Special Finance Commitment, from Dealer Strong.
Are you on the 36% or the 64% team? Trust me – you want to be on the 36% team but it will take special finance commitment. In this post, I will explain the 64% team (and why you don’t want to be on it) and help you see where dealers are missing opportunities to grow.
According to Experian for 2Q2014, the average credit score for a person financing a used car was 641. This means the average customer’s credit score was well below the definition of prime credit and within two points of being a subprime credit customer (compared to a 711 for a person financing a new vehicle).
Combine that with some powerful proprietary data that John Palmer, the CEO of Promax Unlimited, shared with me. Using the State of Illinois as an example, data showed there are 1,060 dealers registered to do business. In that state, over 1 million people had credit scores between 500 and 640 – the heart and soul of subprime. Over a consecutive four month period, 817 dealers both pulled credit bureaus and had at least one credit bureau per month with credit scores between 500 and 640. During those four months, based on the known people living in the state with credit scores in that range, 10% came into a dealership and had credit pulled. Of those, 20% purchased a vehicle at that dealership, meaning 80% did not. Of those that did not, 29% purchased at another dealership.
