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In the world of sub-prime finance, everyone claims to have the secret or trick to creating a successful sub-prime finance department. They tell you that your dealership will make more money than you have ever dreamed of. Their trick is usually something no one has ever heard of, and even if their sub-prime finance department has other problems, all that a dealership has to do is follow these two rules.
Rule #1: Do It Right The First Time!
Rule #2: When in doubt refer to rule #1.
Actually, there is a rule that every sub-prime finance department should be following if they want to earn long-term success, but while it is simple to understand, it is more difficult to follow. The rule is to take your time and do each deal right the first time. No excuses and no cutting corners. Everything good in life takes work, including business, and disgruntled customers don’t usually give referrals. The only time success comes before work is in the dictionary.
If you are not sure what it takes to get it right, here are a few guidelines. First, customers need to feel that you are on their side. From the minute they walk in the door, they should be treated with respect, and when they start the process of getting approved, explain the entire process to them and make sure they understand. Do not leave them waiting for two hours in the waiting area while they are completely in the dark about what you are doing. They will feel abandoned. Explain the process. Do not condescend to them or treat them with disrespect. As the saying goes, it doesn’t cost anything to be nice.
Second, follow up with past customers. Even if they aren’t looking to trade in or buy a new car for themselves, maybe they are looking for a used car for their teenager, or they have a friend or relative looking for a car, ask for referrals. If you treated them with respect and fully explained the terms of their auto loan, they will remember, especially if you follow up with them.
Finally, set the proper expectations for the customer with respect and kindness. It might not be feasible for them to get the car of their dreams if they have bad credit or no credit, but they might be open to a good used car if they have been treated with respect and if they fully understand their credit situation. I highly recommend using the Risked Based Pricing to help explain their credit history completely. If you educate your customer they will appreciate and respect you more in the long term. Happy customers will send you referrals.
If you have any questions or comments feel free to leave them below. Good Luck out there!