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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.

Assessing Subprime Lead Generation for Better Subprime Sales

Posted on: September 17th, 2012 by credit

According to the latest report released by Experian Automotive, loans to borrowers with damaged credit in the second quarter this year increased by 14 percent compared to the same quarter last year. Perhaps, this shows that more lenders or dealers have realized that subprime lending is very lucrative; plus, there is a considerable size of market.

Currently, the demand for sub prime auto leads generated by online lead generation companies like Approved Auto Leads have increased as more car shoppers with bad credit continue to inquire about the amount they can borrow. Sub prime auto leads are obtained when a car shopper starts researching online about how much he can borrow for a car purchase and, in request for that information, provides his contact details and other information which allows dealers to contact and follow up on them.

With this in mind, are you sure you are pulling off your subprime lead generation system? Are you still keeping up with the competition? Take a good look at some of the lead gen aspects discussed below:

Landing Page

The landing page is important for turning your consumers into sub prime auto leads; or, in other words, it plays a major role of converting a visitor into an interested and potential customer. A very important element of a landing page is a call-to-action. The call-to-action is a phrase or statement that expresses action for your visitors to do. It must be clear, telling prospects to do only one thing. It also has to be prominent in your page. Calls to action must be compelling, conveying some sort of sense of urgency.

Lead Generation Company

Many dealers today are turning to lead generation companies like Approved Auto Leads that employ online lead generation techniques to acquire more leads. If you are working with one right now, make sure you are working with the best partner. See if you are getting real and quality leads. If you are just planning to work with one, make sure that the company is legitimately operating and has considerable experience in generating subprime leads. Working with the right lead provider makes your lead generation system more effective.

Response Time

Regardless of where the leads are coming from, responding to their queries quickly is crucial. You are in a fast-paced competition and it is getting more and more aggressive. Your competitors will get to your leads first if you are too slow. Make sure you have an effective system of responding to and following up on your leads. Don’t let them get snatched away by your competitors who are more aggressive than you. You wouldn’t see significant improve in your sales if you don’t keep pace with the competition.

Bad Credit Auto Leads: An Easier Catch Now

Posted on: August 6th, 2012 by credit

Are you sure you’re still catching up? More and more dealers are realizing that there is much profit in special finance lending—by simply acting as the third party to get people with bad credit financed or by directly providing them financing. Here are some facts to convince you that special finance is a where the most fish are right now.

A recent study by CNW Research showed that subprime buyers account for more than 20% of the total used-vehicle sales in July 2012. Meanwhile, the average credit scores for new cars and used cars dropped to 760 and 659, respectively, in the first three months of 2012, according to an Experian Automotive study. This means that more people with lower credit scores are getting approved for auto loans. The study also found that the number of loan programs offered to bad credit auto leads rose by 11%. It also showed that people borrow almost $26, 000 and more than $17, 000 at average for new car purchase and used car purchase, respectively.

These trends in the special finance arm of auto lending is fueled by the decline in loan delinquencies, according to some experts. The rates dropped by 7.6% and 12.1% for people who are 30 days and 60 days late, respectively. Vehicle repossession also dropped by 37%. These make special financing easier for lenders and dealers. On the other hand, as banks and other lenders offer lower interest rates and monthly payments, people with bad credit are gaining more confidence to take auto financing.

With these in mind, what should you do now to keep up with the competition? Here are some insights from experts:

It’s important to have the right process, the right sales team, the right inventory, and the right lenders to convert bad credit auto leads into sales. Firstly, having the right process involves doing away with the notion that when a lead does not meet your criteria, it shall be treated as chaff. Realize that there are many car shoppers who have bad credit who are still serious about buying a car and rich enough to make consistent payments.

Secondly, you must have a special finance department where your sales team are trained and experienced in negotiating with bad credit auto leads. Your sales team should understand their needs and dilemma to effectively turn them into sales.

Thirdly, if you are offering special financing, make sure you have the right inventory for it. There must be car models from 2001, for example, or those that are worth at least $8, 000, available in your car lot.

Lastly, you should have a network of lenders who are willing to buy special finance papers. And remember: Focus on helping your prospects get financed and not get the car that they want.

Just Reminding You About Special Finance Conversion Basics

Posted on: July 31st, 2012 by credit

Special finance auto leads have been important for dealerships lately. They have been boosting the sales of many dealerships who have observed and believed that there is much profit from auto lending, especially to people with less-than-perfect credit. However, there are also several dealers who are missing the opportunity. Are you one of those dealers who have not yet experienced a significant increase in sales with special finance leads? Perhaps, it’s time for you to go back to the basics of converting special finance auto leads.

Avoid deceptive advertising. It’s simple. If you don’t have it, don’t make it seem like you have it. For example, don’t put up an ad that says you can finance anyone when you don’t even do buy here pay here financing. Many dealers resort to this kind of marketing practice just to get people step into their dealership or earn more cash. Instead, keep your advertisements effective but right and clear. Moreover, complying with dealership advertising rules will also earn your dealership more trust from your customers and prospects.

Contact and work on every lead. A lot of dealers focus too much on generating a lot of leads and spend insufficient time on converting them. Actually, lead conversion weighs heavier in importance than lead generation because it is what generates profit for you. Thus, make sure that your sales team and even you are actively responding to every query that comes in.

Follow up leads. Don’t give up on leads easily. Just because a lead didn’t respond positively to your offer or did not call you back anymore doesn’t mean that he or she is no longer interested. Unless a lead makes a decision, don’t cease to reach out. There are car shoppers who would really think about the deal over and take time looking at other options before finally buying a car from a certain dealership. Moreover, follow-up could make your leads consider your dealership as one of their options.

Make sure that you are getting quality leads. Special finance auto leads need more thorough verification and screening to minimize the risk for lenders and dealers. Lead providers should make sure that they meet the criteria you have set. To make sure that you are getting quality leads, ask your lead provider about the methods they use in generating leads and how they carry these out. The way marketing and lead generation strategies are executed affects the quality of leads they will produce. Make sure they use these appropriately and not abusively.

Getting Special Finance Leads From the Right Provider

Posted on: May 3rd, 2012 by credit

Special finance leads are a way for car dealers to meet their sales quota and make more sales. It is also a cheaper way for them to acquire more prospects. However, dealers have to make sure that they are buying special finance leads from the best provider.

First, car dealers should make sure that their prospective lead provider is already experienced in providing special finance leads for at least 5 years already. It must have a proven track record and a good reputation in the industry. Car dealers can request for a list of its previous clients as references. They can also check the Better Business Bureau or BBB database to further assess the reliability of their prospective lead provider. Things that they can find in BBB’s database are BBB accreditation, company review, BBB’s rating, and a summary of complaints of the lead provider. It is important that car dealers deal with a professional and reputable lead provider.

Second, car dealers should also know the various lead generation techniques that their prospective lead provider employs. This is also necessary in evaluating a lead provider because the way lead generation techniques are used impacts the quality of leads that will be generated by those techniques. If those techniques are used abusively and inappropriately, they would produce bad leads. Car dealers should also know if the lead provider buys special finance leads from a third party, which is often the case for this type of leads. Car dealers have to ask about how they make sure that they are getting quality leads from the third party.

Third, a good lead provider must have a screening process where the leads they obtain are verified and pre-qualified before delivering them to their clients. Approved Auto Leads is an example of a lead generation company that employs a screening process. If a lead provider pre-screens leads, car dealers can be sure that the leads they will receive are most likely of quality. They would not also have to spend time on qualifying the leads. Car dealers should not forget to ask their prospective lead provider about this.

Finally, car dealers must choose a lead provider that has no unreasonable and unnecessary fees and charges. There are many lead providers who have abusive terms and rates. To avoid such providers, car dealers should take some time comparing offers from different lead providers. They should remember not to go beyond their budget.

Car dealers must only buy special finance auto leads from the best lead provider. They can experience more success in their dealership if they are working with the right partner.

 

 
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