There’s a myth about buy-here pay-here dealers being in the repo business. That the reason they make money is that they sell cars in order to repossesses them and then re-sell.
Well, that's not what we do at Russell Smith Auto. For one thing, we spend a lot of money on the vehicles that we purchase to sell to make sure they are safe and reliable. It's inspected, it's detailed, and any safety issues are addressed. The mechanics test drive it and the managers usually test-drive it to see if there's anything that needs to be addressed before we put it on the line. It doesn’t make sense to get a car fixed up, put it under warranty, finance the vehicle, then lose money on payments from the customer who bought it, and try to go through all that again with a different customer.
If any of our customers get behind on their payments, we try to work with them and help them figure out what happened and how to avoid repossession. We put a lot of time and money into getting a vehicle ready to put out on the lot, to have it in our inventory. We're not in the repo business.
Usually, as long as we can make contact with them we can figure out what's going on. Because of the COVID pandemic, things have really been challenging for a lot of people. But the worst thing they can do is try to hide from us or ignore our efforts to reach out.
But if we just can't get ahold of them at all there are regional agents outside of the business that we can hire to get the vehicle back. But that's not really what we want to do. So we work with our customers to try to keep them in the car.
There are situations where they’ve been in the hospital, out of work, some emergency that’s left them short on cash so they can’t make payments. It doesn't happen very often, but in extreme cases with documentation of their situation and a good payment history we can help them out in that respect to make arrangements so that they can keep their vehicle and make payments.
Sometimes life throws us a blip in the road that's a one-time thing, not permanent—just something that they're going through at the time. So our collector works with them to figure out exactly what's going on.
It would be counterproductive for us to be in the repo business. We want to keep our customers in their vehicles, making their payments, making it all the way through the note and paying the cars off. It's exciting when a customer pays off their vehicle. They get excited about it when they come in to get their title. It's great they they're successful at making those car payments and get that car paid off and build their credit score too. That's really what we want for our customers. We want them to succeed.