Doug Campbell : I don’t — so I think about it differently. It’s a great question and certainly been on our minds. I don’t know sort of which way it’s going, but we’re sort of trying to prepare ourselves for any variation of an outcome. I think ultimately, if you go back to the last strike on record, I think it was the GM strike, and you go track overall used car prices, which you saw was upward pressure, especially on those brands. I think it was a General Motor strike. If you go back and look at those brands, you saw a nice increase in pop and pricing is days supply diminished on the ground. It almost happened in real time because there’s a lot of speculation in and around that. And so when you have three automakers, right, potentially going on strike and the deadline is looming here, you have to sort of be ready for that, and it’s going to be more than just the overall impact on those three automakers.
It will just be a shortage of supply on the ground. If you looked at absolute supply in our industry, it’s still really at sort of all-time lows. And so the instance of something like this happening could drive values up. And so for us, that is some headwind on the buying side. We can combat that with being more selective on the cars we buy. But to your point, I think what you’re alluding to is, do we stock up for an event like that? I don’t think that is necessarily a lever we would pull. However, I do think if there was some appreciation in value, it becomes a tailwind on the fair market values that we have for the cars that were taken back the repo vehicles. So there’s good and bad to us being having the lending side to this, and — we’re just trying to make sure we’re ready.
We don’t know sort of which way it’s going to go, but our job is to be ready for that, and we’re looking at those options available to us now.
Jeff Williams : You mentioned on the last call, too, that a lot of competition that we have is struggling with capital. We had a couple of sizable competitors go out of business in the last six months or so, too. So there’s some positive on the supply side in addition to some potential negatives too. So that all balances out. And we’re pretty nimble on our procurement. So we’ll be able to address and adjust any situation we see.
John Rowan : Great. Thank you.
Jeff Williams : Thanks, John.
Operator: And thank you. [Operator Instructions] And our next question comes from Vincent Caintic from Stephens. Your line is now open.
Vincent Caintic : Hey, good morning. Thanks for taking my questions. Doug, congratulations and look forward to working with you and Jeff, it’s been a pleasure working with you for the past several years, and we’ll miss you. So first one to zoom out just kind of a broad question about the CEO transition. And if you could walk us through that. It sounds like this process has been going on for the past few years. So I just wanted to kind of get a sense for why now is a good time for the transition and then Doug, anything in particular you’d like to focus on as we start your tenure?
Jeff Williams : Well, yes, as to the timing, this is just a good time in our history. We’ve — we’ve been through some pretty difficult times. Things are still tough, but getting a little bit better in some of these long-term, highly complex, labor-intensive investments and initiatives we’ve had in place. Doug has been able to participate in those for the last year. And those are all coming into play and with Doug and his experience and his talent level. It’s just — it’s a perfect time for us as a company, especially with the transition being extended. There will be plenty of support, plenty of time to transition appropriately as we go forward. So this is just a good time for me, for Doug and for our company and our associates and shareholders. It’s a good time in history to be making this change, especially with the transition plan we have in place.
Doug Campbell : My first, obviously, opportunity to be a CEO of the company. And again, I’m humbled, but at the end of the day, there are a lot of associates who are relying on smooth transition — shareholders relying on a smooth transition. And the more we thought about it, the longer Jeff stayed on to help assist with the transition for the things we know and especially on the credit side of the business of Vincent that it sort of made more sense to accelerate making the announcement and then having Jeff stand up for a longer period of time as opposed to postponing it and doing the transition to a shorter period of time. And I think leading to your question, I’ll probably spend more time on the credit side of the business, the underwriting side of the business and see what improvements that we have there, especially given credit loss.
And when I think about some of the improvements we made in other areas of the business, I’m excited to sort of roll up my sleeves and see what other opportunities are there as well.
Vincent Caintic : Okay. Great. That’s super helpful. My next question, I wanted to touch on the shelf filing that was filed a couple of weeks ago and in some of the comments that were made in the shelf filing, particularly the kind of the unprecedented opportunities you might be seeing, if you could talk about that in more detail what you’re seeing and sort of what you’re looking for that makes you excited about those opportunities?
Jeff Williams : Yeah. The industry, obviously, has been in turmoil. We’ve had major competitors going out of business. There’s a lot of folks that have been in the business for decades that don’t have an exit strategy, don’t have a succession plan, the cost of being in the business continues to go up. So there’s a lot of very good, very strong operators out there of size that are looking for a succession plan or how to get out of the business. And so what we do and what we’ve offered on the acquisition side is appealing to more and more good operators, and we’ve got some good discussions going on. Very optimistic about being able to continue to pick up productivity and profits from our existing store base and then add this acquisition’s effort on separate and apart from all the other good stuff going on.
And it could be really a good point, a great point in history for us to be going out and getting more aggressive with acquisitions and we’re setting ourselves up to do just that. And the shelf registration was just another aspect to that opportunity and giving us more options on the financing side, if and when needed, to support some acquisitions.
Vincent Caintic : Okay. Great. Thank you. And if I could maybe sneak one more in for Vickie. Just on the credit side, the credit reserves have been increasing and understandably about the mix and the term and so forth. Just as the way things stand right now, do you foresee that the credit reserves where we’re at, is that sort of the right level? Or should we be anticipating just help term and mix things continue to change? Thank you.
Vickie Judy : Sure. Well, we continue to look at that quarterly based on historical numbers and what’s happening in the current market as well as some forecasting for some economic events. So we did increase it slightly in the fourth quarter. We were able to keep it level this quarter. So it’s hard to say quarter-over-quarter, but we’re working on a lot of things. As we mentioned in the press release and in a few of my comments in bringing down term, working on down payments hopefully reducing some selling price finance as we move forward. So those will all be things that we’re working on to hopefully offset the impact of any allowance increases. But that’s certainly a possibility as we move forward here and depending on what happens over the next few quarters.
