LAS VEGAS — More than 1,800 dealers, attendees and vendors registered for the National Alliance of Buy-Here, Pay-Here Dealers conference recently hosted in Las Vegas. More than 100 exhibiting sponsors filled the hall, meaning the event set new records, according to Ken Shilson, founder of the group and Subprime Analytics.

The conference covered a variety of topics, including legal issues, bankruptcy tips, IRS developments, starter-interrupt devices, dealer management systems, maximizing recoveries, used-vehicle trends and much more.

Tom Hudson and Emily Beck were on hand to present their "12-Step Practical Compliance Program."

One of the biggest suggestions these two prominent attorneys offered dealer attendees was to ensure stores have a written compliance program. Separating this guideline from the employee handbook is a good idea in case a dealer ever gets into a situation where he needs to hand the compliance program over to attorneys or a court to prove processes were in place to avoid missteps, the attorneys highlighted.

"Every dealership should have a written policy you can follow and train on," Hudson noted.

Another key point the attorneys made is for stores to appoint a privacy officer who can cover the dual role of compliance officer. For larger stores, this person may need the assistance of a committee, while for smaller stores, this person may also serve in another capacity, Hudson and Beck explained.

Additionally, the attorneys said these officers should have a budget allotted to them so they can actually get work done, including reading all available F&I material and receiving certification. This person should also stay tuned in to the state attorney general's Web site so she is aware of what currently tops the AG's hit list when it comes to dealerships.

Another tip offered by the attorneys to ensure that compliance guidelines are being followed is to consider hiring mystery shoppers to test sales associates and the F&I office practices.

Including an arbitration agreement in all contracts is another good idea, Hudson and Beck explained to attendees. This has the potential to help avoid lawsuits and make customers settle via arbitration. However, in some areas, such as Washington, D.C., attorneys have caught on to this practice and are happy to fight via arbitration proceedings, the experts said.

During the presentation titled, "Understanding the Current BHPH Marketplace," Tom Webb, Manheim's chief economist; Shilson and Ron Smith, publisher of SubPrime Auto Finance News and Auto Remarketing NewsMagazine, all discussed various aspects of the business.

Kicking off this presentation was Webb, who said one of the most common things he hears from dealers is, "My biggest difficulty is finding inventory, not customers."

"They don't mean it's difficult to find inventory, but that it's difficult to find inventory that meets their criteria for the price they want to pay," he explained.

According to Webb, dealers are paying more money for higher mileage units than they were several years ago. What fell into the $3,000 to $4,000 tier in 2004 is now in a more expensive tier, he pointed out.

"Yes, older, reliable vehicles are becoming more expensive," he said. "Auction volumes have either remained flat or increased slightly. Also, many of the potential supply of vehicles are still in operation (as the average vehicle on the road gets older and older).

"There are also a lot more people involved in the BHPH business. More franchised dealers are getting into the business," he reported. "We had more than 100,000 unique buyers at Manheim auctions last year, and of those, 62 percent bought at least one vehicle in the $1,000 to $5,000 range."

He also noted that delinquencies in the BHPH market have increased a bit of late; however, since the market is liquid, he doesn't see this rise impacting it.

Shilson went next, providing Subprime Analytics' most recent benchmark statistics. To review the statistics, see the Early June edition of SubPrime Auto Finance News.

As for Smith, he stressed how hard BHPH dealers are working in today's society in order to make a profit. He also noted the importance of community involvement, such as spending both time and money to support various charities.

"Look at your dealership as to how the public might see it, and make improvements where needed," he said. "Treat people with respect. Also, respect yourself or no one else can respect you."

In a panel presentation, several BHPH dealers and an executive from a finance company that specializes in working with dealers in the marketplace gathered together to share best practices and tips for success.

The panel consisted of Vince Cogliano, First 1 Financial, based in Norwell, Mass.; Time Ehde, of Car Hop, in Edina, Minn.; Lawrence Meade, of Easton Motors, in Adams, Wis.; Bob Giles, of Giles Automotive, based in Lafayette, La.; Melanie Jones, of James Wood Motors, in Decatur, Texas; and Brian Lee, of White Mountain Auto, based in Whitefield, N.H.

According to Ehde, his best decision was to manage the business based on cash flow, while his worst decision was to stop training associates consistently.

As for Meade, his best decision was joining a 20 Group, while his worst was hiring an accounting firm that couldn't handle the business.

Meanwhile, Giles pointed out that his business concept is a bit different. Instead of doing BHPH, his company specializes in lease-here, pay-here. He said his group converted to the LHPH model in 2001, and it was the best decision he ever made. Since his group also has new-car stores, these dealerships chip in to help finance the subprime lot.

Instead of going to auctions, Jones noted that James Wood Motors prefers to rely on purchasing used vehicles from franchised stores for inventory.

Lee, who represented the smallest business in the group, based on sales and capital, said if his store needs money, he simply slows down the operation.

"I don't believe in borrowing money," he said. "My best decision was coming to conferences and joining a 20 Group, although it took me a while to find one that would accept me."

Cogliano, who represented First 1 Financial, said his business has about one collector per 500 accounts. He pointed out that his company's best decision was to hire a person dedicated to going out and signing dealers.

First 1 Financial's worst decision was reaching out to dealers in Kentucky, according to Cogliano. The business is based in Massachusetts, and for some reason, his company's collectors had a difficult time collecting money from customers in Kentucky, he explained.

The conference was a mecca for dealers both small and large, as well as lenders and other product representatives, who all converged on Las Vegas to share knowledge, network and enjoy Sin City.

Editor's Note: For an in-depth look at advice and the knowledge of various BHPH industry experts, please stay tuned to SubPrime Auto Finance News.