Newspaper article THE JOURNAL RECORD

Dealer: Used-Car Business Driven by Lending Cycles

Newspaper article THE JOURNAL RECORD

Dealer: Used-Car Business Driven by Lending Cycles

Article excerpt

Robert Mulkey is a used-automobile salesman, but he does more than sell cars.

Mulkey owns Regal Car Sales and Credit. He first stepped into management of the company 26 years ago and took ownership in 2004. Today, Mulkey employs 140 people and reports sales of nearly $50 million from 13 locations in Oklahoma, Missouri and Arkansas.

Mulkey credits his success to respect of his customers. And, he was named the 2007 National Quality Dealer of the Year by the National Independent Automobile Dealers Association.

Mulkey's growth strategy is targeting non-metropolitan areas, he said.

"We are looking to expand to Claremore; Enid; Ardmore; Shawnee; Sedalia, Mo.; Columbia, Mo.; and Jefferson City, Mo.," Mulkey said.

Sales have dipped 7 percent compared to a year ago.

"We finance what we sell and work with people who are not able to obtain traditional financing," Mulkey said. "We deal a lot with people in the subprime financing, which seems to be run in a six- year cycle. I was surprised, with the disaster it caused a few years back. But it is actually coming back pretty strong."

The typical lending cycle starts with the easing of credit for consumer borrowers, then there is a sudden growth in the market, and even more easing of credit restrictions. Eventually, the growth cannot be sustained, Mulkey said.

"People start chasing the growth and the money becomes too easy to get," Mulkey said.

The next step is massive loan write-offs. People who would have been unable to get a loan without the easier requirements fail to make payments. …

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