NVLA LeaseWire
08/03/2020 | Issue 13

President's Message
Trust, like reputation, is collected in drops and lost in torrents.

Billy Joel, who has entertained us for generations, was recently asked which decade in his career has been his favorite. His immediate reply was, "This one!"

While I’m not comparing myself to The Piano Man, were I asked the same question, I would have the same answer, as I continue to enjoy my days in leasing now even more than I did, to use Joel’s lyrics , "when I wore a younger man’s clothes."

As I think about why I was initially attracted to the vehicle leasing game, my mind goes back to my first exposure to it. I liked cars, I wanted to be in business and I wanted to serve people. However, I now realize that the primary reason that I have stayed in the leasing business is because of the integrity of industry members and suppliers with whom I have had the pleasure of interacting.

No trade is perfect. There are always a few unsavory characters, but our vocation does an excellent job of weeding them out. I once called for a reference on a salesperson whom I had interviewed. The past employer’s response still rings in my ear: "I don’t give references over the phone, but I will tell you that he used to work here, and he doesn’t work here any longer. That’s all you need to know."

When federal agents are taught how to spot bogus currency, they aren’t given counterfeit money to examine. They study genuine bills until they master the look and feel of the real thing. Then, when they inspect counterfeit money, they recognize it because they are familiar with genuine currency. I have always made it a priority to spend time with high integrity industry members, and the result is that it helps me to recognize a genuine leasing professional versus one that is not so much the real deal.

Early in my career, I learned a valuable lesson in dealing with unscrupulous behavior when the company I was working for purchased a small distressed lease fleet. One of the reasons we were attracted to the portfolio was that we forecasted a high amount of closed-end equity in the units at lease end. Our due diligence of the files confirmed that only a very few customers had any option to purchase. We quickly became aware that one of the lease company’s previous managers had left the building with a package of its blank letterhead. It wasn’t long before several customers at lease end were producing forged letters signed by that manager giving them the option to purchase for only a few dollars over our residual.  I was livid and went to the owner of my company making it no secret how I felt about the integrity of both the customers and the previous manager. I wanted to challenge every one of the bogus letters and refuse to sell the units to any lessee who was involved. Burke Seitz, my employer, looked at me, then a twenty-something, and said, "These customers know the type of company they dealt with when they signed their lease, and they know the lack of integrity of the previous manager. Let’s show both the customers who we are by honoring each and every option to purchase that they produce, and we will avoid all the energy and ill will that fighting with the customers will create."

The result was that we very successfully renewed most of the leases, and we were able to gain back considerably more than we lost on the forged letters.

Trust and integrity are essential to any business. One of the best ways to network with high integrity lessors, funders, and suppliers is to attend the upcoming NVLA conference March 25 – 27 in Austin, Texas. You will be immersed in The Wins of Change through cutting edge and current presentations, exhibitors that alone who worth the price of admission, and you can catch up with so many NVLA members who are key players in our industry. Of course, spending a few days in such a unique city in a great state will also result in time and money well spent.

2020 NVLA Annual Conference Keynote Speakers
Clemens-Pender Lessor of the Year Nominations
The NVLA is now accepting nominations for the Clemens-Pender Lessor of the Year Award, the highest honor given by the National Vehicle Leasing Association.

Award winners are judged on three categories of achievement:
  • the candidate's service to the industry
  • the candidate's service to the association
  • the candidate's contributions to the community

To submit a nominee, please complete the
2020 Clemens-Pender Lessor of the Year Award nomination form by February 28, 2020.

Open Positions for the 2020 NVLA Election
The Nominating and Elections Committee is seeking candidates interested in serving on the NVLA Board of Directors or an NVLA committee for a one-year term commencing July 1, 2020. Please view our Board Roles and Responsibilities document for an overview of each position.

  • President
  • First Vice President/President Elect
  • Second Vice President
  • Third Vice President
  • Treasurer
  • Secretary
  • Regular Member Director-at-Large (4)
  • Associate Member Director-at-Large (3)
Interview with Leasing Industry Veteran and Serial Entrepreneur Terry Bowdler
Terry Bowdler, founder and CEO of LHPH Capital, talks pioneering subprime leasing, industry curveballs, and the importance of relationships.
If you have been around the NVLA crowd for even a short while you have likely heard of our resident living legend, Terry Bowdler, founder and CEO of LHPH Capital. Bowdler is a pioneer not only in the general leasing arena, but also in the fast-growing and relatively new niche of subprime leasing known as Lease Here Pay Here (LHPH).

He first became familiar with the organization that has evolved to become the NVLA early on in his career and has been an active supporter of and leader in this association throughout his (very successful) career. Bowdler previously served on the board of directors for 15 years and launched the NVLA LHPH division. As we approach the 2020 national conference in Austin, Texas next month, we interviewed Bowdler about his intriguingly innovative career and how the NVLA has served as a touchstone throughout, as well as his well-researched take on the future of consumer leasing in the face of technological advancements.

Bowdler's story has an all-American, small-town start. In 1977, he drove from Geneva, Ohio, population 5,000, to San Diego. He had a high school education and $1,000, plus a commercial license to drive a semi truck.

"That was an ok job," he said, "but just not for me."

In San Diego, Bowdler came across General Car Leasing, a leasing broker with several offices. Within a few months, he knew: "This was what I was supposed to do. I then worked for Autoland as a branch manager and was promoted to vice president to introduce leasing to the four offices. I basically taught rookie sales people how to sell a lease and write a lease by hand."

After several years in the leasing business, and now the Autoland vice president in Los Angeles, Bowdler found California Leasing Association, one of the associations that would eventually evolve to form the NVLA, and went to his first chapter meeting in 1983.

He was intrigued.

"After moving back to San Diego, I got involved in the leadership and eventually became the San Diego chapter chairman. Our meetings had about 40 to 50 people made up of dealer lessors, brokers (a growing segment of the industry), and people just wanting to learn how to get involved in leasing."

He went on to say, "At the time, the leasing industry was going through a major shift--large banks were getting involved and going directly to consumers through the dealerships. This led to heated debates and tense talks amongst independent lessors."

Concurrently, with Bowdler's and others' help, the NVLA started the Certified Vehicle Lease Executive (CVLE) program, a two-year, fully-accredited course that was the fruit of a partnership between the NVLA and San Francisco State University. It was composed of five segments: legal, accounting, technology, marketing, and insurance. Each was taught by the foremost expert on that topic in the leasing industry. Of the program, Bowdler said, "Very detailed. A really solid two-year education. The relationships the group made at the time were priceless and I couldn't have achieved what I have without this program."

Throughout the interview, Bowdler made it clear that relationships have always been the foundation of his businesses and their success. With the CVLE education, Bowdler was ready to step out and the serial entrepreneur emerged.

Throughout the 1980s, Bowdler started several leasing businesses. The first was Auto Lease Specialists, with a staff of one: Bowdler. Again, he highlighted the importance of relationships, noting that Steve Murphy, then-president of First Leasing, spent a lot of time mentoring him. "There were 17 banks funding First Leasing. I would question Steve on (road) biking trips and ask him everything about the business." Murphy gave Bowdler his first line of credit with Auto Lease Specialists, opening the door for more funding and eventual growth.

Next, Bowdler, along with a hire from his Autoland days, Kevin Watkins, started New Cars, Inc. as equal partners. New Cars, Inc. is still in business today, with Watkins as the owner.

Two years later, in 1988, Bowdler began Credit Union Leasing of America (CULA) as an R&D company to identify how to merge credit unions with the leasing industry. Bowdler explained, "Credit unions were good at providing car loans--they had lower rates than banks and didn't pay federal or state tax."

"In 1989, we landed the first credit union willing to give leasing with CULA a try--there were no legal regulations at that time." By the early 1990s, Bowdler went on to explore the credit union relationship full-time by launching indirectly-funded credit leases. "The dealer leases it and documents it, and the credit union and CULA manage the portfolio. This was an unheard of concept at that time."

The early 2000s brought peaks and valleys for Bowdler. In 2000, he saw CULA through the industry shake up when nearly all banks stopped their leasing programs due to the residual crisis.

Amidst the instability, Bowdler, with the help of NVLA's general counsel, Cary Boyden, and NCUA's general counsel, Robert Fenner, put together the regulations for credit unions to do leasing, known as FCR 714 Federal Leasing Rights. "Strategically, this was a big feather in our cap," Bowdler said.

In 2009, CULA had a near-death experience. In two years, CULA's lease portfolio plummeted from 20,000 leases to less than 4,000. Bowdler's staff went from 50 to nine. He had to look at all options and make a pivot. He recounted, "A friend asked if I knew about the Buy Here Pay Here industry. I had never heard of it. I then had the idea to put leasing into the BHPH industry. I met with BHPH industry leaders Don Foss, Chris Leedom, and Ken Shilson. All agreed that LHPH would be a successful direction to go."

Bowdler went on to explain: "The average BHPH payment is $90 per week for a seven or eight-year-old car with 120,000 miles on it. My idea with LHPH was to find out--can we go to the same people for same weekly payment and get them a three-year-old car with 50,000 miles? Yes, we could. The test project was a success."

Several years later, in 2016, Bowdler had his biggest opportunity yet: become one of the only organizations to lend to LHPH dealers. Later that year, LHPH Capital obtained its commercial lending license.

In April 2017, Bowdler sold CULA, with its $1.5 billion lease portfolio, to Westlake Financial, giving Bowdler the resources to grow LHPH Capital.

With a career like his, people always want Bowdler's take on the future of consumer leasing, so we asked. "I might have a controversial view of what's next, but I think leasing will look totally different in 10 years," he responded.

Here's the breakdown of his take on what the future holds:
  • AV/EV industry will become mainstream, maybe within the next 7-10 years.
  • Individuals will subscribe their own vehicles to others to generate income.
  • Manufacturers will engage in a TV-style subscription war that will target consumers directly.
  • As a result, lessors that don't plan for a big pivot will become extinct.
  • Lessors will need to find their niches and excel at using technology, starting now.

With the 2020 conference quickly approaching, we asked Bowdler about how the NVLA has influenced his career. He explained, "NVLA has been the main organization to support my career in leasing. I want the same thing that NVLA wants--ethical dealers promoting the concept of leasing across the country. I want to introduce the LHPH dealers to NVLA because the top people in leasing are involved with NVLA for education and networking."

National Vehicle Leasing Association
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Menomonee Falls, Wisconsin 53051
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