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Dealership Excelling With Niche Credit Market

Would a Special Finance customer drive six hours past hundreds of other automobile dealers – many doing Special Finance – just to do business with one particular dealer? The answer is “Yes” if the dealership is VanDevere Buick-Pontiac-Oldsmobile in Akron, Ohio.
The obvious question is why? Especially when they come from as far away as Detroit, Mi., Buffalo, Ny., and eastern Kentucky. The answer is an open Chapter 7 Bankruptcy program that Special Finance Manager Mike Anthony has perfected over the better part of the last five years. Yes, OPEN Chapter 7 Bankruptcies.

The next obvious question is, “What are finance companies doing for people that just filed Chapter 7 bankruptcies, and have not even been to the meeting of their creditors, let alone been discharged? While there are a few other finance companies occupying this market, the primary finance company utilized by Anthony is Tidewater Motor Credit, which has nested in this market since the early 1990’s. While Tidewater has credit guidelines that cover the full sub-prime credit spectrum, it truly excels with the applicants that have just filed a Chapter 7. Anthony prefers Tidewater as it offers one important element, that being market exclusivity. “Knowing that we can get them approved, and the dealer down the street – or even way down the highway – doesn’t have that ability has been a big factor in our long term relationship,” said Anthony.
According to Anthony, the system he designed to make the program successful is simple. He subscribes to a service, that for 10 cents per name allows him to access a list (which is updated daily) of bankruptcy court filings. Daily, he simply downloads the list of new filings, which he then sends a direct mail letter to each day. By doing this daily, it creates a steady flow of leads that can be worked at a consistent pace.

The direct mail piece is generated internally at VanDevere, and offers no gifts, gimmicks or credit vouchers. It is a straightforward letter that is easy to understand and builds the relationship with integrity. The total cost of the mailing, counting the cost of the lead and postage is 61 cents each.

Additionally, Anthony believes it is important to send more than one letter. He mails the customer within 24 hours of filing, mails them again if they have not purchased at the time of the meeting of the creditors (341(s) meeting), and again at the time of discharge. “I believe that if you don’t at first succeed, try, try again, and that is what we do with the three mailings,” said Anthony.

Anthony's response ratio has always been higher than the typical 1 percent response ratios of most direct mail campaigns. Of the respondents, 40 - 50 percent of the applications are approved by Tidewater Motor Credit. For the current month, he has submitted roughly 80 applications to Tidewater, and has received 37 approvals. He expects to close the month with nearly 30 deliveries to customers with open Chapter 7 Bankruptcy filings. Gross profits on these deals remain near the industry Special Finance benchmarks.

While certainly doing business with many other Special Finance lenders, Mike remains excited toward his relationship with Tidewater. Anthony said, “TMC has certainly allowed us to have a competitive advantage over many larger dealerships and organizations. We are a long-term, established, conservative dealership that builds long-term relationships with its customers. We won’t push the envelope like many others will. Having this program available to us has allowed us to set ourselves apart from the competition, while not having to worry about it hurting our CSI or image. We feel like we are really helping the customer, and in turn they appreciate that.” The results obviously speak for themselves.
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