I think one of my tool truck drivers has had it with non payers

[1Bad55Chevy]

Hard to fix poor as well, who usually rent dumps and end up only qualifying for "buy here Pay here" type of loans, on what are usually crappy cars.

This is the **** right here!

People think down payments cover the cost of the cars and we sell them 100 times. In reality we pay between $5k and $15k for vehicles on a BHPH lot if the car brakes down the payments stop. why the hell would we sell bottom dollar **** cars that will blow the motor up in a week? Ya the customer is out the $1,200 down payment but the dealer loses BIG! A BHPH car lot is a cash buyers worst nightmare because we spend a ton of money buying the better cars at auction and then dump a ton of money reconditioned them. At my lot every car get rotors, pads, water pump, and a timing belt if the vehicle is equipped I also fix any leaking fluids and any codes or issues that are present in the vehicle. When they leave the lot your expecting the cars to be able to run 36 months with oil changes. The issue comes from people not maintaining them then doing Uber eats in them and trying to drive 1k miles a week.

I tell everyone who talks **** about a BHPH dealership that if they can do it better come show us. We would love to see it.

 

[mike93lx]

Maybe the average is, but on basic hand tools it has to be waaaay above that. I've bought probably ten new Matco and Snap On ratchets on Ebay for 30-45% off list. Meaning the margin has to be 50-100% on things like ratchets, screwdrivers.... for the dealer. On high $ stuff like a $1k ball joint press, $2k wrench set... then yeah, much less.

Didn't you show that the student price was like 50% off list on some stuff you bought?

Margin can't be 100%, but markup can be.

Margin is the percentage of the selling price that is above the cost you are referencing. Markup is the multiplier applied to cost

 

[1Bad55Chevy]

The cost of carrying that debt eats into profit margins. It's not free.

The price is adjusted to include that cost.

This isn't true. The IRS taxes you on sales not your accounts receivables. It dosen't matter how the sale was made. What's ****** about it is say you sold $250k this year and only collect $20k of that money the IRS taxes you on the entire $250k even though it has yet to be collected. You are paying taxes on phantom profits that you might never receive. If the account defaults you can write it off but thats different. You can get into adding a related finance company to your operation but thats getting way outside the scope of this.

 

[mike93lx]

This isn't true. The IRS taxes you on sales not your accounts receivables. It dosen't matter how the sale was made. What's ****** about it is say you sold $250k this year and only collect $20k of that money the IRS taxes you on the entire $250k even though it has yet to be collected. You are paying taxes on phantom profits that you might never receive. If the account defaults you can write it off but thats different. You can get into adding a related finance company to your operation but thats getting way outside the scope of this.

Lol. Ok. I have more than a little experience in this stuff

I said nothing about taxes, not sure why you brought that in

 

[1Bad55Chevy]

Lol. Ok. I have more than a little experience in this stuff

I said nothing about taxes, not sure why you brought that in

I guess i dont understand what you meant about carrying an A/R cuts into your profits? Are you trying to get at the fact that you start running out of capital when you start loaning money?

Looking back at it idk why I was talking about taxes. I was just trying to get at the profit numbers on the business from a finance company standpoint being different then say a retail store.

 

[mike93lx]

I guess i dont understand what you meant about carrying an A/R cuts into your profits? Are you trying to get at the fact that you start running out of capital when you start loaning money?

Looking back at it idk why I was talking about taxes. I was just trying to get at the profit numbers on the business from a finance company standpoint being different then say a retail store.

Money costs money. Lending it to people costs businesses money in interest and lost opportunities, plus write off and collection costs.

Using a cost of capital in excess of 10% is standard practice in business when evaluating projects and working capital moves (a/r, a/p and inventory) and businesses pay a lot of money to collect debts a little sooner all the time.

All of those costs have to be paid by someone... The customer.

This is not a novel or controversial subject.

 

[1Bad55Chevy]

Money costs money. Lending it to people costs businesses money in interest and lost opportunities, plus write off and collection costs.

Using a cost of capital in excess of 10% is standard practice in business when evaluating projects and working capital moves (a/r, a/p and inventory) and businesses pay a lot of money to collect debts a little sooner all the time.

All of those costs have to be paid by someone... The customer.

This is not a novel or controversial subject.

I guess I have a different view point on it because lending money is the only way I sell cars so there are no lost opportunities. Car dealerships also do their own in house collecting and banks wont work with deep sub prime lenders like us. Everything has to be funded out of our own pockets for the most part, there are some companies that will let you borrow against you receivables but thats a nasty trap.

Idk how these major major bhph lots get funding from major banks. Look at Tricolor and what happened to them and how much money they burned people out of. But things like that keep banks from working with the little guys.

 

[mike93lx]

Car dealerships also do their own in house collecting and banks wont work with deep sub prime lenders like us. Everything has to be funded out of our own pockets for the most part,

That is the part that costs money.

You are paying people to do admin and collections. And you have to have cash to lend it. Your money is ******* in inventory, wages, overhead, etc.

You don't have to be paying interest directly to incur costs from lending money.

 

[Wrench97]

I own a BHPH car lot so this is up my alley!

How this works is you need a lot of accounts to offset the amount of cash you are putting in the streets. 100 accounts paying $125 a week sounds awesome right? That's $12,500 a week, if everyone pays. In the car business we typically run a 30% repo rate and about 50% of your accounts will be behind by atleast a week. I would assume the tool truck accounts would have similar numbers. So out of that $12,500 a week you hope to collect realistically you will avg around $7,500. Still sounds awesome right? Now you got to deduct what your putting back on the streets every week.... its a tough business!

Now the margins have to be big when you do this because you dont want people making payoff because that cripples you ability to sell. In the car business on vehicles I purchase for $7k and under markup is (cost x 2 + 1,000+ 24% int). I dont know the exact margins for tools but its going to be BIG in order to offset the risk.

It gets difficult for a tool dealer to repo tools because they dont want to piss off the whole shop and lose customers. I have helped my buddy (who also does my repos) do a few tool box repos and you have to go in there willing to fight the entire shop. As a car dealer I dont care who I piss off when I repo the car because they are not my customers.

How long do usually let it go before looking for the car?
Are you using GPS/disable systems like they do around here?
We seem to get one every couple months towed in won't start because of the disabler generally a phone call come in within an hour of it arriving.......it's funny when the same customers as before.

 

[1Bad55Chevy]

How long do usually let it go before looking for the car?
Are you using GPS/disable systems like they do around here?
We seem to get one every couple months towed in won't start because of the disabler generally a phone call come in within an hour of it arriving.......it's funny when the same customers as before.

I dont use starter interups just GPS. You have to hide them under the dash to use interups and YouTube losers tell you to look under the dash for the trackers. I mount all mine inside the drivers side seat up in the seat back. You have to really be on your game to find it.

As for repos it depends. 2 missed payments (either weekly or biweekly) no contact you lost the car, no insurance you lost the car, first payment default you lost the car, and missing a payment then missing the promise to pay you lost the car. But a lot of this depends on the customer. There is a massive difference between a new customer and someone who has been on your books for 8 months. If one of my established customers cals me in August and say they need to skip a payment for school supplies you let that slide if they are a good payer. I had a loser 2 weeks ago miss his second payment and when my system sent out his automated payment reminder he logged in and paid me a dollar... he lost his truck.

I don't not grant payment extensions in December though. I wont let my kids christmas suffer so my customers can put presents under their trees.

When my cars hit a shop I always call. What these people will do is authorize a big ticket then never pick it up. That type of **** puts everyone in a bad spot.

 

[hailwood1965]

This has really been an interesting thread. Thanks to all.

 

[Hakeem]

Maybe the average is, but on basic hand tools it has to be waaaay above that. I've bought probably ten new Matco and Snap On ratchets on Ebay for 30-45% off list. Meaning the margin has to be 50-100% on things like ratchets, screwdrivers.... for the dealer. On high $ stuff like a $1k ball joint press, $2k wrench set... then yeah, much less.

Didn't you show that the student price was like 50% off list on some stuff you bought?

I’m basing it off this:


From this video, so take it with a grain of salt.

That said - ive had more than one driver tell me that the tool price with the student discount is less than they pay. The Snapon discount is about 40-50% off, but the product selection is somewhat limited. Matco discounts their entire catalog, and their exclusive products are discounted at around 50-60% off, while their rebrands of Knipex, etc are only discounted about 30% or so. The discounted prices of these rebrands still land them about 20% higher than MSRP, likely to cover warranty claims.

Here’s one such example:

 

[CoThG]

Do you really think the average person trained to repair vehicles would not be able to find, and disable a tracking or wheel locking device built into a toolbox, or to move a box even if the wheels got locked?

It would have a feature so that any attempt to disable it would trigger the locking and immobilizing functions.

 

[moemc]

Maybe the average is, but on basic hand tools it has to be waaaay above that. I've bought probably ten new Matco and Snap On ratchets on Ebay for 30-45% off list. Meaning the margin has to be 50-100% on things like ratchets, screwdrivers.... for the dealer. On high $ stuff like a $1k ball joint press, $2k wrench set... then yeah, much less.

Didn't you show that the student price was like 50% off list on some stuff you bought?

I think those eBay snapOn sellers have some sort of arrangements to dump factory seconds or warrantied tools on eBay. Every time I got a “deal” on a new snapOn item from eBay, I sent It back due to annoying flaws.

 

[rust in the eye]

Yep, the idiocy gets compounded on top of prior idiocy and bad choices. A friend of mine has a 4-unit rental apartment complex. He had to start eviction proceedings on a young couple recently. They moved in 3 months ago and only paid one month's rent. He noticed they only had one car -- a 2012 or so Malibu with stickers indicating it was from a local buy here/pay here car lot. When they didn't pay the 2nd month's rent, they blamed it on the car because it quit running. But then a newer Jeep Cherokee (2010 or so) showed up with dealer plates and from another buy here/pay here place.

He theorizes they must have a huge car payment because they stopped paying the $700 apartment rent. Good luck with that old Jeep that will probably nuke itself soon under their lack of maintenance. You can't fix stupid.

A friend had many aprtments he rented in a ~ bad part of town, some might call him a slumlord given the clientele but he maintained all his properties well.
As you can imagine he spent some time chasing rent from the more irresponsible tenants. He found that removing the front door was an effective way for those tenants to turn the cigarette, beer and tatoo money into rent.

 

[Sal Bandini]

That said - ive had more than one driver tell me that the tool price with the student discount is less than they pay. The Snapon discount is about 40-50% off, but the product selection is somewhat limited. Matco discounts their entire catalog, and their exclusive products are discounted at around 50-60% off, while their rebrands of Knipex, etc are only discounted about 30% or so. The discounted prices of these rebrands still land them about 20% higher than MSRP, likely to cover warranty claims.

Here’s one such example:

That cutter is about $50-$55 from Knipex, so you aren't getting any savings. You are overpaying for the Matco name on the handle.

 

[DAWrench]

That cutter is about $50-$55 from Knipex, so you aren't getting any savings. You are overpaying for the Matco name on the handle.

That Matco name on the handle will let you warranty them on the truck so it is worth the extra cost.

 

[Sal Bandini]

That Matco name on the handle will let you warranty them on the truck so it is worth the extra cost.

Hook, line, sinker

 

[neophyte]

It would have a feature so that any attempt to disable it would trigger the locking and immobilizing functions.

Multiple car bands, selling for several or more times what a Snap-On box costs, have not been able to make a non-disable able car security system, to prevent theft.
What is the likelihood that a basic tool manufacturer would be able to?
LockpickingLawyer has numerous videos showing how easy it is to disable locks.
Any system installed would have videos showing how to disable the system in a month or two.

 

[Hakeem]

That cutter is about $50-$55 from Knipex, so you aren't getting any savings. You are overpaying for the Matco name on the handle.

You consider $5-10 extra for lifetime warranty to be “overpaying”? That’s worth it to me. In fact, I’d call that a hell of a deal.

Hook, line, sinker

I don’t get it. Could you elaborate?

 

[JeepYJ]

What is the likelihood that a basic tool manufacturer would be able to?

Why would they when the toolbox probably costs far less to manufacture than what they retail? Cut your losses on the ones that disappear and make it up on the guys that are standing in line to pay in full.

 

[cgrutt]

This isn't true. The IRS taxes you on sales not your accounts receivables. It dosen't matter how the sale was made. What's ****** about it is say you sold $250k this year and only collect $20k of that money the IRS taxes you on the entire $250k even though it has yet to be collected. You are paying taxes on phantom profits that you might never receive. If the account defaults you can write it off but thats different. You can get into adding a related finance company to your operation but thats getting way outside the scope of this.

Um suggest you get a better accountant if you're pay IRS taxes on sales...

 

[country83]

I heard that a local dealer got tired of guys skipping out on him, so he made a calendar featuring these bums and started selling it. Apparently it pissed off corporate enough that the CEO got involved...

 

[Mike007]

I know everyone is different. For me, there is very few things in business I despise more then chasing money. It's an incredible amount of time wasted and really annoying.

 

[1Bad55Chevy]

Um suggest you get a better accountant if you're pay IRS taxes on sales...

Jesus.... there is always one clown in the group.

The point is your paying taxes on phantom profits on the 250k in sales. Its a loan business meaning not all the loans will preform and some will default. If you re read it maybe you might understand it.

 

[cgrutt]

Jesus.... there is always one clown in the group.

The point is your paying taxes on phantom profits on the 250k in sales. Its a loan business meaning not all the loans will preform and some will default. If you re read it maybe you might understand it.

I did read it IRS does not tax you on sales its called Income tax for a reason.

 

[1Bad55Chevy]

What's ****** about it is say you sold $250k this year and only collect $20k of that money the IRS taxes you on the entire $250k even though it has yet to be collected. You are paying taxes on phantom profits that you might never receive. If the account defaults you can write it off but thats different. You can get into adding a related finance company to your operation but thats getting way outside the scope of this.

Jesus.... there is always one clown in the group.

The point is your paying taxes on the phantom profits on the 250k in sales. Its a loan business meaning not all the loans will preform and some will default. If you re read it maybe you might understand it.

I did read it IRS does not tax you on sales its called Income tax for a reason.

Try reading it again... I put it in bold for you this time so you can see it.

 

[finn]

You consider $5-10 extra for lifetime warranty to be “overpaying”? That’s worth it to me. In fact, I’d call that a hell of a deal.

I don’t get it. Could you elaborate?

Considering I probably have upwards of 1000 tools, and maybe double that, in my possession, and have waranteed may be ten or so in over fifty years, the majority being things like inexpensive Craftsman screwdrivers. I would certainly ague that $5 or $10 up charge for a lifetime warranty on each purchase is not worth it.

 

[cgrutt]

Try reading it again... I put it in bold for you this time so you can see it.

You can bold it and be as condescending as you like but you're still wrong. Go have yourself a nice day.

 

[joel63]

Neither be a borrower or a lender be.
Ben Franklin

Neither a borrower nor a lender be" is :
a famous piece of advice from William Shakespeare's Hamlet (Act 1, Scene 3), spoken by the character Polonius to his son, Laertes.

 

[i84x]

Or maybe it's to keep the truck coming back to the shop each week.

I've heard people who complain about their tool truck ignoring them when they contact the owner about warranties or if x thing is in stock yet but always turning up like clockwork when they're collecting money.

 

[mepstein]

Tool truck drivers are lending money to a population that don't have a good record of paying money back. That's why corporate isn't involved. If it was easy and profitable, They would finance every screwdriver and wrench.
Really, the first time the tech doesn't pay his bill, the tool truck guy should scoop up a bunch of tools and let them know they will be sold off if the bill isn't paid by the next week. If they just keep chasing money each week, nothing will ever change.

 

[1Bad55Chevy]

Really, the first time the tech doesn't pay his bill, the tool truck guy should scoop up a bunch of tools and let them know they will be sold off if the bill isn't paid by the next week. If they just keep chasing money each week, nothing will ever change.

Being the "one day, one dollar" guy sounds cool and hard coee but it dosen't work. Remember the name of the game is to collect the money not the tools. What ends up happening being the "one day,one dollar" guy is you piss off everyone around and your out of business.

The issue with the OP dealer is he dosen't have the heart for this but thats the issue for most of these guys. You have to have the balls to go pick up your tools and not care about the sob stories, if your bitching about it on FB your failing miserably.

I would probably be terrible at a tool truck because I wouldn't work with people forever.

 

[thunderalley3]

I had a great Snap On guy when I was still working. Never a question on what I wanted or when I would pay. We did $$$$ in business for about 20 years. He became a good friend and always made sure I had hospitality tickets to the drag races etc. He retired and his daughter still runs the truck and anytime I need anything I call her cell and we get a route update and I meet her somewhere and she fixes what I need repaired and gets me whatever I want to buy.

I will say that our relationship became one of trust when one of our mechanics was leaving in a week and it was the last Thursday he was working. The Snap On guy came in and I see the guy who was leaving go to the truck and come back with quite a few tools. I had a feeling in my stomach and when he came by I just casually mentioned that I thought it was nice of the mechanic to buy so much when it was his last two days of work. He did not say a word and went out the door, came in with a cart and I see a small discussion between the two and then the tools started going out the door instead of in, much more than what he had just bought. The Snap On guy called me that night and thanked me for "mentioning" what I did.

The next week he left me a hooded sweatshirt on my box and it was never mentioned. I am sure by the amount of tools that went out he was in to him for a few grand.

 

[Rusted Nut]

Way back when in the ‘70’s when I was turning wrenches; the service dept (your employer) paid your tool truck bill every week and deducted it from your check. You signed a short contract with the service dept for this. Weekly $$$ amount was limited, based on expected weekly earnings. Tool truck guy always got paid.

Best advice from some of the older guys in the shop “stay out of the tool truck kid”.

 

[CHI_Tool&Die]

@Shoreline_ bro is this dealer of yours a MAC guy? I’ve been seeing a MAC dude on my social doing exactly that and he got called out by a few dudes for being unprofessional. He is still doing it but he isn’t tagging anyone anymore, just bitching.

 

[zendriver]

If I had a business where receivables would make or break whether I eat or not, I would hope I would seriously consider whether or not I should still be in that business.

It’s like operator truck driver you’re not making any money why are you doing it?

 

[OccupantRJ]

Tool truck drivers are lending money to a population that don't have a good record of paying money back. That's why corporate isn't involved. If it was easy and profitable, They would finance every screwdriver and wrench.
Really, the first time the tech doesn't pay his bill, the tool truck guy should scoop up a bunch of tools and let them know they will be sold off if the bill isn't paid by the next week. If they just keep chasing money each week, nothing will ever change.

My wife was the social services director for a county and worked closely with the Sheriff department. The deadbeat dads who were decreed by the courts to pay child support had every excuse under the sun why they could not pay up. Once they were arrested for non payment, money miraculously appeared from someone they knew.

 

[OccupantRJ]

If I had a business where receivables would make or break whether I eat or not, I would hope I would seriously consider whether or not I should still be in that business.

It’s like operator truck driver you’re not making any money why are you doing it?

Right. A GJ member owner operator is a good friend and he says if he is going to go broke he would rather it be at home than running the road and paying for maintenance.

 

[RTM]

This is the **** right here!

People think down payments cover the cost of the cars and we sell them 100 times. In reality we pay between $5k and $15k for vehicles on a BHPH lot if the car brakes down the payments stop. why the hell would we sell bottom dollar **** cars that will blow the motor up in a week? Ya the customer is out the $1,200 down payment but the dealer loses BIG! A BHPH car lot is a cash buyers worst nightmare because we spend a ton of money buying the better cars at auction and then dump a ton of money reconditioned them. At my lot every car get rotors, pads, water pump, and a timing belt if the vehicle is equipped I also fix any leaking fluids and any codes or issues that are present in the vehicle. When they leave the lot your expecting the cars to be able to run 36 months with oil changes. The issue comes from people not maintaining them then doing Uber eats in them and trying to drive 1k miles a week.

I tell everyone who talks **** about a BHPH dealership that if they can do it better come show us. We would love to see it.

50 years ago, my boss would do BHPH deals on some cars, for people who couldn’t get financing. He usually bought them a at auction, for under $500, but only bought good quality ones, that I could safely drive home. Never did any major repairs on them, motor mount was by most memorable project as a 16 yr old. Never repo’d any that I know of.