When I was on the retail side of things this was by far the worst month of the year, with the possible exception of that magical “13^th month” between Santa and Baby New Year.  Well, same goes for the auto finance lead side of things, December is the time when people are more concerned about finding the right Cabbage Patch Doll or GI Joe than they are with buying a car. 

There is always an upside though, because the car loan leads that we do generate in December are need buyers and are online because they have to do something right now.  This is my 7^th Christmas on this side of the business, and it’s always been the same, leads are lighter than normal and car sales are down.  That is why the way things are playing out this year has caught me off guard a little.

For the first time we have more consumer traffic in December than we did last month, and dealers are telling me that they are seeing sales numbers that look more like October than December.  For the last two years I’ve sat with you at trade shows and conventions, all of us agreeing that when this thing turns it’s gonna happen fast, and we’re there.  People have run out of duct tape to keep their old cars held together, and they're ready for a new ride. 

These aren’t folks who are out kicking tires and trying to decide if they can work you down another $100 by shopping 4 other stores, these are mostly people who weren’t really thinking about buying a car but suddenly find themselves in a position where they have to.

We’ve all seen this movie a few years ago, and we know that there will be a point where instead of grabbing easy market share, dealers will be playing catch up.  Today’s decisions will determine who is knocking them dead in first quarter and who is wishing that they’d done more to attract used car buyers.  I’m not saying that you have to buy my leads (although I’d love it if that was your first choice), but I am telling you that you have to do something.  Find an advertising source that gives you a guaranteed number of folks to talk to every month and run with it. 

If you sit and wait I promise that you’ll get tired of hearing from your friends in your market who didn’t.

Bob Harwood is the National Sales Manager for Carloan.com. Prior to joining Carloan.com six and half years ago, he worked on both sides of the financing process -- first at Capital One and then at a dealership here in Richmond. You can reach Bob at 804-521-8581 or via email at bharwoodATcarloan.com.

When I was on the retail side of things this was by far the worst month of the year, with the possible exception of that magical “13^th month” between Santa and Baby New Year.  Well, same goes for the auto finance lead side of things, December is the time when people are more concerned about finding the right Cabbage Patch Doll or GI Joe than they are with buying a car. 

There is always an upside though, because the car loan leads that we do generate in December are need buyers and are online because they have to do something right now.  This is my 7^th Christmas on this side of the business, and it’s always been the same, leads are lighter than normal and car sales are down.  That is why the way things are playing out this year has caught me off guard a little.

For the first time we have more consumer traffic in December than we did last month, and dealers are telling me that they are seeing sales numbers that look more like October than December.  For the last two years I’ve sat with you at trade shows and conventions, all of us agreeing that when this thing turns it’s gonna happen fast, and we’re there.  People have run out of duct tape to keep their old cars held together, and they're ready for a new ride. 

These aren’t folks who are out kicking tires and trying to decide if they can work you down another $100 by shopping 4 other stores, these are mostly people who weren’t really thinking about buying a car but suddenly find themselves in a position where they have to.

We’ve all seen this movie a few years ago, and we know that there will be a point where instead of grabbing easy market share, dealers will be playing catch up.  Today’s decisions will determine who is knocking them dead in first quarter and who is wishing that they’d done more to attract used car buyers.  I’m not saying that you have to buy my leads (although I’d love it if that was your first choice), but I am telling you that you have to do something.  Find an advertising source that gives you a guaranteed number of folks to talk to every month and run with it. 

If you sit and wait I promise that you’ll get tired of hearing from your friends in your market who didn’t.

Bob Harwood is the National Sales Manager for Carloan.com. Prior to joining Carloan.com six and half years ago, he worked on both sides of the financing process -- first at Capital One and then at a dealership here in Richmond. You can reach Bob at 804-521-8581 or via email at bharwoodATcarloan.com.

If you were looking online yesterday, you saw the big news about a jump in lending to folks with less-than-perfect credit. Since most dealerships stopped catering to that segment of the popluation as the economy tanked, let's take a look at what it takes to get back in the game and get ready for 2011.

How to rebuild/expand a special finance department

Obviously the first key to rebuilding a special finance department is to find the right personnel. A subprime manager must be experienced, but ambitious.  Subprime deals definitely take more effort and work than your average prime deal but the pot of gold at the end of the rainbow is typically bigger if the deal is done right.

Also, as cliché as it may sound, birds of a feather flock together, and if you can get a customer done where other dealers failed, they will be sure to send their friends and family your way.  A qualified special finance manager must be able to leverage personal relationships with lenders and local credit unions.  The days of shotgunning deals to every lender in DealerTrack and looking for the best call back are long gone.

This leads into the next step, which is getting the correct portfolio of lenders.  The old players of Americredit, Chase Custom, and CapitalOne are starting to get more aggressive with their advances, but it is important to have a wide variety of lenders.  For those especially credit challenged customers this includes Drive, Santander, and CAC, but it is also crucial to develop relationships with local credit unions as well.

Last but not least, a special finance department is dependent on having the proper inventory of vehicles.  Without the cars that fit their programs, a subprime lender will be of little help.  The majority of subprime customers are not make- or brand-specific but instead are looking for a specific payment call.  It is important for a dealer looking to increase subprime sales to keep a good mix of late model low mileage cars that fit between an 8k and 16k price range.

There are several ways to acquire these units from trades, auction or wholesalers but the best way is through keeping trades.  The special finance manager will have to work hand in hand with an experienced used car manager to keep the right cars on the lot. 

The time for action is now, and if your dealership does not take action, the one down the street will.  Take this opportunity to expand, rebuild or even start from scratch your special finance department and take back the market share that is rightfully yours!

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 or bmatthewsATcarloan.com.

If you were looking online yesterday, you saw the big news about a jump in lending to folks with less-than-perfect credit. Since most dealerships stopped catering to that segment of the popluation as the economy tanked, let's take a look at what it takes to get back in the game and get ready for 2011.

How to rebuild/expand a special finance department

Obviously the first key to rebuilding a special finance department is to find the right personnel. A subprime manager must be experienced, but ambitious.  Subprime deals definitely take more effort and work than your average prime deal but the pot of gold at the end of the rainbow is typically bigger if the deal is done right.

Also, as cliché as it may sound, birds of a feather flock together, and if you can get a customer done where other dealers failed, they will be sure to send their friends and family your way.  A qualified special finance manager must be able to leverage personal relationships with lenders and local credit unions.  The days of shotgunning deals to every lender in DealerTrack and looking for the best call back are long gone.

This leads into the next step, which is getting the correct portfolio of lenders.  The old players of Americredit, Chase Custom, and CapitalOne are starting to get more aggressive with their advances, but it is important to have a wide variety of lenders.  For those especially credit challenged customers this includes Drive, Santander, and CAC, but it is also crucial to develop relationships with local credit unions as well.

Last but not least, a special finance department is dependent on having the proper inventory of vehicles.  Without the cars that fit their programs, a subprime lender will be of little help.  The majority of subprime customers are not make- or brand-specific but instead are looking for a specific payment call.  It is important for a dealer looking to increase subprime sales to keep a good mix of late model low mileage cars that fit between an 8k and 16k price range.

There are several ways to acquire these units from trades, auction or wholesalers but the best way is through keeping trades.  The special finance manager will have to work hand in hand with an experienced used car manager to keep the right cars on the lot. 

The time for action is now, and if your dealership does not take action, the one down the street will.  Take this opportunity to expand, rebuild or even start from scratch your special finance department and take back the market share that is rightfully yours!

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 or bmatthewsATcarloan.com.

Every day, I talk to dealers who are either interested in or already using auto finance leads. They also  come to me with specific questions about how to handle special finance customers. 

Let's walk through a question I get a lot:

Dealer: I want to work with subprime clients, but I do not have the right inventory to do so. Any recommendations for finding inventory?  Where do I go?

My Response: The first thing you would have to do is find the cars that work well with secondary payment calls. When working with special finance situations, you are working the deal backwards instead of building a structured deal for a prime customer on a specific car.

I recommend getting low-mileage, late-model-year cars that book out well with banks doing subprime. The average price of the cars should be between $7,000 and $15,000, and their mileage should be under 80,000. This combination gives a better opportunity to get a longer approval term and a lower rate to maximize the payment call.

As for where to go and find these cars, I suggest you go to your regular dealer auctions such as Manheim.  Check out other dealers like CarMax, Honda, and Toyota that have auctions for used cars, trades and silent auctions. I would also suggest concentrating on local trades with decent mileage from previous customers, as well as the new customers just trying to upgrade their present vehicle.

Depending on your store, I would suggest having 20-30 cars set aside just for subprime and mark them with red stickers on the windshield. That way, when you have a customer that falls into the special finance category, you will know right away that they have a variety to choose from — and you have the cars that will book out and make you money.

Once you embrace subprime and have the ingredients to cater to it, the results are profitable and you won’t be leaving money on the table. Good Luck!

Mark Fernandez is an auto finance marketing consultant for Carloan.com. He has been working with special finance consumers since 1997 and brings that expertise to helping his dealer partners sell more cars. You can reach Mark at 804-521-8579 or via email at markATcarloan.com.

Every day, I talk to dealers who are either interested in or already using auto finance leads. They also  come to me with specific questions about how to handle special finance customers. 

Let's walk through a question I get a lot:

Dealer: I want to work with subprime clients, but I do not have the right inventory to do so. Any recommendations for finding inventory?  Where do I go?

My Response: The first thing you would have to do is find the cars that work well with secondary payment calls. When working with special finance situations, you are working the deal backwards instead of building a structured deal for a prime customer on a specific car.

I recommend getting low-mileage, late-model-year cars that book out well with banks doing subprime. The average price of the cars should be between $7,000 and $15,000, and their mileage should be under 80,000. This combination gives a better opportunity to get a longer approval term and a lower rate to maximize the payment call.

As for where to go and find these cars, I suggest you go to your regular dealer auctions such as Manheim.  Check out other dealers like CarMax, Honda, and Toyota that have auctions for used cars, trades and silent auctions. I would also suggest concentrating on local trades with decent mileage from previous customers, as well as the new customers just trying to upgrade their present vehicle.

Depending on your store, I would suggest having 20-30 cars set aside just for subprime and mark them with red stickers on the windshield. That way, when you have a customer that falls into the special finance category, you will know right away that they have a variety to choose from — and you have the cars that will book out and make you money.

Once you embrace subprime and have the ingredients to cater to it, the results are profitable and you won’t be leaving money on the table. Good Luck!

Mark Fernandez is an auto finance marketing consultant for Carloan.com. He has been working with special finance consumers since 1997 and brings that expertise to helping his dealer partners sell more cars. You can reach Mark at 804-521-8579 or via email at markATcarloan.com.

Of the many territories I deal with for auto finance marketing programs, there are a few states that I would like to focus on in the coming year and they include Texas, Minnesota, and Wisconsin.

Some dealers may argue that they get special finance customers in by the dozens, but aren’t closing deals!   Should they have to deal with 10 special finance visitors to get a deal or is the number more like 100?

Like everything else, it is a numbers game.

How many customers do you need to see to deliver one car and what does it cost you?  Some dealers I speak to say they have too much sub-prime traffic now and don’t want to “pay” for more of it. Whether you have a ton of special finance traffic or not, if you have the right basic lenders, inventory and people in place, you can be successful in the subprime arena and keep your cost per delivery below $300.

Here are some ways for dealers to ensure success, especially when dealing with special finance customers:

• Bring in all customers who reach out, don’t cherry pick.
• Get them approved by working the deal backwards:

1. Discuss their credit with them and select four or five vehicles that best suit their credit/ what they are approved for and work from there
2. Talk to them about the types of car they are interested in
3. Show them the cars that match what they qualify for

• Finally and most importantly, treat them well whether they are approved or not.

Think about this quote: “Everyone will buy a car.  Question is, will they buy it from you?”  Are you doing enough to make sure you’re the guy?

One thing I have found in my numerous, daily conversations with dealers across the country is:  You either want to do subprime or you don’t.  At the end of the day, you are either all the way in or you should stay out.

Mike Gray is an auto finance marketing consultant for Carloan.com. He has helped with dealers with their marketing programs in various roles for Carloan.com since 2004. You can reach Mike at 804-521-8578 or mgrayATcarloan.com.

Of the many territories I deal with for auto finance marketing programs, there are a few states that I would like to focus on in the coming year and they include Texas, Minnesota, and Wisconsin.

Some dealers may argue that they get special finance customers in by the dozens, but aren’t closing deals!   Should they have to deal with 10 special finance visitors to get a deal or is the number more like 100?

Like everything else, it is a numbers game.

How many customers do you need to see to deliver one car and what does it cost you?  Some dealers I speak to say they have too much sub-prime traffic now and don’t want to “pay” for more of it. Whether you have a ton of special finance traffic or not, if you have the right basic lenders, inventory and people in place, you can be successful in the subprime arena and keep your cost per delivery below $300.

Here are some ways for dealers to ensure success, especially when dealing with special finance customers:

• Bring in all customers who reach out, don’t cherry pick.
• Get them approved by working the deal backwards:

1. Discuss their credit with them and select four or five vehicles that best suit their credit/ what they are approved for and work from there
2. Talk to them about the types of car they are interested in
3. Show them the cars that match what they qualify for

• Finally and most importantly, treat them well whether they are approved or not.

Think about this quote: “Everyone will buy a car.  Question is, will they buy it from you?”  Are you doing enough to make sure you’re the guy?

One thing I have found in my numerous, daily conversations with dealers across the country is:  You either want to do subprime or you don’t.  At the end of the day, you are either all the way in or you should stay out.

Mike Gray is an auto finance marketing consultant for Carloan.com. He has helped with dealers with their marketing programs in various roles for Carloan.com since 2004. You can reach Mike at 804-521-8578 or mgrayATcarloan.com.