Almost all financial organizations have a fitness department. Their names are as varied as Troubled Loan Management; Central Loan Department; o Department of Special Assets. A dealer can be assigned to one of these special departments, or a member of the department can start to appear at the meeting with the dealer’s regular banking officer.

Courts have consistently upheld the rights of lenders to have clearing teams and for those teams, within broad parameters, to take affirmative action to protect the interests of lenders.

Matching the experience of the average trader with training to the experience of the lender would be the equivalent of comparing a high school football team to a professional team. Professionals have played the game hundreds of times. They have seen and heard hundreds of presentations, arguments, excuses and reasons for a dealership’s problems, while the inexperienced dealership encounters trauma for the first time. Realizing that the dealer is probably a neophyte, with regard to training, the dealer is provided with the following rules, such as a plumb line, which he must follow throughout the training procedure:

1. Don’t confuse friendship with business. Factories and lenders have seen and heard most of the settlement plans any dealer could suggest. You’ve probably seen versions of each plan that have been perfected over generations by some of the best minds in the business. However, your experience cannot help the dealer to get the best dealer benefits.

Factory / lender employees have an obligation to their corporation, and in turn, to their shareholders, to obtain the best contract for their corporation. There is nothing wrong in it; They have a legal duty to their shareholders and creditors to protect them, not you.

However, they will indicate whether your training plan is “acceptable” or “unacceptable” to them. If the proposed plan is “unacceptable”, one of two things can happen. The merchant can continue to propose plans, until one is accepted, or the factory / lender can suggest an acceptable alternative.

If the factory / lender suggests a plan acceptable to them, it means just that: the training plan is acceptable to the factory / lender. It does not mean, and should not mean, that the factory / lender will not approve some other plan, which may be more beneficial to the dealer. if the distributor knows what to order and how to structure it.

2. Don’t confuse optimism with confidence. Optimism means waiting for a plan to work. Confidence means knowing what to do if not. Never act without confidence.

3. Do not value a dealer with the formula “SOT + Assets”. The odds against the plan working are roughly the same as the odds against winning the lottery, except that the initial bet is higher.

4. Don’t say “SOT”. Sometimes a dealer talks in terms of SOT (sold out of trust) or OT (out of trust) with the factory or the lender, when the dealer actually has SAU (sold and unpaid) units. Once the dealer refers to a mistrust situation, he puts the factory / lender in a precarious position. Then all kinds of rules come into play, both legal and company, that no have had to go into effect if the distributor used the phrase SAU. The factory / lender cannot read minds to know that the dealer was actually referring to SAU, rather than SOT. From the moment the SOT phrase is used, the only thing the listener knows for sure is that if there is a demand and the listener was asked if the merchant said SOT was on this or that date, the listener would have to respond ” Yes”. Don’t put them in that position.

5. Don’t lie. Do not lie to yourself; don’t lie to the factory; don’t lie to the lender.

Distributors, who lie to themselves about their problems, how they got there, or their ability to solve them, base their entire solution on a lie and, without exception, compound and complicate the original problems.

A lie to the factory / lender will alienate the only entities that have the ability to help and those who can earn the most, besides the distributor and the distributor’s family, in finding a viable solution. When in doubt, remember what Mark Twain said: “I was never hurt by anything I didn’t say.” He also said that when he was ninety years old, he remembered that he had worried about many things in life, most of which never happened.

6. Don’t panic. There are many challenges in business and the shortage of cash is just one of them. Numerous dealers have been there before and numerous dealers have survived.

Analyze the problem as if it were someone else’s problem and write a short letter as if you were giving advice to another dealer. The advice should be to seek professional help. A storm at sea requires experienced sailors. No one would want a crew with little experience in storms, unfamiliar with navigation, no charts, no radar, and no one to ask for advice. A dealer with a SOT problem is in a big storm, except it won’t go away over time. Without help, the dealer’s family, friends and employees will be affected. The dealer has to make tough decisions, or time will make them, and the dealer will not like decisions made by time.

By the time the lender has the second meeting, mentioned above, in which the lender wants the merchant to sign the resolution agreement, the merchant should be prepared to structure the resolution plan, the handling of a gatekeeper, the method refund and such.

As soon as you know it is OT, your first call should be to us (or someone as experienced as us) and your second call (after visiting us, your attorney and accountant) should be to the credit company. Telling the credit company that you have sold and unpaid units before they tell you is vital in establishing a foundation on which to build a work plan. At the same time, Automotive Advisors expertise is vital to the dealership and the dealership’s attorney and accountant, providing constructive suggestions and planning and recognizing realistic options.