Managing a Buy Here – Pay Here dealership can be like walking a tightrope. A manager needs to balance creating a friendly atmosphere against the need to maintain a business relationship. Potential customers should feel welcome when they come in to purchase a new vehicle and current customers should feel like the dealership cares out about them and what is going on in their lives as they make their payments. But customers must also understand the necessity of being honest and making their payments when they are due. It is easy for this balance to get out of whack one way or the other. Either way can result in serious consequences to the health of the dealership.
Everyone wants to be liked and the temptation is enormous for the manager to want to be everyone’s friend. The longer a manager holds that position, the greater the temptation becomes. As a customer makes more and more payments on their account and as those customers pay off one vehicle and then buy another, the manager becomes increasingly familiar with these customers and their lives. Many long-time managers have customers who have bought numerous vehicles from them. The longer the relationship between the manager and the customer continues, the easier it becomes to cross that thin line between a friendly business relationship and an actual relationship as a friend.
Once the relationship with customers crosses this line, it becomes more difficult for the manager to perform his duties properly. The manager will make lending decisions that do not fit the dealership’s guidelines. He or she may fail to require down payments as specified by the dealership’s policies, set terms that are not in the best interest of the dealership or even make loans to customers who don’t meet the dealership’s underwriting criteria.
It can be even more noticeable on the collections side of the business. Customers who are friends of the manager may be allowed to pay in a different manner than other customers. This is not only unfair but may open up the dealership to discrimination lawsuits. We understand that most customers will not pay as agreed for the entire term of their loan and that we must be willing to work with customers to keep good customers in their car and paying. However, excessive use of such agreements or agreements that are too lenient may extend the loan beyond the length of time allowed by dealership policy and even beyond the length of time the vehicle can be expected to run, creating an even greater and unnecessary collection problem.
On the other side of the coin, we have the manager who refuses to interact with his or her customers in any way or does so in a negative manner. We try to hire managers who we feel can understand our customer base and the kinds of issues that might arise. However, some managers react to customers who have difficulty handling their accounts as promised or who make promises they are not able to keep by becoming bitter and negative. They begin to view all their customers as liars and to see themselves as better than their customers. Often, contact with customers becomes rude and confrontational. It doesn’t take long for the customers to recognize this type of attitude and to react.
They become less forthcoming about issues in their lives, less likely to contact the dealership when they have problems and less responsive to collection efforts. The dealership becomes less a place where they like and want to do business and are willing to refer friends to and more just another bill collector looking for their money. Repeat and referral sales will suffer dramatically and collections will become a never-ending struggle causing attitudes and dealership morale to decline even further.
Keeping the proper cordial but businesslike attitude towards customers is critical to the success of a Buy Here – Pay Here operation. We must make our customers understand that we are glad they choose to do business with us and that they will be treated fairly, honestly and with respect. But, they must also understand that the dealership is a business and it is the manager’s responsibility to operate that business according to certain guidelines.
We will welcome them when they come to do business with us and we are interested in what is happening in their lives and with their vehicle but they must understand that we expect certain things from them, as well. To uphold their part of the relationship, we expect them to pay as promised whenever possible, to contact us when they have problems and to be honest in their dealings with us. It is the manager’s responsibility to ensure that both the dealership’ responsibilities to the customer and the customer’s responsibilities to the dealership are performed in a professional and friendly, but businesslike, manner. Doing so keeps the dealership operating smoothly and profitably while maintaining the strongest relationship with the customers.
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