John Healy : Okay, great. And then just one clarification question. I think when you guys press-released Purple Wave, you guys called it an investment. I think you’ve used that phrase today a few times, but you’ve also talked about consolidating that business. Can you just confirm to us how much of that business you bought? And really, what drove you guys from being familiar with them to, in your words, family with them? What drove the timing? And just any thoughts of where we’re at in the equipment for marketing cycle, just how you and Leah have studied that?
Jeff Liaw: Oh, on that, I don’t think we would. We would never characterize ourselves as particularly savvy in timing the market. So it’s not that we see a rebound or not in the Yellow Iron space. I think Purple Wave is just a company we have profoundly respected and have had a multiple years-long dialogue with how and why deals ultimately come to – by the way, the same was true for NPA. Leading up to June of 2017, we’ve been in dialogue with them for a decade as well. And what ultimately causes the deal to get over the finish line for two parties to reach that conclusion together is a mix of, of course, objective fact and serendipity and just random timing as well. So it was not our trying to time the market per se. We have acquired a majority stake in the business.
But it was important for us and important for Aaron and Suzy that they continue to retain a meaningful economic share as well. And we are committed and they are committed to growing that business profitably for years to come.
John Healy : Great. Thank you, guys.
Jeff Liaw: Thanks, John.
Operator: Thank you. Next question is coming from Chris Bottiglieri from BNP Paribas. Your line is now live.
Chris Bottiglieri : Hey, thanks for taking the question. I guess the first one is on the – like where is non-insurance today in mix? I think you’ve given that a pass. And then two, at the 35% growth in Blue Car sounds really high. Is that just broad-based? I would think a lot of those markets are like cyclically depressed right now. So is it broad-based or did you win like a couple of large accounts that are driving some of that? And then I have a follow-up? Thank you.
Jeff Liaw: First question.
Leah Stearns: The mix.
Jeff Liaw: Oh, 25% circa, and a very seasonal issue, Chris, frankly with charity volumes spiking in the fourth quarter, first calendar quarter. We’ll call it one out of – just from memory over a longer period of time, one out of four cars is from someone that’s not an insurance carrier. But as you know, both portions of our business have been growing very meaningfully. So insurance is growing and also the Blue Car, Dealer segments as well. And then as to your question about growth within the Blue Car arena, it is across different types of sellers. So it includes banks. It includes rental car companies. It includes corporate fleets and its multiple accounts in each. So it’s not one big seller driving the performance of that business.
Chris Bottiglieri : Yeah, okay. And then the second question is more of a cost question. But when you onboard a larger customer, and this has happened periodically as you’ve won a lot of accounts over the years, what does this mean for expenses? Do you typically see like an increase in headcount or capacity? Is there anything you’d do differently when you’re anticipating a 4% or 5% customer coming on board? How do you handle that? What does that mean for the P&L before that volume arrives?
Jeff Liaw: That’s a fair question, Chris, and I would say I assume you intend to question largely for insurance. Is that fair?
Chris Bottiglieri : Yeah, correct, for insurance. If you win a large insurance customer, how does that impact the P&L ahead of time where the volume shows?
Jeff Liaw: It’s highly idiosyncratic. There are some insurance carriers that we will serve for the first time or we’ll sign them up for the first time. And in that case, the startup costs so to speak, depends in large part on their choice of technology platforms, what their business process looks like, and what it takes for us to integrate with them. In other cases we’ll have customers that we already serve and very substantially so, and we’re merely taking on additional states that we don’t already have. The marginal corporate cost, so to speak, at headquarters for technology and process development and so forth, is more modest in that case, as you might imagine. In the field, the costs certainly are substantial. We will hire additional folks in our facilities to handle both the physical movement and receipt of cars, as well as the back of the house title processing, the title transfer process, loan payoff, title procurement, etcetera, that we scale up as well to serve the customer.
And as you noted, generally speaking, somewhat in advance of that customer turning on their new business. We can’t afford to drop the ball once it’s on, so we make sure we scale up operations beforehand.
Chris Bottiglieri : Yeah, so I mean that’s what I surmised. Okay, thank you so much. I really appreciate it.
Jeff Liaw: Thanks, Chris.
Operator: Thank you. Next question is coming from Ryan Brinkman from JP Morgan. Your line is now live.
Unidentified Participant: Hi. This is Josh Batra [ph] on for Ryan Brinkman. Thanks for taking my question and congrats on a solid quarter. Just wanted to get a sense of how you’re thinking about the cadence of auction fees going forward. Do you continue to see room for price increases, even as used car pricing has started to moderate meaningfully over the past few months? And then it seems like some of your peers on the dealer side have increased their fees, and I’m wondering if Copart has followed suit.
