It has become increasingly apparent to me, as I wander around up here in the not-so-frozen North, that we are on the cusp of another growth period in the Special Finance industry. The demand has never been greater and lenders are beginning to aggressively market their programs. The knowledgeable, committed Special Finance professional is in the proverbial “catbird seat” as our industry looks forward to the upcoming surge in Sub-prime financing.
I know that I promised to write about the various components that make up a successful Special Finance operation. And I also realize that perhaps you may feel that I have gotten hung up on the commitment factor.
However, commitment is the foundation of any serious endeavor.So before we wander off in another direction, let’s talk one last time about this important component of success; in Special Finance or in any other area of our dealerships.
When I talk about commitment to a Special Finance program, I am not just keying on management commitment! Commitment comes from all angles. We look to commitment from management for the tools and internal support that we need to succeed. Aside from these areas, we need commitment to maintain inventory that will work with our various lender programs. Not to mention inventory that customers will proudly drive and maintain. When I ask SF team members about issues that may be holding them back, the number one issue, these days, is lack of inventory. Now I understand what is going on in the used car market, so please don’t accuse me of wearing blinders, but having a used car manager and/or buyers who understand and are committed to the needs of Special Finance can take advantage of what inventory that is available. This knowledge and commitment can make the difference between success and struggle for any Special Finance professional.
But there also needs to be a commitment from those in the trenches! “I am going to try this for a while and see if I can make any money” is not the sort of foundation that will entice management into committing the resources necessary for success. I cringe when I hear, from across the desk, “we need to cash a few deals before we can make a commitment to a bigger advertising budget.” Talk about the cart before the horse!
Perhaps most importantly, commitment to learning all you can about your lender programs is a huge component in developing a successful Special Finance business. As we all know from recent experience, lenders can make or break you. Knowing their programs, submitting only applications that fit their models, and using the approvals that you receive will go a long way in developing working relationships with lender personnel. “Look to Book” may seem to be an old guideline, but it is still in use. How much extra time would you spend on a prospect that continually came into your store, inked a deal, got approved and never took delivery of a vehicle?
Okay, hopefully, you get the picture. Commitment is the foundation for Special Finance or any other worthwhile endeavor. Commitment from management as well as your personal commitment to follow your plan, take advantage of the potential, and make Special Finance the successful dealership component and profit center it can be.
Just my two cents worth!
About the author
Dick Hassberger, of Lake Orion, Michigan is a veteran of over 50 years in the Automotive Financing and Leasing industry, starting his career with the former Wayne Oakland Bank in September 1960. Dick currently represents VOISYS in Michigan. He has held executive positions with Major Banks, Lending Institutions and Leasing companies and has accumulated a vast store of knowledge in the automotive financing industry, which he regularly shares with his client dealerships as well as readers of this blog. Dick was a regular author for World of Special Finance Magazine.