Monday, November 24, 2008

10.5 Hints to Help You Get a Car Loan

By Geoff Cohen

AFI - This is a good article that I found on Ezine

1.Know your credit score.

Get a copy of your credit report. Review it for errors and make any corrections before you try and get a loan. If there are major errors in your credit report, consider delaying your application until the corrections are completed. This will make sure you keep the car dealers honest. If you desperately need transportation, try renting a car short term until your credit report is straightened out. You may actually save money on fuel, insurance and repairs by renting which you can add to your down payment.

2.Have an explanation for your credit issues.

Dont be apologetic. Bad things happen to good people. Be specific about any problems or crisis that caused your problem. Let the bank know about any major upheaval in your life that may have led to your problems such as an illness or a natural disaster, like Katrina, or 9-11.Make sure that you can substantiate your claim.

3.Dont lie about anything on the credit app.

Lenders will turn reject your loan if they find you lied to them.

4.Know your income.

Make sure you can prove what you make. Have your proof readily available.

5.Save your down payment.

More down means more car. Larger down payments can sometimes get a lender to view your application more favorably.

6.Know what the payoff on your trade-in is.

If you are trading in a car with a payoff, get a ten day payoff from the lender. If you have a warranty or additional policies bought with the vehicle, find out if you can cancel them. This will lower your payoff or entitle you to a refund after the vehicle is paid off.

7.Know what your car is worth.

Check out NADA or KBB first. Go to CarMax and see what they will buy it for (provided they stay in business). Use these figures to negotiate the best trade in value. Remember, If you get more than the payoff, that amount becomes down payment.

8.Buy what you need, not what you want.

Set realistic expectations. Dont buy more payment than you can truly afford. Rebuild your credit first, than rebuild your image later.

9.Dont be argumentative.

Nice people get better deals than people who give sales reps a hard time. (Very true)!!!

10.Try other sources to get a loan.

Check online. Lenders such as Capital One, HSBC, Roadloans, and CitiFinancial all have websites which let you apply direct to them for a loan. You may get better rates and terms from lenders online than from a dealer.

Check your credit union or insurance co. They may have a loan program or lender relationship. A good payment history with your insurance company may help you get a loan from their bank. Credit unions can sometimes do automatic payroll deductions, which gives them re-assurance that you will pay the loan, so they might be more receptive.

(AFI's COMMENT - I do this myself, but remember, the f&i manager at least get's a loan origination fee to do the financing at the dealership. To respect the f&i manager, have your financing arranged, but allow them the opportunity to match the interest rate. It should make no difference which finance source you use, and it might make your delivery experience more pleasant as the f&i manager will know that he/she is at least making a little money on the deal. Believe me, there is nothing worse for an F&I Managers attitude sometimes, than having to deliver another "cash deal").

10.5 Dont go from dealer to dealer.

Excessive inquiries can be a reason a lender declines your application.

Geoff Cohen is a seasoned auto professional, with over 30 years experience. He has done it all, from sales rep to F&I Manager, New Car Manager, Used Vehicle Manager, up to GSM and GM. He has also worked as an area sales manager for a major sub-prime lender as well as run his own BHPH and Auto Leasing/Brokerage company.. He is the National Accounts Manager for AutoLending Network and is a contributing author to, a blog about Special Finance solutions for auto dealers as well as F&I Magazine and World of Special Finance Magazine

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Friday, November 14, 2008

Cold Calls

This is is an awesome re-print from a fantastic blog titled Confessions of a Car Man. It is written by David Teves, a veteran of the car business and its self-proclaimed "designated bitcher". Check out his website at

Cold Calls

I believe it’s a universal truth that all car salesmen hate making cold phone calls. It’s one of the great sources of animosity between salesmen and management. Handing out cold call sheets make the managers feel like their doing something proactive. Whether the calls actually work or not is not the point. In my humble opinion it’s mostly just a sadistic power trip.

I have no idea if the practice of cold calls is still prominent in this great country of ours (and I include my friends in Canada here, too). I hope it’s a thing of the past, but I suspect it isn’t.

Let me tell you a story. When I first started selling cars the salesmen in all the dealerships in the East Bay were unionized. (The now defunct Salesmen Local 1095, may it rest in peace.) Apprentice salesmen were not allowed to take an up for the first 30 days of their employment. This rule was strictly enforced. For that first month, I was put under the tutelage of a couple of journeyman salesmen whose job was to show me as they say, “How the cow eats the cabbage”. One of the things they had me do was make cold calls.

In the sales meeting room of Hayward Ford there was a telephone hooked up to a speakerphone. Each day I was taken to that room by one of the salesmen, sat down at the desk, given a script and was forced to make a few cold calls. The older salesman would listen on the speaker and critique me when I was finished.

Let me give you an analogy. When I was a kid I was raised in the Catholic faith. Nothing terrorized me more than going to confession. Here I was, sitting in pitch-black booth talking to the personal representative of God. It scared the living shit out of me. Making those cold calls made me feel the same way.

The irony of it all is that these leads came directly out of the phone book! Here I was calling people at random, in the vain hope that might just happen upon a person who needed a car. Talk about a needle in a haystack! What the hell was the reasoning behind this? At the time I hadn’t a clue. I felt it was some sort of weird Car Man initiation essentially designed to torment me.

My brother, Danny hated to see salesmen standing around doing nothing. (He didn’t understand that standing around doing nothing is one of our God-given rights!) I remember him getting pissed off, taking a telephone book, ripping out a few pages, and handing them out to equally pissed-off salesmen. I love my brother more than anything, but not when he had that phone book in his hands!

For the first five years of selling cars cold calls, or calls to orphan owners (which I’ll admit made a little more sense) was part of my automotive life. It would have been okay if making these calls worked, but I don’t think I ever sold a car off a cold lead. I hated making the calls, but I was always threatened that a manager would check my phone sheets to make sure I had really called the potential customer. For me, it was a demoralizing and depressing situation.

Then something life-changing happened to me.

I first met Tony Taylor when I worked at Elmhurst Ford in Oakland. Tony was a really great, funny guy and a consummate Car Man. He also had the best hairpiece I have ever seen in my life. Tony seemed to take a liking to me and was always giving me advice about selling cars.

A couple of years after I met him we were working together on the used car lot at CST Ford, a mid-70’s incarnation of Hayward Ford. I had been in the business for five years or so. I was a so-so salesman who never seemed to make a lot of money. I struggled each month just to make a living.

One day Tony came into my office. He closed the door and sat down across from me, and crossed his arms.

“What are you doing?” he asked me.

“Just making my phone calls, Tony,” I replied.

“Cold calls, huh?”

I nodded yes.

“Let me see all your call sheets,” he said. It was not a request. It was a demand.

I handed Tony a stack of sheets. He shuffled through them for a moment, looked up at me--and he tore them all in half.

“You’re done with that,” he said. And then he explained the secret to success in the car business. It was simple and to the point.

“Wait on customers,” he said. “Follow-up on them. Ask them for referrals. Those are the people you want call. No one else.”

“But they make me!” I protested.

“Lie,” he said simply. “Everyone else does it. Why not you?”

“But what if they check?”

Tony laughed. “David, do you really think the managers are going to check your cold calls? Do you think they have the time? Do you think when they were salesmen they made these calls? I tell you, son, it’s all just one gigantic stroke.”

In a blinding light of revelation I knew that Tony was speaking the truth. I took his advice, and I soon discovered that when I concentrated on the people I had actually talked to, I immediately started making more money. Great story, huh?

But hey! What’s that I hear? Could it be the sound of cold call sheets being ripped up?

Music to my ears.

Talk to you later,



Saturday, November 8, 2008

Making Presentations Non-Threatening

By David Lewis

Ask your business manager if he or she knows this feeling. They're making a service contract presentation and can just feel and sense the customer squirming. It is very uncomfortable for both them and the customer. The customer doesn't want to be ignorant and stop them, and your business manager still has to make the presentation, all along having a defeated attitude.

This is not the best situation for success selling any F&I products. Check your F&I department's service program and insurance penetrations. Chances are, the percentages of non-penetration are directly from this circumstance.

This can be changed and all it takes is some examination of the question, "Why?" Why are customers uncomfortable listening to a presentation of a product that they don't even know anything about and that may be extremely beneficial to them?

If we understand the psychology of customers' defense mechanisms and their perceptions of what they can expect when put into most selling situations, we can then better understand why they are uncomfortable and how to reduce seller/buyer tensions.

Let's examine the "whys." First, what is a customer's perception of what your business manager really is? The customer perceives them as a salesperson and a salesperson is someone who tries to sell you something for profit.

What is a customer's perception of what a salesperson will do to make a sale for profit? The answer is anything, especially pressure. Why? Because it is in the Salesperson's best financial interest if the customer buys (regardless if it is something good for the customer or not), and a waste of the Salesperson's time if the customer does not.

If you can truly say your F&I Manager is a trained professional, then none of the above customer perceptions should apply to him or her, and they need to let the customer know it! This will allow them to relax and be more receptive to the presentation, which is crucial to getting good objections.

Professional salespeople do not need to use pressure. They believe, and are correct, in feeling they are offering a valuable product or service. They are prepared to respond and do respond to customers' questions and objections logically and intelligently so the customer has all the right information before being expected to make a decision.

Also, they know that regardless of the value of their product or service it will not be for everyone. They know that making a certain number of presentations is required in order to make a certain number of sales. Consequently, professional salespeople are not frustrated about spending a sufficient amount of time with a customer without making the sale, therefore do not show frustration to the customer.

How does your business manager let the customer know they are unique, different and more professional than any other dealership personnel they've encountered? We have found there are two very simple ways for this to be accomplished.

First, we want the customer to feel that we are letting them know what is available to them, what are the features, advantages and benefits, and what it will cost, because they deserve to know. Secondly, when we address their issues (objections) we are only providing them with all the information they should have before making a decision, whether to buy (enroll) or not to buy (enroll), because they deserve to know this also. Note: I prefer to use psychological verbiage, i.e., I believe customers would much rather "enroll in a service program" than "buy an extended warranty."

So how do we get this across to the customer. It's simple. Just say it.

If your business manager senses the customer is feeling uncomfortable or threatened during any of your presentations, simply have them say, "Mr. Jones, Mrs. Jones, by the way the reason I am presenting this program to you is because Mr. Lewis, the dealer, insists that every customer knows what is available to them, what it will and won't do for them, and the cost. He feels you deserve to know, then make your decision as to its benefit or lack of benefit to you."

A tremendously unique way to get this concept to the forefront is something I recommend every business manager do, which many of my clients have done with great success, and that is have a small engraved plaque on their desk that says, "OUR CUSTOMERS DESERVE TO KNOW!," and below that your signature engraved.

When your business manager tells the customer you insist that every customer be told what is available to them, what it will provide, etc., as suggested above, they then can point to the plaque and reinforce their statement. But, most of the time the customer will ask, "what does that mean, the customer deserves to know what?" This is perfect, as your business manager will be able to use the verbiage even before he or she begins their presentation.

Obviously, even if the customer has some interest after the presentation, they will have objections (requests for more information), and your business manager should be prepared to respond to their objections and counter their negative thoughts with positive thoughts. This is not pressure, it is logical and intelligent persistence, which the customer also deserves. If the responses to their negative thought processes (objections) are in fact logical and intelligent, then you are doing nothing more than providing the customer with more information to digest before making their decision, whether to enroll or not to enroll.

Tell the customer this, and it should take away their resistance. The selling process will then become more like a non-confrontational discussion and be perceived by the customer as a comfortable process that has their best interest in mind.

Remember, no customer likes to be sold anything. They would much prefer to make a decision to purchase. Create that comfort level with the customer and develop that bond and trust by taking away that feeling of personal gain, and making it one of mutual respect.

Good Stuff.


To measure a "well-run" automotive F&I Department, visit:

Menu "Closing" ... Not Menu "Selling"

by Ron Martin

My preferred approach to selling F&I is want I call the Hybrid Menu Method. It is a process of menu closing, rather than menu selling. The difference is that menu closing is a planned presentation of selling the features and benefits of F&I products and using the menu as a way to get customers to decide on the products they want to buy. It utilizes the advantages of menu selling: An organized selling approach and an alternative close (would you like a, b, c or d?), and recognizes the weaknesses (trying to get the customer to focus on the presentation and not the payments). This menu closing technique was derived from other F&I selling approaches, including step selling, assumptive selling and traditional menu selling.

The Hybrid Menu Closing Method:

The first step toward customer satisfaction and high F&I profits is preparation. This begins prior to the customer walking into the finance office. The F&I professional should have the deal completely loaded into the computer and all necessary forms pulled. You need to set yourself up for success, and not limit yourself by deciding, even if it’s subconsciously, which products you are likely to sell. Your expectation needs to be that you are going to sell all the products.

Once you are completely prepared, which includes making sure your office is organized and professional looking, it’s time to get the customer. Yes, go out and get customers even if it means walking to the used-vehicle building across the lot. This gives you a chance to establish a little rapport while you are escorting them to your office. It also ensures that customers aren’t brought to you until you are ready for them.

When the customers are settled in your office, begin like this:

Mr. and Mrs. Doyle, I’m sure you want to get on with your day with your new automobile, so I’m going to make sure I get your legal documents completed as efficiently as possible. I have your information completely loaded into the computer and all the necessary documents here for your review, but before we sign the paperwork, I’d like to take a couple quick minutes of your time to thank you for your business. My dealer actually requires I do it. We understand you had a choice about where to purchase your vehicle and we are glad you chose us. What is most important to us is that you’ll chose us the next time you need an automobile, that you will be able to send your family and friends here, that you use our award-winning service department and our body shop and parts department. We want to be your choice for all your automotive needs.

We have found that whether any of this happens is partly a result of how happy you are with your automobile, but mostly it is a result of how you were treated during the sales process. My part of the process is the financial process. When you leave here I would like you to be able to say that I was prompt, efficient and straightforward, but most importantly, that I have described the financial benefit packages that are available to you. And, I would like to take a couple minutes of your time to review those two benefits.

At this point, I will normally lead with the service contract.

I’d like to begin by asking you a question, Mr. and Mrs. Doyle. How would you like to prevent having to pay most future repair bills for the next five years?

This question is meant to break preoccupation and get the customer to think or say, “Why must I listen to you?”

I then proceed with a planned presentation where I give customers some information, ask a question and then listen to their response. This will eventually lead to a closing question designed to get customers to make a decision.

Mr. and Mrs. Doyle, there are two ways you can pay for this: You could pay $1,695 cash or you can include it in your monthly payments which would be $29 per month additional, plus your interest charges, whichever you prefer.

Then I wait for a response. The customer will answer in one of three ways:

1. Give you an objection or say no to your response. You should handle that objection and re-close.
2. Say yes to your offer.
3. Ask the magic question: “What does that make my payment?”

Your response should be:

Good question. I’ll get to that in just a minute. Let me briefly describe the other benefit and then I will break out your options to the penny.
Remember, they already know the payment, which they received on the sales floor.

The other benefit package available to you is the loan protection package. It includes: life insurance, accident and health insurance options.

You will then describe the features and benefits of these options. Once you have finished this description, it’s time to menu close.

Mr. and Mrs. Doyle, here is a list of payment options to help you make your decision.

This is the first point that customers view the choices for their decision and pick from the menu. Once they have made an informed decision, you can step sell them to another product choice.

This way of presenting the menu gives you the best assurance that customers have listened to all product presentations before they choose their options. It gives the F&I manager a comfortable approach to aggressive selling, by limiting the bumping that step selling creates. The approach of, “I have one more thing to talk to you about,” wears out the F&I manager and customers.

Give Products the Win-Win Test

If you’re going to add another product, make sure it first passes the win-win test. If it’s a win for the dealership and the customer, then arrange it within your benefit packages. For example, a maintenance and appearance package can be presented on a lease.

The appearance package also sells very well in a two-step process at point of sale. Incorporate it by transitioning it with the we-owe (or due bill).

Mr. and Mrs. Doyle, it shows here that we will have the vehicle filled with gas and cleaned up prior to delivery. It doesn’t show that you took advantage of the 20-percent discount that you can get if you purchase the appearance package right here at the dealership. Did the salesperson happen to mention that? How would you like to keep your automobile looking new and also help maintain its value?

This transition leads you right into your presentation without the customer feeling any pressure.

Choosing the Best Menu

Many dealers tell me, “We need to menu sell in the F&I department.” When I ask them why, they almost always respond the same way: “I want to be compliant.”

I agree that they should use a menu, but it isn’t necessary to be compliant. You can’t be any more compliant as long as the retail installment contracts and lease agreements follow Regulation Z, Truth in Lending and Regulation M, Truth in Leasing requirements, respectively. A menu can reinforce compliance if used properly, but can promote payment packing if it’s not.

Is profit and compliance better served with an electronic or handwritten menu? If I were a dealer, I would definitely invest in an electronic menu. It reinforces compliance and gives F&I managers the flexibility they need to maximize profits. Why? F&I sales are subject to change when the customer arrives and during the presentation. The options you offer a customer, using menu closing, will vary depending on the customer’s responses to the features and benefits presentation. For example, if customers don’t want the service contract after you have handled their objections, you would be better served adjusting the options you are showing them. You might offer them 30-day retro and 14-day retro accident and health options to choose from.

The flexibility of an electronic menu allows you to change options on the fly, while a handwritten menu doesn’t. The electronic menu also gives the F&I professional the ability to create a new menu when customers change the amount of their down payment at the time of delivery.

From a compliance perspective, a handwritten menu can expose a dealer to payment packing. This happens when F&I managers give themselves a cushion on the base payment to make it look like the products don’t cost as much as they actually do. An electronic menu eliminates this from happening, since the software always determines the exact base payment.

(This is from 2006, and I still use this presentation today).

To measure a "well-run" automotive F&I Department, visit: