Aged inventory means cars that have been sitting at a dealership for a long time without selling. This can be a problem because the dealer isn't making money on them and might have to lower the price to sell.
An independent dealer is a car seller who is not tied to any specific car brand. They usually sell used cars and can offer many different types of cars.
Flipping cars means buying used cars and then selling them again to make money. People often fix them up a little before selling to get a better price.
If you want to sell cars as a business, you need special permission called a dealer license. This makes sure you follow the rules and can sell cars legally.
A curbstoner is a person who sells cars without having a proper business or license. They usually buy cars and sell them quickly to make money but do it in a way that isn't fully legal.
Car flipping means buying a used car cheap, fixing it up a bit, and then selling it for more money. It's like buying and selling cars to make some cash.
If you want to sell cars as a business in California, you have to take a special class that teaches you all the rules and paperwork you need to follow. It helps you get the right permissions and pass inspections.
Recon means fixing up used cars so they look and work better before selling them. It includes things like repairs and cleaning to make the car nicer for buyers.
A one-man operation means one person does everything in the car business, like buying, fixing, and selling cars. It can be hard to do a lot of work quickly when you're alone.
Gross profits mean how much money you actually earn from selling a car before paying for things like rent or bills. It shows if selling the car was a good deal.
Reinsurance means a dealer makes their own insurance plan to protect cars they sell instead of buying insurance from another company. This can save money and help them manage repairs better.
The Ford Fusion is a four-door car that many people buy because it's comfortable and doesn't use too much gas. The 2014 model is a few years old but still common.
The BMW 5 Series is a comfortable and stylish car made for everyday driving. It is a mid-sized car that many people use for work and travel. It is known for being smooth to drive and having nice features inside.
The Ford Explorer is a type of SUV that many people like because it has enough space for families and daily driving. It comes with different engines, some more powerful than others.
The Morgan Plus Six is a special kind of sports car made in Britain. It looks old-fashioned but has modern parts inside to make it fast and fun to drive. It is made in small numbers and is different from most cars you see.
A floor plan is like a loan dealers use to buy cars to sell. They borrow money to get cars and pay it back when they sell them. It can help get more cars but can also cost more if not handled well.
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are addicted to buying right you want to go to the action you want to find a deal so you're buying even
though you're not selling and that's a real problem because that's when they're probably their turn
time starts going up they got all this aged inventory they got a ton of crap sitting in the
back lot well maybe the next one find somebody who can be a salesman whether that's your dad's
part time or whether that's a buddy that wants to come in part time and be on commission but it's
gonna hurt because a you've got a bunch of overpriced inventory that you're probably into too heavy
you're gonna need to get that out man yeah yeah just get those out blow them out at a
break even or a loss and get those non-movers out of here that have been on your lot too long
because nobody wants to see a stale lot no one wants to see a facebook listing that's been up for
four months
hello and welcome to the independent dealer podcast lute one of our favorite favorite
episodes we ever do is when we get to talk to dealers who are i don't know i kind of knew maybe
need some help some advice because we always love to give people bad advice
jeff likes to give bad advice i like to help dealers succeed and you know we got we got a
guy here today that reached out on facebook in the independent dealer group and was asking
a question and it's one of those things that you know you can be in business for a while and then
all of a sudden you're like oh man what is going on so Fernando introduce yourself to the podcast
community hey what's up guys well yeah my name is Fernando Vargas i'm here located in vapor
field california and i got a little dealership going been going strong for five years well
shape four years this past year has been a little tough so uh yeah i'm just here seeking some advice
and see oh yeah that is really oh man i'll tell you five years of business four been good one
happened you can't always figure that they they're all gonna be good for nanda exactly yeah i'm pretty
i'm positive though so i i mean i'm right next door to Fernando right i mean he's only four hours
down the road for me you're doing it on hard mode because you're in california like that just
automatically adds a whole another level of like nonsense and frustration and yeah and like people
trying to sue you every time you turn around so good for you for staying at it yeah yeah i appreciate
it i appreciate it i have thought of relocating i'm not gonna lie but uh we're going strong we're
holding on are you Fernando are you from the bankersville area yeah i'm born and raised okay yeah
bankersfield i've been there i'm gonna go there so tell us how did you get into the business how
did you get started give us a little bit of background and then we kind of want to get into
like where you are now and and anything we can do to help get over these hurdles these headaches man
how did you start uh sure well back i want to say six years ago i was working overnight in agriculture
and machinery so we wouldn't i was pretty much work age 17 18 right around 19 i believe i started
helping them sorry flip the cars nothing crazy we were doing probably like two or three a month
maybe four on a good month but probably average two to three and yeah sure enough one day i just got
i live out in button willow which is like 20 minutes off from bankersfield or even smaller
town that population is like 2000 so yeah it's a really really small town and one day i was asleep
from coming home from work and i got knocked on door and yeah sure enough it was dmv agent
and they were pretty much saying like hey you got to come down to the to the police office
or whatever you want to call it and yeah they just interviewed us for a little bit
which kind of should have to say we know what's going on if you want to do this you got to do it
the right way and yeah i mean it was it was definitely a blessing because i think someone
read this out but well you have to get you have to get legit you have to go
jeff how many times have we heard this curb stoner to deal with oh of course i mean that's
how everyone that's how you get started man you love it you're passionate for it you like cars
you like flipping making money and and uh and you got to get you got to get the licenses so
did you said you were doing it with some folks before there was there was is that still the case
or did yeah it's me and my dad me and my dad's still going full time he's a supervisor in agriculture
place and he does pretty good he's we're really trying to you know get him full time over here
that's the main goal but yeah yeah we're going at it man
together he helped you buy and sell and with his spare time but for the most part he has another
job uh well he leaves like at four or five a.m. man he comes home like seven sometimes eight so
i'm pretty much on my own yeah okay yeah he has his thing and i gotta handle this
i guess he helped you with the with some of the capital to start yeah yeah with the 20 30k it was
he has like 20 something i had like 10k to my name and you know we just got rocking rolling from
there went all in but but you're a young guy so i mean going all in early is is good right
yeah yeah 100% i'm trying to learn the hard lessons right now so i mean that's just going from
flipping cars to running a car business i mean that's a that's a big growth curve right yeah yeah
definitely we we started small though with like three or four cars here in california
once we were rocking and rolling that was pretty smooth yeah so how did you learn how to do this
stuff did you just teach yourself did you go to another dealer did you research online like
you had to get legit how'd you figure that part out yeah honestly i can't even tell you from
the top of my head but i did my research online uh eventually figured it out read some stuff
and i found a course that pretty much shows you a through z how to get everything done
you have to take the course here in california anyways i'm not sure how this in other states but
it's like a seven hour course and they're really helpful they pretty much tell you what you need
to do what permits you need to get what you need to have in place for the dnb inspection how to
set the inspection and yeah dealer one-on-one i believe they were called they were they were
really helpful and they helped me pretty much navigate the beginning so yeah just online research
really and once i found that course it was pretty easy because i could reach out to them
whenever i had a question yeah i mean do it you know doing doing the paperwork and doing the
business portion uh that can be taught pretty easy the hard part is figuring out what cars to buy and
sell yeah how how did you figure that out um well we used to do a lot of Ford edges anyways
and Honda's that sort of stuff like that i found out pretty quickly though we can't do much with
humbers and Toyota's even united auction unless you buy only that with them they even like pretend
to recall and you know something funky so it was like family SUVs Ford edges stuff like that in like
the three four k range that we knew we knew what they would sell for already and pretty much just
just went at it that way with with a little bit of knowledge that we had and slowly we learned
which cars knew good which cars have a lot of problems which cars um stay long so we kind of
just went at it a little blind but we had an idea of what we were doing in the beginning
and how many cars you said the the first four years are pretty good how many cars you sell them on
uh probably around it depends it depends they were lower budget cars definitely
but from eight to twelve i'd say okay when you say low budget now you're already selling cars
under ten thousand dollars so to me that's extremely low budget yeah what was what was
low budget because i'm going uh i mean how much lower can you go yeah i was selling cars for like
thirty nine hundred four nine hundred fifty nine hundred but i'm pretty sure you guys know as well
those those cars are just headaches and even post sales there they could be a headache you can make
good money on a handful of them but eventually you're gonna have an issue with one of them you
know so eventually i did take advice from other dealers on the facebook group which i do think
was good advice to you know go a little higher get out of cheap cars and not deal with that market
so i did do that not too crazy what is the what is the sweet spot for you right now
right around like eighty nine hundred is where probably everything is that on average so um
yeah i went up a little bit but nothing too crazy like i said it's all under ten k for the most
nine hundred percent of it's under ten k so nothing crazy but we did go up a little bit um
did it amount yeah does that did that cause your sales so slow are you still selling the
same amount of cars i was still doing good for a good amount of time um and i wasn't moving them
i think what happened though is once i got to like 150 k worth of the inventory i'm a one-man
operation i'm gonna try making excuses but i think i just got a little bit lost in the sauce
kind of left too many cars you know on recon thinking i'll get to it later and you know
this doesn't go the way you think and let's talk about that let's get into some of the
numbers of what you're doing right now and and where things may have gotten a little off the
rail so you say you got about 150 in inventory right now 150 dollars how many cars is that
return to 22 cars so so you had 22 cars and were you selling 22 a month
no no i think most of the time half of my cars have been recon which you know that's that's
probably not good but most of the time like if i had five with ten in inventory five of them would
be on the lot and five wouldn't be in recon or eight of them would be in recon that's that's pretty
much for the most part how how it usually went all these years if i had to i have to say and
i don't have like a mechanic that works with me right then i i do have you know i've made
great relationships with local shops here and they helped me out a lot but yeah they got their
stuff to do too and you know it's not it's not the best but we get it done okay it's not the
fastest yeah so i'd make one observation at this point luke and you can correct me if i'm wrong
but if you're a one-man band you're a one-man operation and you're buying an eight thousand
dollar car um what do you think a what do you think a realistic goal would be for fernando if
he wants if he's if he's cool just staying there right and we haven't talked about where your goals
are and where you want to be but if you're a one-man band buying maybe you're not fixing them
yourself you're sending them out i mean do you fix any on your own do you have mechanical
ability yeah yeah i do what i can but when it gets a little more complicated yeah like
everything's gonna take way too long you know you got a bad buy you're trying to get here
exactly yeah yeah i mean i'll take the whole day you know so there's some other things to do
can't really can't really do everything yeah i mean like what eight cars a month how many
that he needs to have a lot you know a one-man band if you're a one-man operation i think buying
fixing and selling ten to twelve okay ten so you're doing two to three a week let's say yeah
realistically you go buy one or two at the auction two or three get them home try to get
them fixed get them sold because because at that point you've got yeah 20 an inventory yeah yeah
i mean it's hard to do everything on your own jeff and i'm i think that's what i'm saying like
where's that line and what i'm trying to draw the picture of so everybody knows where i'm driving is
like fernando you need to know that like there is an inflection point where you can't do it on
your own anymore yeah you've got to build this thing in a way that you can start bringing on a
part-time somebody a full-time mechanic like the numbers have got to work for you so yeah
you make it a business and not just a job or a side hustle right yeah yeah 100 yeah right i mean
right now you got yourself a job i mean i think yeah that's and that's fine because you're working
for yourself you're doing your own thing you're young that makes a lot of sense um you know if
you were really good at buying cars you'd probably look at getting somebody's really good selling
cars right um but but you know there's uh there's only so much one person can do now you'll you'll
hear stories of these these one one guy operations that are selling 30 cars a month you know your
stories of them might be missed i don't know um it's it's hard to do but anything i think i think
ever if you think you could do over 12 a month as a single person buying selling recon and everything
i just don't think you're gonna yeah not in that not in that price range if you're selling
if you're selling 20 to 30 a month as a single you're getting cars handpicked by a buyer that
come front line ready that are low mileage off lease you're dealing even 30 to 40 thousand
dollar area that's right you're never leaving the office you're you're just selling and yeah that
could that could happen but there's few and far between with digulars out there doing that yeah
yeah for sure i pretty much do everything right now so and and let's talk about that for now so
the lesson that you think you've learned from the post and right now is and you mentioned it
just for a second you got lost in it man you're busy yeah you're doing this your turn time is not
where it should be right because your home runs on stuff you're not just a little base hits and
singles is that you think that's kind of what you're thinking 100 percent 100 percent kind of
i remember the first time i made two grand on the on the car which was like my first year
business i thought like damn like this is this is great but after like a second or 30 year
probably around like the fourth years when i started you know some i would get some that
would make four or five grand on sometimes but as you guys know that that's pretty rare it doesn't
happen i think that that it's uh make trying to you know trying to have a business where you're
making four and five thousand dollars a car is is unsustainable honestly yeah especially especially
in the the price car you're you're dealing with you know in this price range i think what do you
think jeff uh gross profits gotta be that 1500 dollar range or am i wrong on that um i think
maybe what happened for now is we all got romantic with post-covid times when we were ripping three
and four grand on a car right because the market was moving so fast and there was so much demand
so yeah now we're back to the grind and and yeah i mean you're gonna make 1500 dollars
and you don't sell any back end products i assume i do have yeah i do have gwc and
immediately i do need to get better at it because a lot of the customers i do like right now i'm
doing a lot of west like most of my customers right now are 90 of them are probably like west
lake and i'm not sure if you guys know how the structure works exactly but i try to add the
warranty on there and they just the numbers don't work out anymore most of the time so
yeah i don't do a lot of warranties unfortunately hey sorry to break in real quick but make sure
you guys know about buck guy long time awesome sponsor the podcast and who i use for all my
reinsurance products i can't thank them enough for teaching me so much about reinsurance over the
years and coming up with new products and new ways to get my portfolio secured my customers have
options of warranties and service contracts gap i just just been great jeff it's absolutely been a
great way for me to build wealth put away some money so if you are a buyer pay here lease your
pay here or a retail dealer it works for all dealers you can set up a reinsurance company
you can ensure your own stop giving money to those third party providers that aren't going to cover
your stuff anyways keep it in house call the guys and girls over at buck guy risk services and get
set up asap yeah so so what's tough is sometimes you'll get stuck in the no man's land right because
the west lake people are a little less price conscious yeah buy something that might be a
higher market value but then you got no room to put a warranty on it because you're already max
loaned a value with west lake whereas if you kept your gross margins a little lower up front
maybe you'd be attracting some cash buyers that would be attracted to that car and you could
extract yeah everything and they might pay for a warranty they might go to a credit union
and finance themselves so you got to be careful either it's very hard to be a hybrid subprime
and retail lot yeah honestly yeah yeah exactly that's what i got the most out of that post honestly
i kind of had an idea but that just kind of confirmed even further because i have you know
this 2014 for fusion again i'm looking at right now i got it you know didn't need much a little bit
of paint and i mean it probably like right around on the foregrain like 39 something and i listed it
for you know 9900 and now it's been three months and still here so now i have it at 6900 and i'm
giving a ton of interest and i'm sure i'll sell it this week but yeah that's even even when they
don't need a huge amount of recon i think it's better than especially in my market to just you
know put them on the law at a great price because i'm competing against price you know
placing it in mark yeah pricing is so key in retail um and what's what's unfortunate is you
find you'll find oh i bought this car i know it's going to sell for this and the best way to
determine what a car is going to sell for is you put it out there for a week and you don't have any
interest you just gotta start dropping the price yeah and there will be a there will be a time
when you drop the price enough where everybody starts calling and then at that point you can kind
of go back up a little bit but yeah it's an interesting retail is so interesting in that
and it's so price specific yeah yeah i mean if i want to track those cash buyers i am in that
you know price range of cash buyers if i want to compete with other other people in the area
i kind of have to you know give great deals in this crash range i feel like to track cash
buyers because if i raise the price i'm just attracting 500 to 550s and you know that price
it gets cut by like a grand and a half or two grand anyways and fees from west lake so yeah i
definitely do think i i'm i have a great idea like a much better idea of what i need to do
moving forward i feel like but uh yeah it's still i don't understand and then what i would say is on
top of what you said there is it's okay and dealers that are listening it's okay to be a west lake
and a cac dealer and have high prices so make sure you know that's who you are when you're that size
you got to be one or the other in my opinion i could be wrong yeah but yeah you're okay to go
after the west lakes and the 500 credit scores and price them wherever you want to price them and
just advertise you're approved you know no credit bad credit doesn't matter so if you're okay and you
mark it up proportionate to absorb the fees the west lake's going to charge you right so there's
a business you had there i'm just saying don't get caught in the middle now with all that being said
i think the next step you have fernando is you've got an issue of if you do go after the west lake
people that's a lot of work if you just want to put prices on your cars and have cash buyers come in
and go to the credit union get a check or a money order a signature loan or whatever that's a little
less work but you still are at the point where i don't know if you need to decide which one you're
well i do know which one you should be you might need a salesman you might need someone to help
you out to work those leads make sure everything gets on marketplace make sure stuff gets to recon
fast make sure you have time to negotiate with customers because if you're trying to do it all
right now you're definitely scaling to the point where that's you can't get to it all yeah um yeah
so i agree you're stuck in the middle you gotta get it you gotta get out of the middle and
either there's nothing wrong with selling cheap cars either jeff i mean yeah there's
there's nothing wrong with it um i'm gonna ask you i'm gonna ask you something about the marketing
side uh for one i go and i google fern county movers in your 4.7 good job
well yeah i'm working on him no that's good and you just need more you just need more of them but
if i go and and try to locate your your uh your dealership it's got you on the wrong street
and it looks like a house google does yeah i fixed it with apple mats i i needed content
they got the address is all mixed up and it's it has been causing some issues but
yeah on google was the only only place to show on there and i i really need it well you say yeah
we say that only google considering google is the most important thing out there so you guys
you gotta get you gotta get that straight um yeah that creates a real problem because if i was going
to your dealership and actually i just found your dealership on uh on google and um it took me i had
to go across to a different street to find it right so yeah you need to make sure because if i if i
saw that if i was going to buy a car and typically whenever i'm doing anything i want to see pictures
of the dealership i want the i want the view i want to be able to see where i'm going and
if i if i went to google to find you and saw was the empty dirt lot or a house
i'm not coming to you and yeah things things like that things like that are super important
okay for sure i'm gonna get on that as soon as we get out this call for sure that's a great point
playing your google listing it's super easy you do it through your email you know well it appears
it it appears it even sees it do you not have your google listings like on google whenever you look
up a vehicle no do you own your google business page oh um it's i pay a network solution and the
work center sets up my website so you should have your google listing you should own that as you're
personally because if you don't for one you could have you could probably already fix this um but
you don't want somebody else to own it because if you end up not using them anymore then you're
kind of you're kind of screwed right jeff yeah i don't understand uh yeah i don't understand that
definitely well let's talk about that afterwards and we'll guide you in the right direction and
make sure you own that list that business listing and you can update it sure okay for sure hours
but what it was all that stuff and so most of your marketing is just facebook marketplaces
is that the case yeah i 90 percent of my buyers 80 to 90 percent are facebook marketplace i say
yeah i mean that essence yeah it makes sense it's it's i mean i think that it calls zero
makes the most sense of using that as uh and most people are looking at a facebook marketplace
anyway for for cars which blows my mind but that's i that is how it's how it's working yeah your
website you got to do some work on your website that goes out you need to do some work on your
website you got to get some action yeah yeah um like i said i do i keep my offer up on my facebook
a1 but my website i definitely need to to be a market date on that it's kind of hard to try
making excuses i definitely should have it but like i said you got to do mainly this isn't
important now but you got to do the things you got to do here you know take care of our customers
and d&d stuff all that crap so yeah for sure when you're a one-person band that's that's the way it
goes right yeah exactly i'm fresh kind of thin but i could definitely improve on that that's not
too crazy that's not too hard to to date you know another another recommendation i would have is that
you know when i look at your when i look at the inventory you're carrying it it doesn't seem
like very desirable inventory and i know you're trying to be cost-conscious on what your your
final price will be but when you're selling you know terrains and darts and you know fusions and
and traverses and things there's not a lot of people out there looking for um so you're getting
people whoa whoa whoa whoa whoa whoa whoa whoa yeah i'm gonna push back on that go push back let's
go let's go let's ask i mean i look at his inventory that i mean here's the the other thing i'd say
is just you can't stop buying terrains and akadia's and traverses man that's what i just said well
it's not about cars not desirable you can sell that car that is a hot hot car people will buy it
but it's a pile of crap and so you're buying it and you're doing timing chains on every single one
of them and it's costing you a fortune because they're stuck at your mechanics guy's place all
the time because they're just they're just not good cars yeah i was doing pretty good with them
for a little bit but then i the market just tanked on them as well so i kind of well that's
because they are made like a hundred thousand miles guaranteed well the good thing is this
tax season and you can get rid of these cars yeah you can just take them back and turn them in
yeah for sure well so is is bakersville is it uh is it like southern cow vibe or is it uh
you know i wish it was a little more more southern cow vibe but it feels like a desert out here really
it's pretty huge not humid but it's mostly warm most of the year you know summertime gets to like
115 on a bad day so it's one of those cities that yeah aggregate both of them dependant yeah uh 100
percent okay i mean you know it's uh i think it's a market that uh could use a little different
inventory would be my opinion we have about 500 000 people in the city so you know it's not too small
but uh yeah that's a big that's a big town bro exactly yeah i i just got to figure some stuff out
so do you get any sell reports to see what uh what is selling in the area sell reports i do not
honestly if you don't i can't even tell you what that is from well i mean west lake could give you
their top sales report for for that area um cac could give you the top sales report for that area
if you want to stay with that model if not you'd have to get a cross sell report and kind of
try to dig down into the lower price stuff to see what's selling i think i do think inventory is
is something you need to to work on okay for sure for sure what are you i mean it's probably hard
for you to guess my market but what would you recommend if you had to um yeah i don't know i
truly don't know i you know it's just by far darian and john darian don't have a lot well i have
i have a toyot at honda bias um just because that's what i've always sold the margins are
are slim but i think your margins are slim anyway so um people are not a search speaks
pennish i do i do how much of your clientele is spanish speaking um i'd say
right around 50 because a lot of people they are hispanic but uh you know most people here
speaking english is fine so there's probably like 40 that don't all right jeff sorry to break in but
we gotta talk about putting money in the bank and how do we do that i do it through blitz pay the guys
on top of it i have had little to no issues since i switched over from that other company
for sure they to me they're probably the best services when it comes to answering phone calls
and taking care of things that i've ever seen a vendor um and the backing automation i've actually
been working with that for a couple dealers here lately and going in and changing up these automated
texts that go out super simple they work uh the customers click and pay it's fantastic
and also they got this ai thing jeff pretty cool yeah i'm stoked they got the audio ai the phone
caller and hopefully very soon the texting version of that so it'll help my collector be
way more efficient in the future um i'm super stoked to see the ai get integrated into the
collections process and blitz pay is on the cutting edge of it so if you're taking credit cards at all
whether you're buy here pay here lease here pay here even retail dealers can take advantage of
this and use blitz pay for their credit card processing incredibly competitive rates super
easy interface call the team over at blitz pay and move your credit card processing today yeah i mean
if i think you you probably know what sells in that market i honestly think your inventory
makeup is not a problem other than you've just got some cars that are just junk and i would just
stay away from them and you'll learn that as you buy you're not buying enough volume maybe to always
see a trend like the 3.5 eco boost in the explorers i would just avoid that all together but i would
get the regular 3.5s all day long and and you'll see something pop up a fort explorer will sell
in the hispanic community they absolutely love us right yeah i did cgf i did mention the fort
explorer because i think it's really your car it is that engine sucks but so you'll you know what
will sell just start start avoiding the ones that are giving you recon headaches all together
or do more research before you get into it i wouldn't mess with b&w's and europeans but that's
yeah yeah moving forward i did have an idea no more europeans for sure yeah honestly i would stick
to the bread and butter domestics you could chase the hondas and the toyotas but they're just more
expensive and i'm sure they move i know hondas and toyotas move great in the hispanic community
um and if you want to cater more towards third row and people movers and basic commuter cars like
those are always solid staples people need them yeah but you are competing a lot on those ones
so yeah i don't think it's so much an inventory issue as i personally think you have an attention
and a sales issue because you're stretched so many ways and that's where i led too earlier is
maybe it is time to start bring a buddy in part time and pay him commission
to be the one answering the phones talking to people making deals happen moving this inventory
like i don't know and you stay buying and and helping out i don't know if you're at that point
yet but i feel like you you are man i don't know jeff what yeah i see and here's you know you
mentioned that you were looking for a 20 group and as i said joining 20 group i don't think we're
at a 20 group level yet are we jeff no no i think i think there's uh for one there's a lot of other
things that you can improve on before you get to that um uh and jeff's right i you can't do everything
by yourself but also you can't have expenses that you don't need either so you're kind of
in there you're kind of well you pay him on commission right if he sells a car he doesn't
do you do you enjoy that part more fernando which part of the business do you enjoy the most the
buying the selling man it's hard uh probably the buying honestly probably that's buying
hey see car dealers in his blood we love to buy cars i knew what you were gonna answer
because i know how many cars you have an inventory yeah are addicted to buying right you want to go
to the action you want to find a deal so you're buying even though you're not selling and that's
a real problem because that's when your problem their turn time starts going out they got all this
aged inventory they got a ton of crap sitting in the back lot well maybe the next one maybe i just
need to buy it on maybe i need to so number one a find somebody who can be a salesman whether that's
your dad part time or whether that's a buddy that wants to come in part time and be on commission
but it's gonna hurt because a you've got a bunch of overpriced inventory that you're probably into
too heavy you're gonna need to get that out man yeah just get those out blow them out at a break
even or a loss and get those non-movers out of here that have been on your lot too long because
nobody wants to see a stale lot no one wants to see a facebook listing that's been up for four months
like yeah for sure you got a mover yeah for sure i moved six last month which you know
was slow month but a slower month but yeah i had to sell a few at this counter mainly to move on
if there was that all yeah they were they were definitely aged most of them were definitely aged
so yeah i would blow out those aged ones man if they're over like 90 days just get them gone by
the weekend somehow and that'll create more extension and excitement maybe you'll get a trade
in you can rip you know get those and get all those traverses and akadia's out and replace
them all with explorers yeah yeah i have um like a bmw at a shop this jaguar i know how bad
jaguars are i've had this one for like two years i have oh yeah there's a cup yeah there's a couple
of them that i have that you know we're almost ready but we've had them for like six plus months
at this point so do you think at that point it's better just come i lost it send it back to option
do we can with that area yes 100 yeah it is it goes against everything that's probably bred into
you to take a loss and lose and throw bad money away but like tells dude yeah it's walking down
that shop that mechanic is pissed that it's still sitting there like you can't get any stuff because
he's busy with his old stuff and if you have a car that's just retail old just cut the price
whatever you think whatever you think it would do at the auction i mean essentially cut it down
to that because you yeah but we're all for retail nets and you are to send it to the auction i did
that yesterday uh i slashed my prices i'm pretty much all my age inventory like i said that fusion
6900 now so i'm trying to hit them this week those akadia's and traverses you saw i've listed them
both for 6900 so i'm sure i'm moving you know bad i have some adventures right now so still make
like a grand and a half and 2k so that's you know that was kind of a plan to move forward like i'm
gonna just move these make a grand or two whatever you can and i'm gonna just buy maybe in the 5k
range try to make 2k and just you know really move them nothing nothing sitting no more because that's
i think that's what cost me a lot of money do you have a do you have a floor plan i do um but
now i kind of paid that off it was just a headache really especially you know with my recon times that
was all over the place and it's funny it's funny uh floor plans a lot of times makes you increase
your inventory and all it does is increase your cost it does it you don't sell a lot more cars
if not if you don't manage the rest of it properly so yeah i'm glad you paid that all that's that's
a good idea yeah it's definitely a tool if you can manage it correctly but i don't think i was managing
the best so there's a lot and and there's a lot of people that don't so don't uh don't
reach yourself up up for that and if you don't need it the expenses are going to vary for me
and for like them cut cut that floor plan save that expense yeah and stay disciplined right yeah
that way you don't need it because you're going to stay disciplined you're going to stay slim
if you sell a third row whatever go buy a third row whatever right yeah yeah you find that people
like the dodge dart go buy another one like yeah and just just keep that super tight
i'm saying anything else that you found was super interesting from that post that you feel like
was a valuable feedback from the dealer community um well a lot of people say that you know we're
in the terrible market and this is like the covid hangover and all this sort of stuff but on the other
don't listen to them yeah exactly on the other hand i do see other people absolutely killing
and having their best years best months so i'm sure you just got to find a way and you can make it
happen that's what i'm trying to do right yeah and that's i mean the positive attitude is is
where you need to be uh if you believe that we're in a covid hangover you're going to continue to
have a covid hangover so yeah yeah yeah i mean i like that the positivity that's that can be found
from other dealers is is great sometimes um the negativity that you find from other dealers can
hurt sometimes yeah you see a lot about there but like i said there's some other guys come to him
they're similar to my age there's something to do that was like 25 years old i'm sorry he's 18
i love that killing it so i know it's possible yeah yep howdy does he man it's all as good as
it is between your own ears right that's what we always say man is really loves company
and they everybody wants excuses to you know they all want excuses as to why things aren't good
so that they can all just sit on their thumbs and say business is usual it's just the market
no yeah yeah exactly that's what i don't want to be mind everyone in your neighborhood's killing it
and doing great you're gonna panic and you're gonna make drastic changes to try to get there so
don't settle yeah man my dad would always be like yeah i guess it's a bad market and just go out of
business yeah that that wouldn't make sense we gotta be away yeah if other people are doing
it i know i could do it so i'm not i know that we could figure it out that's right my dad would
always be like if you called him and see how everybody else around town's doing it's like no
i don't want to know appreciate your time buddy this has been great hopefully helpful man and
i hope you check back in with us um let us know how things are going if you need anything else or
or whatever man just just holler man appreciate your time i i appreciate you guys and i appreciate
the advice i'm definitely gonna work on that google and close up yeah everyone uh how i need to move
forward and where i'm going wrong so definitely i could check in with you guys like by december
something that'd be great yeah i want to see you know i'm sure i'll be i'll be a lot better
in the position that i am right now so that'd be great cool buddy we're rooting for you take
care all right i mean you too appreciate it take it easy
About this episode
Fernando Vargas shares his journey from flipping cars part-time to running a small dealership in California, navigating the challenges of going legit in a tough regulatory environment. The conversation covers his early days flipping low-budget cars, the importance of getting licensed, and the struggles of managing inventory and recon work as a one-man operation. Advice focuses on balancing buying and selling, avoiding stale inventory, and knowing when to bring in help to scale the business. The episode offers real-world insights into the ups and downs of starting and sustaining a dealership in a competitive market.
In this episode of the Independent Dealer Podcast, hosts Jeff Watson and Luke Godwin sit down with Fernando Vargas — a young independent dealer from Bakersfield, California who's been at it for 5 years and is ready to break through. They dig into his operation and get real about the inventory mistakes, recon bottlenecks, and one-man-band growing pains that are holding him back.
What You'll Learn:
Why over-buying is a trap — and how aged inventory quietly kills your cash flow
Which vehicles to avoid if you want to keep recon costs under control
When it's time to bring in your first commission salesperson
Why your Google Business listing matters more than you think
How to reset your lot by blowing out stale inventory the right way
Key Takeaways:
You can't buy your way out of a selling problem
If half your inventory is in recon, you have a systems problem
Own your Google Business listing — don't let a vendor hold it hostage
Aged inventory over 90 days?
Get it gone, even at a loss
Facebook Marketplace is free, works, and should be your best friend
A straight-talk gut check for any solo dealer grinding it out and wondering why things aren't clicking.
Fernando's story might be yours too.
Support the businesses that support the podcast:
Buckeye Risk Services - Reinsurance, tax planning, and long-term wealth strategies built specifically for independent dealers. https://theindependentdealer.com/buckeye
Ituran GPS - GPS and payment technology for BHPH and retail dealerships focused on asset protection, recovery tools, and customer management. https://theindependentdealer.com/ituran
