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Secrets to Getting More & Better Lender Approvals! John Palmer President and CEO ProMax Unlimited

Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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Page 1: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

Secrets to Getting More &

Better Lender Approvals!

John Palmer

President and CEO

ProMax Unlimited

Page 2: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 3: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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!

Page 4: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

Track how well you are doing based

on credit bureau score range.

Page 5: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

More and Better Approvals Require the

Utilization, Integration, and Optimization

of 3 Key Elements People

Technology Information

Page 6: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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.

Page 7: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 8: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 9: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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!

Page 10: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

#1 reason closing ratios are so low

on subprime customers

Allowing the customer to pick out the wrong vehicle because of poor qualifying.

Page 11: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

Pull a Soft Credit Inquiry on ALL Your

Prospects and Really See What’s

Going On In Your Store

Page 12: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

Use Soft Pull Credit Technology On Your Website

For More and Pre-Approved Credit Leads

Page 13: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%
Page 14: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%
Page 15: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

Suggested plugin images!

Page 16: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

Make sure your website is built

utilizing responsive mobile design

Page 17: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 18: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

Qualify Correctly

1. Trade-in

2. Income

3. Down Payment

4. Expectations

5. Co-app

Page 19: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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.

Page 20: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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.

Page 21: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 22: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%
Page 23: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%
Page 24: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%
Page 25: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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.

Page 26: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

Select the right mix of lenders Buying aggressively in your market

Page 27: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 28: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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/

Page 29: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 30: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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!

Page 31: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 32: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

Give them 3 payment options on the

vehicle they choose Never give any customer an option of only one choice – but always 3!

Page 33: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

“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.”

Page 34: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 35: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 36: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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.

Page 37: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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:

Page 38: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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.

Page 39: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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:

Page 40: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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.

Page 41: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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

Page 42: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%
Page 43: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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”!

Page 44: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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?

Page 45: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

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:

Page 46: Secrets to Getting More Lender Approvals! · •Most captive, prime, and subprime lenders will use the highest score of 2 or even all 3 bureaus to determine approvals and tier •60%

John Palmer

CEO

Dealer Marketing Services, Maker of ProMax Unlimited

[email protected]

Contact Info