Rajat Gupta: Great. Thanks for taking the question. Just had a couple of quick ones. One on the other gross profit line, the services efficiency that you mentioned. Is there a way to give us a little more granularity on the $25 million year-over-year improvement there because revenues did not go up that much. Does it come primarily from reduced headcount or any other areas that you can flag? Thanks.
Enrique Mayor-Mora: Yeah. Thanks for the question, Rajat. So really two things drove that, right? Within bucket of service, service is really where we saw the year-over-year increase, about $26 million. And actually, we’re able to deliver profitability and service, which we haven’t done in a couple of years in the quarter here. So we’re really pleased with the progress that we’ve made. Two things have driven that. Number one is we took cost coverage metrics — measures, I’m sorry. So as you recall, we’ve been hit by inflation for a good period of amount of time here. And we took increase in rates in labor. We took increase in rates and parts, and that has allowed us to cover the inflationary pressures that we’ve been facing.
That’s number one. Number two, really strong focus on efficiency still a headwind year-over-year, especially with sales still being challenged. But we’ve shown now sequential improvement in driving efficiency in the service department. So we’ve reduced labor along with retaining our tech, which is critical right? But we have been able to reduce labor. We’re also in a little bit more of a stable sales environment, which allows for more effective scheduling. And so those are the primary reasons why we’ve seen that benefit. I would expect that year-over-year benefit to continue for the rest of the year. Whether or not service will be profitable for the year, we’ll see, right? But what we do know is that we do expect from a year-over-year basis to show some pretty considerable improvements year-over-year for the rest of the year.
Rajat Gupta: Got it. That’s helpful. May I just ask one quick one on CAF since I haven’t been much asked yet. Just on the provisioning improvement, on a year-over-year basis or more on a sequential basis. Is there an element of recoveries that you can talk about that might have benefited sequentially? Or if you could just generally talk about what you saw from a recovery standpoint, either frequency or severity and anyway to think about provisions over the next couple of quarters? Thanks.
Jon Daniels: Sure. Yeah, I appreciate the question, Rajat. Yeah, I’ll just talk about the provision sequentially quarter-over-quarter. I think that’s driven primarily by some of the tightening that we’ve done. Obviously, you’re going to provision for your new originations within the quarter. So if you tighten and that’s going to come in at a lower loss rates then there’s just less money that you need to put towards those receivables. I mean, obviously, we then make adjustments on existing portfolio accordingly. So I think that’s some of what you’re seeing there. With regard to your recovery rates, I’ll just speak in general around that. Historically, we’re between 40% to 60% on our recovery rate. Obviously, with vehicle values very high.
We enjoyed recovery rates in the 70% range. Year-over-year, we’re probably down 13 points — 12 to 13 points were actually up sequentially. So, yes, I don’t think recovery rate that was playing a large piece of that. I think units still carry the day here and again, hopefully, that explains the provisioning down quarter-over-quarter.
Rajat Gupta: Got it. Just to clarify, you mentioned 70% on the recovery in the quarter?
Jon Daniels: So the recovery rate for the quarter was — I think the numbers were let’s see, I think we’ll show it about 59% to 60% when all is counted. So which we were 73% to 74% last year, we were about 57% last quarter. So just obviously down year-over-year, but a tick up quarter-over-quarter.
Rajat Gupta: Great. Thanks a lot for the color.
Bill Nash: Sure. Thanks, Rajat.
