Sub-Prime Checkup
By Paul Snider
Review all agreements with lenders. Refer to my previous articles that address dealer pitfalls and take immediate steps to correct. It may be beneficial to ask each lender for a copy of their latest agreement as comparison.
- Are training schedules in place for all staff including management?
- Does special finance have an advertising budget each month that coincides with the business plan?
- 800 lead generation numbers should be in ALL advertising and referred to as toll free especially if you use 877 or 888 .
- Ask for details and reports on how leads from 800 number and the Internet are being handled. Is there a plan for follow-up on unsold leads?
- Inventory should be reviewed. One of the biggest mistakes dealerships make is marinating the wrong inventory. Stock vehicles that fit payment needs of the customer plus carry longest possible term and greatest gross potential. Remember, terms change in January, making some vehicles hard to finance because of the short-term lenders offer combined with higher interest rates.
- Is direct mail in the plan for 2000? If so, what steps have been taken to maximize the traffic and deliver a higher percentage of vehicles?
- Does the dealership have fraud and misrepresentation policies in place? Who follows up to insure policies are adhered to? This should be an everyday responsibility.
- Contract in transit-hire a funding clerk who is paid on quick funding to eliminate this problem. Request training from lenders to eliminate returned contracts.
- Review all lenders' guidelines for changes that staff may not be aware of.
- Is department separate from regular F&I? Do you have the right manager to meet and exceed business plans? Review all pay plans for sales and management. Adequate compensation is directly tied to success in this department.
- Do managers have written limits of authority?
- Review dealership spot delivery policies and procedures.
- Were the marketing efforts of '99 analyzed for profitability?
- Were unsuccessful efforts dissected to ensure failure was not because of poor follow-up, lack of attention etc.
- Have all advertising campaigns for 2000 been refreshed? Advertising becomes stale after a while and must be changed periodically.
- Is the Special Finance Department aware of '99 performances? Has an informal business plan been done for 2000, including revenue/sales projections?
- Have all pay plans been revised to ensure staff has not become complacent?
By taking some time to review the special finance department early in 2000, the process will be easier to manage and more successful throughout the year.
Paul Snider is President of VOISYS Systems Corporation, specializing in lead-generating services including 800 loan-by-phone and Internet applications. psnider@dealeronline.com
