Used Vehicle Group

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Comment by John Fuhrman on November 19, 2009 at 9:05am

Structuring Deals With Credit Issues

A customer comes into your showroom and begins the process of selecting and negotiating to purchase a vehicle. The salesperson does the job of locating the right vehicle in inventory, demos the vehicle, and begins to close the deal. Negotiations go back and forth and ultimately a price is agreed to. Sounds like nothing out of the ordinary so far.

Now, you take the customer application and begin submitting it to the lenders you have. One after another, you receive the news that this customer has a credit score that is lower than they accept. You have one lender who does look at deals like this. They take a little longer, but you get an approval. The problem is, even with the approval, you can’t deliver the car. The discount fees make this deal a loser.

You can avoid this by simply working the deal in reverse. Instead of negotiations and selection, work on approval first. Find out who and how the deal will be bought and then let the customers know which vehicle(s) they can and will be approved for. The only way to do this is to really qualify the customer before they look at too many vehicles. And, the best way to do this is to ask one simple question.

This simple question works every time, is not high pressure, and can be asked almost immediately after greeting the customer. Here it is. “Mr./Ms. Customer, if by chance we find the perfect car for you today, do you usually just write a check, or will you need help with financing?” There are only three possible answers.

If the customer says, “I’ll just write a check,” there’s a great chance that you can find a car and make a deal. If they answer, “I’ll be going to my credit union, bank, or other,” they probably have good enough credit. And, if they say, “I’m going to need some help,” you have the answer. You simply say, “That’s what I’m an expert at. Tell me about your situation.”

Once you have their information, have them pick a car or two and let them know that you’ll run them through the application process to see which they can qualify for. Then, they can try and negotiate. But, because you already know how the deal must be structured, you won’t give away what you need to cover any fees. Plus, if you’re using our lender program, you’ll be able to sell a service contract and GAP to add to the total profit of the deal.

This Week’s New Dealers

Grimard’s Auto Sales – NH Earth Auto Shippers – TX
Imports Plus – ME Graham and Nash – NC
East Coast Auto – NC J + G Auto Sales – TX
8th Street Auto – WI

Welcome New Agents
Randy Welter – Western NC, TN, GA
Antonio Sturges – New York

If you’d like more information on adding lenders or used car leasing to your dealership, please email, jfuhrman@dealerprofitsnow.com and an agent will contact you within 24 hours. In addition, you can get info on Service Contracts, GAP, Key Replacement, Appearance packages, Tire and Wheel coverage, Maintenance Programs and Etch. Carolina Automotive Resource Services is now serving dealers in GA, SC, NC, TN, TX, VA, MD, PA, NY, NJ, CT, RI, MA, ME, NH, and VT.

Comment by John Fuhrman on October 7, 2009 at 5:19pm

As we continue to grow, we are discovering the innovation that makes our business exciting even in tough times. We are now adding a second web based application program that will give dealers a minimum of 6 10 lenders who really do buy well structured deals.

What we bring to the table with the application is training for anyone who is not familiaar with proper structuring of lesss than prime deals to insure maximum profits even withthe discounts that lenders charge.

In addition, dealers who qualify can have the use of this entire process at no cost to them by using select products with those deals. If you're interested, you're probably asking how well this might work for you. Here's our experience.

If you are losing about 20 deals on average that can't be approved, we'll help you recover 4-6 of them. Plus, you'll be able to make profits with service contracts and GAP that we've got pre approved for these lenders. You can continue using whatever products you have with all of your other deals and just use our approved products on the deals we get financed.

For more info email jfuhrman@dealerprofitsnow.com

Comment by Lin Poissonnier on April 3, 2009 at 10:36pm

Hi, All

Comment by Dugan Anderson on March 30, 2009 at 11:02am

Just wanted to pass this on:

At a recent dealership visit, the owner of the Inn where I stay pulled me aside and asked to share a story with me. I am ALWAYS pushing this establishment for her, for its GREAT food, atmosphere and staff. I assumed that was what the story was about and here it is:

A salesperson at my client’s dealership (RV Dealership) was trying to strengthen the relationship between his customer and himself, and offered to take them to lunch. Having heard so much about the Inn where I stay, he decided to take them there.

He and his customers went in, were immediately seated, the waitress took their drink orders and gave them menus to look over. After a few minutes the customers informed the salesperson there was NOTHING on the menu that excited them and wanted to leave. When the waitress came back, the salesperson politely asked for the check. Shocked, the waitress asked if there was a problem and was told the menu was not to their liking (the customers liking), that they had their minds set on a steak and none were offered.

Flustered, the waitress went to get the check, but stopped by to chat with the owner, first, to tell her what was going on. The owner went promptly went in to the kitchen, asked the chef if the grill was hot enough to cook steaks and was informed it was. She then grabbed a couple of dinner menus and presented them to the salesperson and his customers. They selected their steaks, had a nice lunch and then went on their way. By getting someone else involved, they turned a $10 beverage sale into a $120.00 meal ticket. Shouldn’t we ALWAYS get someone else INVOLVED?

Is it POSSIBLE that this, or something like this is happening at your dealership? My point(s) are these;

NO one single individual in a dealership is QUALIFIED to let a customer GO, without a SECOND OPINION.

TWO HEADS are better than ONE.

EVERY customer needs to talk to a manager, BEFORE they leave the dealership, NO EXCEPTIONS.

Or my new favorite, NO ONE LEAVES UNTIL THEY’VE SEEN THE DINNER MENU!

Comment by Shawn Foster on February 27, 2009 at 9:14am

Charlie

What you might find is it is easier to leave your business out of it. Last year I got 100k from wells fargo and 50k from cap one on two credit cards through their small business departments. Go for it from a personal side and leave your business out of the conversation. The rates are comparable and you wont scare them off by telling them you want to run a used car dealership with the money.

Comment by Charlie Hernandez on February 26, 2009 at 11:18pm

Does anyone know if there are any banks out there willing to give working capital loans to a dealer in business for over 7 years, with excellent credit and credentials?

Comment by Sheldon Wolff on February 26, 2009 at 9:46pm

spring is here and tax money is coming, lets a have a great new 1st 1/4. lets create our own stimulus package!

Comment by Fred Stice on February 25, 2009 at 2:32am

I am glad to be part of this group, I look forward to the great discussions here.

Comment by Shawn Morse on February 23, 2009 at 11:43am

I would check out westlake, chase subprime, wachovia,fireside, and UCS. They are banks that i had success with as an independent dealer

Comment by Secondarypro on February 23, 2009 at 10:25am

Charlie,
Unfortunately the banks you want are going away and most other lenders want 2 years business records before they sign you up.

Westlake Financial is good for the low end paper, expect that your down payment will be 50% of your profit. ( ie $2K down gets you a $1K profit). They do not have any real requirement for a dealer. www.westlakefinancial.com

Ben

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