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F&I Department
October 02, 2001 19:13:15
Understanding Special Finance

Paul Snider
CEO of CreditIQ, Inc.

Understanding special finance seems simple on the surface, customers are plentiful, lenders aggressive and inventory readily available… what's to understand? PLENTY! Having spent time in various dealerships during the past 30 days talking with customers, managers and dealers it became apparent to me that many dealerships still live and die by the 7 Last Words “We've Never Done It That Way Before!” I say that because dealerships that completely understand special finance and the customers who need our services take a different approach, lets examine a few areas that will make a difference when properly understood.

Who is the sub prime customer in 2001? This has changed and will continue to do so as our economy softens. The difference now as opposed to previous years is the customer today who I refer to as the “new generation special finance buyer” has previously purchased vehicles as a prime customer. They are better educated in the buying process, understand their options and refuse to be treated as credit criminals or roaches! Make sure your advertising attracts this former dot comer who is now a dot bomber and that your staff understands how to treat them. Remember, the next wave of customers to enter the sub prime arena will be technology-related individuals who have all the same resources available to them as you do. KBB, NADA, lenders, pre-approvals, and a command of the credit rebuilding process are just a few of the resources available and they will not stand to be treated any differently than a prime customer.

Lead Generation has and will continue to be a viable source for special finance customers. Using professional Loan by Phone services that are GLB compliant will generate quality leads that want to purchase now. The difference is timing, allow me to explain. While in a dealership last month the special finance manager received 17 leads in one afternoon, because her provider does not transcribe the name and address it took her over 1 hour to call the service and transcribe the customer data. Plus, she was faced with multiple deliveries. When the 17 customers were finally called many had called other numbers and had begun working with her competitors! This customer wants to buy now and loan by phone leads have a distinct shelf life, call this customer back immediately and make the appointment. Stop trying to sell and qualify when calling this customer back! Get them into the store where you at least have a chance to put a deal together. Let your Loan by Phone provider complete the initial privacy notice and send to you on all callers, this way it never gets lost and you have more time to sell vehicles. If your provider does not offer that, call me, we do!

The gap between lender and dealer continues to widen. Take time to build solid relationships with your lenders and the results will be impressive. Lenders want good business that can be funded, dealers want the same. It is time to put down the shields and work together towards one common goal. Interview properly, complete credit applications with detail, structure deals that make sense and profit, put customers in cars that will perform and they can afford and most of all clean up the dirty loan packages so everyone gets paid!

Finally, go back to the basics! Set the special finance department up properly and invest in training! In many cases very bright women and men are placed in the position of special finance manager with little to no formal training! Then when the department fails everyone asks why. I can show you case after case where dealerships who are committed to training succeed and the ones who are not fail! Remember, this department is special finance, which means we need special skills to handle special customers with special needs! Currently I am involved with other professionals to develop certification programs and standards that will not only clean up the industry but also take special finance departments from worst to first! Training is not a one-time thing, it is like winning, it is an all the time thing and we must commit to learning new processes that are tried and proven.

I hope these tips have given you food for thought and serve to inspire you to attend the workshops in New Orleans during the National Special Finance Conference. Also write NADA requesting more workshops on special finance be part of their agenda in the future. I commend Denny O'Brien on his article in the July issue of WOSF titled “This is Training”. It is about time someone recognized that most trainers today still do not understand special finance or the opportunity it affords dealerships. Thanks Denny for letting everyone know how “Goofy” some really are!!

Good selling! See you in New Orleans!

Paul Snider is CEO of CreditIQ, Inc.parent company to VOISYS Systems Corporation, the leader in Loan by Phone products. Paul is a renowned industry expert in subprime finance and has conducted workshops and seminars across the country. Paul contributes monthly articles for numerous automotive trade magazines and can be reached at



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