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.

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.

Two years ago I spent 3 days in New Orleans at an NADA show that was more frustrating than anything that I could imagine. 

Not only did I have to contend with slashed ad budgets, but it seemed like half of the folks that I spoke with were convinced that special finance was dead and would not experience a Lazarus-like return.  Most of the people seemed to pity me, seeing our auto finance marketing products as a once-great idea whose time had come and gone. 

I was basically trying to sell encyclopedias at a Google convention.

While most people gave me a polite brush off, one General Manager decided that he would take a half-hour to explain to me why subprime could never come back.  Armed with some CNN sound bites and some out-of-context data from Automotive News, he gave quite an impressive soliloquy on the brave new world of auto finance.  I, of course, tried to explain my belief that our industry would not tolerate a vacuum for long, and with credit scores dipping some banks would figure out a way to structure their programs to fill the void.

His final words as he walked away from our booth were “I like that you can come up with reasonable arguments to support a fundamentally flawed position, once you guys go out of business give me a call and I may have a spot for you”.  He laughed and walked on to his next session, while I shook his comments off and looked for the next person who would give me a few minutes to chat.

I was reminded of this story earlier this week when I got a call from the same GM. 

He’s now the Finance Director for another store, and obviously didn’t remember me, but I sure remember him.  He spent about 5 minutes telling me about his research that showed special finance was going to come back soon, and he was thinking about buying some leads. I shared with him that subprime had already come back, and that the banks had created programs that helped get people into cars without setting us up for another mess in a few years. 

I’d be lying if told you I didn’t get some pleasure out of telling him that he’d missed out on the opportunity to get in early, and that I was sold out of leads in his market. 

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.

Two years ago I spent 3 days in New Orleans at an NADA show that was more frustrating than anything that I could imagine. 

Not only did I have to contend with slashed ad budgets, but it seemed like half of the folks that I spoke with were convinced that special finance was dead and would not experience a Lazarus-like return.  Most of the people seemed to pity me, seeing our auto finance marketing products as a once-great idea whose time had come and gone. 

I was basically trying to sell encyclopedias at a Google convention.

While most people gave me a polite brush off, one General Manager decided that he would take a half-hour to explain to me why subprime could never come back.  Armed with some CNN sound bites and some out-of-context data from Automotive News, he gave quite an impressive soliloquy on the brave new world of auto finance.  I, of course, tried to explain my belief that our industry would not tolerate a vacuum for long, and with credit scores dipping some banks would figure out a way to structure their programs to fill the void.

His final words as he walked away from our booth were “I like that you can come up with reasonable arguments to support a fundamentally flawed position, once you guys go out of business give me a call and I may have a spot for you”.  He laughed and walked on to his next session, while I shook his comments off and looked for the next person who would give me a few minutes to chat.

I was reminded of this story earlier this week when I got a call from the same GM. 

He’s now the Finance Director for another store, and obviously didn’t remember me, but I sure remember him.  He spent about 5 minutes telling me about his research that showed special finance was going to come back soon, and he was thinking about buying some leads. I shared with him that subprime had already come back, and that the banks had created programs that helped get people into cars without setting us up for another mess in a few years. 

I’d be lying if told you I didn’t get some pleasure out of telling him that he’d missed out on the opportunity to get in early, and that I was sold out of leads in his market. 

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 it comes to finding an appropriate match between our proactive consumers and a qualified dealer I like to take a consultative approach with the dealership.

I am able to provide advice not only on how to set appointments and get consumers into the showroom but to ultimately get them approved. While some dealers are still hesitant about special finance customers, it is a fact that almost 40% of Americans now fall into that subprime category.

Most dealerships are turning to subprime to avoid losing market share to competitors who have been working with secondary finance for years.

The most important thing is to know how to treat the customer once they are in the door:

• Make sure they understand what the limitations are to buying a car and what it is that they qualify for.
• Show features and benefits of the automobile that they are interested in.
• If the customer doesn’t qualify, still counsel them on why the bank denied/declined their credit. Help guide them on what they can do to improve their credit.
• After the sale or even denial, follow up with the customer.

Follow-up or special attention to a customer who is unqualified or may even have been declined may seem like a waste of time.  However, this is actually an opportunity to differentiate yourself from all the other dealerships they have experienced.

All customers remember good experiences, and they will remember how helpful you were when their financial situation changes. If you are courteous and helpful the customer will even refer their friends and family to you for their automotive and financing needs.

Some dealers understand the need for a secondary department but are still in the process of developing a portfolio of subprime lenders or obtaining the right type of inventory.

Mike Sadowski is an auto finance marketing consultant for Carloan.com. He spent 14 years in the car business in Richmond, Virginia and has been helping dealers manage their Carloan.com marketing programs since 2003. You can reach Mike at 804-521-8577 or mikeATcarloan.com.

When it comes to finding an appropriate match between our proactive consumers and a qualified dealer I like to take a consultative approach with the dealership.

I am able to provide advice not only on how to set appointments and get consumers into the showroom but to ultimately get them approved. While some dealers are still hesitant about special finance customers, it is a fact that almost 40% of Americans now fall into that subprime category.

Most dealerships are turning to subprime to avoid losing market share to competitors who have been working with secondary finance for years.

The most important thing is to know how to treat the customer once they are in the door:

• Make sure they understand what the limitations are to buying a car and what it is that they qualify for.
• Show features and benefits of the automobile that they are interested in.
• If the customer doesn’t qualify, still counsel them on why the bank denied/declined their credit. Help guide them on what they can do to improve their credit.
• After the sale or even denial, follow up with the customer.

Follow-up or special attention to a customer who is unqualified or may even have been declined may seem like a waste of time.  However, this is actually an opportunity to differentiate yourself from all the other dealerships they have experienced.

All customers remember good experiences, and they will remember how helpful you were when their financial situation changes. If you are courteous and helpful the customer will even refer their friends and family to you for their automotive and financing needs.

Some dealers understand the need for a secondary department but are still in the process of developing a portfolio of subprime lenders or obtaining the right type of inventory.

Mike Sadowski is an auto finance marketing consultant for Carloan.com. He spent 14 years in the car business in Richmond, Virginia and has been helping dealers manage their Carloan.com marketing programs since 2003. You can reach Mike at 804-521-8577 or mikeATcarloan.com.

Guest post today from our General Manager, Tom Feary. He's noticed a significant disconnect between online marketing practices and dealer operations that has popped up in the field.

The question for the month is… Do your finance people talk to your marketing and Internet people?   Many of our customers invest in used and new car leads right along with auto finance leads.  Yet the expectation of how finance leads are filtered and delivered can vary, sometimes dramatically.

An example is geographical targeting.  Your finance manager may request leads from less than 10 miles away but your marketing and Internet teams are targeting and optimizing for greater distances, such as 30 and 50 miles.  These teams invest in advertising and Internet tactics to attract a larger footprint.  Yet a finance manager can place hand-cuffs on your spending by restricting the targeting area.

One of the great things I love about the web is the ability to trip over things.  Nothing is more exciting to me than conducting a search and finding a good morsel of information by accident.  Search results and online advertising are delivered to a user based on sophisticated reasoning and calculations.  Each vendor, whether it is a search engine or ad server, has a different slant and that’s why there is opportunity everywhere.

Geo targeting on the web is just one of many slants.  For one channel, 10 miles may be a margin of error.  For another channel, 10 miles may be impossible.  And the more calculations, the more precise… the more cost.  Not cash cost, but lost opportunity because a programmer’s math determines a lead just 9 miles away looks like its 19 miles away.

So where’s the real opportunity for your finance team?  Why will an Internet sales manager work a lead from 30 or 50 miles away but a finance manager turn away a lead just several miles down the road?  How is that good for the dealer?

We’re sincere with our questions and look forward to your comments.

Tom Feary is General Manager for Interactive Financial Marketing Group, an online marketing firm serving car dealers under the Carloan.com brand.  Dealers can learn more on our web site for dealers.  You can follow Tom on Twitter @tomfeary.

Guest post today from our General Manager, Tom Feary. He's noticed a significant disconnect between online marketing practices and dealer operations that has popped up in the field.

The question for the month is… Do your finance people talk to your marketing and Internet people?   Many of our customers invest in used and new car leads right along with auto finance leads.  Yet the expectation of how finance leads are filtered and delivered can vary, sometimes dramatically.

An example is geographical targeting.  Your finance manager may request leads from less than 10 miles away but your marketing and Internet teams are targeting and optimizing for greater distances, such as 30 and 50 miles.  These teams invest in advertising and Internet tactics to attract a larger footprint.  Yet a finance manager can place hand-cuffs on your spending by restricting the targeting area.

One of the great things I love about the web is the ability to trip over things.  Nothing is more exciting to me than conducting a search and finding a good morsel of information by accident.  Search results and online advertising are delivered to a user based on sophisticated reasoning and calculations.  Each vendor, whether it is a search engine or ad server, has a different slant and that’s why there is opportunity everywhere.

Geo targeting on the web is just one of many slants.  For one channel, 10 miles may be a margin of error.  For another channel, 10 miles may be impossible.  And the more calculations, the more precise… the more cost.  Not cash cost, but lost opportunity because a programmer’s math determines a lead just 9 miles away looks like its 19 miles away.

So where’s the real opportunity for your finance team?  Why will an Internet sales manager work a lead from 30 or 50 miles away but a finance manager turn away a lead just several miles down the road?  How is that good for the dealer?

We’re sincere with our questions and look forward to your comments.

Tom Feary is General Manager for Interactive Financial Marketing Group, an online marketing firm serving car dealers under the Carloan.com brand.  Dealers can learn more on our web site for dealers.  You can follow Tom on Twitter @tomfeary.