Making Lemon Aid from Lemons

Geoff Cohen

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Everyone that has anything to say about Special Finance all agree on at least one thing. No matter how many cars or how much profit they make, it’s never enough. For the amount of effort required, Special Finance Departments are always expected to do better than they do, yet nobody seems to be able to pinpoint the short comings. They point fingers at the Used Car Manager (“The inventory stinks!”), the Special Finance Manager (“He can’t get a deal bought!”}, the Salespeople (“They can’t qualify a customer!”), the Sales Desk (“They can’t work a deal right!”) or the BDC (The leads they get stink!”).

Sound familiar? I’m sure you get some, if not all of those comments at your Manager’s Meetings on a regular basis. So what do you do about it? You can let the war go on, with each department trying to blame the other, or you can call a truce and find a solution.

Regardless of the source, your leads are only as good as you make them. The main reason that leads don’t produce appointments for a dealership is nobody has really worked them. What typically happens is whoever is making your calls attempts to contact the lead once or twice. After getting no response, they assume the lead is dead, and it’s filed away in the no-sale category. Let’s analyze this for a moment.

Who do you have making the calls for you? If you have a BDC, there is no reason for this lead to be filed away and forgotten. The BDC’s primary responsibility is to make contact with your leads and/or customers. They should continue attempting to contact until either the customer buys a vehicle from your dealership or specifically asks not to be contacted again. If you have a specific person making these calls, you need to be sure the process is the same. You have only two types of customers – those that buy and those that don’t!

The secret to phone success is perseverance. You must continue to call until you actually reach the customer. Make the initial contact, set the appointment and sell the process. You are selling the concept of rebuilding the customer’s credit. “Sell a loan and get a car”. Continually leaving messages accomplishes nothing. Stagger your calls, so you do not try to reach them at the same time each day, your mission is to secure an appointment. If your initial contact is say, Monday at 1PM, and you call and get no answer, call back during the next day at 3PM. Work in two hour intervals. Why call back the next day at the same time? Follow up on Monday at 4pm as well as Tuesday at 6PM. Use this 2 hour stagger arrangement for the next two weeks until you contact this lead and get an appointment. In the meantime, be sure to send a follow-up letter or email to your lead, which at least lets them know you received their inquiry and have been trying to contact them.

If you think the customers are not being worked properly, then you need to rethink your entire process. Too often we find that the reason a dealership is missing out on the sub-prime business in their market, yet the dealership down the street is doing extraordinarily well is the process they use. The sales desk gets the prospect first and the desk and the salesman work the deal like a primary customer, only to find out after the deal is made that the customer has credit issues. Sub-prime customers must be worked backwards from a regular customer. Keep your customer focused on the credit issue and away from an inventory issue. Teach your salespeople how to properly qualify a customer. Make sure your sub-prime appointments come in asking for a manager who is already expecting them. Do it this way and you’ll know upfront how to deal with a customer when they get to your dealership. Make sure your salespeople know to refer these people directly to you or all is lost again.

Speaking of salespeople, make sure to properly train your salespeople on how to deal with a sub-prime customer. As I said earlier, these customers need to be work backwards. The first order of business is to assess their credit issues. Find out exactly what their situation is and work your deal accordingly. Keep you customer focused on the credit rebuilding process and away from your inventory and you will close a lot more deals.

Inventory is always an issue but should never prevent you from making a deal. If your used car inventory is not properly aligned for Special Finance, you have two choices. You can pass on every deal because there isn’t enough profit on that particular vehicle or you can deliver a car, make the most profit you can on that particular deal, reduce your used car inventory by one, and go on to the next deal. As my dad used to say, “It’s just a hunk of steel that needs to go away. ” Get it off your lot and get another one to replace it. It’s not like there aren’t any more used cars to go around.

More importantly, is your Used Car Manager up to speed on what he needs to buy. Does anybody let him know what inventory is preferred by your sub-prime lenders, or what vehicles tend to do the best with your sub-prime customers? If you want the best inventory, everyone needs to be on the same page. Communication is always the key.

If your problem is getting deals bought, the question is “Who is working your deals?” Are your sales desk or primary F&I manager working the deals? If you’re having problems getting deals hung, maybe you need to consider splitting your primary and special finance departments. A dedicated department focusing solely on special finance will allow you to rehash deals more efficiently, as well as having someone who knows the lenders and how to structure a deal accordingly. Remember that anybody can deliver a vehicle; the real talent lies in getting the deal funded quickly and without any deductions.

Things are never as bleak as they seem to be. No matter how bad things may look, with a little bit of cooperation, success is within your reach. Stop the finger pointing and get everyone moving in the same direction. Soon your sub-prime efforts will be everything you hope for and more.

Geoff Cohen is a seasoned auto professional, with over 30 years experience. He has done it all, from sales rep to F&I Manager, New Car Manager, Used Vehicle Manager, up to GSM and GM. He has also worked as an area sales manager for a major sub-prime lender as well as run his own BHPH and Auto Leasing/Brokerage company. . He is the National Accounts Manager for AutoLending Network and is a contributing author to , a blog about Special Finance solutions for auto dealers as well as F&I Magazine and World of Special Finance Magazine


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