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The good news for car buyers and car dealers is that lenders are finally beginning to loosen up when it comes to lending to buyers with less than perfect credit. The average credit score for auto loans fell to 766 in the first quarter of 2011 which is the lowest since the last quarter of 2008, according to figures that Experian released last week.
Most Americans have hunkered down and made do with what they have over the past few years. Consumers have repaired old cars and made do with their family truckster while finances were tight.
Others have wanted to buy but have been unable to do so because cautious finance companies have been unwilling to lend to buyers with credit problems. The pent-up demand from consumers along with lenders loosening their purse strings should result in a spike in sales for dealers who are prepared.
Secondary departments have to begin getting the inventory in place to work with secondary customers and reaching back out to the lenders that have taken a hiatus from dipping into the secondary market.
The next step is to get the word out to consumers that the banks are lending now. Dealers should go back through old leads and customers who they couldn’t get done over the past few years.
If a dealer doesn’t see secondary traffic or have a means by which to drive that traffic to the store, now is the time to start exploring those options. Up to a third of all Americans have what would be classified as "subprime" credit, which falls into 680 and below. Any dealer who chooses to ignore that demographic is forfeiting a huge chunk of market share.
To get back into secondary, first you need to get your lenders and inventory in line to cater to the secondary customers. Next reach out to customers who had the desire to buy in the past but lacked the ability. Contact me to learn more about ways to drive motivated buyers in that 520-650 wheelhouse to your dealership!
Brian Matthews is an account executive for Carloan.com. He has been helping dealers with their sales and marketing processes since 2007. You can reach Brian at 804-521-8569, via email atbmatthewsATcarloan.com and follow Brian on Twitter at @BrianCarloan.