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Auto Loan Delinquencies Low, So What?

Posted on: August 22nd, 2012 by credit

The rate of auto loan delinquencies in the United States has dropped in this year’s second quarter according to the report by credit bureau TransUnion. Delinquency rate is down to 0.33 percent from 0.36 percent in the first quarter of this year. On a year-on-year comparison, it has dropped by 25 percent already since last year.

However, analysts from the reporting body TransUnion and another credit bureau Experian Automotive both said that the delinquency rate on auto loans will not continue to drop until the next quarter of this year but assured that it will still remain to be low.

The study found that borrowers have learned to put their car payments on top of their other credit obligations since the recession. This is because auto loan borrowers deem their cars as necessary and important for them to continue running their daily errands.

So, as a dealer, how should you respond to this recent trend in the auto lending aspect of the industry? Here are some ideas:

Stay online. If you are satisfied with the results you’re getting from your lead generation and general F&I efforts, keep being on the lookout for more finance auto leads in the Internet for they are surely coming in. The results of the TransUnion report might be telling you that borrowers are getting late in their payments less so there is really nothing to be so afraid of in dealing with them. In fact, an analyst from the credit bureau himself said that loans are gearing toward nonprime borrowers more. Stay where you are getting your finance auto leads from and focus on closing these deals.

Don’t play favoritism. Subprime leads are indeed hot in the industry now but it does not mean that you should only fix your eyes on them. Consider all kinds of borrowers and make sure you are not giving too much attention to one in expense of another.

Review your strategies. Do not be so satisfied if your lead generation and sales tactics are working well. Be reminded that you should review your plans and strategies regularly and see if they are still in-tune with the current behavior of consumers and the competition in the industry. Perhaps you can think of new tactics considering that borrowers now are more responsible with their car payments.

The decline in auto loan delinquencies is good news for the whole automotive industry. It encourages auto lenders to accommodate more borrowers and makes auto loan approval easier for borrowers. Keep track with the trends and find out where they might be pointing you.

The Smart Choice: Investing in an Auto Finance Lead

Posted on: July 20th, 2012 by credit

In today’s hard financial times, it is getting harder and harder to sell expensive things such as cars. After all, people will not part with a huge amount of money just on a whim. Nevertheless, car dealers need to make an income and they have quotas to fill so they should not rely only on customers that actually visit the dealership. This is where the auto finance lead enters the picture.

Investing in Auto Finance Leads

An auto finance lead is a collection of information about people who have shown interest in buying cars recently and in the past. Because of the crisis that gripped the automotive industry back in 2008 which was followed by a worldwide recession, auto dealerships suffered a dramatic decline in sales. However, things are looking up because they are now investing in auto finance leads.

These are very useful because the leads often translate into a sale. The leads are real people who truly want to purchase a car. Using sales leads is seen as a good investment because car dealers are able to attract customers right away. They can do away with expensive advertisements in newspapers and billboards that do not produce a good return of investment. Furthermore, they do not have to come up with fresh ideas for their marketing efforts just to be able to attract customers. Planning and implementing different marketing strategies are often time consuming and the results are not always guaranteed.

Niche Marketing: Special Auto Finance Leads

Car dealers should not disregard people with bad credit or no credit. They can generate a lot of business if they invest in special auto finance leads. This type of auto finance lead, also known as subprime auto sales lead, is a collection of information of people with bad or no credit. The credit ratings of these people are low due to not paying bills on time, having credit card debt or they have yet to establish their credit history. Nevertheless, just because they have bad or no credit does not mean they are unable to finance a car. Most of these people work hard to improve their credit rating so car dealers should tap into this particular market segment.

Car dealers should exploit all the possible options if they want to reach their sales quotas. Investing in an auto finance lead is a good business strategy because they are able to contact potential customers in different key demographic areas. Today, selling cars is not about making offers only to the people who visit the dealership. It is about investing in different types of auto finance leads and taking advantage of the tools that can help them in their business.

Trigger Leads are Advantage, But Not All the Time

Posted on: June 26th, 2012 by credit

Trigger finance leads are information of people who have pulled out their credit reports from credit bureaus for the purpose of applying for a car loan. The very act of pulling out the credit report makes a person a trigger lead. Credit bureaus sell these leads to lenders and dealers but with only limited information. Typically, credit bureaus only provide the applicant’s name, telephone number, address, and some information relevant to the lender’s or dealer’s criteria.

If you noticed, only the telephone number of the applicant is provided by credit bureaus. They do not provide the mobile number and email address of the person. This what makes closing trigger leads highly competitive, but at the same time exciting. Your sales staffs would not have any other choice to reach the leads but to call them up—immediately. Otherwise, your competitors will get to them first. Your sales team, therefore, must be aggressive enough to get the attention of your trigger finance leads. If they get this right, you have a sure sale. However, trigger leads could also be nuisances in another perspective.

Remember that you’re not the only dealership who knows about trigger leads. Apparently, your competitors know about them too and they could be more aggressive than you are. The problem is when they try to get in the way while you try to convert your hard-earned leads into a sales. Think of this scenario: You are wondering why a prospect who has just called you and was so interested in your offer suddenly never called again. You would then find out that a competitor reached out to your prospect as they found out that he just pulled out his credit report. That would be devastating. So, how are you going to stop loosing your leads to your competitors who have become like almost experts in closing trigger leads?

One, talk to your leads upfront. Respond immediately after they have sent their query in. Warn them about other dealerships who might call them up and try to convince them to get their offers. In many cases, people blame lenders and dealers for giving out their information to other companies whom they haven’t talked to. You should avoid this from happening to you by informing your leads about such dealers and telling them not to entertain them.

Two, keep them interested even at your first contact with them. It is not that easy to do but you have to work toward making them satisfied with your offers that they would not want to consider other options. Lastly, be aggressive in closing your finance leads. Always keep in mind the various types of competitors you have around you. Train your sales department to be competitive in this area.

Why You Should Not Stop Pursuing Finance Auto Leads

Posted on: June 13th, 2012 by credit

Finance auto leads are not easy to pursue and to convert. Follow-up is a tiring task that would not even turn in good results sometimes. You may also be thinking that you could be wasting your time on following up leads instead of finding other leads with higher conversion rates. You may also feel like giving up on pursuing finance auto leads but, you should not lose heart; they will eventually turn into sales. How is that going to be possible?

Easier Access to Auto Financing

The latest report released by Experian this year says that automotive lending is becoming stronger, making auto financing easier for consumers. The report shows that the average credit score of consumers seeking auto financing fell to 760 for new car buyers and 659 for used car buyers. Moreover, automotive lenders and dealers have been offering lower interest rates. New cars and used cars are financed at an average of 4.5 percent and 9 percent, respectively. Loan terms are also longer now, allowing borrowers to make lower monthly payments.

Less Risk

According to Experian’s director of automotive credit, borrowers have been doing a good job repaying their loans in the past quarters and the percentage of dollars at risk is also now at its lowest in six years. This means that there is less risk for you now to deal with people seeking financing for their cars. Moreover, the report also highlights that there are lower numbers of loan delinquencies and auto repossessions. Thus, with auto loans made more available to consumers, it is then easier for them to say yes to your deal as long as you give them an irresistible offer.

More Competitive Offers

The fact is, and as other dealers have said, automotive lending has loosened up a bit and is getting more aggressive and competitive. Good loan terms are no longer confined to good credit borrowers. Banks, which had been the most unwilling lending institution to accommodate bad credit borrowers, are now becoming more aggressive, accommodating consumers with lower credit scores and offering them better terms and lower interest rates. Other lenders now also have zero interest and no money down loan programs. Moreover, old finance auto leads are now back in the market, as some dealers have observed, and with better loan terms, it is more certain that you could turn them into sales if you keep on pursuing them.

Numbers show that even if the automotive industry had experienced a crisis 2 years ago, lenders are now already back in the game of making money and they are doing it in a more competitive manner this time. Therefore, you have to keep pace with the competition and never lose those leads that you’ve already got by making your offers as competitive as possible.

The Benefits Dealers Get From Obtaining Finance Auto Leads

Posted on: February 29th, 2012 by credit








Most people are aware that the reason auto dealerships obtain finance auto leads online is because these leads allow them the opportunity to earn more money.  With the considerable number of car buyers doing their shopping online, any auto dealer can easily reach potential customers with the help of finance auto lead generation.  In a time when the economy is weak, these leads also keep the dealerships in business.  However, increased revenue is not the only advantage of having such leads.  There are many other benefits in store for auto dealerships that invest in finance auto leads.


One benefit is reduced expenditure.  Auto dealerships still spend money when they rent or buy leads, but the amount they spend is significantly less than what they would usually spend for standard marketing.  Advertising through radio, television and print media often requires hundreds of thousands from an auto dealership.  Sadly, traditional advertising is no longer effective in getting the attention of prospective car buyers.  Hence, when dealers obtain leads, they pay less money and effectively reach their target market in the process.


A benefit related to the first one is access to real customers.  With traditional advertising, auto dealers promote to a wide but passive audience: the radio advertisements and TV commercials are seen by even those who have no intention to buy a car.  On the contrary, when dealers obtain finance auto leads, they specifically access their real customers.  Leads—the high quality ones, in particular—are not merely window-shoppers; they are serious shoppers ready to purchase when presented with the right car offer.  Hence, dealers need not waste time and money on people who would not be buying because the high quality leads let them know who their intended clientele is.  Leads with high quality can be purchased from reputable lead generators such as Approved Auto Leads.


Auto finance leads are also beneficial to auto dealerships because of the specific information contained in them.  Each lead contains particular details about a potential customer, including the name, address, and contact details.  Leads also include the vehicle preferences of the customer.  Hence, if an auto dealer has leads, it can serve the prospective car buyers better because it would know what to offer based on the information provided.  The dealer would be in the position to make an offer that a customer is most likely to take since it is what he or she wanted.


Lastly, obtaining Internet-generated leads also enables the dealers to go beyond their current sales territory and sell to customers who have probably never set foot in their showrooms.  Most people who do not shop in person do their shopping online, and online shopping allows these people to check out the best offers outside their place of residence.  Once these online shoppers become leads, the auto dealers get the chance to pursue buyers beyond their usual range.  Hence, the dealers get to make their business grow and expand thanks to their new customers, or the people who do not normally consider them as an option in shopping.

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