Galaxy Motors management team (from left) Trent Cummings

Galaxy Motors management team (from left) Trent Cummings

Growth projections out of this world for Colwood-based Galaxy Motors

Former chef Phil Dagger leads auto dealership’s expansion

The used vehicle industry in Greater Victoria is highly competitive, with operators doing whatever it takes to attract and keep customers.

In an industry where small- to medium-sized dealerships dot the landscape, especially on the West Shore, some organizations have done a good job of building staying power.

One such company is Galaxy Motors, which centralized its Greater Victoria operations in Colwood on Island Highway in 2010-11, having opened lots in Nanaimo in 2009 and Duncan in 2010. Galaxy recently opened stores in Courtenay and Langley, giving it five sales lots in total.

Company owner Phil Dagger estimates that Galaxy, its growth fuelled by repeat and referral business, will open four or five new dealerships on the mainland within the next four to five years.

“I like to think we always treated customers the way they wanted to be treated,” he says of how Galaxy sustains its business.

A former executive chef who enjoyed success selling cars for a major GM dealership in Victoria in the mid-1980s, he leapt into the world of pre-owned vehicles in 1988 when he borrowed $10,000 from his mother to open his own business – Uptown Motors focused on the wholesale vehicle trade.

“I still had some of that entrepreneurial spirit in me,” says Dagger, an affable Brit who shuns the spotlight.

The Galaxy Motors name was secured in 1990 when he spent “$40,000 that I didn’t have” for the rights to use it, Dagger says. The new company landed in various locations, primarily on the West Shore, and operated multiple lots in Greater Victoria in the 2000s, when head office was located on Attree Avenue in Langford.

According to Galaxy general manager David King, the decision to pull everything back together on one site was made partially to eliminate competition between lots. “We were competing with ourselves more than anything,” he says.

Removing the cost of operating multiple lots in Greater Victoria also allowed Galaxy to upgrade its inventory, King says. While it happily accepts trade-ins, this is not a company in the business of refurbishing tired, older vehicles. With few exceptions, the rule is to avoid selling vehicles older than 10 years, or those with more than 175,000 kilometres.

It also spends approximately $750 per car in refurbishing costs, which includes a 155-point pre-sale inspection, far more intensive than the industry average of 42 points, King says.

In describing the company and how it operates, he says, “We’re like a new car dealer that doesn’t sell new cars.” He explains that concept by saying the company’s inventory – more than 620 used vehicles at last count, worth upwards of $10 million – allows it to match clients with their desired vehicle in a way similar to new car dealerships.

“Each dealership operates as if they have 600 cars, and at the end of the day, they’re all Galaxy cars.”

A major underpinning for the company, like most car dealers, is its ability to arrange financing for customers, a strategy it undertook way back in 2002. Galaxy was one of the first pre-owned vehicle dealers in the area to offer sub-prime loans – also known as second-chance credit – to clients with credit issues or income challenges.

Today, King says, Galaxy’s sales ratio is about one-third each for cash deals, sub-prime rate financed deals and those financed at prime.

Galaxy expects to do an estimated $55 million in revenue this fiscal year and an incredible $80 million to $90 million next fiscal with the new dealerships and its service departments contributing ever more significantly to the bottom line, King and Dagger say.

Asked about his long-term goals for Galaxy Motors, Dagger, who employs more than 100 people, mostly full-time, grins and says the plan is to keep moving forward, keep buying cars and continue to offer more choice for customers.

“It’s just what I do; work is not work. It’s a passion, something I thoroughly enjoy. We’re going to keep growing.”