Hammer Time: Investments

Steven Lang
by Steven Lang
hammer time investments

Five years ago ‘financing’ was like a cuss word to me. I had spent the prior two years traveling around the country for an auto finance company liquidating 10,000+ repos annually. Seeing repossessed Ford Rangers with $600+ monthly payments and Kias given to anyone with a pulse made me very wary of that world. I stuck with cash cars and made a great worry free living doing that. That was until October 2008 when the cash customer literally disappeared from my landscape.

Since that time at least half my customers have been financed by yours truly. $500 to $700 down, $50 to $60 a week, for a 12 to 15 month period is typical for most of what I offer. I do have a few luxury vehicles that require longer loan periods. But typically my customers are simply looking for comfortable and worry-free A to B transportation. There are a lot of things I do to keep those folks happy… and honest.

The first is to catch little problems before they become big problems. On the payment front, I offer folks the opportunity to make their payment directly to a bank instead of at the lot. The bank that I use has long hours on Saturdays and is even open on Sundays from 12:30 to 4:00 P.M. The customers come by. Make their payment. Get a receipt with the company name showing the day, time and amount. Then call me so that I can confirm the deposit. If someone hasn’t contacted me by 3:00 PM on Saturday they will hear from me… in a decent and friendly way… and the process becomes far less problematic.

I do not charge late fees. Ever. I’ve always considered the terms usurious and surprisingly, I’ve found that you can get a far better return from referrals and the general willingness to work with people in their tight periods. There are some customers who have given me a five figure return through the referrals. Most others simply tell the truth. A few others tell convenient lies. It’s not a perfect world and in times of difficulty you also have to be willing to ‘pull the trigger’ and get your car back.

The trigger depends on any combination of three things. Do they pay? Do they tell you the truth? Do they return your calls? If #1 doesn’t happen, then either #2 or #3 will result in a repo. Some folks need the shock value of seeing the car gone before they are scared straight into paying. I’ve had people who mysteriously lose their cell phone come up with several hundred in cash within 24 hours. People who think by moving they can’t be traced. Kids who think they can keep on milking their parents for all the payments. Even con artists and drug runners who think they are beyond the reach of anyone. A $100 transponder can go a very long way to getting your asset back. And there’s one other thing…

I always pay a premium for experience. This comes to advertising, repairs, and most especially repos. My repo guy also happens to be a preacher at a nearby church (no I’m not making this up) and his powers of persuasion and ability to figure out people is amazing. I pay him a bit more than other folks typically do, and often times I not only get the car back, I get the key and a cleaned out interior as well. Most places pay a repo guy in 30 days. The big companies wait until 90 days or never. He gets it on the very day and I go out of my way to help him with anything he needs. In the new economy, it’s the collectors and the protectors that can save your skin.

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4 of 20 comments
  • Newcarscostalot Newcarscostalot on Jun 16, 2010

    The key is to avoid the trap of credit. I know lots of people that own their cars outright. No payments. No interest. No repo worries. Cheaper insurance. A better situation IMHO.

    • See 1 previous
    • Newcarscostalot Newcarscostalot on Jun 16, 2010

      Credit and interest can cause debt. Also, all the people I know that paid for their cars outright were able to avoid loans. These are nice cars that serve their purpose and are not beaters. Credit is a necessary evil to be sure, but I have seen people do fine without it at least when it comes to car purchases.

  • Nrd515 Nrd515 on Jun 17, 2010

    I know a guy who seems to constantly live on the edge where car payments are concerned. Over the years he's had vehicle after vehicle repoed or the bank/finance company has threatened to do it. Somehow, he kept getting loans. I don't understand how. His last one was for a Chrysler 300 SRT8 with about 8K miles on it. It was a very nice car. Was, not for long though. His payments and insurance were insanely high as the F150 he traded was worth about $500 after the payoff. Almost immediately, he started having trouble making them, and started hitting up friends who actually did help him out. Finally, he got behind, and they came and took it from the parking lot of where he worked. He got it back the first time by hitting up his parents and sister for about $1200 each, and then about six months later, they took it again, and it was eventually auctioned off. A friend and I went to the auction, my friend was thinking about buying it, but it was trashed, inside and out, and he passed on it. Right now, he's driving, and complaining about, his mom's old Camry, with 200K on it, and a caved in passenger door. He has no car payment for the first time in about 30 years, but is already planning on buying either an F150, or a Ram 1500. New, of course. If the finance companies have any sense, they will just tell him NO, and make him pay cash for whatever he wants to get. But I bet one of them bites and he gets what he wants. Someone gave him a mortgage about 5 years ago too. Somehow, he hasn't lost the house yet. The bank probably would do almost anything to keep from taking it back at this point.

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