Ed Bobit's Publisher's Page
Things used to be so simple in the fleet business. I was wearing my white shoes with the gold fish in the heels, and I was buying booze and broads. I was selling fleet cars like popcorn. Now everything keeps changing. This year the car manufacturers have changed, confusing the seller and the buyer ...
A cynic is a man who, when he smells flowers, looks around for a coffin. -H.L.Mencken
A cynic is a man who knows the price of everything and the value of nothing.-Oscar Wilde (1854 - 1900)
Cynic: n. a Blackguard whose faulty vision sees things as they are, not as they ought to be.-Ambrose Bierce
My indebtedness matches my gratitude to Tom Mourning, of Ray Oldsmobile, for sharing his tongue-in-cheek presentation at a recent AFLA meeting.
Recently, I ran into an old friend of mine, Tommy "Whiteshoes" Fleeter. He was standing in a lobby whistling, and singing his favorite song, "Whiteshoes is my name - selling fleet cars is my game."
I said, "Hi, how are you?"
He replied, "Terrible, I am so confused. Things used to be so simple in the fleet business. I was wearing my white shoes with the gold fish in the heels, and I was buying booze and broads. I was selling fleet cars like popcorn. Now everything keeps changing. This year the car manufacturers have changed, confusing the seller and the buyer ... consider
The holdback from 2 percent to 3 percent.
Which dealer gets the service for delivery card - it's now the delivering dealer.
The free floor plan period - from 25 days to 15 days.
The discount percentage.
The warranty.
The price goes up every 90 days.
I think the Communists and the Japanese are behind it all.
"Remember Fast Freddy from Promise Motors? Boy, he was the #1 guy in the fleet business for three years. Now he is out of work. Lost his job. He said the owner of the dealership had to close the fleet operation because of reverse cash flow. Remember Les who owned 'Lease 'M for Less' Leasing Company? He lost his company for the same reason, reverse cash flow. When I was a kid, I was afraid of the bogeyman, now I 'm afraid of reverse cash flow ... consider
"Do you know the average fleet car I sell is now $7500.00?
"Let me tell you what happens when I sell that fleet car:
The holdback average is $260
The advertising rebate is $50
The distant delivery rebate is $50
My interest and O.H. is $50+
My floor plan service charge is $5.50
I have to pay the delivery dealer $50+
That totals $465.50+
"If I have to pre-pay license and taxes for my client that averages $300.00. Now, I have a reverse cash flow of $765.50. If I sell 100 cars a month, that's over $70,000.00, and I have to wait 90 days to get the holdback. Now we are up to $210,000.00. I live in fear that the client pays me for the car prior to the end of the delayed floor plan privilege period, or I have to pay the car off out of my cash, and at an average of $7,500.00. That's not peanuts.
"Do you know last April I was paying 21 percent interest on my floor plan? It dropped but, recently, it went up again and the prime rate is now 15.5 percent.
"I'm glad guys like Les from 'Lease 'M or Less' are not buying from me now. He never did pay me for cars when he said he would. With Les, it was always: 'Check is in the mail, or I didn't get your billing, or the driver didn't sign the delivery receipt, or my check writing girl is on vacation, or my computer isn't working.'
"The free floor plan period is now 15 days. With a guy like Les, you blow all your profit in interest.
"Oh yes, guess what I had to buy? A computer. All these companies wanted status reports, price protection reports, and my dealership 'Green Shades' said my department had to get more productive. Do you know that baby cost me $150,000.00. I wonder if my customers will let me pass along that expense to them?
"Well, I've got to go. The factory changed who gets the service credit for the pre-delivery card, so now it goes to the delivering dealer, not me, the selling dealer. Now, I've got to re-do 600 of my deals, and so far, everybody thinks they should get the service card and the same amount of money I paid them last year. I I wonder if my customers will let me pass that expense on to them?"
I asked, "With all of these confusing changes and rising costs, do you think you can really afford to be in the fleet business?"
He answered, "Yes."
"But I must do business only with those that:
are honest with me:
pay their bills on time.
"And I must:
be more productive;
sell only those deals that make a profit;
control our expenses.
"A fleet dealer cannot give in to all this confusion, and must become an 'Island in the Storm' for good fleet accounts."
We parted and I can still hear him whistling and singing his new song. "Tommy Whiteshoes is my name, selling fleet cars is my game. If confusion, the bogeyman or reverse cash flow don't get me."
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