I received a lot of e-mails and phone calls about my most recent article, “Who is buying under a 475?” Some from lenders, whom I use, saying, “Wait a second, we buy under a 475,” and some from other lenders saying, “Thanks for saying that.” Well here’s the skinny….those banks do exist, but not many without the big discount. The point I was making and will re-iterate is the fact that there is a reason our customers score so low. Normally they deserve it. Now, with that being well established, it should also be duly noted that a score doesn’t always mean that much.

Let’s talk about the lenders who are not score driven but credit driven for a second. One namely is Wells Fargo Financial. I have gotten as low as a 425 bought with them in the past and with a full advance. On the other end of the spectrum I have had a 750 and had to send them to a discount lender at book with a large discount.

When reading and calling credit, glance at the score then push it aside. A score will be used to fit into or take out of consideration a lenders program or tiers for the most part, but beyond that, it is all about the meat in the bureau, it’s about their ability to repay a debt. That 425 score I am talking about was currently late on a couple of credit cards and a motorcycle that he signed for his son. Beyond that, he had perfect car and mortgage credit so it was a no-brainer for the lender.

The 750 score was a kid who had been on the bureau for a couple of months and had paid for 2 months his Sears card perfectly. Dealers or managers who look at a score and discard a customer automatically based on a credit score are not working the system and maximizing their profit potential. Secondly, beyond that, those dealers or managers who do not have a lender spectrum large enough to handle the person who deserves the 450, or the person who doesn’t deserve the 750 are hurting their bottom line in the same fashion.

Let’s discuss some discount lenders specifically, and maybe I can help you build your bottom line by building your lender base. People’s Credit, based out of Portland, Ore. Probably the best “bottom-feeder” there is out there outside of a portfolio lender. They are non-credit based. You simply answer a few questions and provide the proof to those answers. Their max amount to finance is $7,000, so have the inventory prepared for them and expect a 10 to 15 percent discount.

Another for those of us in California or Arizona is A/L Financial, an excellent discount lender. Watch your portfolio and your first payment defaults, and they will be your best friend for low income low tier paper.

There are many others including portfolio lenders, Wells Fargo CAR program, Credit Acceptance (God Bless any dealer who is successful) and Western Funding or Drive Financial who will buy the car; not the customer. These lenders will be essential if you want to truly be competitive in the market place that is constantly growing with more and more dealers getting in the business.

We all need a few good first time buyer programs. And don’t hang your hat on the Credit Unions for too long. With 62 percent of Americans classified as “special finance” that can be looked at as about 50 percent or more who aren’t going to make their payments regularly on that car note either, so the credit unions won’t sustain that program for long. Look at some diehards like United Auto Credit Corp. or CPS. These programs will have the large fees or the small advances but it gives you a consistent way to go with this paper.

We all make our money on the B to C tier Household, Wells Fargo, Transouth paper, but we can really clean up and make a great paycheck and a great name for ourselves in the community if we branch out and help everyone who needs a car. Hope to see you at the top, but in only a way I can say it. I would rather look down on you, anyway if you don’t care to join me up here.

Vol 2, Issue 4