Breaking Into Motorcoach: Vehicle Trends, Financing, and More with Eric Coolbaugh

Episode Transcript
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Ken Lucci (00:23):
Hey, good afternoon and welcome to another exciting
episode of the GroundTransportation Podcast with my
co-host, James Blaine from Pax.
Say Hello,

James Blain (00:33):
Hey there everybody.
How are you?

Ken Lucci (00:35):
and Eric Coolbaugh from Advantage Remarketing is
our, uh, guest on this episode.
But before we, we get into, uh,talking about advantage
remarketing, I just want to sayflat out, this is the only place
in the chauffeur transportationindustry that you can go for
continuous education everysingle week.

(00:57):
if you listen to the podcast,you'll pick up more tips in one
hour on this podcast than youwill, and for no money.
You don't have to travelanywhere.
You don't have to get a hotelroom, you don't have to buy a
conference ticket.
So, uh, really, really happy tosay we have had.
Over 70,000 views of our shorts.

(01:19):
And, um, we have had 5,000downloads or 5,000 plays of the
podcast.
So we're very, very happy to be,uh, continually providing
education at no cost for thechauffeur, transportation and
motor coach industry.
uh, now I'm happy to introduce avery close friend of mine, uh,
Eric Augh Advantage Remarketing.

(01:42):
Um, and Eric is, uh, I have totell the story of how we met.
I was doing strategic consultingfor a client in, uh, I think
2017, where this big guy walksthrough the door larger than
life and introduces himself tome, and we've been best friends
ever since.
So, Eric, really, uh, thank youfor coming on the podcast and
really appreciate you, uh,joining us today.

Eric_Coolbaugh (02:05):
So it's my pleasure, Ken.
Thanks for having me.
And I can't believe 70,000.
What

Ken Lucci (02:10):
70,000 downloads or views of our shorts, of our,
our, our, our Facebook, uh,short videos.

And, and there you go.
Let's clarify that.
We don't mean like our literalshorts, right?
Like the ones we're wearing, wemean like shorts on YouTube and
whatnot.
For the younger generation,

Ken Lucci (02:25):
Correct?

you know Ken Lucci, he doesn't wear shorts.

Ken Lucci (02:29):
No,

had to go there.
Had to go there.

Ken Lucci (02:31):
I rarely wear shorts

I've, I've went to a sauna with him.
Trust me.
It's,

Oh.

it's interesting.
But anyway, tha thanks Ken.
I appreciate you having me.
Um, congratulations for all yoursuccess.
I understand this, you know, alot of different m and a stuff
you've been doing since I spoketo you last time.
So kudos to you, man.
You do a great job.
You become the nationallyrecognized speaker for the limo
and livery community in a veryshort period of time.

(02:59):
So good stuff.

Ken Lucci (03:01):
I'm, I might be overplayed, Eric, a little bit
overplayed.
So, um, we just hope we addvalue.
That's all we do.
Every single week we employ a,uh, producer to do this podcast.
We took him off the street and,um, we, uh, gave him a good
home.
And we, we, you know, we spend alot of money every single week
to support the industry and we,we, we hope people appreciate

(03:23):
it.
And that's why we brought you onbecause you've got a kind of,
uh, extremely longstanding, uh,relationship with both the Motor
Coach and Charet space.
Why don't you tell us a littlebit about how you started, uh,
and where you started in theindustry?

Sure.
And I love how you eloquentlycall me old.
By utilizing a lot more words.
Um, but yeah.
Thank you.
Um, so anyway, I've been in thefunding side of the livery
industry.
It's all I've ever done since Iwas a kid.
Started when I was 20, and thatwas 38 years ago.
As an independent sales rep fora consumer financing department,

(03:58):
um, was relatively unsuccessfuluntil I found transportation.
I remember doing an El Doradomini bus, uh, and I thought it
was an El Dorado sedan.
Uh, so when I sent the deal inand, and contracted it and
finally got my commissionstructure, which was five times
the amount of any of my othercar deals, I questioned why,

(04:18):
what is an El Dorado mini bus?
And there I was born into thetransportation field.
So, um, understanding that andthat it was a, uh, a need and
not a want.
I was very, uh, integral inrolling out the transportation
division for that point in time.
I even forgot what the company'sname was.
But we started thetransportation, uh, funding
division for that company.

(04:40):
And quickly, I, I found that,you know, I like this business.
Uh, I've always loved motorcoaches.
I've always loved limousines.
I've always loved thetransportation space.
'cause it always exists, right?
It's not going away.
Good times, bad times, goodeconomies, bad time.
People have to move.
so I, I quickly figured out thatwe can start our own, um,

(05:01):
leasing company, which I didwith two partners, ed Kay and
Michael Kaplan.
Both still friends of mine.
Uh, and we rolled out Advantagefunding back in 1994.
Uh, and we were specific tosedans, SUVs, you know,
limousines, uh, mini buses,executive shuttles and motor
coaches for the transportation,uh, companies.
Um, we ran that, uh, independentleasing company to about$80

(05:25):
million and on a, yeah, on a, ona Friday.
Well, at that, that point intime, it was large for
independence, uh, because weweren't bank owned.
We were, you know, a separateleasing company.
But we were approached, believeit or not, on a Friday
afternoon.
And I know Kenny doesn't likewhen I day drink, but sometimes
back then we did.
Uh, so just imagine.

Ken Lucci (05:45):
I I, I just know when I get the calls when you're day
drinking, it's very interesting.

But, but it's Friday afternoon, so we're,
we're on that line.
Right.
It's, it's weekend ish.

Yeah.
Yes.

Ken Lucci (05:55):
set the stage.
You,

Uh,

Ken Lucci (05:57):
uh, you, you, you've had your second or third, and
then what happened?

You know, I, I'm not gonna count drinks, right?
'cause I don't want to bejudged.
So all I can tell you is a, agirl named Yuki shows up at the
reception desk and proceeds totell my receptionist that she's
there from a large Japanese, uh,multi-billion dollar
conglomerate and they're lookingto buy the company.

Wow,

So Michael Kaplan, my partner, gets the
call and Michael, there's a girlnamed Yuki here, and he says,
ah, send it to Eric.
So I get the call from thereceptionist and she says the
same thing to me, and I said,send it to Ed.
Ed was the only person thatspoke to Ms.
Yuki on that Friday afternoon atabout three o'clock and 16
months later, uh, they hadpurchased 80% of Advantage, uh,

(06:43):
funding, and we retained 20%full leadership.
And now we had theinfrastructure of a
multi-billion dollar Japaneseconglomerate

Ken Lucci (06:52):
What year was this?

this was 1996.

Ken Lucci (06:56):
Oh,

Wow.
And how does that change thebusiness, right?
I mean, how does that change dayto day for you guys?

Well, just think about it.
I, I was, at that point in time,Michael, ed and myself had to
personally guarantee every loanwe under oath, right?
So if the primary, uh, obligordoesn't pay, guess what Ed

on you.

we do.
So this stopped all that, right?
We started funding through theirfunding transactions, which gave
us a much lower cost of funds, amuch higher, uh, amount that we
can lend to the street at muchbetter rates.
so it just basically changed ourentire organization.
Uh, but what was reallyinteresting is they let us

(07:35):
continue to keep fullleadership.
So we had the pen, um, weapproved the deals, we
structured the transactions, andthen we grew that portfolio to
about a half billion dollars.
Over the course of the nextYeah, uh, several years.
And 2014, uh, we were bought outat that point in time, they
approached us and what I learnedis, uh, that when a, you know,

(07:58):
50 50 partnership wants todivide, you know, you have a
conversation when an 80%, 20%multi-billion dollar Japanese,
uh, person says, you wanna bebought out.
You get bought out.
so one door opens another door,you know, one door closes,
another door opens.
So at that point in time we weresort of restricted from the
transportation lending space.
So we said, well, our customersalso need a whole bunch of

(08:19):
equipment financing, right?
Lifts, business essentialequipment, whatever.
And we started their nextcompany called Access Commercial
Capital, and that was 2015.
Took about a year off, um, thatcompany.
We were exclusive to, you know,different types of non
transportation assets, but withthe same customer base.
So we kept in front of them.
Um, and thankfully we havethousands of great relationships

(08:42):
over the course of the last 30years.
Um, yeah, and we rolled that, werolled that company into 2017
where we were approached byanother, uh, independent leasing
company out of Indiana, whichbought a hundred percent of that
company and wanted us to rollout the transportation division
for it.
So.

(09:03):
We started, we started to dovery, very well.
And then, uh, 2019 comes in andwe get the Covid pandemic and we
get shut down in, what was that?
March of 2020.

March, 2020.

Ken Lucci (09:16):
2020.
Yep.

So remember it well, um, you know, a
completely, completely, youknow, devastating thing for not
only our country and the world,but the transportation industry.
Just imagine, I mean, you, youguys lived it, right?
So overnight everytransportation provider in the
United States was told You can'tmove anybody.

Oh yeah.
It, I mean, it was just, Iremember being at the show in
Vegas, talking to a friend ofmine saying, you'd just gotten
back from Japan, right.
Lines down the street to buymasks.
It'll never happen here.
Literally, the next month, itground to a standstill and it
just all went downhill fromthere.
So you're, you're not joking.
I mean, it was overnight.

Ken Lucci (09:54):
So they closed you completely.

No, no.
You talking about the, the, uh,access commercial capital.

Yeah.

Ken Lucci (10:00):
Yeah.
What happened?
What happened to that?
Now you, you, I'm confusedbecause we started working
together in the middle of thepandemic.

Right.
So Access Commercial Capital,where, where I was working at
that point in time, before Istarted Advantage remarketing,
uh, I was working for them andthey furloughed me, which I, I
never understood that wordfurloughed.
It sounded a lot like fired, butno, they made it sound better.

They just kept the f

so again, another door closes, one door
open.
So that negated my non-competefor transportation lending, um,
which was, you know, which was,I was actually kind of happy
because I've, I've really onlyexisted in this, you know,
world, uh, through independentownership.
I, I'm not a good employee, Iguess is the answer to that

(10:48):
question.
So anyway, when, when we gotfurloughed, I had a lot of time
on my hands again, you know, so,um, we were told, um, I guess it
was about probably six months.
They furloughed me, and it wasabout six months where I had a
chance to just sit down andthink about what I wanted to do
next.
And the same breath I wasgetting call after call after

(11:09):
call from different banks acrossthe United States saying, Eric,
we're in big trouble.
What are we gonna do with allthese repossessions?
Um, and I said, look, you know,we, we have relationships that
span decades.
Um, I have no problem, you know,opening up a facility, which we
did a five and a half, half acrefacility in Pasadena, Maryland,

(11:30):
uh, with my partner mert.
And we began taking onrepossessed vehicles from banks,
um, safely, you know, harboringthem and then gently
refurbishing them and thenwaiting till we could resell
them.
And that actually came quickerthan I thought it would.
Right.
We, we didn't know what, wherewe were going at that point in
time, but we started gettingcalls from different operators

(11:51):
saying, Eric, I.
I have to downsize, you know, 15executive shuttle buses At the
same time, I was getting callsfrom people that were, had
contract work that needed toincrease their, their, uh,
units.
So it was really a, a win-win,right?
We were able to put two and twotogether, buying units for our
inventory and also consigningunits for different parties

(12:12):
across the United States thathad needs.
So that's the way Advantageremarketing was born

so you really are the connector at that point,
right?
You've got all these connectionsyou've built up, and because of
all of these connections,because of all these
relationships, it's tyingeverything together through you.

correct?

Yeah.

Ken Lucci (12:30):
Now, at that point you did not have the lending
division, or you didn't havebanks that were willing to
finance, or you did.
Did you

I did not,

Ken Lucci (12:38):
a couple of None

I, I started basically, uh, you know, with
the strategy of, of becoming astorage yard for, for
repossessions, I.
Uh, I hired shop people.
I hired mechanics and, and bodyand paint people knowing that we
would need refurbishment.
And then my strategy was to sellthese, you know, whenever the
market started to come backinto, uh, into life.

So what does that look like in terms of the
industries that you wereconnecting?
Right.
I mean, obviously we've gotpeople that listening to this
are in NEMT, they're in MotorCoach, they're in, you know,
chauffeur, they're in Taxi.
We have all of these differentindustries.
Were you spanning all of thosedifferent verticals, or was
there a certain one that kind ofstood out or that you guys were
focused on?

It was primarily li uh, chauffeur, chauffeur,
transportation.
So anywhere from sedans, SUVs,limousines, stretch SUVs, limo
buses, executive shuttles, andmy specialty is motor coach.

Ken Lucci (13:32):
So flash forward from the time that you started in the
middle of the pandemic, how hasthe business evolved, um,
compared to what you originallywere thinking you were gonna be
doing?

Yeah, it's interesting because Ken, you
designed our business plan, as Isaid, um, which, which by the
way, you know, if, if anybodyneeds any type of strategic
advice in any facet of, of thetransportation space, he's good.
And, and I'm not blowingsunshine up your butt, Kenny.
And he doesn't,

Ken Lucci (14:02):
overplayed.
E Eric, I'm overplayed.
I'm, I'm too visible.
I'm overplayed.
I'm sorry.
Keep going.

and Ken is the only person that lets me call
him Kenny.
Nobody else.

Ken Lucci (14:11):
is true.
This is true.
No question about it.
So Yeah.
So when did your, when didAdvantage remarketing morph into
more of a, when did you startreselling with, with vigor in
2021 or when did you pick backup?

You know, I, I would say that 2020 was a
formative year.
2021, uh, is when we really gotto work.
Uh, and to your, uh, to answeryour question that you gave me
before about the banking, um,you know, I have a lot of
friends in the industry, uh,that all are transportation, you
know, professionals and all do agreat job.
And we were able to cobbletogether, you know, what we

(14:53):
currently have, which is a, youknow, seven bank, portfolio of
transportation lenders that alldo a great job.
So, um, you know, when westarted to buy and sell
equipment nationally, the firstthing that people would ask is
funding.
Because at that point in time,the banks were extremely,
extremely tight with regard towho they would lend to and how

(15:14):
much.
Um, so again, cobbling togetherpeople that I knew, I.
Um, was very beneficial for themas well.
You know, right now we could doapp only to about a million
bucks, which is an applicationin three months.
Bank statements where any otherbanking institution's gonna ask
you for at least three yearsworth of financials and all
kinds of stuff.

Right.

Ken Lucci (15:32):
take all kinds of time doing it and, you know,
keep going back.
It's like death by a thousandstabs when you try to go to a
traditional bank, unless you'vegot your stuff together well in
advance.

Right

Ken Lucci (15:43):
What's your turnaround time?
If I say, you know, I love thatmotor coach.
Um, here's my 20%, here's my 10,whatever it is, what's your
turnaround from, you know,application to completion of
transaction?

a week.

Wow.
Now,

4, 24 to 48 hours on approval, uh, contracts
are sent digitally and thenfunding occurs, you know, 48
hours afterwards.
So we've literally turned dealsin three days.

Ken Lucci (16:11):
that's incredible.
So how many gi, on any givenday, how many vehicles are
sitting on the ladder?
How many do you have for sale onthe website?

So inventory pieces, 30 to the 50.
Um, we always have a largeassortment also of, of LA West
Sprinters, uh, available, youknow, being built monthly at the
shop.
Um, and then I'd say another 20or 30 consignment units at any
point in time.
You know, we're being contacted,you know, daily with requests to
consign.

(16:39):
Um, some of it's difficult, youknow, it, it's just, uh, you
know, people believe in us, theybelieve in the product that we
turn out of our garages, butwhen I deal with the
consignment, I'm sometimesdealing with people that I don't
know.
So, although we do our best toinvestigate that product, we're
doing it digitally.
It's not on site.
So

Ken Lucci (16:58):
your own fleet versus consignment roughly.

50 50.

Ken Lucci (17:03):
Interesting.
Interesting.
So at any given time, you've got50 to 75 units available.

Yeah,

Ken Lucci (17:10):
What is the most from, what's the easiest vehicle
to turn if you get a usedvehicle in assuming it's in
great shape?
What's the easiest vehicle toturn?
The fastest vehicle

right now, late model motor coaches, uh, or any
type of late model executiveshuttle or something with, you
know, in decent condition withlow mileage, you know, I'm not
sure what the, the tariffs aregonna do.
You know, I've heard all kindsof different things.
Um, but, you know, people are,are definitely concerned that
that$650,000 motor coach, whichif you asked me 30 years ago,

(17:47):
would a coach ever become a600,000?
I would've said no.
Um, but if that 600,000 motorcoach becomes a 800,000 motor
coach, I don't see it.
I just don't see it as a viableasset.

I was about to say, he's, he's kind of hit on where
I was gonna go and, and that wasthat we are hearing time and
time again that right now theconcern is, is not even abound.
That it's also, well, if I haveall these 600,000 motor co
dollars motor coaches that turninto 800,000 motor coaches,
what's it gonna do to my partsand my maintenance cost?

(18:21):
And is it gonna be viable to tryand run them?
And what does that look like?
Thankfully, we haven't ran intothat, but it sounds like you're
seeing a surge in that area aspeople get ready for that.

Yeah, and you know, again, there's just, it's,
it's all about inventory.
It's all about knowing where theassets are.
You know, a lot of people don't,uh, we thankfully do

Ken Lucci (18:41):
So when I'm looking for a used motor coach, what
should I be looking for?

something that runs good.

Ken Lucci (18:48):
But what if I am, assume that I'm a novice in the
motor code space?
A lot of chauffeur operators aretrying to make the connection.
They're trying to make theconversion over to do motor
coach.
What should I be looking for?
Would you say, if I'm justgetting into the motor code
space, buy buy new because youdon't know enough about the
maintenance?
Or do you think it's safe to buya good quality used coach?

Unquestionably, you just have to know your
network, right?
You, you know, you're gonna needcertain maintenance,
preventative, and certain thingsto fix, so you have to know who
you're going to, right?
If you're in the middle ofnowhere with no access to a
Cummins and or Detroit, youknow, diesel engine, uh, repair
shop, and you have pretty muchnobody that understands motor
coaches need you, I wouldsuggest that you think really

(19:35):
hard about that because you knowyou're gonna have issues and you
gotta have the ability to getthem fixed.
Uh, as far as the new side, I.
You know, I don't know.
I, I, I, I really cautionpeople, I understand you get a
warranty and whatever, but theseare very expensive items.
They're not like limousines,they're not like, you know,
Freightliner of cutaways.
These are, you know, operatingequipment that has a thousand

(19:59):
different operating, you know,components on it.
So you really need to be, youknow, sophisticated and have
work for these things to keepthem running.
to your point, um, I have noproblem.
I sell used motor coaches everyday.
Um, and I'm, when I say used,you know, they're not lightly
used.
I, I've sold 2010, 2012, 2008,you know, up to 2020 threes.

(20:22):
Um, and they all, you know, justhad the same kind of thing.
We go through the coaches, wemake sure that the asset, when
you get it, is going to be DOTready and running and all the
operating systems working.
But after the delivery, we don'tknow what we don't know.

Ken Lucci (20:36):
So what would you say has changed the most since you
have gone from financingequipment?
You knew what the asset, um, thecategories look like, you knew
what the trends were.
What's the biggest change thatyou've seen in your time in the
industry as far as vehicle, um,you know, vehicle trends?

You know, there used to be motor coach companies
and then there were li limousineand chauffeur

Yep.

Um, they really didn't cross into each other's
space, you know, so, you know, Iguess it was what, 15, 18 years
ago?
I mean, E four fifties were thego-to mini buses.
E three fifties, you know,passenger counts, maybe 32.
Uh, you know, and then we sawthat trend towards the freight
line of cutaways and the largercapacity, you know, thirties and

(21:27):
40, uh, passenger.
Um, but you know, we, we didn'tsee the, the limousine operators
entering the motor code space,which is.
Completely the opposite ofwhat's happening now.
Um, you know, coach companies,you know, it was, it was a nine
to five business.
You call them after five o'clockand that's it.
They're closed weekends, I'mclosed.

(21:47):
You know, the chauffeurtransportation came in there and
they're utilizing theirchauffeur, you know, their way
of doing business, seven days aweek, 24 hours a day to the
larger coaches.
So that's been a, a bigtransition and it's worked out
very, very well.
I think the limousine guys aredoing a great job with the motor
coaches.

I, I think we see a lot of that blurring in the line
going both ways, right.
I'm one of, I'm, I'm luckyenough to sit in a, a bunch of
different verticals and one ofthe things that we've seen to
your point was probably about 10years ago, this shift of.
Starting to see guys movetowards motor coaches and now
we've seen motor coach guys noware starting to run black car

(22:25):
fleets.
And so I think that blurring ofthe line is only gonna get
blurrier.
And it looks like what we'reseeing is they're taking the
best of the motor coach world,the best of CHA services world.
You know, we're starting to seeNEMT Tech, we're starting to see
all these different fleets kindof blur.
What does that do from thestandpoint of purchasing
equipment, from dealing withthese banks, from doing those

(22:47):
types of things?
Are they gonna view that anydifferently?
If I'm a mixed fleet companythan purely a motor coach
company, is that gonna changethe game for me at all when I
come to you to purchase a newvehicle?

You are gonna get asked questions.
Right, which you should have thedirect answer to because why
would you be aqui acquiring theequipment in the first place?
But, but no, I, I see.
No, I mean, on the banking side,we're looking for credit.
We're looking for revenue, we'relooking for comp borrowing,
right?
So if, if you're buying a motorcoach and you happen to be in an
EMT, uh, you're gonna be asked aquestion, whatcha gonna be

(23:20):
utilizing the motor coach for,but you can certain, you can
certainly explain, you know,what you're doing.
I have a contract with ahospital that requires, you
know, 56 passenger motorcoaches.
And then you should understand,you know, what the compliance
rules are and how are you goingto, you know, perform your
preventative maintenance becausethese are larger pieces of
equipment.
But at the same time, I, I likethe diversification.

Yeah.

Ken Lucci (23:43):
W Well, it definitely, when we saw the
business fall off, either duringthe financial crisis or during
Covid, it helped to be fullydiversified.
Right?
As

Right.

Ken Lucci (23:54):
were making a profit and all the segments you were
in.
If I, what advice do you havefor an operator who's coming up
and they want to get the bestdeals on buying equipment,
meaning the best financingdeals?
What should they be prepared tobring to the table besides three

(24:15):
bank statements?

That's really it.
I mean, you know, I'm gonna askyou questions about utilization
and you know, how you pricingand so on and so forth, just to
be an advocate for you, right?
Because if you're under pricingor you, you, you, you're
thinking the revenue numbersshould be a different amount, we
should talk about this, right?
And maybe that that'll skew yourdecision to enter into that
marketplace.

(24:36):
Other than that, on the creditside, it's an application in
three months, bank statements,and that's it.

Ken Lucci (24:41):
How do you deal with people that, how do you deal
with people with credit problemsthat, is it still an issue if
you had to turn in equipmentduring the pandemic, or maybe
your credit was not perfectprior to the pandemic?
How do you deal with that?
How do you deal with people thatmaybe a little bit of challenge
in their history?

We'd sit, we'd talk and we, you know, try to
make sense of what happened.
Everyone knows what happenedduring the pandemic, right?
Everyone was sort of like lefton their own, um, to do, to
survive, you know?
So, uh, we did haverepossessions, we had bank
workouts, we had all kinds ofthings deferrals.
Um, but if, if, if credit ischallenged and there's a reason

(25:21):
behind it, you build a story andthen you also layer in the
strength of the company as itexists today.

Ken Lucci (25:27):
That's a good point.
So if you get something in yourbackground, the, the worst thing
you want to do is hide it.
Right?
So you want to come clean as towhy you had to do it, what the
circumstances was.
You know, it was a pandemic.
Everybody was going through it.
I lost the contract.
I, you know, I got caughtwithout enough capital to cover,
I lost a contract completely.
But then it's building theopportunity story.

(25:49):
How mu how important is, youknow, is the business plan or
how important is the, the, thegood quality of how the business
is going compared to, you know,the past problems that the
people may have had.

Yeah, and it's very important that owner
operators understand theircompany and where they're going,
right?
We, we, you know, you can't justsay, Hey, listen, I had some
credit problems.
You know, it is what it is.

And you're drawing a really interesting parallel
because Ken, you and I have hadguests on here talking about
insurance.
We've talked about safetyprograms and what happens when
it's time for renewal on yourinsurance.
You have to paint the picture ofyour company.
You have to tell the story.
You have to help them understandwhat's going on.
And it's a really interestingparallel here because you kind
of have that same thing.
You've gotta paint Exactly.

(26:36):
You're doing the same thing in adifferent part of the business.
You're painting that financialpicture.
You're saying, Hey, we might'vehad some missteps here.
There might've been some issuesthere, but let me walk you
through what happened.
Let me show you the financialstability.
Now you walk you through wherewe're at now, and so this is
kind of a recurring theme thatwe've seen come up over and
over.
Let me ask you, and this isreally important, Eric.

(26:56):
How much of a difference doestheir ability to tell that story
or to paint that picture make?
Is this, I mean, this is thedifference between getting the
asset and not getting the assetright.

A hundred percent or getting the asset
with, you know, a huge downpayment, right.
Which secures the bank and, and,you know, pays for that risk
factor.
Right?
But again, I, I just don't thinkit's prudent.
I think understanding andexplaining your situation past
and present and future makes,you know, so much sense.
And, and to that point, there'sother things, metrics that banks

(27:27):
look at, right?
Not only is it personal credit,it's pay net, right?
Which is a commercial, um, youknow, a commercial score of your
commercial debt and how you payit.
Uh, but you know, I've, I'veseen people that have had
short-term problems, which ledto delinquency.
And I, I try to explain to tothem that that payment score
affects your buy rate by such alarge amount that, you know, do

(27:51):
whatever you can to avoid thosesloppy payments.
Because it, it's gonna just likeinsurance, right?

now now tell us a little bit more about that.
What, when, when you say paintit for, for those of us, I mean,

Ken Lucci (28:01):
to pay net?

yeah.
What is it?
Where does that come from?
I mean, is this like a creditscore?
What?
What is

Yeah.
Yeah.
So it's, it's, it's basicallythe commercial version of an
Experian or a TRW personalscore, uh, any bank that reports
to the PayNet.
Right.
If I, if I deal with, let's saya Sentium Capital or Balboa or
one of the larger banks, theyall report to a system called
PayNet, which reflects theirloan and how you pay it to them.

so it's your business's credit score.
Basically if, if you don't payon time, instead of reporting it
to Experian or your creditbureau personally, pay net is
basically that placeholder inthe commercial side.

Correct.
And everybody that reports toPayNet gets access to PayNet.

Okay.

Ken Lucci (28:42):
so it's like a club, right?

Yeah.

Ken Lucci (28:44):
bank is, is putting their loan information in and
keeping it updated, you get to,you get the pool information,
you get the information on thosecompanies.

Yep.

Ken Lucci (28:55):
what about DB?
How important is like a DBscore?

Oh, great question.

Yeah, it's, to me, it's, it's self-reporting
for the most part.
So I, I don't trust the data andit really doesn't do anything
for me to make a financialdecision on somebody.

what else are they looking at then?
I mean, obviously pay net soundslike their way to keep, you
know, I, I'm gonna report it inhere so I don't get burned.
You report it in there so youdon't get burned and then we
watch out for each other.
What are the other major factorsyou're looking at?

time in business

Okay,

revenue, through your banking statements and
retention and personal credit,

Are they expecting personal guarantees In many
cases then?

almost all.

Okay.

Ken Lucci (29:36):
Okay, so when did, when do you get, when do you get
off the personal credit thing?
When do, in your mind, know, weall had to do it.
I had to do it.

Yeah.

Ken Lucci (29:45):
and every business I've been in, for some reason
has been perceived as a riskybusiness for some reason.
Right.
The home security business, thephysical security business, the
boutique hotel business, thechauffeur business, they're all
risky for some reason.
And I

I, I heard podcasting was just upgraded to
risky as well.
They, they did that last

Ken Lucci (30:03):
is really risky.
But is this it?
Is this even a business?
This is not a

No, no.
This is something we do onFridays for fun.

Ken Lucci (30:11):
Exactly.
So when as a business owner, Ilook forward to, is this
transportation company saying,whew, don't need to do personal
guarantees anymore.

yeah.
So you, you've establishedyourself, right?
You went through those years andit's typically the first five
that you've personallyguaranteed everything you did.
Um, you've borrowed money,you've paid that money back
successfully pay nets.
Reflecting that, your personalcredits reflecting that your
financial statements arereflecting growth and, and good
margins and

Ken Lucci (30:42):
what?
What did you say?
Financial statements.
What?

what showing growth in good.

Ken Lucci (30:46):
statement?
No, no, no.
You said what is the financialstatement?
Explain it to the audienceplease.
I'm being facetious.
Sorry

Oh, I,

Ken Lucci (30:52):
a prick today.
I apologize.

I was gonna say financial statement is a napkin
and a pen.
Will you write

Ah.

you made?

For those of you that are looking to grow past
that, my wonderful cohost KenLucci, as a course, he can teach
you how to grow beyond thenapkin,

Ken Lucci (31:07):
A hundred percent.
You know what?
Wait.
Whoa, whoa.

but

Ken Lucci (31:10):
title right there.
Wait a minute.
Grow Your financial Statements.
Belong the Be

beyond the napkin

Ken Lucci (31:16):
Napkin.
So financial statements make adifference.
I'm happy to hear you say that.

do, are you getting guys that come in on the napkin
though, that are just off thecuff?
Is that something that you dealwith often?

Oh, I've been doing this for a long time, so
Yeah.
Yeah.
I, I've had, you know, peoplecome to me with million dollar
requests and, you know, hadn'tfiled for two years, and I say,
you know, I don't knowunderstand that at all, but do
you have some sort of internal pand l and balance sheet?
What's, what's that?
Um, so, yeah.
You know, and I get it, youknow, they're running small
businesses and they're busy andthey're driving and so on and so

(31:48):
forth.
It's time consuming, but at, onthe same breath, I try to get
involved with them and explainto them that, look, if you are
operating this company and youdon't know per asset that you
have and per month what you'remaking, you are really just, you
know,

You're guessing.

Ken Lucci (32:03):
Yeah, it's totally by the seat of your pants, and then
they get into trouble.
How often do you run intooperators who have or behind on
their taxes or behind on filingtheir taxes?

You know, I, I would love to say it was a lot,
but it's probably 20% of thetime, you know, somebody has,
you know, something like that.
It's, it's really not themajority.
And I'll tell you over thecourse of the last 10 years, and
certainly since the pandemic'sshut down, I found that, that,
that operators are becoming moresophisticated with regard to
their knowledge, although westill have a lot of operators
that are small.

So what, what would you say are, if you had to pick
the top three or top five?
The top three are top fivethings that people come to you
that they could have fixed, theycould have gotten right, but
it's holding them back fromgetting the asset they want or
need.
What would those top five be?

Ken Lucci (32:52):
Or it's making them pay a much higher

Yeah, absolutely.

Ken Lucci (32:57):
get the assets.
So what are the top five thingsthat if I

I,

Ken Lucci (33:01):
to be a, a fast borrower at the best interest
rates, what should I focus on?

Well, o obviously you can't change time
in business, right?
But time in business definitelyhelps you, uh, having, having
your checking statements withmoney in them, right?
You know, the last thing abanker wants to see is$32 in the
beginning, a hundred thousanddollars going in and out, and
then$32 in, in the end, youknow, with NSFs and what have
you.
It just shows that there's somesort of cash

having that cushion there is important then

It's very important.
It's very important.
And again, retention shows thatyou, you're not strapped, right?
For cash flow.
You have the availability of,you know, free cash flow.

What do they, what do they wanna see there, right?
If I've got, if I've got ahundred thousand dollars that is
flowing through that account, isthat 10%?
Is that, what type of cushionare they expecting to see there?

If you're running low six figures to the
account, you should at leasthave moderate five figures in

Okay.
That makes sense.

Ken Lucci (33:57):
I'm, you know, at the end of the day, the business, if
you are doing a hundred thousanda month, 1,000,002 a year, a
million million two a year, andyou begin the year, you end the
year with money or the samemoney that you had at the
beginning, it's a problem.

Yeah.

Ken Lucci (34:13):
Right?
So what he's saying is, youknow, the, the savings account,
the, the liquid capital, thathelps his story, that helps the
story that, you know, I did, Idid a hundred grand last three
months, and guess what?
I have$60,000 left in the bank.
It makes a lot of sense.

And then concentration, right?
Nobody wants to, you know, if welook at the pay net and the, and
the business is to Ken's point a$1.2 million business, but you
have$1.9 million in relativelynew motor coach loans, any bank
is going to become veryconcerned that you're, you have
too much debt.

Right.
Well, and that come, that's thesame as your personal life,
right?
You know, obviously you, you go,you wanna buy a car, you wanna
buy a house, they're gonna lookat your debt to income ratio.
So it sounds like they're doingthe exact same type of math
there on your business.

They are.

Ken Lucci (35:07):
Yeah.
And, and I mean we, the banksthat we deal with when we do,
um, when we do financial reviewson companies, they want to see
it less than a 0.4, actuallyless than a 0.3 long-term debt
to your, your annual income,they

No.

Ken Lucci (35:22):
up to a 0.4.
Interesting.
Before the pandemic, we, we wereworking with banks, they would
say 0.45.
So for a million dollar companyyou could have 450,000 in debt.
But the other piece of that isnot Eric, that's not a hard,
fast rule.
Meaning that if you can say,listen, I bought these two motor
coaches because I've got a brandnew contract and you can see the

(35:42):
revenue coming in, but now Ineed a few sedans for my regular
business.
That's, it's really with the,it's the story you can tell the
bank, correct.

Absolutely.
I mean, listen to your point,I've had companies that were a
million dollar company that grewto be a$10 million company in
two years.
So anybody would've looked atthat on the financial side and
said, this is a very riskything.
But to your, to your pointbehind the scenes, they had
three contracts installed thatwere five year renewable
contracts, very profitablecontracts, and they had

(36:14):
organizational infrastructure torun those contracts.
So just because the companylooked like it was, you know,
leveraging itself quite a bit,they were very sophisticated and
they grew the company quickly.

Ken Lucci (36:25):
So bank statements that in general, if you do six
figures, you should have 40, 50.
Let's just say for every ahundred thousand, what do you
think you should have leftoverat the end of the month?

Again, I always say moderate five figures.
So 35 to$50,000 is fine.
You know, some months are gonnabe higher, some months gonna be
lower, and you know, you mighthave purchased equipment for
cash in those months, but withthat story, you know, any banker
that's looking and vetting yourcredit will understand it.

Right.

Ken Lucci (36:55):
How important the fact that I have 20 paid off
vehicles mean anything to thebank or do they don't care?
The titles

No banker would respond to that very well.
They're gonna respond in twodifferent fashions.
One, they're gonna wanna securethe assets against your new
loans, which is not what, what,what you would be looking to do
unless you needed to.
Number two, you have fleet of 20units that are running without
payments, and they know that, sothat should be reflective on
your financial statements asadditional cash flow or if we

(37:24):
don't have financial statementsto your bank statements.
But yeah, that's a very positivesign.
Um, you know, in the motor coachspace 20 years ago, everyone had
fleets in every 50% of the fleetwas owned free and clear.
And the other 50% was, was, uh,payments.
And that's the way it alwayswas, you know, and we got to the
point where a lot of the guyswere, 90% of the equipment was

(37:44):
financed, 10% was owned, orsometimes a hundred percent was
financed with nothing owned.

Well, and we're seeing that now that we've got
new entrance, right, they,they're bringing on first time
vehicles.
Obviously more of it's gonna befinanced because they're
building out that side of thefleet.
They haven't been running'em aslong, so it makes a lot of
sense.

Ken Lucci (38:02):
so what mistakes do you see people make where you
say, that one's a tough, thatwas a tough loan to process.
What, what mistakes are youseeing people make?

You know, it's all about repayment history,
right?
You know, just sloppy payments,just put question marks into
any, you know, credit desk.
So if you're, you know, ifyou're not making payments on
time because you're just notconcentrating on your business,
you're really doing yourself adisservice because to your
point, if the deal gets through,you're gonna be paying multiple

(38:32):
points higher in interest, whichis a lot of money over time.

Ken Lucci (38:37):
No, No, question about it.
I mean, sometimes it, the, the.
Interest, lack of a downpayment, like a zero down, a
high interest rates, thedifference between an acceptable
gross profit and almost notworth having the piece of
equipment not worth having.
What's, let's switch toinventory trends.
What, what do you see dw,besides stretch limousines, what

(39:00):
are you seeing that's just not,that's tough to move?
That's from a per perspective ofa type of vehicle

Yeah.
Well, to your point, to yourpoint on limousines, you're
right.
I mean, we still have, and we'llaccept trades of, of stretch
limousines, but the, the type,the manufacturers are getting
very, very specific.
Uh, the ages are getting veryspecific.
The avail available areas thatwill take them is getting very,
very specific.
So we'll still do it, but I'mseeing that as a long-term trend

(39:30):
downward.
Right.
Uh, as far as, you know, what wesaw maybe two years ago, I would
tell you that the freight linercutaways were under pressure,
uh, because the tempsa productin both 30 and 35 foot was
coming on the scene.
And instead of having a.
Chassis on body, you were ableto get a monocoque motor coach,

(39:51):
you know, with a full underbellyluggage and laboratories, you
know, that.
And you know, again, these arebuilt as buses, not as cutaways.
So we saw, you know, pricingpressure on the Freightliner
product, and now I'm seeing itrelieve itself a little bit
more, uh, including the peoplethat I'm talking to in the
industry that tell me that theFreightliners are sewing very

(40:13):
quickly.

Now, let me ask you something, because you know
you've got MCI has 35 footproduct.
Van Hole has 35 foot product,right?
Um, they've got these 30 fivesthat obviously are gonna be a
little easier to navigate.
Do you see those kind of beingin that same realm of that
Tessa, or is that price jumpbetween that Tessa and those
others gonna be too great?

(40:34):
Was it, was it really kind ofshared across that whole range
or was it really more of justTessa's price point and Tessa's
vehicle there that you saw asthe trend?

Yeah.
And attempts when it came intothe marketplace in 2009, I
stayed away as a financier, youknow, because I've seen new
entrants come and go And whenthey, when they go, it's painful
as an asset lender, um, for mycustomers and for me.
So, you know, I stayed away fromit.
When Bob Foley came into the mixsometime in, I guess 11, 10 or

(41:04):
11, uh, he brought a lot of, uh,you know, credit to that
product.

Ken Lucci (41:08):
so, but for people who don't know him, he came from
where

a, B, C.

Yeah,

Ken Lucci (41:14):
from, A, B, C, and he went over to Temsa.

Yeah.
He was retired for quite a,quite a while, uh, after Ron
Cornell died.
But he, um, he came back, uh, atthe benefit of Tempsa, uh,
because he wanted to roll itout.
He was, he was the one that wasreally, um, successful in
bringing Von Houl, which wasprobably the most successful
entrant into the US marketplacethat I've seen in my entire
career.

(41:37):
Um, he was, he was all overthat.
So I knew we had the skillset, Iknew we had the relationships
with the banks so we can getthem started to lend on attempts
of product.
And then to your point, James,the uh, price point, you know,
was just, it.
It had, you were of par to afreight line of cutaway and now
you have a MOOC motor coach.
So it was a no-brainer.

And, and I don't, I don't know that this is still a
positioning now that they've, Imean obviously they've, they've
got a, a much a different rangeto what they started with.
But, you know, for a long timewhen I was kind of moving to
learning more and moving towardsthe motor coach industry, a lot
of that industry kind of viewedthat tempsa as it's a low entry
point in the price point.
It's a good vehicle, it's a goodplace to start.

(42:18):
And what we would, what I wouldsee a lot was companies would go
to those products and that wouldbe kind of their entry point
because they knew the pricewould be lower, they knew it was
a good product.
Um, at some point they mightmove to an MCI to a van h you
know, to Aravo.
But really they were kind ofusing that as the entry point.
And I, I would be curious toknow kinda what do you see when

(42:39):
you've got people that are kindof those new entrants?
Is that still kind of the paththey tend to go is, Hey, I'm
gonna go through a temp, sir, orwhat are you seeing for the
companies?
That are looking for thatentrance into the motor coach
space.

Yeah, so it was always the same, right?
It was the E four 50 guys goingafter an F five 50 guy going out
to a freight line of guy andthen considering a motor coach.
So I think the Tempsa product isnot really the true guys that
are going to the motor coachbusiness all want to these, that
is the replacement for thecutaway.
Right?
You know, it's, it's a, it's amotor coach.

(43:12):
I have my underbelly luggage.
It's great for collegeathletics, it's great for, you
know, maneuverability as youstated.
Uh, but certain guys have theneed for 56 passenger motor
coaches from the groups.
So it's, I I don't really see itas a stepping stone.
It's just a, a diversion in thebusiness model.
You know, whereas, um, if youneed a motor coach, you, you're
not going for a 40 passengertemps, a TS 35

Ken Lucci (43:36):
Right.

Yeah.
That.

Ken Lucci (43:37):
so, so you, couple things you, you hit on that are
critically important is beforeyou get into Motor Coach, better
identify the service center thatcan take care of it.
And it's

Yep.

Ken Lucci (43:48):
Hey, I think there's a diesel shop down the street,
or there's a cat.
There's a cat shop down the

Uh,

Ken Lucci (43:53):
go there, visit with them, ask'em about their
capability because there's ahell of a shortage of diesel
certified diesel mechanics.

certified diesel bus.
Mechanics

yes.
Yes.

truck.
Truck guys are not bus guys.
And if you go to a truckfacility, yeah.
If you go to a truck facilitywith a bus, prepare to have it
sit in the backyard for fourweeks before they even look at
it.

no.
And that, yeah.

Ken Lucci (44:21):
That hurts you if you're spending four to six
grand on a motor coach paymentand it's you losing that kind of
production.
yeah.
I, I, this year I had a reallygood client,$10 million
operator.
Great kid.
It just does a great job.
Who said, Ken, it's time for meto get into Motor Coach.
I said, I've been waiting forthis.
So we did a complete PRfinancial pro forma with him, we

(44:45):
looked at what his break evenwas.
We looked at what his productionhad to be.
We, and, and I said the firstthing, where are, what are you
thinking you're gonna do forproduct?
I'm gonna do, I'm gonna use a,I'm gonna buy a brand new
Tempsa.
Okay.
Who's gonna service it for you?
Oh, I've got, I've got threeplayers within the tri-state
market that Absolutely.
Have you visited them?

(45:06):
No.
Go visit them.
So it wasn't just a financialpiece.
It was, this is not like a minibus.
This is, you're not gonna beable to bring this to the
freight liner guy that you use.
This is a completely different,this is a completely different
beast.
How do you think the tempsa, uh,what's the power plant in the
Tempsa?

They're typically running Cummins
Allison.

Ken Lucci (45:26):
So how do you think that they've, they've certainly
improved over the years, and I'mnot asking to say who's better
than that.
What do you think of thereliability of the Tempsa
product today?

I think the product and support has gotten
very, very good.
I really do.

Ken Lucci (45:40):
yep.
And it's critical.
I mean, anybody who's listeningto this, I, I don't care what
you buy, I don't care who youbuy, you can, if you don't have
a service center that you have arelationship with.
That vehicle can sit and, andthe last thing you wanna do is
piss off the service center,but, but go visit them before
you make a purchase like this.
Would you say the same is truefor the big freight liners, for

(46:03):
the same, for the big cutaways,that you want to establish those
relationships much, much inadvance?

You do.
But at the end of the day, youknow, a freight line of cutaway
is, is relatively a truck.
Right.

It's got more in common.

Ken Lucci (46:16):
It's like a straight

go ahead, Jess.

no, no, no.
I was about to say, I mean,you're, you're talking the
difference of it started itslife as a truck and then became
a bus versus what was born Abus, designed a bus to be a bus.
It's a, it's a different animal,you know, and when, um, shout
out to International Motor CoachGroup, IMG, you know, when we
were at their meeting earlierthis year, even with some of the
larger motor coach operators,they have multiple locations,

(46:41):
right?
They've got tons of mechanics.
One of the things they'restruggling with there is
actually recruiting theirin-house mechanics.
So I would say in addition tolooking at that service network,
just like you brought up asecond ago, Ken, knowing what
the other players in your markethave, you know, if you've got a
large motor coach operator inyour market that has their own
mechanics and you don't go visitthem and talk to them, you're

(47:02):
making a mistake because that'san opportunity to work with
them.

Ken Lucci (47:06):
And, you know, we're not emphasize, this is not, this
is, we cannot emphasize thisenough as far as I'm concerned,
because the, the, the mistake Isaw a lot of limo guys make in
2019, general, there's a herdmentality in this industry where

Yeah,

Ken Lucci (47:20):
has gotten into motor coach.
So I have to as well.
That to me is not a businessdecision.
Right.

it's the Escalade versus Suburban.

Ken Lucci (47:30):
it's exactly

We talk about that all the time.

Ken Lucci (47:32):
so to me it's the difference, and you tell me if
I'm wrong, it's the differencebetween operating a prop plane
and a full and a jet plane.
It's that different.

It is.

no.

Ken Lucci (47:43):
Now the, now at the same time.
From where I sit, the marginsare much better if you know what
you're doing, the margins onMotor Coach Charter, you have
the right clientele and if youare priced right, they're the
best margins in thetransportation business.
But you, but you can eat awayyour margins by going down a

(48:07):
path of entering the Motor Coachspace without co uh, an absolute
plan and total forethought.
So talk to a guy like Eric,what, what are you seeing?
Hey, listen, I'm thinking ofbuying a used MCI or I'm
thinking about doing this.
Talk to your competitors in yourregion.
Don't be afraid to talk to thebus guys, because those guys, I

(48:29):
don't, I don't know about youEric, but I find the bus guys
are really a little bit of adifferent breed.
They help each other out a lotmore than I see the chauffeur
guys do.
And I.
Even they'll help a totalstranger that's passing through
their area with a motor coach.
Um, ask them what they're usingfor equipment and don't be
afraid to ask whoever's tryingto sell you the motor coach.

(48:52):
Hey, who's the bigger fleetsaround that are using this unit?
wish I had did that.
When I was an operator.
I bought MCs and then I sawshiny gold.
I'm not gonna even say the, thebrand name, but I saw a shiny
gold motor coach and I said, Ican see the, the marketing, it's
gonna be ambassador limousinebrings the gold standard and

(49:13):
motor coach, that son of a bitchwas on the highway, on the side
of the highway, you know, morethan the mile markers were.

It is funny

Ken Lucci (49:20):
and the funny thing is, after I bought it, I
contacted one of the biggestfleet operators in Florida who
also bought a ton of them.
And I said, listen, I've gotmodel such and such and I'm
looking for your input.
And they, he started laughing.
I've got 50 of'em.
I never would buy'em again.

Ah.

Ken Lucci (49:38):
So I didn't go, I, I assumed my mechanic could handle
it'cause he was handling cis.
I didn't go to the servicecenter in Tampa and make friends
with the guy and say, listen,are you seeing a lot of these?
And to your point, if there weretrucking, if there were, if
there were trucking above atruck mechanic shop, true

(49:58):
statement.
If they're not, if they're not,um, specializing in bus, you
should go down the street andfind somebody who specializes in
buses.

and you know, one of the things we didn't even
talk about as a group is thesimple fact of.
You don't need to go out and buya Motor Coach day one when you
get your first job right?
You can easily subcontract thisstuff to a reputable bus company
that knows buses and how tooperate them.
You can still charge you 20% ontop of what they're gonna give
you the rack rates at, and thenyou could start figuring out

(50:30):
your customer base and how muchbus business you have, right?
Kenny will ask you that.
How much did you subcontractbefore you buy that bus?

Ken Lucci (50:37):
the guy that's a$10 million operator, and I said to
him, how much did you sub outfor motor coaches last year?
And he said, 375,000.
I said, okay, there we go.
I said, what's the problem?
Why?
He said, I can, I can't getanybody to take my jobs anymore
because it's not the price.
They're all busy.

Huh.

Ken Lucci (50:54):
great.
That's the another greatexample.
And then the third thing I saidis, what are the hourlies for
the quality coach companies inyour area?
And he told me what they were.
I said, now we have something towork with.
Right?

Yep.

Ken Lucci (51:07):
I mean, I'm, I, I'm seeing the motor coach rates
pretty close to 300 an hour now,right?
For quality, uh, et cetera.
So Eric, what are you seeingbesides the stretch limousines,

Okay,

Ken Lucci (51:20):
the high top vans, um, necessary to have a sprinter
or are you finding that there'sbroad acceptance of the transits
and.
And the Dodge, um, the DodgeHigh tops.

so there was a time we, we just got off the
motor coach conversation, right?
So there was a time 20 yearsago, 25 years ago that every
motor coach, anybody saw, laymansaw was called a Greyhound,
right?
So it wasn't a Greyhound, it wasa Prevo, it was an MCI.
It was Avant Hall.
It was a motor coach, right?

(51:55):
Grey Greyhound was just thelarge guy out there that used
to, most motor coaches you sawwas Greyhound or trailers.
So I think the same thing asapparent, not with the chauffeur
transportation companies, butwith their customer base.
When they call up, they'rementioning the word sprinter
because they've been trained tosay sprinter.
And obviously everyone lovesthat star coming at you when

(52:16):
they, when the VE vehicle drivesup.
But I think the terminology thatthey're stating, and this is
after, I mean, Kenny, you and Idid it, this is after speaking
to a hundred different operatorsacross the United States, that a
sprinter is categorized by ablack high top van with wood
look floors and leatheretteseating with good, you know, a
trunk space.

It's a catchall turn,

if I sent you a Ford Transit to that executive
van job that you ordered,nobody's complaining.

Ken Lucci (52:45):
agree with that.

Oh

Ken Lucci (52:46):
when we did this, 'cause Eric and I did a
financial comparison on theMercedes Sprinter and the Ford
Transit.
Now a couple things.
When we did it, we're looking atthe the Ford, the gas engine
Ford versus the diesel engine.
And when we were doing it, whatwas diesel like?
90 cents more

Yeah.
Yeah.

Ken Lucci (53:07):
it was a clear, the Ford Transit was just an it.
You had to be 15% higher, higheron your hourly to make the same
gross margin.
But before we did that, I sentout a survey to 200 operators
and George Jacobs from.
City picked up the phone.
He called me.
He said, I'm glad you sent thatsurvey out.

(53:28):
He said, doesn't make a damn bitof difference except if you are
in the entertainment space andyou get somebody that you're
pulling up to a private jet andyou're is an entertainment
entertainer, whether it's musicor at, or film, et cetera, et
cetera.
You better have a Mercedessprinter or you better ask the
question when they're doingreservations.
He said.
Other than that, no one in thecorporate space cares.

Yeah.

Ken Lucci (53:53):
I'm looking at that guy and saying, listen, this
guy's like the Good Housekeeping seal of approval.
He's been in it for 175 years,and if he says, it doesn't make
a difference to me, it didn'tmake a difference.
But I think too many people lookat, okay, I have to have a
Mercedes Sprinter.
And my, my whole point when welook at the price difference is,

(54:14):
can you charge more in yourmarket for your client groups
for that vehicle?
Um, so what other vehicles wouldyou say are moving that you're
seeing?
Shoot, I wish I had 10 more onthe lot.

Well, I mean, Ford Transit, for example, um,
we had purchased a hundred andhad them upfitted by a company
called Diverge in 2023, knowingthat the asset classes were just
very, very restricted out there,right?
We, we, we, we nobody hadvisibility on chassis.
So I leveraged somerelationships that I had to get
them.
Um, I gotta tell you that the,and the price disparity was

(54:52):
approximately$50,000.
So you have a black, high topexecutive interior full luggage
wall, you know, the sameblueprint as a sprinter.
And they were well receivedbecause people couldn't get the
chassis of any type.
But then once chassis started tobecome available, people I

(55:12):
struggled to, to convince themthat your fleet should have Ford
Transit.
We also brought in those Ram ProMaster LA West, which I thought
was really cool, not wellreceived.
And everyone wanted me to sell'em a sprinter.
So

now do you think that's, and, and, and Ken was
talking about sec, uh, secondago.
Are we thinking that's areflection of what the owners
perceive, or do we think thatthat'cause it, it sounds to me
like that goes back to what wetalk about all the time, right?
It's the owner's perception ofthe image, not necessarily what
they could use and run.
Right.

(55:46):
Do you think if they would'vegone that route and put it in
their fleet, they would've seenany difference?
Or is this purely owner'sperception on that?

it is 80% owner's perception in my
opinion.
I mean, listen, o owners, verysophisticated transportation
companies know exactly who theirclients are.
'cause they're, they're speakingto dispatch.
They dispatch is very, you know,they know that you don't send,
you don't send Mr.
Smith a Ford Transit.
He's, he's had it, he's exec andhe's freaked out about it.

(56:15):
So they know granularly what'sup.
I'm just thinking the, thesmaller companies that are
starting and you know, theirproduct lines are airport
transfers, how you need$150,000Sprinter van to do airport
transfers?
I just don't know because you'recompeting against a lot of guys
with lower priced equipment.

Ken Lucci (56:34):
I always ask the question, if you're gonna go
with a sprinter versus atransit, are you, are you gonna
charge a differential for that?
Because

Right

Ken Lucci (56:42):
are that much higher?
The diesel and the def, youroperating costs are that much
higher, which is great as longas you have the market for the

to account for it.

Ken Lucci (56:51):
the same discussion.
I was talking to a huge operatorup in Massachusetts.
He said, I don't want Es, Idon't want iOS that have
escalates because I don't, Ihave suburbans and, and, and
across the board, everything Ido is Suburbans or Suburban and
Expeditions.
I don't want a, the corporateaccount saying, whoa, whoa,
whoa, wait a minute.

(57:11):
I can't be seen in a Cadillac.
Or the reverse is, uh, I don'twant that expedition, I want the
Escalade that you sent, and I'm

Yeah.

Ken Lucci (57:20):
of small operators making the mistake of going out
and flat out and buying 125,$130,000 Escalade.

And you know, I'll tell you what, I travel a lot.
Can you travel a lot it in,unless you are paying attention.
If I just got into the side of avehicle, I, I don't know that
I'm going to massively notice adifference, right?
I might see it subconsciously,but the irony about that is
they're on the same platform.
They drive the same, right?

(57:49):
It's, it's a trim levelbasically.
Right?
What they did is they took thosecompanies and they made a
separate brand, but you'rebasically almost at a higher
trim level.
The door's gonna feel the samethings are there.
Um, I'll hear guys argue, man,you just, they'll just know.
But I, I would say I, I thinkthat's one of the big things we
see in this industry over andover and over, and it's starting

(58:09):
to now happen more and more onthe motor coach side.
Is that personal image thatpersonal ego is starting to
bleed in, which would lead me toask, is that, so Eric, where you
find yourself trying to tellthese guys, Hey, based on your
financials, based on this, thisis where you should be at.
Or are people just so dead seton what they want that there's
no talking of it?

(58:34):
It depends on the guy, right?

I have conversations all the time and I
say, you know, I just askquestions.
Right?
I need a black executive.
And do you have any sprinters?
Oh, I do.
And here's what else I have.
What are you using it for?
Right?
We, we just have a conversation.
Um, you know, I, I gotta tellyou that it's, it's a lot easier
for me to convince somebody tobuy a lot more expensive van
than a less expensive van thathappens to be a Ford.

(58:58):
So, I know that's a weird answerto your

Well, it's, it's perceived value.
It, it makes

I.

sense.

Ken Lucci (59:04):
But it, you know, and I always look, I always tell the
whoever's trying to look at a pbuy a piece of equipment, will
they pay the differential?

Yeah.

Ken Lucci (59:13):
I have to have a Mercedes sprinter.
Will your clients pay thedifferential?
How about you ask, how about yousay, these are the classes that
I can provide you and, and toyour point.
Put the Sprinter on your website

Yep.

Ken Lucci (59:29):
the transit that you actually have in your fleet and
see if it makes a difference.
And I argue it doesn't.
So I wanna But the last, we onlyhave probably about 10

Now we're coming to a close.

Ken Lucci (59:40):
wanna ask you, I want to delve into the, to the, how
you run your business, becauseyou've had me on calls your,
your staff calls, um, on Fridaymornings.
I, I want, I wanna talk aboutthe culture you've created at
Advantage.
This is not your first rodeo.

Nope.

Ken Lucci (59:56):
this several times and you've got, got some of the
same people you, that were inyour original foxhole, decided
to come work with you in thisbrand new foxhole.
How did you do that?
And how do you, how do you buildthe culture, the positive
culture that you have, and howdo you motivate your

(01:00:17):
salespeople?

Eric_Coolbaugh (01:00:19):
You lead by example.
You know, I, I, I'm a, a roadguy for the last 38 years.
I've never gotten off the road.
So I go physically with my salesstaff and my admin staff, or my
finance staff, and we visitcustomers.
We get on the road, we go outand we introduce ourselves to
people we don't know, and topeople we do.

Ken Lucci (01:00:38):
don't just do Google.
Wait a minute.
You don't just do Google PPC adsand wait and see what happens.

You know, when I got into the dealer game, I
found that a lot of dealerswould take a picture of a
product, whatever it is, a brandnew mini buss motor coach.
They put it on the website andthen they pray.
I just, I've never seen that asa, I don't understand that that
sale.

Ken Lucci (01:00:57):
hope is not a business strategy?

you told me that one time, maybe twice.

Ken Lucci (01:01:01):
he, he, he is literally a road warrior, but
every operator should take, asan example, he visits his

James Blain (01:01:10):
Yeah.

Ken Lucci (01:01:11):
He introduces his staff to his users.
He's out there.
He's not just throwing up to hispoint.
He's not just throwing up apicture and, and leaving it to
Google and saying, I hope thatvehicle sells.
How often do you go on the roadwith a piece of equipment that
was available to sell, didn'thave a buyer?

(01:01:32):
Buyer?
What are the odds that you'regonna sell that vehicle on the
road?

I would say every road trip results in
sales.
It's, it's, it's only a questionof, it's only a question of
need.

Ken Lucci (01:01:42):
caller.

Yeah.
Well, yeah, it's true.

Ken Lucci (01:01:44):
calling.

Well, and Ken, tie this back for a second'cause
there's something else here.
He's, he's tapping intosomething we talked about in the
beginning.
That's crucial, right?
Because he's going out, he'smaking connections.
He is there on purpose.
Like he's there in person.
He's connecting with people.
What did we talk about earlieron this episode?
This business came about becausehe had two different desires and

(01:02:09):
needs coming to him as a resultof his network, and he was able
to cross connect those.
And that led to a business.
So I I, I, it can't, yeah, itcan't be overstated, right?
And we, we see this come up timeand time and time again on the
podcast.
Making those connections,spending that time is just a key

(01:02:30):
strategy.
Do you think you could do whatyou do if you didn't do that?

No, I really don't.
Or I wouldn't wanna do it.
I mean, people say all the time,Eric, I can't believe you're
everywhere.
So I, I don't like to beeverywhere.
Sometimes it does get a little.

Ken Lucci (01:02:43):
you are over?
Eric, when they say you are allover the

Oh, geez.

Ken Lucci (01:02:46):
did they say you are overexposed?
They do.
I don't, I've never heard thatabout you being told you are
overexposed, by the way.
He's the best networker in theindustry.
Okay.
When I'll have somebody and I'llsay, listen, do you know so and
so?
Yeah.
Go talk to so-and-so and he'lldo the same with me.
So to me, that relationships,he's, he's built and the way he

(01:03:10):
approached me was, Hey, what doyou do?
What are you doing here?
And we just, we just hit it off.
But he's cold calling people tobuy his products and services.
He's not sitting just,

He is going to it.

Ken Lucci (01:03:24):
I'm gonna build the fanciest website.
I'm gonna hire a digitalmarketing company and, and I'm
gonna do spend gazillions onPPC.
He's a road warrior.

So, I'll tell you a funny story because we had
a, a delivery just this week toum, an assisted living facility
up in Armac, New York.
Right?
That facility ordered five vansfrom us in January to go to
different senior livingfacilities.
So everyone said turned to me,why would a senior living
facility need a sprinter and ahigh-end portal door?

(01:03:55):
LA West Sprinter that's 80 acompliant, why would they need
something like that?
I said, because they saw anothersenior living facility.
Have one.

Keeping up with the Joneses.

and, and I'll tell you, these are beautiful.
The customers love them.
I mean, some of these higher endfacilities, which by the way are
very expensive, so can save youmoney'cause you're getting a
little older.
I.

Ken Lucci (01:04:13):
long-term care insurance.

Yeah, yeah, definitely something we should
all be thinking about.
But, but anyway, they're very,very high end.
Uh, I mean, the Armac facilityhad a saxophone player in the,
the, um, reception area.
Yeah.
And, you know, all decked outmarble and so on and so forth.
And then we introduced the vanand they loved it.
And the, and their constituentscame out and they were all over

(01:04:38):
it.
So I expect to get multipleother sales, you know, after
these five to different seniorliving facilities.
But, um.

Ken Lucci (01:04:45):
your point, people buy.
People buy from, from providersthat people in their industry
use,

Yep.

Ken Lucci (01:04:55):
right?
So this is a lesson foroperators.
If you've got one law firm,they're not the only one in
town, go sell another law firm

Right.

Ken Lucci (01:05:03):
them about the use

I,

Ken Lucci (01:05:05):
What you've described is the use case.
If you wanna be perceived as ahigher end senior community, you
can't have an Econ Ford Econoline sitting out there with all
kinds of dents in it.
You know?
I mean, and the reality is, ifthey keep that in good shape,
that's a 10 year unit for thembecause

yeah.

Ken Lucci (01:05:21):
only go a few, a few miles a day at it.

Total cost of ownership makes all the sense in
the world.
But, but again, you know, wewouldn't have had those sales if
we didn't do the road tours.
Um, and then, you know, again,we, I.
Thankfully have hundreds, if notthousands of operators across
the country that I knowpersonally that have, you know,
I've been doing business withgenerationally.
I'm very fortunate in thatrespect.

(01:05:45):
But when you pull up to anoperator, you know, it's not
just the owner that comes outbecause obviously that's, we
want to speak to a decisionmaker, but their sales staff
comes out, their dispatch staffcomes out.
They all can now see, touch, andfeel the product that hopefully
they'll be buying.

So as, as we kind of wrap things up, right, we're,
we're getting to be kind of thehour mark, uh, what, what would
you tell the listeners, right?
Knowing that we've got a wideaudience, if you had to leave
them with one thought, right?
Kinda as we bring it to a close,what's the one thing that you
would share with them?
What's the one importanttakeaway?

(01:06:23):
If they only got one thing fromthis entire episode, what's the
takeaway you wanna leave themwith?

Use Ken Lucci Masterclass.

Ken, Ken will be mailing the check, uh, to you
shortly

That's, that's 20 bucks, Kenny.

Each time he said it, uh, no.
And, and two things.
One.

Ken Lucci (01:06:44):
to your success?

Yeah.

Ken Lucci (01:06:45):
very humble, but what is the secret to, to Eric's
success?
Look, we all know guys in thefinance space, in this industry
whose names are mud.
Why is, why are you universallyref refer to you all the time,

So I, luckily I had time on my side, right?
So I've been doing what Ibelieve is consistent good work
for our industry for decades,uh, that people, you know, they
understand and they listen tothat, right?
So when you know I'm selling aproduct, it could be across the
country.
People believe in my ability anddiscretion to tell them exactly

(01:07:22):
what it is.
Um, so all I can say to, if youask me that question again is
understand who it is that you'redealing with, right?
Believe in them.
Vet them and, you know, make adecision to do deal with people
that know the industry.
Um, you know, again, 38 years, along period of time to
understand not only the financeside, what works, what doesn't

(01:07:42):
work, trends, um, economiccycles up and down.
I mean, I've lived through'emall.
Uh, you know, and, and you cantake a guy like me and ask him
any question in the world, itdoesn't cost you a dime.
You could take a guy like Kenny,ask him a question, it doesn't
cost you a dime.
Um, we're here to share ournetwork and our experiences with
any operators, and that's veryimportant to me.

Ken Lucci (01:08:03):
No, I mean, at the, and the reality is I, I, I want
to help every operator make theright financial decision when
they're buying their vehicle.
I believe when you get into thelarger vehicles, you get into
the larger profits, but the bthe, the acquisition of the
vehicle is the first step.
Right.
And if you buy it from the wrongperson, you just buy it from a

(01:08:24):
website in Nevada that you'venever been in Nevada and you're
just gonna buy it because youthink it's a good price, gonna
get into trouble.
So it, it's truly a relationshipsale.
And I think that that's he, whyAdvantage is so successful.
It took off like a rocket ship.
I mean, I know, uh, a few other,um, used bus dealers or uh, and

(01:08:46):
bus dealers that can't getlines.
They can't get the LA West line,they can't get the product that
he has.
And I think a lot has to dowith, with your relationships
that you've built and yourintegrity.

I think that's the perfect lead out, right?
So as we close this episode, Ithink that the real takeaway
message here, and I would saythis expands really to the
reason we made this podcast inthe first place.
The reason Ken and I sat downand put this together is you've
gotta have people that you cantrust that are going to tell you
what you need to hear, that aregonna give you what's there,

(01:09:18):
that aren't gonna try and say,oh, well this is more expensive.
Or, oh, you should, Hey, whatyou, you said it best earlier in
the episode.
I ask questions, I find out whatthey're doing.
I mean, I think that speaks tohow Ken operates, how I operate.
Um, so I think as we close thisepisode out, the big one is have
people you can trust and workwith, like always.
Thank you everybody forlistening.

(01:09:38):
This has been an incredibleepisode, Eric.
Can't thank you enough, Ken.
Always a pleasure.

Ken Lucci (01:09:43):
Eric, give us the give us the takeaway on where
they find you and the website,et cetera.

Sure it's Advantage remarketing.com is the
website.
You can contact me direct, 8 6 66 7 5 2 2 7 1, extension 500.
Um, smoke signals, whatever elseworks as well.

and we will drop all that in the show notes as
well.

Thank you.

Ken Lucci (01:10:09):
hundred percent.
We'll make sure that it's, um,it's on the YouTube video and
I'm glad we caught you beforeboating season'cause I know
where you are.
Friday afternoons.
It's during boating season.
Only kidding.
you are the hardest, one of thehardest working men in the
industry.
So thank you very much, EricAugh from Advantage Remarketing
and say ho to say hello to yourbusiness partner Murdo.

(01:10:29):
Now.
Thank you very much for comingon the podcast.

Thanks again, Eric.

Have a great weekend.
Thank you for listening to theground transportation podcast.
If you enjoyed this episode,please remember to subscribe to
the show on apple, Spotify,YouTube, or wherever you get
your podcasts.
For more information about PAXtraining and to contact James,
go to PAX training.com.
And for more information aboutdriving transactions and to

(01:10:55):
contact Ken, Go to drivingtransactions.com.
We'll see you next time on theground transportation podcast.

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