When it comes to near-prime and non-prime car shoppers, some dealers may regard the purchase of third-party leads to be a bit of a gamble. After all, every situation is different, and there’s no guarantee the dealer will be able to help the customer obtain financing through the dealership’s usual finance sources. However, the RoadLoans program aims to remove some of that uncertainty from the equation and gives dealers one more weapon in the battle to get customers into the showroom—an approval for financing.
RoadLoans is a combination of a lead program and a finance program. Dealers belonging to the program’s Preferred Dealer Network pay a subscription rate for a group of leads (no per-lead fees) to receive exclusive leads on near-prime and non-prime customers, and each lead comes with a built-in offer of financing from RoadLoans, a division of Santander Consumer USA. However, dealers are not required to use the financing offer attached to the lead.
“They can either use the RoadLoans approval or they can shop it to their other [finance sources] to try to find a better deal,” said Lana Johnson, vice president of originations for Santander Consumer USA. The dealer has the security of knowing the RoadLoans financing is there if needed, but still retains the freedom to choose where to find the best deal for the consumer and for the dealership. “Once we pass the lead to them, they really own … that relationship and control the transaction going forward.”
Through various consumer loan sites, including RoadLoans.com and other partners, consumers can complete a short finance application and receive a decision within 15 seconds. The customer is presented with three options to structure their financing. The first option offers a balance between interest rate and down payment, the second offers a lower interest rate but a higher down payment, and the third allows a lower down payment but decreases the approval amount. Once the customer chooses which structure they prefer, they are given the details of their approval along with the name and contact information for a RoadLoans Preferred Dealer.
“On the customer approval page, the dealership can promote any selling points or incentives … so that they have an opportunity to really set themselves apart and tell the customer why they should shop at this dealership,” said Johnson. “We also have online functionality that will allow the customer to do three things specific to the dealership,” she added. “They can print a map, they can view the inventory – which links the customer to the dealership’s Web site – and they can also set an appointment with the dealership online.” Customers are then able to print off a finance packet, complete with a voucher made out to the dealer they’ve been assigned to. “They can go shopping the same day,” Johnson pointed out.
The dealer is notified of the new lead immediately via e-mail and can logon to the RoadLoans lead management system, where they can get a list of all their RoadLoans leads and assign a status to each. The dealer is also able to view the three approval options presented to each customer and can print off a new finance packet for the customer if, for example, the customer forgets to bring their documents when they visit the dealership or even if they change their mind and decide to go with one of the other approval options.
Johnson said, “Our dealers experience anywhere from a 10 to 30 percent close rate.” She added that RoadLoans Preferred Dealers are strongly encouraged to contact leads as soon as possible, preferably within one hour of the customer’s approval if it occurs during business hours. “We notify the dealer immediately and the faster they contact the customer, the better their closure’s going to be,” she stated. She described the process as a joint effort between RoadLoans and the dealer.
“We actually have a call center that does nothing but make outbound calls to set appointments for our dealers that are on the program,” she added. “For every customer that’s approved, we make an outbound phone call to the customer and the goal … is to set an appointment for the dealership.” However, she said, “We want the dealer to go ahead and pursue talking to the customer as quickly as possible because a lot of times the customers have questions about the vehicles that are available, and our call center really can’t help with that as much as a dealer can.”
Johnson revealed that to be a RoadLoans Preferred Dealer, a dealer should have a strong Internet department or someone within the dealership who understands how to work with Internet customers and will be accountable for the performance of the leads. Also extremely important, she said, “is that they have a really strong used car inventory—a large selection of vehicles, makes, models and price points.”
Advances can be anywhere from 105 to 145 percent, although the average is about 110. Interest rates are 10 percent and up, with the average rate being 18 percent, and typical down payments are between $1,200 and $1,500. Also, dealers are allowed to tack on back-end products like warranties and GAP, as long as the deal falls within the approval amount. Suitable vehicles for the program tend to have 60,000 miles or fewer, and most are in the one-to-three-year-old range with terms of 72 months. However, Johnson said it’s possible to go up to 90,000 miles and seven years old with a shorter term.
The RoadLoans program is currently available in 40 states with more on the way; dealers will need to contact their area Santander Consumer USA representative for more information. Dealers who are not already signed up with Santander can visit www.roadloans.com/RLDealer to learn more about the program and download a dealer packet.