November 23, 2007

Bad Credit mortgage problems could affect the auto loan sector business

Analysts fear that the recent troubles in the sub prime mortgage industry could damage the auto loan financing sector. (Read More…)

Comments (0)




November 22, 2007

Getting Your Sub Prime Car Deals Approved.

Getting sub prime customers approved for a car loan is as much as art as it is a science.

1. Know the Deal - Have the deal in front of you and know it inside and out. Analyze the bureau and credit application. Obtain information from the customer on critical issues involved in their credit history and prepare your story for the lender.

2. Integrity It is a proven fact. Dealers who build good relationships with lenders get more marginal deals done. Be up front and forthright at all times. Never lie or intentionally misrepresent a deal to the lender.

3. Accuracy You can not kink deals. The application and other paperwork must be accurate. You can not stretch even a little. Everything must be verified. Remember, the customer’s goal is to obtain a vehicle. A desperate individual may attempt to mislead you. You are cautioned to always verify the accuracy of the data provided to you by the customer.

4. Analysis Do not shotgun deals. A proper analysis will point you to the best lender available. It is costly and time consuming for lenders to process these applications. They watch funding to application ratios carefully. Dealers with unacceptable ratios can be “cut-off” by the lender.
(Read More…)

Comments (0)




November 17, 2007

Specia Finance Department Work Flow

The work flow within the special finance department has to be organized. A tool I’ve always used to keep organized is a lender call-in log. When properly maintained a lender call-in log can help you track critical success metrics within your department.

For example:

• Book to Look Ratios
• Submitted /Approved/Delivered
• Lender mix/Approval ratios
• Advertising source evaluation
• Salesperson Success

(Read More…)

Comments (0)




November 15, 2007

Special Finance Car Sales and Sub Prime Auto Lenders

When deciding which lenders your dealership should sign up with it is necessary to determine what type of special finance you wish to do.

Buy Here Pay Here

This was the only option for car dealers ten years ago. Times have changed. Customers now have choices. They will not always settle for the inventory available at buy here pay here lots. Disadvantages of buy here pay here lots:

• High mileage low cost cars
• Special inventory
• Little, if any, back end.  Many cars are not eligible for a warranty.
• Negative CSI - resulting in lost repeat business and referrals.
• Having to collect receivables

(Read More…)

Comments (0)




November 8, 2007

Special Finance Manager job description

Overview: the special finance manager (SFM) structures car deals for clients with sub prime credit that fall outside the conventional system, in compliance with special finance lender guidelines and auto dealership policy, resulting in quick funding, and a high level of customer satisfaction. Responsibilities include the following: (Read More…)

Comments (0)




November 6, 2007

Special Finance Car Sales “ Recipe for Success”

To maintain long term success in sub prime auto sales focus on improving the Critical Success Factors: Lenders, People, Business Process, Technology, Inventory, and Advertising.

Sub Prime Lenders

More and more sub prime auto lenders are trying to edge their way into the conventional finance office. As a result, these same lenders are not buying as deeply as they once used to. Make sure your lender mix contains lenders that approve a wide variety of subprime credit scenarios. In addition, to reduce your risk, place your loans with numerous lenders. If you only use one or two lenders and they run into troubled times, you could be left with contracts in transit that you will have to place with other lenders. (Read More…)

Comments (0)




November 5, 2007

Are Special Finance Car Sales Worth The Potential Grief?

Working a special finance deal is not the same as working a conventional deal. What does it take to put a special finance deal together? It’s easy! All you need to do is sign up a few sub prime auto lenders, desk a few deals, submit them via Route One or Dealer Track and wait for all those approvals. Wrong! The truth is…

It’s Not That Easy!

If it were that easy everyone would be doing it. The fact is special finance is not easy and it’s not for everyone. Those who attempt to enter this highly profitable segment of the car business need to be properly trained. (Read More…)

Comments (0)