Best way to keep an after hours deal together?
Everyone's had deals like this. It's 5:30 on a Saturday, the customer is a 630 fico who should get done, but all the banks that can do the loan are closed. What's the best way to keep the deal together when an approval won't be available until Monday morning?
Replies to This Discussion
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Permalink Reply by MARV ELEAZER on -
With all the proper insurance/loaner docs in place and a valid driver's license simply dehorse the customer explaining that "Everything will be fine, the banks are closed at this time. What time will be good for you on Monday to stop by to finish your paperwork. 4 or 5:00?" Make sure there's plenty of fuel in the vehicle and then head to the house for a margarita.
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Permalink Reply by George M on -
Get a deposit or partial down payment so you have leverage to get the customer back in. Too many people walk with final numbers and start dialing or googling when they get home then come back and want to re-negotiate.
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Permalink Reply by Secondarypro on
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Harlene, that's easy. Just have all banks send you the complete computer scorecard that they used to buy deals.(LOL)
I would generally just spot the deal on a "one pay" contract. I tell the customers that we have several banks available and I want to make sure that they all have an opportunity to get the customer the best financial deal.
Very few customers will say no. Everyone wants the best deal.
Ben
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Permalink Reply by Mike Canfield on
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You can never go wrong getting a substantial deposit and arranging delivery on Monday. 1) If they go shopping, it means the deal wasn't solid to begin with. 2) If they don't get approved, you still have the car.
Until the days of instant approval that process always worked. Deals very seldom fell apart. Very seldom.
The key is the deposit. If you only get $100, that's the level of commitment you'll get. I always believed in asking for 10% down to hold the car. As it's likely to be $3000, you'll have a shocked look on the customer's face. They'll say: "I don't have $3000, will you take $1000?" At $1000 you can be sure they'll be back to take delivery.
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Permalink Reply by Matt Schnell on
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Thanks for all the great feedback, you all are great. Certainly interested to hear what anyone else has to say as well, but I'm gathering that to keep the finance deal together, I have to better teach my salesmen to get the deal together stronger before it gets to the box. As my old, old sales manager used to say, "It's all in how you set them up"
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Permalink Reply by Tim Burns on -
Spot it. That's what you pay your managers for...to make these decisions. If DTI/PTI are in line and you have a good enough relationship with your lenders, get it hung on Monday. Get POI/POR & REFS just in case. If you're having questions about 630's, give ma a call. I need a new gig anyway. Put them on a BVA, collect a deposit, and that car will be sitting in your lot on Monday AM b/c they ran into a SALESMAN on Sunday.
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Permalink Reply by Gene Daughtry on -
Tim sounds like he went to the same "school" I did in the car business.
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Permalink Reply by Mike "BK" Anthony on -
Tim and Gene are right on ,,, If i cannot place a 630 I should be shot. Spot Spot Spot !!!!!
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Permalink Reply by Matt Schnell on
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I should have been more specific with my customer info. The 630 I was talking about had 3 short lines of credit, no installment. Most likely gonna need a cosigner to get anything done, otherwise a credit union deal. Most of my banks are worthless, as nobody wants to take independents anymore, and the ones that were good have been shutting down left and right. If I spot it on paper like you two recommend, what are my options if no one picks up the deal? This is the issue that I'm running into. I would like to be as aggressive as possible, without ending up holding the note for the next 5 years myself.
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Permalink Reply by Tim Burns on
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A deeper 630 would be nice. Now the equation has changed. I'm not in one store at the moment but I know things are changing daily. I always keep someone in my hip pocket that will do these deals on equity if nothing else. (Say, 75% LTV...no matter how you get there.) Your captives like VW Credit or Toyota will do these deals if you're sending them enough of your A+ paper and they're on the right car. Are they a college grad? Are they military? There's a "seat for every butt".
I was in a store for 10 and a half years that spotted everything and the dealer loved me but he'd fire me before he'd kiss a note and I never asked him to. My last dealer would not put anything on paper without an approval in hand. (As far as he knew...LOL.) That's the thing about having a great relationship with your desks. If you start having to cut gross to get it in line, they'll agree to BVA it until Monday. TODAY, at 5:30 on a Saturday, with a thin 630, I'm collecting the DP/Stips, signing everything EXCEPT the LAW contract and black-tagging it. I'm making the customer comfortable that I'm working to get them the best financing available and I'll need to see them once more @ their convenience early in the week. IF they won't go for that, sign them up at usury rate on that year model, only IF everything else is in line.
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Permalink Reply by Gene Daughtry on
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If you spot the customer on Saturday and Monday you cannot get the loan done then you have to call the customer and tell them that you missed a document and they need to stop by and sign. Or you can tell them the VIN did not match up on the paperwork and that you have to verify it and have them sign the verification form. I worked at a store in the 90's that would spot up to 100 deals on Saturday's. I can only remember 2 times in 2 years that we had a problem getting the vehicle back.
I haven't been in retail finance for several years and today I would not have them sign a contract. On a 630 with 3 tradelines I don't think I would even BVA that customer. I would go for the cash deposit and make an appointment for Monday.
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Permalink Reply by Tim Burns on
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I remember those Saturday's! Off topic...I left the dealer I'd been with for 10 years chasing money. A year later they needed me & I went back. In that year, the F&I department had ruined our relationships with the lenders. AND they had 40-plus people on contracts they couldn't cash. I found deal folders hidden under desks and above ceiling tiles. CIT was sitting at almost 60 days...One customer had been making his pmts at the store for 90 days. I fired everybody & brought in my crew. We worked day & night. All of these were subprime deals, so phones were disconnected, ppl had changed jobs, etc...We brought everybody back in, got new approvals, new stips, restructured a few deals...Long story short, we had to get ONE car back, and that guy WANTED out of his deal.
The buyer is smarter now than even 10-12 years ago. They know a contract is binding and they can hold our feet to the fire. None of my guys ever held copies. If they called me at night about an "iffy" deal, I asked them to do what I'd do. If you've got enough DP and can take enough rate, I'll get it done. If you're whipped by the pencil, it can wait for an approval. I'll fade the heat if we lose the deal. If you handle it right, you can make 'em feel like they bought a car and they won't shop you while you're getting an approval.
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