In the subprime and non prime worlds, dealerships have had to employ new strategies and new mindsets in order to attract new customers from new places.
Not long ago, customers would walk onto the lot, ask to drive a car or two and if they weren't qualified properly, they'd get all the way to the closing table before admitting they had bad credit.
Today, thanks in part to the Internet, customers see value in securing lending before going in to look at cars.
One dealership strategy of attracting customers from this niche has been to first appeal to their need for financing before even inviting them onto the lot.
Since subprime lenders typically work directly with dealers and not customers, the dealerships have to assume the role of bringing together the customers and the lenders.
This newsletter does not seek to cover that dynamic.
Any dealership with a subprime department already understands its function.
As a result of taking the we can help , or the 100% approval approach, you may attract customers who have already selected a vehicle from a private seller, or a competitor and just look to you for the financing, often due to your marketing.
You subprime traffic controllers out there have heard the abandon in your salesperson's voice when they take such a call.
Tell your people to take heart.
Handled correctly, this can be an easy conversion.
It's time to put on your educator hat.
First, ask the customer how their credit is.
You may know already but that's not the point.
The point is to get the customer to say the words.
After which it is incumbent upon you to kindly and empathetically explain to your customer how subprime lenders lend.
These lenders don't have locations on the corner for walk-in traffic and they don't advertise on TV or radio because they don't work directly with customers.
They work with the dealership.
The reason for this: they don't just make lending decisions on the person, but on the dealership and the car as well.
Further explain the security the lender gets from dealerships, such as recourse, maybe first payment collection, repo assistance or securing of stips.
More practically, explain the dealer's local proximity to the customers that a remote lender with a single location can not otherwise have or afford.
Then explain the vehicles that banks won't lend on at all, the need for confidence in past vehicle maintenance and reconditioning (time to convey value in your dealership) and that the lender would have none of these things in a private transaction.
Most importantly, sum it all up with the clear message to the customer that: you understand what they want to buy but the lender will tell them what they can buy.
You're in the position of teaching the customer that the only way they'll get a car...
is through you.