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Secrets to Getting More &
Better Lender Approvals!
John Palmer
President and CEO
ProMax Unlimited
Average price of a new car in 2015 was
$33,543*, a used car was $18,800**
61% of Americans have less than $1000 in savings***
21% of Americans don’t even have a savings account***
Average monthly new car payment was $485*** and used car payment was $361***
90-95% of American will finance their next car purchase!
* Source – Kelley Blue Book ** Source – Edmunds ***Source – Google Consumers Survey
For the vast majority of people the
Payment, Interest Rate, and Credit
Approval are far more relevant and
important than price!
The more credit approvals, and at better terms, the more sales you make.
It’s that simple!
Track how well you are doing based
on credit bureau score range.
More and Better Approvals Require the
Utilization, Integration, and Optimization
of 3 Key Elements People
Technology Information
Use soft pull credit technology to prescreen
every prospect early in the sales process
Get more deals approved by making sure the customer is on the right vehicle.
Soft pull credit technology is consumer
friendly and dealership compliant
• No SS# or DOB required
• No credit app or signature required
• Does not show as an inquiry or affect the prospect’s credit in any way
• “Firm offer of credit” required – perfect for unsold prospect
• Bring consistency & compliance to your desking and payment quotes
Special Finance is 42.5% of the market!
% of population Credit Score
1.09% 350-460
1.11% 460-519
6.12% 520-574
16.10% 575-619
18.08% 620-679
23.10% 680-719
27.20% 720-759
7.20% 760+
FICO Credit Scores
The startling fact is that for most dealerships over 70%
of people that they pull a credit bureau on with a score
of 650 or below they do not even submit to a lender!!
What an opportunity these people represent if they would only be worked correctly from the beginning of the sale!
#1 reason closing ratios are so low
on subprime customers
Allowing the customer to pick out the wrong vehicle because of poor qualifying.
Pull a Soft Credit Inquiry on ALL Your
Prospects and Really See What’s
Going On In Your Store
Use Soft Pull Credit Technology On Your Website
For More and Pre-Approved Credit Leads
Suggested plugin images!
Make sure your website is built
utilizing responsive mobile design
Put Them On a Vehicle And
Structure a Deal With The Greatest
Chance of Approval
1. Qualify Correctly
2. Make Sure You Have The Correct Inventory
3. Have the Right Mix of Lenders
4. Give Them a Choice of 3 Vehicles
5. Give Them 3 Payment Options On The Vehicle They Choose
Qualify Correctly
1. Trade-in
2. Income
3. Down Payment
4. Expectations
5. Co-app
Make sure you have the correct
inventory for your subprime customer.
What works best for the prime side of your business may be just the opposite of what you need to be successful in Special Finance.
50% of the gross on Special Finance deals is based on “Spread” the other 50% on how you work the deal.
First Analyze your Current Inventory
Book out every used vehicle by NADA Clean Trade (what most special finance lenders use for advance)
Subtract your “cost” from the book value
Entry level new cars with large incentive work great also.
If your current inventory analysis shows you need vehicles –
Go to the auction with a list of vehicles to buy for your Special
Finance customers
Bidzpin – A great tool for your used car
manager to use at the auction!
A green box tells the buyer the lender will finance the vehicle and make more than the dealership profit minimums.
Select the right mix of lenders Buying aggressively in your market
AmeriCredit GM Financial http://www.americredit.com/contact_us_global.asp
Capitol One http://www.capitalone.com/autoloans/
Chase Custom Finance
https://www.chase.com/index.jsp?pg_name=ccpmapp/shared/assets/page/phone2
Wachovia https://www.wachovia.com/contact
Fireside Bank http://www.firesidebank.com/Dealers.aspx
Citizens http://answers.yahoo.com/question/index?qid=20090307205154AAtnjcs
Santander Auto Finance
http://www.santanderconsumerusa.com/dealers/dealer_contact.aspx
Security Auto Loans http://www.securityal.com/sal/dealer/SALHome.php
Citi Financial http://www.citifinancial.com/USCFA/CFA/portal/Home.do
First Financial Investors https://www.fifsg.com/Contact_Us.aspx
Full sub-prime spectrum lenders
Lenders for the lower tier customer Exeter Finance Corp http://www.exeterfinance.com/CustomersContactUs.aspx
Westlake Financial http://www.westlakefinancial.com/Pages/LoanCustomersFAQ.aspx
Drive Financial http://www.santanderconsumerusa.com/about/contact_us.aspx
CAC http://www.creditacceptance.com/content2.aspx?page=2&subpage=3
Regional Credit Corp http://www.regionalacceptance.com/default.cfm?fuseaction=home&CFID=3114650&CFTOKEN=71963133
Flagship Credit Corp http://www.flagshipcreditcorp.com/contact_us.html
Globe Acceptance Corp http://www.creditreportproblems.com/Global_Acceptance_Credit_Company.htm
United Auto Credit Corp http://www.upfc.com/makePayment.asp
Honor Finance http://www.honorfinance.com/
Tidewater Motor Credithttp://www.tidewatercredit.com/
Prestige Finance http://www.gopfs.com/
Friendly Finance http://www.friendlyfinance.ca/
CPS http://www.consumerportfolio.com/
Lenders specializing in bankruptcy
Really Know Your Lenders Programs,
Rep, and Buyer Don’t just go by the published rate and program guides. Call or better yet visit with your rep and/or buyer – ASK QUESTIONS!
Give them a choice of 3 Qualifying Vehicles
“John, my manager has selected 3 vehicles he thinks you will really like, fit your budget, and be able to get you financed on.”
“John, of the 3 vehicles which ones would you like to go and take a look at?”
Present, Demo, Excite and Trial Close – Just like a Prime Customer!
or or
Give them 3 payment options on the
vehicle they choose Never give any customer an option of only one choice – but always 3!
“Joe, Congratulations! (Extend your arm, and shake their hand)
“I have some great news for you; my manager has put together a proposal for you on the 2011 Kia Sorento that you just drove that I know you are going to be really excited about!
Script for the Presentation of the
Initial Proposal
Our Sale price is only $12,995 over $3,000 below the Kelley Blue value. We are also able to give you $800 for your 2003 Chevy Cavalier. That will bring our cash difference to $12,195 plus taxes, fees and your payoff.
Now my manager has given you three different options to look at as far as your monthly payments are concerned. I’d like to go over all three with you right now, and have you tell me which one you would prefer to go with; is that alright?
First you could choose 48 months with $2,635 down and have payments of $360 per month, or you could go with 60 months and $1,625 down and have payments of $345 per month, or you could go with 60 months and only $1,125 down, the $800 you mentioned earlier you had for down payment plus your next car payment on your trade of $325 due next week and keep your payments at $360 per month.
Joe, of these three options, which one would you like to go with? Great, why don’t you give me your driver’s license and well get started on the paperwork.”
Pull all 3 Credit Bureaus with every
credit application • Most captive, prime, and subprime lenders will
use the highest score of 2 or even all 3 bureaus to determine approvals and tier
• 60% of multi-scored applicants have risk scores that vary by more than 20 points
• There is a much greater likelihood of getting more subprime deals bought and at higher tiers when 2 or all 3 bureaus are pulled
Pulling Multiple Credit Reports
Increases Auto Dealer Reserve and Profit
A recent study conducted by Dealer Marketing Services, Inc. (“DMS”), the makers of ProMax Unlimited, revealed that not only does obtaining credit reports from multiple credit reporting agencies for each consumer increase the total number of deals; it increases the reserve and profit on those deals as well. Surveying DMS’ large database of transactional data (from the month of February 2015) that encompassed hundreds of thousands of applications and inquiries, several patterns emerged. 1. Obtaining credit reports from multiple credit reporting agencies increased the likelihood of identifying the highest credit score available for the consumer
Obtaining two credit reports from different credit reporting agencies results in a 20% likelihood of an increase to the consumer’s credit score by 20 points or more, and an additional $69.26 additional reserve on all financed deals. Obtaining credit reports from three different credit reporting agencies results in a 32% likelihood of an increase to the consumer’s credit score by 20 points or more, and an additional $107.12 additional reserve on all financed deals.
2. Dealers had a greater chance of obtaining a higher
score from a different credit reporting agency when the
initial score was low
A dealership’s initial reaction to a consumer with a low score may be that a deal couldn’t get done. The data in this study indicates that the lower the initial score is, the more likely the chances of obtaining a higher score from another credit report from a different credit reporting agency:
3. A higher credit score resulted in more deals being
funded for the dealership
Underlying these results is a simple fact that Finance & Insurance veterans already know: applicants’ scores can vary significantly from one consumer reporting agency to another. 60% of multi-scored applicants in this study had credit scores that varied by more than 20 points.
The importance of these findings is obvious. Namely, the higher a consumer’s credit score, the more likely they are to have a deal funded. Many captive, prime, and subprime lenders will use the highest score of two or even all three bureaus to determine approvals and tier.
4. Obtaining credit reports from multiple consumer
reporting agencies increases profit on a per-deal basis
Note the increasing profit per credit application when obtaining one additional credit report from another consumer reporting agency:
This positive effect becomes even more pronounced when obtaining credit reports from all three nationwide consumer reporting agencies:
Conclusion When obtaining credit reports from two or more consumer reporting agencies, there is a much greater likelihood of getting more subprime deals purchased and increasing reserve for prime deals.
The Credit Application and
Customer Interview
• Complete Totally and Accurately
• Maximize Income
• Verify Income When Possible with Equifax’s “The Work Number”
• Get The “Story” Behind The Numbers
• Ask for a Co-Applicant If Going to Be Needed
Use RouteOne or Dealertrack With
Maximum Effectiveness!
Send to your best, most profitable and most likely approval lender first – No shotgunning!
Use the “notes” field when appropriate
Submit a properly structured actual deal not just a “payment call”!
Rehash your turndowns with Talent,
Expertise and Rapport!
Know and talk to your buyer on a regular basis even when you don’t need anything. Know what they look for.
Talk to their boss every couple months – how is your portfolio performing?
Never beg – talk content, alternatives, and the customer’s “story”
More income? Restructure deal to score better? A qualified co-signer? A different vehicle?
Final thought… If you want more approvals,
then you need more applications –
so get more credit leads!!
1. Optimize your website for payment search and quotes – example: www.royschmidthonda.com
2. Automotive Credit Trigger Leads
3. Bankruptcy Mailer – To newly filed
4. High Interest Rate – High FICO mail piece
5. Send out an email campaign to all your prospects in your CRM offering free credit approval and see their credit score with link to soft pull credit app
Here are 5 great ways to do so:
