Car counselor

Before the federal government's Cash for Clunkers, the Texas state government through its own auto stimulus program gave money to car buyers who replaced a clunker with a more fuel-efficient new or used automobile. Like its federal counterpart, the Texas program required dealers to submit reams of paperwork and then wait days or months to get paid.

Mike Lacy, 50, has been selling used cars for the past 10 years in Austin, Texas. He told me it didn't take him and his two partners long to figure out they couldn't afford to wait 60-90 days to be paid: "We don't have that kind of cash on hand." He isn't the stereotypical used car dealer who tries to sell an iffy vehicle to a gullible buyer. Lacy is a car locater: He finds a particular car for a particular individual.

Here's how the business works: Customers hear about Lacy through one of the five credit unions with which he works, or through friends, or fellow church members. Once they contact him, he begins "car counseling," where he finds out exactly what they want in a car and how they'll use it. "I do as much car counseling as I do car purchasing," Lacy said. "They might not be ready for a car, or maybe they need to save more money."

Lacy advises his customers to "finance as little as possible for as short a time as possible." He adds, "There's nothing wrong with saving up for something for a year. You don't have to have it yesterday. . . . I tell people about the total cost of ownership, including gas, insurance, maintenance. We figure in depreciation and can do it for any make and model."

Once he's armed with information, Lacy hunkers down at his computer, searching the sales for cars that meet the needs of his customers. In Texas alone, 10,000 to 12,000 used cars are auctioned every week at large factory sales throughout the state. Most of these cars are coming off leases, which means they have low mileage, have been cared for, and are clean.

In any single month he's working with 10 or 12 customers: "That's searching, car counseling, inspecting, making ready, detailing, delivering. More than 12 a month and my customer service begins to wane." One place he searches is the catalog for the Dallas auction, where 4,000 cars, all makes and models, are sold each week. If his customers want a Mercedes or a Lexus, he'll go to the monthly high line sale.

The Dallas sale begins at 9 a.m. and goes until 1 p.m. or so. Lacy or one of his representatives goes the day before to check out the cars he's identified from the search engine. He inspects them to make sure they are clean, haven't been in a wreck, or belonged to smokers. He takes pictures and emails them to potential buyers along with details about the cars. And he tells buyers, based on experience and the record from the four previous sales, how much (within $200) a car will cost.

If a buyer likes a car, Lacy gets ready to bid. The Dallas sale is an auction on steroids. It's arranged in 15 lanes, with two blocks in each lane, moving 30 vehicles every minute. If a dealer bids higher than Lacy expects for one of the cars he wants, he lets it go. There will be another auction and another car, if a customer can be patient.

Lacy calls his business model both "low-risk" and "high touch, high people." He has little overhead (he works mainly from home and the credit unions) and a just-in-time inventory. He doesn't own any cars that he has to unload on a buyer. His buyers are pre-approved for loans by their credit unions, so Lacy knows before he bids that the customer can afford the car. Only when the customer gives approval, and that's after extensive counseling, does Lacy bid on the car. It all operates on a handshake.

Lacy says, "Have I ever signed a contract with somebody that they must buy this car? Never have. It's always been a handshake. Do they ever change their mind? Yes they do. Maybe 7 out of 100 times there's a financial catastrophe that happened in that time. Maybe they get cold feet, or there's been miscommunication, or they change their mind, or they find another car and don't tell us."

When that happens, Lacy finds himself with a $15,000 or $20,000 asset he didn't expect to own. Since he only buys good, clean cars, he usually can sell it to another wholesaler or at auction for no more than a small loss. The point Lacy makes is that the buyer is never at risk.

Nor is Lacy, although his business model won't make him rich, and it's not for those who measure success in terms of volume. Traditional car dealers try to move lots of cars and make money on the cars, the trade-in, the loans, and the warranties and other after-market products. But Lacy gets by with less and says, "You don't have to make a whole lot of profit when you don't have a whole lot of bills to pay." He compares himself to an "ant in the midst of the jungle of the car business. I can't serve all of humanity, but I can make an impact on people I come in contact with."

Lacy thinks about his work through an Ephesians 2:10 prism: "For we are His workmanship, created in Christ Jesus for good works, which God prepared beforehand, that we should walk in them." He explains: "We are His masterpieces of creation. . . . He created me to do good works and have influence on human beings. . . . By divine appointment He has given me a love for people and He stuck me in this car business. . . . I love helping people. It makes me feel validated."

He sees each day as being "full of opportunities, if we're paying attention, to show people God's love and compassion." Sometimes that happens by being friendly and showing care for his customers. Sometimes he helps a single mom get a good car that she can afford. He helps missionaries on furlough get cars for the six months or a year they are in the United States. (He knows wholesalers who will buy the cars back for nearly what the missionaries paid.) He's sold cars to people he's never met, and says a man living in Okinawa holds the record for being farthest away when he received car counseling. (The car was delivered to Austin.)

Last Christmas he and his partners agreed to help a youth pastor get a new truck to replace a Toyota Camry with 200,000 miles, no AC, bad brakes, and windows that didn't work. "I didn't want my son to ride in there. It was a safety hazard." The church conducted a stealth campaign, raising $13,500 in six weeks without the pastor's knowledge. Then one Sunday after the service, the members of the church came out to the parking lot, thinking they were going to hear an update on a parking lot expansion plan. Instead, Lacy drove up in a 3-year-old Ford super crew pickup. Fifteen members of the youth group were in the back of the truck. The whole church applauded.

Lacy said that arrangement "got me into the Christmas spirit last year."