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The Train Wreck

Sometimes this column seems to be focused towards a certain segment of the dealers—often those that are more actively engaged to the Special Finance process. This month, however, I take my message to the masses. It is a simple message, and a relatively short one for me, but still a very important one. I write this on the heels of conducting two Special Finance seminars sandwiched around a Special Finance 20 Group meeting, all of which contained some very strong Special Finance dealers. Even with their levels of sophistication, the situations that I am about to describe could even happen in their dealerships. Past that, I know that it happens every day in most other dealerships around the country. I call it the proverbial “train wreck.”

See if you recognize this scenario. As the Special Finance Manager (aka Miracle Worker) you get a call from the Finance Manager or Sales Manager. “Guess what, we’ve got one for you!” “Terrific,” you say. “What do you have?”

Well, it seems that the salesperson did a great job. They diligently and professionally performed a meet-and-greet, followed the steps to the sale, sold features, benefits and values. The sales manager was called in, and finally gained agreement on the transaction, after the customer had been in the dealership nearly two hours. Of course you know where I am going next. During the two-hour process, no one bothered to qualify the customer or pull credit. When the deal was presented to the Finance Manager, it was a well-penciled deal on a new 2003 $38,000 MSRP Suburbilac Sport-Ute, discounted to $32,500 (using the rebate as a discount), and subject to payments. Then came the “train wreck.” The ensuing credit bureau discovered 585 Beacon with a bankruptcy discharged two years ago. Medics!

Time to handoff to the Special Finance Manager and let them handle it. Of course the customer won’t feel embarrassed, humiliated or even angry. Of course the Special Finance Manager isn’t worth a darn if he can’t salvage something out of that, right?

I have heard this scenario more times than I can count. Dealers and general managers complain to me that their department just doesn’t seem to be able to book many deals. They are sure though, that they have a high number of customers that can’t go through conventional financing. Let me go on record right now. . . it isn’t the Special Finance Manager (usually) that is the problem.

The wreck actually occurred when the customer was greeted at the dealership (or perhaps it even started on the phone) and was worked as a prime credit deal from the start. No qualifying. No deductive reasoning used by the sales person (or sales manager). The customer said they wanted a new 2003 Suburbillac Sport-Ute. They wanted the one that was advertised in the paper at only $249 a month (with the fine print saying it was on a 63-month, 10,000 miles per year lease with a cap-cost reduction of $4000 at lease signing), and by gosh, the sales department made sure that is what they showed him.

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