Nearly 90% of Americans will finance their next vehicle. For the vast majority of consumers, the payment, interest rate, and getting credit approval are much more important than the price of the vehicle. Obviously, the more approvals you can obtain, the more car sales you will make. So how DO you get more and better lender approvals?
Here are five crucial steps you can take to get better lender approvals at your dealership:
- Perform detailed analysis of your dealership’s KPIs among customers in different credit tiers
- More and better approvals require the utilization, integration, and optimization of three key elements: information, people, and technology.
- Special Finance is 42.5% of the market. It is crucial to your success to track how well you are doing based on credit bureau score range.
- The #1 reason closing ratios are so low on subprime customers is allowing the customer to pick out the wrong vehicle because of poor qualifying.
- Leverage soft pull technology to correctly qualify prospects and get them 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
- 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
- Put them on a vehicle and structure a deal with the greatest chance of approval
- Soft pull credit technology is consumer friendly and dealership compliant:
- Maximize your inventory with invaluable vehicle data and auction processes
- Make sure you have the correct inventory for your subprime customer- what works for the prime side may be just the opposite of what you need to be successful in Special Finance
- Analyze your current inventory
- Identify which vehicles you need for Special Finance
- Head to auction prepared
- Make sure you have the correct inventory for your subprime customer- what works for the prime side may be just the opposite of what you need to be successful in Special Finance
- 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!- Know your buyer and talk to them on a regular basis, even when you don’t need anything; know what they look for
- Talk to their boss every couple of months- how is your portfolio performing?
- Never beg- talk content, alternatives, and the customer’s ‘story’
- Utilize an effective multi-bureau strategy to increase reserve and profits, and sales
- 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
Follow these five steps and I guarantee you will increase both the quality and the quantity of your subprime deals.
Join my session at the 22ND Digital Dealer Conference & Expo this April 11-13th in Tampa, FL, where you’ll learn the secrets to getting more and better lender approvals.