How are you navigating the tighter lending practices?

Jared Hamilton
Chrysler is out of leasing, GMAC wants only 700+ credit scores, some banks wont even finance V8 engines anymore... How are you dealing with this at your stores, what are you doing to keep the deal flow going through the F&I office? New banks, more customer downpayment, or is the media making this sound worse than it is? Just curious to hear how others are navigating these crazy waters. Who has the strongest finance programs for your market?
Michael Kebrdle
IMO, the media is blowing this way out of proportion in intentionally or inadvertently using scare tactics on our customers. Rates are low and as long as the bank isn't in SERIOUS financial trouble, they are being super agressive. All of a sudden, situations that have always happened; i.e. a 700 beacon score getting turned down for a loan usually because of DTI, too many open autos, past BK, whatever has turned into "NO ONE CAN GET A CARLOAN! EVEN WITH GOOD CREDIT!" We have three manufacturers and 24+ banks and credit unions that we use. Since the financial crisis started, we have had one (1) bank change its practices which was a retail bank with a weak indirect department. Even when the media talks about dealers closing, its not necessarily the financial crisis. Bill Heard broke the law one too many times and mismanaged his floorplan. Auto Experts predicted a sharp decline in sales and more dealers closing than normal a year ago simply from self correcting market conditions. So, to answer y
Larry Schlagheck
Let's face it, people were being put into cars thay couldn't afford. I'm not blaming anyone, it's just a fact. Now, stricter rules are being enforced which is leading many to believe that the sky is falling. I see two things that need to be done: First, F&I managers have to be a bit more creative and broader thinking. I had a friend last week who was turned down for a Cadillac lease. He went to the next Cadillac dealer and was aprroved at a reasonable rate. Just gotta work harder these days. Second, buyers will start being smarter consumers. Just like they did with learning all about the pricing before walking into a dealership they're goin got learn more about financing, too. Check out this article in the Detroit Free Press from yesterday: ... 2/BUSINESS In my opinion it's a bit too "sky is falling" in nature but it does point out
Bart Wilson
I especially agree with 1) Build relationships with local lenders. Check out the Strategies page for more on this. Someone posted a best practice. The thing I like most about local lenders is that usually you can talk to a person and they have a little bit more say in the deal than a computer.
Jared Hamilton
Its good to see the governments plan starting to deliver results. As a direct result of the billions that GMAC received they announced that they have dropped their minimum credit score requirement on applications from 700 to 621. Its may not be the perfect solutions but at least with this govt action there is a direct, tangible results in the market place where the rubber meets the road.

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