Dealer finance network

Martins Ville

I wonder when car dealers are going to stop letting the banks make the bulk of the money on car deals?

Did you know anyone can start a credit union?

Did you know in one regional area there's 20 to 50 car dealers that could creep their own dealer finance network and create a credit union where they can dictate who gets the loans or not?

Under this type of proposal dealers could provide retail installment contracts to every customer, and add an extra $2,000 to $5,000 and profit per retail deal.

So if you're a car dealer and you do 100 retail deals a month, and your current banks make on average $3,000 in interest profit per deal, imagine what an extra $3 million in profits per month would mean to your dealership. 36 million per year per dealer doing 100 retail units. 

Would you be in on this game?

Martins Ville

Sorry, $300,000 per month and $3.6 million per year... Added profit. But if there were 10 dealerships in your group you could potentially make an extra $3 million a month. 

Mark Rask

That would be tough to  start 

Martins Ville

Not really Mark, but it's easier to hand over the bulk of all profits made inside a car deal to banks who we most of the time, seek an approval electronically at the press of a mouse once the deal is loaded and the F&I people "do their job" , in seconds -while it takes a dealer years to grow a business and hours and days to win over a single customer through a complicated and expensive process. It's just something most people in the car business - dealer owners, GM's, SM's, F&I Directors, Industry website have never even thought about doing. It's been on my mind a long time. It's competition. Here's the blueprint how to make it happen: https://www.ncua.gov/files/publications/resources-expansion/Federal-Credit-Union-Charter-Application-Guide.pdf

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