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Learn the Lenders, Inventory, Marketing and Sales Process Your Store Needs To Maximize its Profit Potential with this
Huge And Growing Market!
John Palmer, President & CEOProMax Unlimited & ProCredit Express
Become Great At Subprime - It’s Over 40% of the Market!
Pages: 56
Special Finance is 42% of the market!
% of population Credit Score
2% 300-499
10% 500-549
8% 550-599
22% 600-649
10% 650-699
18% 700-749
17% 750-799
13% 800-850
FICO Credit Scores
Source: National Credit Reporting Agency
Lending was up dramatically across the board for 2012
27 billion increase
Over 41 percent of Americans are in need of subprime financing options, and according to A. T. Kearney’s 15th Annual Automotive Study, the economic downturn of 2008-2009 resulted in an additional 15 million Americans being classified as subprime.
“A huge consideration in the sales and marketing strategy for retail automobile dealerships should be the resurgence of subprime.”
Jim ZieglerF&I Showroom Sept. 2013
You already have more subprime customers coming in your store than you think.
Start keeping track of how many and how well you are doing with them.
How do you turn Special Finance Prospects into Customers?
• The right mix of lenders• The correct inventory• Marketing tools to generate leads without
detracting from stores image • A blended sales process that maximizes every
opportunity
To be successful in Special Finance a dealership needs:
First - Select the right mix of Lenders
Lenders for the lower tier customerExeter Finance Corphttp://www.exeterfinance.com/CustomersContactUs.aspx
Westlake Financial http://www.westlakefinancial.com/Pages/LoanCustomersFAQ.aspx
Drive Financial http://www.santanderconsumerusa.com/about/contact_us.aspx
CAC http://www.creditacceptance.com/content2.aspx?page=2&subpage=3
Regional Credit Corp http://www.regionalacceptance.com/default.cfm?fuseaction=home&CFID=3114650&CFTOKEN=71963133
Flagship Credit Corp http://www.flagshipcreditcorp.com/contact_us.html
Globe Acceptance Corp http://www.creditreportproblems.com/Global_Acceptance_Credit_Company.htm
United Auto Credit Corp http://www.upfc.com/makePayment.asp
Honor Finance http://www.honorfinance.com/
Tidewater Motor Credithttp://www.tidewatercredit.com/
Prestige Finance http://www.gopfs.com/
Friendly Finance http://www.friendlyfinance.ca/
CPS http://www.consumerportfolio.com/
Lenders specializing in bankruptcy
AmeriCredit GM Financial http://www.americredit.com/contact_us_global.asp
Capitol One http://www.capitalone.com/autoloans/
Chase custom finance
https://www.chase.com/index.jsp?pg_name=ccpmapp/shared/assets/page/phone2
Wachovia https://www.wachovia.com/contact
Fireside Bank http://www.firesidebank.com/Dealers.aspx
Citizens http://answers.yahoo.com/question/index?qid=20090307205154AAtnjcs
Santander Auto Finance
http://www.santanderconsumerusa.com/dealers/dealer_contact.aspx
Security Auto Loans http://www.securityal.com/sal/dealer/SALHome.php
Citi financial http://www.citifinancial.com/USCFA/CFA/portal/Home.do
First Financial Investors https://www.fifsg.com/Contact_Us.aspx
Full sub-prime spectrum lenders
Next - Make sure you have the correct inventory.What works best for the prime side of your business may be just the opposite of what you need to be successful in Special Finance.
50% of the gross on Special Finance deals is based on the “Spread” the other 50% on how you work the deal.
First analyze your current inventory for Special Finance opportunities
(This actual dealer needs some good SF vehicles!)
If your current inventory analysis shows you need vehicles –
Go to the auction with a list of vehicles to buy for
your Special Finance customers
Here are some great Special Finance vehicles for your Special Finance customer
While most dealers have inventory automatically posted online, there is nothing that states or requires you to post your entire inventory.
If you buy inventory specifically for your Special Finance prospects, you can simply leave those vehicles off the Internet, so that you don’t get locked into unworkable deals structures.
Of course you can sell those vehicles to regular retail customers, but most dealers will see little benefit in pricing every Chevrolet Impala with prime credit pricing models.
• Your dealership website• A special finance micro site• Trigger leads• Fresh BK leads both open and discharged• References and referrals• Prior unfinanceable showroom traffic
Marketing and advertising tools to generate leads without detracting from your stores image.
Optimize Your Website to Get More and Better Credit Leads
1
Suggested plug-in images!
Place the credit offer on your Inventory Results and Vehicle Detail
pages to provide maximum exposure.
Advertise a separate website specifically for your Subprime customer2
Do you want to know who applied for an auto loan YESTERDAY within 30 miles of your dealership with a credit score between 500-639?
How it works: When a dealership, finance company, credit union or bank pulls a TransUnion, Equifax, or Experian credit bureau on a consumer the bureau is flagged with an auto inquiry. If the consumer falls within the radius and CB score range you have selected then your dealership will be given the name, address and phone number (usually about 30% have phone numbers after scrubbed against the do-not-call list). The next day a letter will be mailed with an offer of credit backed by a lender of permissible purpose. Average response rates vary between 5% and 10 %.
Trigger Leads3
Bankruptcy levels still over 1 million filings in 2012 and expected to rise in 2013
Judge Julia Gibbons, chair of the budget committee of the Judicial Conference of the United States, which oversees the federal court system, told a Congressional committee earlier this year that court administrators expect bankruptcy filing to increase by 8 percent or more in 2013.
Fresh BK leads both open and discharged.4
People with Special Finance needs usually have friends with Special Finance needs – Birds of a feather, do indeed flock together.
Most people with really bad credit just assume a new car dealer can’t help them and think BHPH is the only answer – This is a totally wrong assumption.
References & Referrals5
Send out a letter to every reference on your Special Finance customer’s credit application letting them know they were a reference and that you offer credit for any situation – perfectly legal.
“One dealer I know sells 10 cars a month this way with less than $500a month in ad costs!”
On every outbound and inbound call that is Special Finance oriented ask for 2 references at the end of the call – with training and skill, salespeople will average one per call.
You’ve spent thousands and thousands of dollars getting prospects into your showroom over the last few months that you could not get financed.
Prior Unfinanceable Showroom Traffic 6
Send out an email every 2-3 months to your credit challenged prospects.
• No separate SF department• Qualify prospect early • Work the deal backwards• Give customer a choice of 3-4
vehicles• Close the selected vehicle with
alternate choice close
A blended sales process that maximizes every opportunity
Qualify all showroom traffic easily
Two Types:
1. Appointments from SF marketing efforts
2. Walk-in Traffic
Appointments - Take appointments directly to office and fill out a complete credit application. Explain to customer you and your manager will pick out 3 vehicles for them to choose from that will fit their needs and help re-establish their credit.
Walk-in traffic – Much bigger than you think Analysis CB scores pulled in the last month.
Qualify in one of two way:1.Qualifying questions such as “Do you intend to
finance, lease or pay cash for your next vehicle?”
“On a scale of 1-5 with 5 being great, how would you rate your credit?”“Who are you currently making payment to?”“Who was your last car financed through?”“Are you here to take advantage of 0% APR financing for customers with preferred credit?”
2. Use a credit prescreen tool integrated into your CRM for automated qualifying.
If customer fits Special Finance criteria take to office to fill out complete application and see manager to come back with a selection of 3 vehicles.
Never leta Special Finance
customer pick out their
own car!
A manager needs to review the credit application and credit bureau to get an idea of available lenders. He can then choose the top grossing combinations of vehicles and lenders and select 3 vehicles which the salesperson can show the prospect.
This can be done manually with an inventory list or with available software programs.
Work the deal backwards
Give your customer a choice of 3 to 4 vehicles
Never give any customer an option of one choice – but always 3
Here is an example of a good alternate choice worksheet.
Close the selected vehicle with an Alternate Choice close.
John Palmer, President & CEOProMax Unlimited & ProCredit Express
If you have any questions, comments or need help with Special Finance?
You can contact me directly at: (800) 322-9034 ext. 103
Cell: 309-269-1247 or email: [email protected]
For more information visit our site at: www.promaxunlimited.com
Become Great At Subprime - It’s Over 40% of the Market!
