|How often are your deals getting delayed in funding? Do you know how much those delays are costing your dealership? Let’s say you have 20 deals in funding at any given time, with an average value of $25,000 each. Factor in flooring, carrying cost, etc.—plus the fact that the customer is driving the car–all without clearing the finance company. That means you are floating more than a half million dollars at any given time. Every delayed deal represents cash in the bank for you–which is why fast funding is critical to your business.|
The number one reason a deal becomes delayed in funding is that incomplete packages are submitted to the finance company. Once a package is received, it is reviewed and if it is determined to be missing paperwork, then the delay begins. The finance company contacts the F&I Manager or the customer depending on the information needed to get the specific items required. If they don’t have the information or have to get it from a third party, it can take even longer to gather the details. While messages are being left and return calls are waited on, time continues to tick away. Meanwhile, the customer is driving the car and you are waiting for the funding to clear.
HSBC Auto Finance strives for fast funding. Through its service triangle of buyers, funders and field sales representatives, HSBC provides guidelines and checklists to help ensure dealers know ahead of time what needs to be included in each package.
Step 1: Call in the complete structure prior to sending packages.
HSBC and most other lenders have clear guidelines on sales price and amount financed. By calling in a completed structure before sending in a package any potential issues on advances, employment or income can be identified up front. This will ultimately save time, effort and money.
Step 2: Look the package over one more time before sending it in.
This step can reduce funding turn time by days. Use a lender-provided checklist to ensure all the required documents are included, such as pay stub, insurance information and references. These are some of the items that cause delays since a lender has to contact the customer to get any missing information. Make sure to include the buyer’s order/invoice to eliminate the need to fax it in later. It is also important to use the correct mailing address for the finance company when sending in the package to eliminate potential fees and additional processing delays.
Step 3: Call your buyer immediately if you find the specifics of the deal have changed.
For example, if you find out the customer is actually self-employed, call to see if your lender can help you out up front. If your lender can work within the new deal specifics, you’ll find out right away and the funding process will not be delayed while the lender reviews the new specifics. If it falls outside of the lender’s program, then you won’t waste time sending the deal to a lender that won’t be able to buy it.
Step 4: Know your buyer, funder and sales rep and call with any questions.
HSBC utilizes a service triangle, allowing you to work with a sales rep, buyer and funder–all of whom are there to work with you. They can educate you on HSBC’s program, answer questions about a specific deal and help speed up funding turn time by making sure the packages are clean and within program guidelines before they are submitted.
Better education leads to cleaner packages submitted, which in turn leads to faster funding turn times.
Building strong relationships with dealers is important to HSBC Auto Finance. HSBC is working together with its dealers to sell more cars. Knowing your finance partner helps you get questions answered quickly and accurately.
A funding package is money in the bank. If we don’t think of the paperwork as having a dollar value, we are all missing the most important point. A deal is not just a package–it is a package worth thousands of dollars!
Vol 2, Issue 12
ADESA has named 20-year industry veteran Dave Fountaine as the new general manager of its Buffalo auction.