The Internet and Special Finance: The Silver Lining Of Financial Distress

Did you know that just under half of the consumers in America have been reported as “late” on loan payments? According to a survey on credit activity across the United States conducted by Fair Isaac, statistics reflect that blemishes on credit reports of Americans represent a large percentage of consumers. Another astounding fact, according to the U.S. Courts Web site, is that bankruptcy filings rose to 1,794,795 in 2006, compared to the 1,590,975 cases filed in 2005.

So, what’s to blame for all of these financial failings? It’s not what, but who. It’s not interest rates or inflation, but people’s general lack of good judgment and caution when spending. How’s this going to affect your dealership? It can affect your dealership positively, if management is prepared to assist this growing number of Special Finance consumers.

Be Part of the Solution
It is no surprise to learn that the “thirty-something” generation has racked up the highest debt ratio in the history of American economics. However, it not just doom and gloom. There is hope for a better future for both the financially challenged buyer and the automotive retailer. Everyone knows that a therapeutic prescription for bad credit is buying a car and making regular payments, so these credit-challenged consumers are always willing and eager buyers. They do not, however, have the luxury of bank financing and as a result are seeking alternative methods to finance their purchases.
This is where your dealership can be a part of the solution.

With the vast majority of today’s car buyers turning to the Internet to begin their buying process, it only stands to reason that this Special Finance market holds enormous potential for dealerships to increase sales and profits through targeted digital marketing to this demographic. The evolution of e-commerce has provided a unique opportunity for dealerships of all sizes to move beyond their traditional restraints and limitations into the realm of digital financing. The value of convenience and saving time has become a greater priority to car buyers and the phenomenal growth of the Internet has begun to change the way dealers and consumers exchange information—not only in the area of sales, but in the search for credit as well. Today’s consumers are compelled by the speed, convenience and the variety of choices available through the Web. They are tossing their newspapers and phone books to be able to conduct business and obtain financing from the privacy of their homes.

According to statistics in a study conducted by CNW Research, the Special Finance market accounts for one-third of the overall finance market. This means one out of three buyers coming into your dealership will have difficulty securing a traditional car loan due to a bad credit score and/or bankruptcy. Surprisingly, only a small portion of dealerships actually specialize in catering to the credit challenged buyers. With the rising numbers of financial struggles among this computer-centric generation, it makes great economic sense for dealers to devise digital marketing strategies to pursue the potential that exists within this market. Today’s tech-generation dealers can now focus on the Internet as a virtual showroom, but that’s only the beginning. Through digital marketing, dealers are breaking through the physical barriers traditionally placed on communication and relationships with consumers, not only in regard to sales, but in another very lucrative profit center—F&I. 

Search Engine Marketing
Today’s tech-savvy consumers utilize the Internet primarily for convenience to examine products and receive additional information. As a result, top dealers are discovering the prolific results of utilizing the Internet as a marketing medium for Special Finance customers and credit challenged buyers. Information gathered through digital marketing leads enables dealerships to gather information about the consumer for use in obtaining financing, and many dealers are using the Internet to aid in getting customers financed. Red McCombs out of San Antonio is generating Texas-sized results by capitalizing on the benefits of search engine generated leads. Tony Rimas, Internet director at Red McCombs, explained that all of their sites are top ranked on major search engine portals, so that all customers surfing the Web with sub-prime credit searches are attracted to the site,

Dick Hannah of Oregon is also harnessing the Web’s power to generate results.  “We direct every customer who is interested in a vehicle to complete a secured online credit application,” explains Babak Mohammadi of Dick Hannah. “We also have a Special Finance department that sells over 150 cars a month, so we have a specific Web site for all of our sub-prime customers ( Most of our sub-prime leads come from the Web, and it has been a critical part of our business,” added Mohammadi.

CRM Technology
With the increase of leads generated through search engine marketing, dealerships need to be equipped with the right tools. A powerful CRM product provides dealers with all the tools needed to run dealerships with a seamless path from marketing to sales to loan management. With the plethora of choices now available to consumers through the Internet, most prospects do not make their decision right away; therefore they need followed up on. Many retailers do not have the staff or the necessary time to maintain the level of follow-up needed to secure these prospects. The best and most successful dealerships follow up with these customers with targeted e-mail contacts over a period of time, which greatly increases their closing ratios. Automated e-mail campaigns keep dealerships in front of the prospect often enough so that when they are ready to buy, the dealership is only a click away.

Successful dealers are capturing the “iffy” credit buyers through targeted bulk mailings and customized, keyword-specific search engine marketing (SEM) campaigns. Tracy Myers, owner of Frank Myers Auto Maxx prefers to take matters into his own hands with regard to generating leads from the Special Finance market. “We actually created our own lead provider,” stated Myers. His dealership implemented and markets a microsite to attract and capture leads for financing. With a powerful and innovative CRM tool, dealerships can manage Internet or other prospective leads, communicate through real-time e-mail responses, collect and work a prospect’s credit application, and process the application electronically.

When planning a digital marketing strategy for capturing the special finance market, the following are key “must be’s” for attracting automotive consumers who are opting to secure their financing electronically:

  • Convenient – create a site that is easily accessible
  • Secured – ensure confidentiality of information
  • Simple – make it straightforward and easy to use
  • Helpful – provide on-screen aids and easy-to-access worksheets and calculators
  • Accurate – integrate error checking processes to eliminate delay-causing mistakes
  • Adaptive – present only questions that apply to the consumer’s request
  • Quick – provide real-time credit processing

Both credit-challenged individuals and those with good credit have found that securing financing online is a great way to get the money they need quickly and conveniently. Successful and innovative dealers are not only willing to work with them to secure financing and get them into a new or used vehicle, but are actively and aggressively seeking out this demographic of eager consumers.

Vol 4, Issue 5


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