. Everyone would be in high spirits. Even some of the Grand Old Men of the dealership, some of who had been selling cars there since the 40’s when Hayward Ford was nothing but an old gas station on the corner of Mission Blvd. and “A” Street, would come to witness the proceedings. In my twenty-one-year-old mind I always imagined them muttering things like, “Young wipper snappers!”

Hank Medeiros was the perfect MC for the job. He was by all accounts a natural born ham. He’d been selling Fords in the East Bay for years. He loved to be in the limelight, tell a few jokes, and have a good time. He set the perfect tone for The Golden Skate Award ceremonies.

I wish I could tell you the names of some of the winners, but the sad fact is that skaters, though entertaining in a weird way, never last long in a dealership. They were like the itinerant gamblers of the Old West, always drifting from one place to another to apply their trade and getting out when the citizens got wind of the cheating.

Hank would tell his jokes, run down a list of the dirty deeds of the award’s winner. When it was finally presented it was met with laughter by all and the red face of the thought-he-was-clever winner. Busted! A second prize was give out, The Golden Key Award, to the guy who tried hard but came in second best. The glittering key was decked out with a fancy ribbon and presented with as much good-natured malice as the skate itself.

Prizewinners were required to keep their trophies in their office on prominent display for the next thirty days. There it could be seen by all, questioned by customers, and a little reminder that they weren’t as smart as they thought they were.

“The Golden Skate Award” is a cherished memory of my youth. These days, working mostly alone, there is no one to skate me—though I have to keep an eye on my boss, another Hayward Ford veteran. But I am certain that the practice sill goes on because skating is part of our tradition, and for Car Men, traditions run deep.

Talk to you later,



Tags: Automotive Finance F&I Finance & Insurance
Credit Repair va, Credit Repair blog, Credit Restoration

The Golden Skate Award" Part 1

Car sales reality imortalized in print by David Teves. Read on:

On a bright summer morning in 1971, Mike Aahl was rooting around in the trunk of old Buick trade-in along the back fence of Hayward Ford. As his hands moved piles of old newspapers, crumpled cigarette packages, and empty oil bottles his eyes brightened. There in front of him was quite a find. It was an old roller skate.

Mike withdrew his prize, his mind reeling with the possibilities. The skate itself was a scruffy, white leather affair, definitely something worn by a girl. It had old-fashioned steel wheels. Its metal frame was spotted with dust. Mike discovered an equally crusty skate key inside of it. All in all, it was perfect!

The plan for the skate’s resurrection started off simple enough; a quick clean up and a visit to the local hardware store for some gold spray paint. Within a couple of hours it was finished and set to dry along the warm western wall of the parts department. Beside it was the key, also sprayed gold, for it, too, was part of plan.

Things then got a little more complicated. Someone suggested, “Let’s take it to a trophy shop and have it mounted on a nice slab of wood.” It was a great idea, no doubt. By the time it hit the local shop another great idea was hatched and added to the plan.

In a couple of days it was done. Mike went to retreat it, and we all gathered around in his office to admire the results. There it was, a beautiful bright gold, looking like a bronzed baby shoe from hell. It had been mounted on an oak platform befitting its importance. The small gold place on the mountains base said, “The Golden Skate Award.”

It was ready to go, all we had to do was wait for the results.

Skating is a term used by car salesmen to signify, and there’s no polite way of saying this, stealing all or part of a car deal from another salesman.

In the bad old days of the car business salesmen skating each other was almost like a national sport. This was particularly true in big dealerships where there were large crews of guys fighting for survival each month.

There are different levels of skating.

In it’s most common form, another salesman would somehow manage to get on your deal after you had done all the work.

Any old Car Man can tell a story of going out to lunch only to return to discover that their appointment had shown up early. In those days the desk did not hold your customer, and whoever was there to slap the report of sale on the window got half a deal regardless of his previous involvement in the deal.

At least in this situation things managed to even themselves out over time. You couldn’t be there protecting your ass all the time Occasionally lost a half, but occasionally you got a half and the order of the universe was once more restored.

Then there was the out-and-out, you-lost-a-deal skate.

If it’s done correctly many times you never know about it. The guy you sold that 280Z to sends in his buddy to see you on your day off, and another guy sells him a car and doesn’t put your name on it. If you discover the evil deed the usual reply was, “He didn’t ask for you.”

I’ve known salesman to tell customers that the guy they asked for didn’t work there anymore, or “Bill doesn’t sell used cars. I’ll have to be the one to help out with that.” Being the clever bastards we are, there were dozens of lies you could tell a customer to get him away from you.

Management never condoned skating, but there’s not a lot they would do about it. A little skating toughens everyone up, and that’s the way they like it. They prefer to let the salesman work it out (or in some cases duke it out) on their own. The general rule: If he got you, you get him twice. It became a competition among thieves.

Skating is one of those things that The Others could never understand. They mostly live in a world governed by fairness, a place where Car Men only have a marginal acquaintance. That’s why the first rule of our business is, “The Car Business Isn’t Fair.” It is something Car Men have to accept if they are to survive. It’s not something your average schoolteacher or government worker could ever accept.

Getting skated does tend to piss you off.

I remember once a guy telling me with more than a little glee that he had gotten to me dozens of times. This was said with the rancor of, “I hate you ‘cause your brother owns the place.” That’s okay. I got all the spoons.

I’m not a saint, but I’ve never been one to skate people. You see, the third rule of the business is, “What goes around, comes around.” It’s kind of like Car Man Karma. That and my Portuguese/Catholic upbringing always prevented me from being a skater. But I will admit, I have been sorely tempted. Like our former President, Jimmie Carter, I’ve lusted in my heart.

More to come.



Tags: Automotive Finance F&I Finance & Insurance
Credit Repair va, Credit Repair blog, Credit Restoration

Thursday, February 19, 2009

Financing Customers With Pre-Discharge Bankruptcies

By: Rob Hagen

For special finance managers who are willing to listen and learn, pre-discharge BKs can be a source of growth and profit for any dealership.

AFI - Interesting article with decent info on BK's.

Dealers are looking everywhere they can to find profits to boost their bottom lines and return to profitability, and special finance is going to play a huge part in achieving that goal. With the limited number of funding sources, booking deals for credit-challenged customers has become harder, even as that sector continues to grow. To really ramp up sales, experienced special finance managers get good at selling to “niche” markets. One such market that has been a source of profits for many dealers is customers who have recently filed for bankruptcy.

Bankruptcies have always been a fundamental part of any well-run special finance department, but most dealers tend to wait until a customer’s bankruptcy has been discharged — that is, their debts have been cleared — before they’ll make a move. One way to gain market share is to work with “pre-discharge” customers who are still in the process of Chapter 7 bankruptcy.

Going after this market requires a little extra work, but it pays off in the margins. Grosses, for instance, are much higher due to the fact you don’t have to worry about negative equity from trade-ins. But to do it right, a special finance manager will first need to learn how bankruptcies work.

Bankruptcy basics:

Dealers who work with pre-discharge buyers often have to take on two roles: credit counselor and dealmaker. That requires extensive knowledge of how bankruptcies work. For starters, let’s define the two main forms of individual bankruptcy protection:

• Chapter 7: This is the most common form of bankruptcy for individuals. Often referred to as a ‘liquidation,’ the debtor’s non-exempt property — the guidelines for which vary from state to state — goes toward repaying his or her creditors, after which most remaining debts are discharged, typically within 90 to 120 days. Certain debts such as income and property tax, child support and student loans typically cannot be discharged.

• Chapter 13: This less-common filing is, on the surface, somewhat more like debt consolidation. An income-earning individual can file for protection under Chapter 13 and set up a plan to repay his or her creditors, typically over a period of three to five years.

The Administrative Office of the United States Courts reports that bankruptcy filings and discharges are escalating. 101,753 American households filed or discharged a bankruptcy between Jan. 1–23, 2009, compared to 78,278 during the same period in 2008.

“The good news is that franchise dealers are working with lenders like Tidewater, CapOne, AmeriCredit, Wachovia and many others to offer loans to these individuals,” says Robert Davies, president of “It’s a win-win situation. Families are buying quality automobiles while re-establishing their credit with firms that report to the credit bureaus.”

The numbers project to at least 101,753 bankruptcy cases filed in January 2009, including 52,207 discharged Chapter 7s and 13s, a 20 percent increase from 2008. Chapter 7s accounted for more than 70 percent of all bankruptcies. As of January 6, 2009, there were nearly 1 million open bankruptcies being processed for discharge in the U.S.


When it comes to their vehicles, filers often don’t know what they should do. They need their cars and they fear they’ll never be approved for another purchase. This may lead them to reaffirm outstanding debt on a vehicle that may have mechanical problems or they owe way too much on. For that reason alone, special finance managers who want to tap into the bankruptcy market must also take on a third role: marketing expert.

Marketing to the pre-discharge customer:

Ideally, your first mailer will reach a pre-discharge customer within a few days of his or her filing. With a lot of other matters to cover, bankruptcy attorneys aren’t always able to convey all the pertinent information an individual needs to decide how to handle their vehicle situation.

You want to get them on the phone as close to the filing date as possible.

“Getting on these customers early and often is the key to advertising to the bankruptcy customers,” says J.P. Miller Jr., vice president of Paul Miller Ford Mazda in Lexington, Ky. “We start to send mail to them starting the day after filing and continue till discharge. It pays huge dividends for us as we average much higher grosses on these customers.”

Auto retail veteran Tom Martin agrees. He spent 10 years working with bankruptcy customers — at one point mailing 10,000 to 15,000 letters each month for a single Ford dealership in Ohio. He then founded Columbus, Ohio-based ACH Consulting LLC, a consulting firm that specializes in helping auto dealers start their own dedicated bankruptcy departments.

“The latest phase of this business has gone to the ’Net,” Martin says. “We’re trying to lead customers to a Website that will capture their information. We send out a mailer called The Top 5 Things Your Attorney Did Not Tell You. They log onto our site and submit their names, phone numbers and e-mail addresses before they can continue. Then we take their e-mails and put them into a series of auto responders to keep us in front of customers.”

Another part of Martin’s marketing plan is to get to know bankruptcy attorneys.

“Attorneys have been one of my best sources for leads throughout the years,” he says. “I have even done credit-building seminars for several attorneys’ clients so they could understand how to build their credit the right way.”

A sympathetic ear

In the counselor role, a special finance manager must be willing to get to the bottom of each customer’s credit situation. Bankruptcies, more than any other form of negative credit, are influenced by outside factors. Whether it’s an unexpected medical expense, job loss or divorce, many of your pre-discharge customers never planned to file for bankruptcy — they just ran out of options.

In 1993, one of the first special finance customers I ever worked with walked into my office with a perfect credit bureau report … except for a Chapter 7 bankruptcy. Everything else was paid on time, and I had to ask what led to the filing. He and his wife explained that their daughter was born with a hole in her heart and they had racked up $500,000 in medical bills almost overnight. They tried to work out some kind of settlement, but the hospital was preparing to sue them and they had to seek protection.

Every time I start to get frustrated by the job, I remember how I helped those people and how grateful they were. There are a lot of people who have to file bankruptcy for similar reasons. They’re not all deadbeats or career debtors, and a good special finance manager will be ready with a sympathetic ear. Remember that these customers are under a lot of stress and can lose sight of their goals.

“Whenever I hire someone for a bankruptcy department, I look for a person who is not a car person, and I typically prefer to hire ladies,” Tom Martin says. “I find that women are more willing and able to gain the trust of customers in bankruptcy.”

Specialty lenders (and this is a key)!

The last part of the equation is having lenders that will approve these customers. Just about every subprime lender has programs for recently discharged customers, but far fewer are equipped to handle a pre-discharge.

Virginia Beach, Va.-based Tidewater Motor Credit has been financing pre-discharge customers for many years. The performance of those loans over time has justified their focus on that market.

“We are still buying open Chapter 7s and discharged BKs,” says Dedra Muffley, Tidewater’s marketing supervisor. “In fact, the open BKs represented the majority of our business last month. In this critical time, it became necessary for all of us to re-evaluate how we are operating and become as efficient and effective as possible. During this evaluation, we had to make some painful decisions regarding staffing and dealer clients.

“We confirmed for ourselves that lending to those people whose credit problems are behind them is what makes the best business sense for us and what pays out better. Generally, we are still buying those customers in the same way.”

When asked if that strategy will hold up through what promises to be a difficult year, Muffley is adamant.

“We absolutely expect this to be the bread and butter for ’09,” she says, “and we hope that those slices become loaves as we are able to add more dealers little by little. We remain hopeful that in the coming months, we will once again have a ‘green light’ as far as growth is concerned.”

Due to an expanding market for dealers and high profitability for lenders, bankruptcy business is sure to be an area that grows faster than other areas of the special finance business as it rebounds from a shaky 2008.

Rob Hagen is the founder of, a Houston-based consulting firm specializing in department setup and growth. E-mail Rob at

AFI's take on this:

I hope re-printing this article doesn't sound like a plug for Tidewater Finance. As a franchised dealer, I get my share of bankrupt customers. Finding a lender to buy the paper of an un-discharged BK is the key to whether or not the customers will roll off my lot in anything.

My unbiased review of the experience I will have with Tidewater Finance will be published in a future post.

Anyway - it's 5 o'clock somewhere.



Print this article for your records.

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