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Running Special Finance Department the Right Way

Posted on: September 24th, 2012 by credit

It is just necessary for dealers to start establishing their own special finance departments as there are more car buyers with non-prime credit who are seeking financing. Lending to borrowers with bad credit is no longer seen as a highly risky business today but as more lucrative than selling cars. With this trend, dealers should keep up with the competition by building a separate department to cater to subprime leads. Here are some basic pointers on running a special finance department rightly:

Expand your network of lenders. With the influx of subprime borrowers, it is just important for you, dealers, to be connected with many lenders. If you only have a few lenders, you have fewer chances of closing sales. For example, a car buyer is willing to buy a used car as long as you could fix financing for him or her. However, no lender from your network agreed to provide financing for the car buyer. You would end up losing the sale. To avoid this dilemma, establish relationships with various lenders. Moreover, if you could not find a lender for your car buyer, offer another vehicle to your car buyer which he or she could most likely get financed for.

Sell the right cars. Make sure that you have the right inventory. One thing you should understand about running a special finance department is you are dealing with a special kind of car buyers. Subprime leads need a different approach. This means that you cannot sell them cars that you also sell to people with good credit. Offer your subprime leads car models that they can afford and which your lenders can agree to finance.

Train your special finance staff. Hire people who have experience in handling subprime borrowers. Then, train them in every aspect of the credit application. Sometimes, the special finance manager would be so busy that he or she cannot do the final processing of the application. If your prospects would have to wait, they might probably end up in your competitor’s hands. Teach your sales people how to conduct interviews, review credit applications, and the like. In this way, you will avoid losing sales unnecessarily.

Veer away from putting up deceptive ads. Everyone may be doing it but such strategy would not place anyone in a permanent position of success. Your ads should not indicate a promise that your prospects would not receive when they step into your dealership. For example, don’t tell them that you can finance anyone if you are not willing to cater to people with really low scores.  This practice will only mar your reputation in the long run. Choose to be honest with your special finance ads instead.

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