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Jared Hamilton
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2012 Special Finance


2012 Automotive Special Finance


Banks are buying again and they are buying deep. Sub Prime Business is back and it is extremely profitable. I work with dealerships all over the country and the feeling is unanimous… They are ALL loving it! Why wouldn’t they? Over 60% of the United States has less than perfect credit.

Let me clear up some misconceptions about Special Finance. There are two different ways that you can engage the sub prime market (or not engage it at all).

The first way, is the most common way. It is being “reactive”, meaning that your dealership tries to get people that have “bad credit or no credit” approved when they are in your showroom.  Usually these are people that walk into the dealership, or start on the phone or Internet and are treated like a conventional or normal opportunity. Meaning, they are put through the “normal” “road to the sales” process and during that process it comes out that they have bad credit or no credit and then the dealership tries to put a deal together AND tries to get the deal approved.  

The second way is being “proactive”. Meaning that the dealership actively seeks people that have “bad credit or no credit” and they usually have a different process than a conventional opportunity or they have a different (or specialized) team that handles these opportunities.  

Then there are dealerships that do NOT want to deal with ANYTHING related to “Special Finance” they are under the impression that “these people” are “mooches”, “roaches” etc… In other words there are dealerships that think that there is NO value in working with people that have credit challenges.

Here is the reality check people… OVER 60% of people have less than perfect credit. It is way more than you can imagine.  So in other words there are MORE people with credit issues than there are people that don’t have credit issues. So, why in the world would you not engage these people? Why would you NOT maximize these opportunities?

Now let me add to the equation that sub prime deals average HIGHER GROSS per copy compared to convention deals.  My clients are averaging over $3,500 per copy with their Sub Prime deals versus their $2,ooo a copy for their conventional deals.

And as far as the ridiculous notion that “these people” are roaches or mooches” or that you do not want to contaminate your dealership with “these people” is beyond ridiculous!  Please think about what this country has been through in the last 3-4 years with the real-estate market, with the job market, with Wall Street. Not to mention all of the traditional reasons for credit challenges… Over Due Medical Bills, Divorce, Bankruptcy etc… We have seen tumultuous times and so has YOUR PROSPECTS, so has YOUR CLIENTS. This doesn’t mean JUST “poor people”. There are a lot of “rich” people that have bad credit. There are a lot of people that make a lot of money that have bad credit. 

So, when I speak to highline dealerships and they are appalled at the thought of engaging in sub prime, it perplexes me. Why…? Because rich people with bad credit or people that make a lot of money with bad credit can AFFORD to pay a down payment and a lot of time they can afford a LARGE (or larger) down payment compared to a financially challenged person.

Ok, now that I have convinced you that Sub Prime Opportunities are NOT only relevant, but are valuable.  I want to go over what you and your dealership need to do to make sure you are successful in your initiative.

Here are the TOP 5 Things that you need to have or do to be successful in Sub Prime:


  1. First and foremost, you need to have a complete plan as to what you want to do. Create a complete game plan… How many sub prime deals do you want to deliver per month. How many leads / credit apps are you going to need to buy or generate in order to deliver the special finance units that you want to. How many people are you going to need to handle the amount of leads / credit apps that you are going to buy or generate.  Who is going to handle the Special Finance leads? Sub Prime prospects are COMPLETELY different than a traditional prospect.
  2. You are going to need the RIGHT inventory. Meaning that you need vehicles that “Book Out” the best. You need vehicles that are going to fit the budget ranges (price and or payment) of your sub prime prospects.
  3. You are going to need the proper banks / lending institutions to ensure you can get deals approved and funded. You need a myriad of banks. Not just one or two. You want a diversified list of financial partners that have different programs, rates, fees that can fit EVERYONE’S unique situations.
  4. Leads… you need “opportunities to do business” in order to do business! Meaning… you need people to sell to.  So, you ware going to want to find third party providers that have experience in generating QUALITY Special Finance Leads. Key word meaning “Quality”. You don’t want to deal with fledgling companies with no track record or unrepeatable sources. Leads are VERY important. Remember, there is a HUGE difference from being “Reactive” to Special Finance” versus to being “Proactive” and having a “REAL” Special Finance initiative or department.
  5. Process, Process, Process… What is the outbound phone call process, what is the inbound phone call process, what is the outbound email process, what is the inbound email process, what is protocol for objections and rebuttals. What is the “What If….” Process. Meaning, you need to know what to do, when to do it and why you are doing it.


Bottom line is that Automotive Special Finance is a HUGE opportunity to incrementally increase VOLUME and GROSS.

If you have ANY questions about this article or Automotive Special Finance please feel free to call me at 267-319-6776 or email me at

Jeremy Alicandri
Special finance does in fact have some opportunities. I'm actually seeing the luxury OEMs accept credit apps that are being denied by Kia!
Sean Bradley
Jeremy you are SO right! I am onsite a dealership right now in Chicago and at first they weren't too interested in "traditional" Special Finance prospects but then I explained that my intention was a "higher" level of a Special Finance prospect, they went from being intrigued to being all in! Thanks for the feedback-
Amy Taggart
It's definitely an interesting time for those of us who held on through the downturn - we're seeing a higher volume and better quality of auto loan applicant come through our website network looking for financing.

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