Are you paying attention to the fundamentals of your Buy-Here Pay-Here business?

Here is a list of some of those fundamentals we need to pay close attention every day of the year.

1 “Good Down Payments Do Not Equal Good Customers!”
There certainly is a customer for every vehicle and a vehicle for every customer. However, how many “Credit Criminals” have you put out on the street in your most expensive vehicle because they had a big down payment? Poor credit risk customers with large down payments belong in the units with the lowest risk, not the other way around.

2 “Our Customers Are Truly Captive.”
Take your time to be complete and accurate when taking your customer through the financing process. Don’t let your Sales Associates rush your credit decision because “the customer is about to walk and has been on the lot for hours…” Your customers are at your lot to obtain financing because they cannot find conventional or secondary financing elsewhere. Your customers will not walk out during the process if they know your dealership will finance them and that they will be financed today.

3 “There Is No Better Time To Gather All Customer Information.”
We must be complete and accurate when completing credit applications and reference sheets. I can’t tell you how many incomplete apps and reference sheets I find when I go out to lots to do consulting work. Take your time when completing these processes and be very sure you are comfortable with the accuracy and completeness of each form. If you are not comfortable with information you are given or the information you receive, stop the process and only move forward when all questions have been answered to your satisfaction.

4 "Ability Is Just As Important As Stability.”
You must put your customer in a payment that they can easily afford. I can’t tell you how many times I’ve ruined a good previous-customer by putting that customer in financial turmoil with a payment they could not afford. We avoid this pitfall two ways. First, we must structure payments to coincide with our customer’s paydays. Second, we must not overburden our customer with a payment that exceeds our customer’s means. Remember that our customer will almost always take on more financial responsibility that they can afford.

5 “Review The Rules Before Delivery.”
Part of your closing procedure should include all the rules of your financing program and must include a list of what you expect from the customer and what the customer can expect from you. If you close every loan the same way and answer every question the customer may have, there will be no question about the rules of the relationship you have both just entered into.

Of course, this is just a partial list of the fundamentals of Buy-Here Pay-Here, but these are the fundamentals that are the most commonly neglected.