The first thing I noticed this year at NADA was the difference in tone when it came to dealers and their attitudes. Two years ago when I attended in New Orleans the attitude and overall feel was completely different. At that time dealers were just looking for ways to becomes more efficient and survive the storm.

Few were willing to look at lead generation or anything that involved expanding their business, but instead were looking at ways to maximize what they already had. This led to a large demand for the lending aspect of our company, but a tepid approach when it came to looking at lead generation.

This year you saw the difference in attitude and intent with all of the dealers that were at the show from the first bell on that Saturday. Those that have survived the past few years have learned to be more lean and efficient and make the most of what the market offers. They are now looking to expand their book of business and attack the customers who are not walking onto their lot.

Lenders are stepping up to the plate and actually looking to add dealers in 2011. This means to increase market share, dealers will have to find new ways to reach customers outside of their traditional forms of advertisement. Our ability to eliminate duplication among all the different verticals of lead generation that a dealer may utilize puts us in a unique position to offer non-brand-specific customers that the dealership is not seeing currently.

We're looking forward to helping our dealer partners find car buyers that no other provider (new/used/finance/brand specific/inventory based) can supply. 2011 is going to be a great year for selling cars.

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 at bmatthewsATcarloan.com and follow Brian on Twitter at @BrianCarloan.

Good day.  Exciting news we're communicating to the market today.  We're announcing that we have surpassed the 5 million mark of online car loan applications delivered to our Carloan.com network of dealers.  Over the last 8 years we've averaged 625,000 apps a year or 52,000 each month.  Big stuff considering the last two years have been within a recession.

A big thanks to our dealers.

Many of you have been doing business with us for well over 12 months, and several for over 5 years.  We can't say "thank you" enough for sticking with us through the downturn.  Of course, we have warm fuzzies for our new customers too.  All in all the level of service you provide to hard working people every day is extraordinary.  Our marketing doesn't work if dealers on the ground don't back it up.  Thanks!

Surpassing 5 million car loan applications has us pumped. What has us confident that we'll hit our next 5 million faster than the first is the ground work we're laying in our business now.  We're excited about the investments we're making.  There's a lot moving with new faces and talent, new teams, new tools, and new ways of collaborating with partners.  We feel down the stretch in 2011, our brands will be stronger than ever, and as customers you'll benefit from stronger intent in the buyer.  Our goal remains your mission, Sell More Cars!®

Please stop by our booth at NADA and say hello - booth #2046S.  If you're free Saturday at 12:30 come help us celebrate our milestone.  Marketing got a fancy cake and everything.

Safe travels,

-Tom

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.

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.

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.

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.

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.