As a G/A, I have over 40 dealers my agents work with.  The Lender Company I work with is about to sign dealer #500.  I share this so dealers reading don't think I had one bad experience.  Dealers are in a time warp.


Every dealer we speak with has the same basic complaints.  Financing is tough.  The rules have changed.  Banks are tight and credit scores are lower than ever.  Independent dealers have even bigger challenges.  Lenders are leaving their markets faster than ever.  Every dealer knows this.  Yet, once they get a deal, they think it's 2005.


Lenders are slower, tighter and more restrictive than ever.  Deals with $500 down on 100K mile 10 year old cars with 590 credit scores are not getting financed.  And if they can get approved it will be at a deep discount and it probably took a full day to get an answer.  Yet, even when you tell the dealer what to expect, they call 15 minutes after the app is in looking for an answer.


Worse, they ignore the lender guidelines that are sent to them from every lender they get.  A dealer just sent a deal into the company with a 740 credit score good money down and solid income.  They chose a lender that had one restriction.  Their cap was 85,000 miles and 8 model years on vehicles financed.  Now the dealer is mad because the lender won't look at the app.  Reason, 9 year old car with 102,000 miles.


Attention dealers.  THE DAYS OF SENDING APPS JUST TO SEE IF YOU CAN SLIP ONE THROUGH ARE OVER!  For independent dealers it's even worse.  Spot deliveries are history.  You need to prep your customers.  No wait, I take that back.  You need to prep yourselves.  The customers are not in a rush.  You are.  Then when funding is delayed because you can't get the buyer back into the store with "stips" you forgot to wait for, you blame everyone but yourselves.

Here is the good news.  There are lenders.  They are approving deals.  They will sign independents.  And they will allow you to sell products.  We have plenty of them.  But, they have rules.  Unlike the glory days gone by, they stict strictly to these rules.  If you follow them, you have a chance to add significant deliveries each and every month.  Choose to send in bad apps, according to their guidelines, you will not get anything approved.  That's okay.


Just remember, that's your fault.  If you are willing to change with the market, you will grow.  If not, only sell to cash customers.  Otherwise, you'll just get frustrated adn lose more money.  But, if you will actually read the guidelines, learn the system and understand how important it is to follow the lenders' rules, you will find business is getting better all the time.


And, for those who think I am exagerating, Dealer # 500 came in last night.  We had sent an email blast to all the dealers to announce a training program to learn about the lenders, the online finance system, and how to structure profitable deals.  With a current approval rate of 46%, there are some deals to be made.  Email blast out, training is today,  2 dealers responded.


The rest are complaining.

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Replies to This Discussion

Thank you John!!! I haven't smiled as much reading a post .....ever....... Being a lender I can only back up what you say! 500 dealers ... a webinar... and two dealers signed up!!!! And he who breaks or at least trys to bend the most rules complains the loudest!! Again Thanks for the smile.
Good morning John. Im one of those independents that has no issues following any rules. I cant seem to find any lenders that will allow me to sign up. You get me lenders and i guarantee you I can make it work. If you feel you can help give me a call. 845-705-2768 or send me a message. Im in upstate NY
Very well said! Although, this way of thinking isn't exclusive to independent dealers, franchise dealers are still burying their heads in the sand and waiting for 2005 to comeback! It's amazing how many dealers are still sticking with their "know it all, shotgun finance guy" that never really knew how to get a deal bought in the first place. You have to believe that sooner or later these dealers will lose enough money to make them take a hard look at their staff of untrained people that keep making excuses about why they can't get deals done.

Actually, some franchises are worse. The dealer is often far removed from the finance manager and takes their word as gospel. Great example. We had a deal submitted by a franchise F&I manager. The customer was below marginal and most of the lender guidelines were just barley met. Now, it was approved with a discount fee. That's th ereality of high risk lending. But the lender allowed for $1,800 of back end products. A service contract could have made F&I about $600 - $800 or with Gap, they could have made $700 total.

But, the F&I manager couldn't structure the deal because they had no sub prime experience. When we offered to help, the manager told us he could get this deal "hung" all day long anddidn't think we were worth the $99 a month they get charged. The dealer called me to tell me he wanted to cancel since "none" of the deals he had submitted were approved. I asked him to let me check that out.

I called the dealer back and aid that we'd be happy to cancel the service as we are month to month. But, I thought he should know that only one application was ever submitted. I then told him that we actually got the deal approved through a discount lender. I explained the terms and how the delaer could have structured the deal and delivered it. I then said that his F&I manager said he could get it tone elsewhere without any fees. Silence. No comment from the dealer. Finally he told me that the F&I manager said that ALL THE DEALS he had submitted through us were turned down.

Here's the surprise ending. The F&I manager is still there. The dealer is still signed up. But, since then, about 3 months, not one additional application has been sent through us. Ego and ignorance is going to be the real downfall of the auto industry and not lenders or the economy.


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