Car Dealer Lawyer

One of the most difficult parts of the car business is keeping your gross margin high.  When you buy your cars in an efficient market and sell them to an increasingly sophisticated customer base, it is difficult to maintain a return that justifies the investment, effort and risk.  There are only two ways to increase your gross margin: (1) charge more for the car; or, (2) buy it for less.

Stephen Lussier, a classic car dealer in New England, allegedly discovered two aggressive ways to increase his margin:  (1) don’t pay for the inventory (theft) and (2) assign contracts to banks without sales to back them up (bank fraud).  Mr. Lussier’s plan was pretty simple - take cars in consignment, sell them, and then don’t pay the owners.  This was good for about $150,000 to $200,000 in revenue.  The bank loans were good for about $430,000 in revenue.  But the great thing about Mr. Lussier’s business model is that he had absolutely no “cost of goods sold.”  If he kept his rent, advertising, payroll, and other expenses down, then his bottom line would look pretty good.

Theft and bank fraud on a large scale will lead to a government bailout, but on a small scale it usually leads to jail.  Mr. Lussier was indicted in both state and federal court and is facing a maximum of 7 1/2 to 15 years in prison for each theft charge.  But from a pure numbers standpoint, his gross margin was a thing of beauty.

Source:  Nashuatelegraph.com