I am interested in the process and procedures of dealerships when it comes to chasing stips. When the F&I manager has "papered" a customer before an approval what happens when stips are still yet to be collected? Scenario: Customer has out of state drivers license and subrime lender requires drivers license to match present address or current pastub,utility bill, references,etc. Deal has already been contracted per sales manager, and sits in the F&I managers office waiting on customer to come up with stips. Accountability becomes F&I managers....contract date lags on....CIT problem becomes F&I departments problem. Give me some idea on how different dealerships handle this. Thanks

Tags: lenders, stips

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F & I manager better know what stips he needs for most deals and DO NOT contract the rig without them. The salesman gets no commission until all the stips are produced. After 20 years of dealing with customers of special finance, BHPH and car sales people, I know that we NEVER roll a rig without the basic stips. If you have a deal that looks good, send the salesman to the customers house on a "test drive" to gather stips. If you give the customer the car, they have no motivation to help you.
Hey Gene. Thanks for your reply. This question was presented to me by someone who was directed by the GSM to paper everyone, yet left him hanging with the accountability to chase stips and take the fall for issues it created. F&I is the backstop apparently meant once it's papered it was his "hot potato" This presents somewhat of a catch 22 situation...what would you do?
Frank I like Gene have been doing this a very long time and what you are describing is not asking it is begging for funding nightmares. Time for some frank honest talks at that dealership about who is going to be accountable when they happen. Not if but when because I promise you they will happen!!
Thanks jeff, I appreciate the feedback. I'll pass this on, but I'm looking for more specific input on your idea of the proper procedure. For instance would you paper customer first, then wait for stips, or would you tell the gsm nothing gets papered until the stips, what is your point of view of step 1,2,3, etc.
When I was doing SF, did not matter if I had a huge gross and the dealer wanted to roll the unit. Seldom a customer will sign all papers, not take delivery until the lender funds the deal. If can get customer to agree on leaving the car behind for a week or two until funding passes through and there is no legality to keep from doing it, then I did it. But again, depends on the customer. With out of state license to match address, the lender is just looking for ways not to fund deals, when able to collect utility, phone, post marked bills, etc. I typically got on the phone with the bank rep, because they too have to earn their commission ..call the funding dept. and the rep.
Frank, The GSM must not understand the financing process or he wouldn't ask the F & I person to do this. Why not just give cars out for free? He will be searching for one soon or kissing the paper at the bank.
1. The sales person needs to be trained on the entire process to get the Special Finance deal done ( I prefer a specific person for SF). If the deal is not funded the sales person is not paid. The sales person should know very quickly who he is dealing with and change his tactics quick. I have always identified a SF customer quick and brought them in for "pre approval" before selling the car.
2. The desk man (or specific SF person) should know where the deal will be "hung" once he sees it and guide the salesman on the needed stips or "boot" the customer out.
3. The sales person needs to get the customer licking the paint on the right vehicle, ask them for a cash deposit, then send the customer out for the stips.
4. F & I can get a pre approval and the customer can be brought back in for delivery. I usually make an appointment while the customer is licking the paint for them to come back that afternoon or the next day.
The GSM ISN"T the expert, if he's not an idiot he would never require papering every car. In Wisconsin it's not an option, when they sign, it's done. Chasing stips is amateur. All stips in and faxed (and approved) before the car leaves, period. Anything less guarantees problems.

Thats how we do it ...usually a salesperson has some contact with most SF customers before they hit the lot and are well versed in what they need to bring with them to make a same day drive it home now deal... ...either that or (depending on the deal) chase or fly ...the cars only get delivered when there is a cashable contract in the bucket. During bankers hours we will; fax the documents and signed contract with all stips to the bank while the customer is there and the last thing that happens is the customer does his interview (PC) with the bank ...all done !!

 

The F&I Manager should be taken out back and shot for "Papering" a Special Finance Customer before all of the Stips are in house. I would probably do likewise to the Sales Manager who signed off on typing the deal. You own the contract if the stips are not in and the lender won't fund the deal. Now if you don't mind holding the paper on those deals have at it, but most dealers who made it beyond 8th Grade, and have not experienced a closed head injury know better!
To me stips are like that measuring stick on the amusement park ride. You have to be this tall to ride. You wouldn't get on the ride if you didn't meet the height requirement. Collect and explaine the stips before your customer even begins the rollercoaster ride of getting approved. When your sales staff uses the stip collection process as a rapport building tool they will get better flexibility from the customer. If you don't calculate the paystubs for accurate income, there is no way to overcome that with the customer or the bank once the deal is done. Everyone has the stips on them. If they tell you they don't its because they know the stips they have don't qualify and are hoping you make the mistake of forgetting about it.
Right on Peter. There is only one way to insure every deal is funded, and that is to make sure the stips are in house, and correct before the paperwork is done. Who needs the added stress of held offerings with Sub-Prime Lenders, not to mention the dealer proncipal heat that is sure to follow.
Great analogy, Peter. I need to remember that one. You are absolutely correct. The stips absolutely, in every case, with no exceptions need to come prior to delivery. As has been stated before, once the customer is driving, they have no reason to help you. In today's economy when every dealer is, or should be, keeping a close eye on available cash and frozen assets, deals that don't fund promptly because of uncollected stips will bring the kind of attention we all want to avoid.

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