Timeless Topics – 2
Some topics are really never out of date. While I was looking through some old files and articles, the title of this one that was written back in 2002 caught my eye!
While I was tempted to update some of the specific make and model references, I decided it would be fun to just revisit 2002, as it was, and see how little has really changed in a decade.
Opportunities are never lost
Someone else will take the ones you miss.
I certainly wish that I could give credit to the person who penned that phrase, but I don’t have a clue where I picked it up. I just know that it made an awful lot of sense to me. I seem to remember that I read it on a sign in front of a school as I was driving somewhere. That would be a pretty good guess. When one lives out in the sticks, like we do, it is a hike to anywhere, except, of course, the golf course.
I was contemplating (that’s a 50¢ word for thinking out loud) writing something about inventory, since that topic seems to come up anytime someone is trying to explain to me why they just had a lousy month. The sales staff, of course, never has the inventory they need and the used car manager is struggling to find a place to put all the units he has purchased. And these guys sit within fifteen feet of one another. Go figure!
Now this is not going to be a sermon dedicated to converting all of the used car managers and buyers out there into Special Finance Inventory Specialists. And, on the other hand, I am not going to try to convince Special Finance Professionals to “sell what you have.” But I do want to take a couple paragraphs to talk about how inventory impacts our industry and how, by working together, we can make some more money. That is the point of all of this, isn’t it?
It wasn’t very long ago, when I was visiting a major dealer, who happens to be a customer of ours, that I sat and listened to a pretty savvy Special Finance Manager and the GSM of the dealership tell me that their Special Finance operation just wasn’t doing what they had projected. Their closing ratios were dismal and most of the leads they got were no good. They almost had me in tears! Then I started asking questions and the answers I got gave me a pretty good idea of the problems they were having. The biggest clue, and they sailed right by this one, was that sure, they could get prospects approved but they couldn’t seem to close the deals. Now in this case, I know that closing skills were not an issue. I walked them both over to the window overlooking the used car lot and said: “What do you see?” Of course, I got a couple smart answers like “cars.” They still didn’t see my point. I proceeded to point out that while there was, indeed, a sea of nice pre-owned inventory, it all looked alike! 99% of the inventory was four door, mid-sized, GM sedans. Now, while I certainly don’t have a thing against GM, not everyone in the world shares my preferences. There were two minivans, one SUV and three pickups on the lot. Not a single luxury sedan, like a Lincoln or Cadillac. There were a total of 2 Chrysler products and 3 Fords. The very next thing out of the mouth of the GSM was, “Those customers don’t care what they drive. If you get them financed, you can tell them what they are going to drive.” If he had been one of my kids, I would have sent him to his room. How the devil can you convince a family with 4 kids and a large dog that they need to drive a GrandAm sedan? Customers want and need choices!! If you don’t have the vehicle they want, your competition does. If you are not positioned to take advantage of an opportunity, then somebody else will!
Lets back up a minute here. I know that you and I have had this discussion before, but I guess it needs to be said again and again.
Special Finance customers are people just like you and I, who happen to have less that perfect credit!
Back in the old days when this industry was firing up, prospects were thrilled to be able to get financed and they would drive almost anything. Those days are ancient history. Special Finance customers, even more than conventional prospects, want to be treated like any other customer. Don’t talk down to them. Don’t treat them differently and don’t give them three cars to choose from. We found out that putting the Special Finance Department in a trailer out on the back of the lot just didn’t work. Most successful Special Finance operations blend right in with the rest of the dealership functions. Our customers appreciate the fact that they are not labeled Special Finance by the other folks in and around the dealership. What makes us think that they are going to accept less of a choice in the vehicle they drive than any other prospect? Oh sure, these prospects will be more likely to overlook a repaired fender or a dinged door panel than the average buyer, but they want choice.
If all of us have access to most of the same lenders, and we do, what is the difference between this dealership and the one down the street? How about friendly service and being treated like important customers? Those are two good ones. How about a selection of vehicles to choose from that reflects the market? Here are a couple suggestions.
How about Minivans? What percentage of the families out there drives minivans? And with all the expiring leases, they should be back of book on a regular basis. How about Luxocruisers? Why not have a couple Cadillacs or Lincolns on the lot. If those cars have a little bodywork, the mainline dealers will avoid them like the plague and you can buy them back of book all day long. And they book out great with your lenders. Suvs? How about two wheel drive models? These are usually a dog at the auction, but your SUV buyer wants the image of a SUV. He or she doesn’t really care if the Explorer is 2 or 4 WD. Choices, choices, choices, that is what this is all about. You are never going to have the perfect vehicle for absolutely everyone, but most of us could come a lot closer than we do.
I know, all you old-time used car guys are out there shaking your heads and saying something like, ‘What does this guy know about used cars. I maintain a good looking lot.” You’re right. It looks great! All the cars are lined up with military precision, all polished and gleaming, but they all look the same. We usually only get one good shot at matching an approved prospect with a vehicle he or she is going to love. If you don’t have the car of his or her dreams somebody else will. If your closing ratios are suffering, take a real close look at what you are trying to sell to your Special Finance customers. Give your prospects a choice and your Special Finance Department a chance to make more profits for the dealership.
Opportunities are never lost; someone else will take the ones you miss!
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.