Wednesday, August 6, 2008

How to Handle a "Special Finance" Customer

First of all, a definition: Special Finance: a customer with bad credit who cannot get financed through conventional methods and who has a large chance of having their next vehicle get repossessed. If they ever get approved, their interest rate is going to be sky-high and it will probably not be their dream vehicle.

OK--here are some techniques to handle this large and growing customer type.

1) Never tell them they are approved over the phone. If you do that, they usually get the attitude that they can now buy whatever they want from whomever they want.

2) If they tell you they have money to put down, ask if they really have it. For example, I had someone once tell me to "figure it with $2000 down." I turned around and asked, "Do you have $2000 to put down right now?" They said, "Uh--no, but I will in 6 weeks when I get my tax return." Your job is to sell them a car RIGHT NOW, not 6 weeks from now.

I love when a Special Finance Manager gets someone "approved" but it is not a deal that can be structured with your particular customer. "Hey--I got your guy approved but he needs $8000 down." Uh, no. That is a B.S. call--that is the banks way of saying "No." Now granted, some special finance customers can come up with that kind of money but we are talking about a small, small percentile of them. That is also like a salesperson saying, "I sold that guy a Corvette. He said he'll take it if the payment is $250 per month. I sold him--he just can't buy." Uh, no. You did not sell anyone anything. The deal has to be structured where...

a) The customer accepts it
b) Your manager accepts it
c) Your customer buys it (busting bugs, burning that all so expensive gas!)

3) If you get them approved before they come up, find out what vehicles you can sell them with the money they have down and more importantly, WITH THE PAYMENT THEY WANT! If you have a 2003 Trailblazer that is $300 and they want to be at $300, why would you try to sell them a 2005 Trailblazer at $500? Makes no sense whatsoever!

I used to work with a guy--probably the best used car salesperson that I had ever met. He told me he would get the leads online, get the people approved and have the car they could buy ready for them--all cleaned up and looking shiny. When they pulled up he would say, "This is your car and this is your payment." He also told me (and I believed every word) that he averaged around $5000 front end gross a pop and that he rarely ever made less than $15K per month. Anytime I saw the guy, he was on the phone working customers, working customers in person and working the finance guy on his customers--except the few times I saw him in the lunch room eating a lunch that he brought (I never once saw him leave for lunch.) Super hard worker--I wish I had 1/2 the work ethic that he has!

OK--now for the big thing. What if they people don't want one of the cars you have "picked out" for them? What if they want a Suburban (for some reason, people with bad credit always want the high-dollar vehicles) and you can only get them approved on a Blazer?

I like to call it the "Shot at the Doctor's Office Close."

Here's how it goes.

"Mr. Customer, I understand that you want a Suburban. I can get you worked out on a Blazer."

Customer: "The Blazer's too small. I want a Suburban."

You: "I just want you to understand that they will not approve you on a Suburban at this time. What I would recommend is getting the Blazer--they will approve you on it and it's a great opportunity for you."

Customer: "How's that?"

You: "It's kinda like going to the Doctor's office to get a shot. It hurts for a bit but in the long run, it keeps you healthy. Getting this Blazer is like getting the shot. It will hurt for a while but in the long run it will make you healthier because if you pay it perfect, you will help reestablish your credit. It's actually a great opportunity for you and quite frankly, I think it will be a mistake to look a gift horse in the mouth."

Then I like to add: "You will pay it perfect, right?" If they say "yes" then they just agreed to buy the Blazer.

This works really well if the payment is higher than they want to pay. "They higher payment is like getting a shot..." You get the picture.

Well, everyone, good luck and good night! I'm gonna hit the sack and have sweet dreams of my recent vacation to Mackinac Island and the surrounding area. Here is a nice picture with some soft colors that I took yesterday at dusk.

1 comment:

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