Getting deals financed over the past 18 months has been tougher than ever due to much tighter lending restrictions of finance companies across the country. Those finance companies are also keeping a very close eye on a dealership’s look-to-book, so dealership personnel must be cautious and precise when putting together and submitting deals. Early this year, lead provider DealerLink introduced a new product to help dealers cope with this difficult financing environment, Guaranteed Credit Scored Leads.
“The vast majority of [finance companies] out there today are Beacon-score driven, and it doesn’t matter if it’s one point below [their minimum requirement], their automated systems will kick it out,” said Tim Parker, president of DealerLink. “Almost everything is automated now; it either fits or it doesn’t fit ... so if you don’t have at least the minimum criteria, you’re wasting your time.” DealerLink designed this new program to offer leads guaranteed to meet the minimum requirements of most finance companies.
Guaranteed Credit Scored Leads are packaged into two programs, Gold and Platinum. The Gold Program provides leads with guaranteed credit scores between 530 and 599, while the Platinum Program offers leads with guaranteed scores between 600 and 850. Additionally, leads are guaranteed to have a minimum income of $2,000, no open bankruptcies and no repossessions within the last 12 months. With no extra effort on their part, dealers get the reassurance of knowing the leads they’re receiving already meet the minimum requirements set by many finance companies.
Parker added that utilizing leads with guaranteed scores helps dealers maintain good relationships with their finance sources. He said at DealerLink, they’ve heard reports of dealers all over the country being dropped outright by finance companies because they were not keeping their look-to-book within acceptable levels. “This [program] eliminates that problem because you’re not ever going to submit a customer to a finance company that doesn’t have at least the minimum criteria,” he stated.
The division into two distinct programs allows dealers to choose which product tier best fits their needs, or they can take advantage of both programs. Parker estimated that 90 percent of dealers on the program opt to take both groups of scores. He cautioned, however, to make sure leads are being directed to those best trained to handle customers in that particular credit score range. “Those people that are approaching 700 or beyond, are asked a different set of questions than a person at a 595 score,” he noted.
As with the company’s other lead products, dealers using Guaranteed Credit Scored Leads will receive free and unlimited access to DealerLink’s online lead management system, which can also be utilized for leads other than those purchased from DealerLink. There are no start-up fees or long-term contracts, and the company guarantees 100-percent exclusive subprime leads, backed up by their published invalid lead policy.
Parker said he has recently seen a renewed interest in the program among dealers in the last couple of months. “At this point in time, the traffic on the lot is virtually non-existent,” he explained. “The scored program offers a customer who’s already indicated that they want to buy a vehicle. We’ve identified them as being qualified with at least the minimum standards that all of the mainstream banks are looking for.”
According to Parker, the feedback they’ve gotten from dealers has been excellent. “I can tell you that I don’t know of anyone on this scored program who’s not doing at least 10 percent or better in terms of conversion rates,” he stated. “It’s been a long time since I could say that.”
Something else they’ve been hearing quite often, he added, is that the program has improved morale in many dealerships. A dealer in Oklahoma told him for the first time in 18 months employees are coming and looking for leads, and up until this time he couldn’t get anybody to work a lead in the store, period.” Parker said the morale boost was a side effect they hadn’t considered when putting the program together. “It was one of those unintended consequences, but a good one … We didn’t anticipate it, but we’re very happy that it’s occurred.”
Despite the present slowdown in traffic that many dealers are experiencing, Parker believed things were starting to turn around. “Although [finance companies] … probably never will be back to where they were 18 months ago, there are signs that there’s been a little flexibility with what they’re doing,” he said. “We’ve heard reports from different areas of the country that they … are more dealer-friendly now than they have been in the last 18 months or so, and that’s really a good thing to hear for the dealers out there.”