Friday, December 11, 2009

You Need a Solid Partner When it Comes to Tire & Wheel Road Hazard Protection



As Tire & Wheel Protection gains market share and program scope, it continues to be an evolving program for both third party administrators and underwriters.

However, due to recent developments in the industry, some providers may be leaving the Tire & Wheel business.

Others may not be offering a fully-compliant product.

You may have noticed changes from your providers and their insurers lately.

While this isn't a surprise due to today's challenging market, it makes it obvious who you want to partner with in the long run.

Where price in the short term used to be the key decision maker, sustainable relationships and coverage for your customers should be at the forefront of any decision process now.

Make sure that your Tire & Wheel partner and all of your F&I providers can provide the service and comprehensive coverage you expect for the long run.


Make sure your F&I provider:

* Offers free training for both agents and dealer personnel.

* Has solid relationships with A-rated insurers.

* Puts claims customer satisfaction first.

* Facilitates immediate credit card claim payments.

* Manages fully compliant programs.

* Offers the most comprehensive product on the market, not just a cheaper product that result in more exclusions (and less satisfaction).


Send an email to AutoFinanceInsider@yahoo.com with Tire/Wheel Info as the heading and I will send you information on the BEST tire @ wheel program in the industry. It's the one I use and recommend.

AFI


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Tags: Automotive Finance, F&I, Finance & Insurance,
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Tuesday, November 24, 2009

5 Ways To Kill Your Credit Scores

Here is some good information by Liz Pulliam Weston


One of the questions I'm asked most often about credit scores is exactly how much certain actions affect people's scores.

What good is a good credit score?

Until now, the best I could do was say, "It depends." That's because the company that created the leading credit score, the FICO, has been wary about releasing specifics.

Fortunately, that just changed. At my request and for the first time, the company (also known as FICO) has released details about how specific actions, from maxing out a credit card to filing for bankruptcy, can affect people with different credit scores.

I asked the company to compute the results of those actions for two examples: a person with a 780 score, which is an excellent score on the 300-to-850 FICO scale, and someone with a 680 score. The results:


Effect on a 680 score Effect on a 780 score

Maxed-out card
-10 to -30
-25 to -45

30-day late payment
-60 to -80
-90 to -110

Debt settlement
-45 to -65
-105 to -125

Foreclosure
-85 to -105
-140 to -160

Bankruptcy
-130 to -150
-220 to -240


Source: FICO

The results are given in a range because FICO is still a little nervous about revealing too much about its proprietary scoring. But the range is fairly tight, and we can clearly see the disparate impacts of the different actions.


A Guide, Not a Guarantee.

Before we go further, I have to make this clear: Your mileage may vary.

People with the same credit score can have very different credit profiles: more or fewer accounts, a different mix of accounts, a longer or shorter credit history, use of more or less of their available credit, etc.

Because of those differences, the same action -- maxing out a card, say -- can have different effects on people with the same score, depending on the details of their individual credit profiles.

For the sake of this exercise, FICO assumed both people had several active major credit cards as well as a mortgage, a car loan and student loans.


The person with the 780 score:

Has at least 10 credit accounts in total and a 15-year credit history.
Uses 15% to 25% of her credit card limits.
Has no late payments on her credit reports.
Has no collection accounts or other major negatives.
The person with the 680 score:

Has six credit accounts and an eight-year credit history.
Uses 40% to 50% of her credit card limits.
Was 90 days late on an account two years ago.
Was 30 days late on another account one year ago.


Here's what you need to know about each action and the effect it had:


1. Maxing out a credit card

Using 100% of your limit on any credit card puts you at risk of over-limit fees. It also takes a bite out of your credit score.

Our person with the 680 score might lose 10 to 30 points from this one action, while the 780 scorer could shed 25 to 45 points.

The difference points up an important fact: The higher your score, the more points you tend to lose from "bad" actions. That's because the scoring formula is sensitive to any sign you're getting in over your head. Maxing out a credit card is considered one of those signs.

You also should know that it typically doesn't matter to the formula if you carry a balance or pay off that maxed-out card as soon as you get your statement. What's usually reported to the credit bureaus is the balance on your last statement. Even if you pay the debt in full before the due date, the maxed-out card will hurt your score.


2. Skipping a payment

Mailing a payment a few days late normally won't hurt your score, although you may incur late fees and trigger higher interest rates. The big hurt comes when you miss a payment cycle entirely.

A 30-day-late report would shave 60 to 80 points from our lower-scoring person and 90 to 110 points from our higher scorer. In other words, one lapse of attention could plunge the 680-scorer into subprime credit territory, and our 780-scorer could find credit much harder to get and more expensive.

This is why it's so important to set up automatic payments to ensure your bills get paid on time, all the time. With credit cards, you can set up automatic payments that take the minimum payment out of your checking account to ward against a late payment. You can always make a second payment that reduces your debt or pays it off entirely. You can sign up for automatic payments on the Web site of your card issuer.


3. Settling a credit card debt

All the advertisements about "settling your debt for pennies on the dollar" make debt settlement sound like a great solution. But failing to pay what you owe a creditor will take a serious toll on your score.

The 680 scorer would lose 45 to 65 points with this maneuver, while the 780 scorer would shed 105 to 125 points.

Our scenario assumed that our borrowers would miss one payment before settling the debt with their credit card companies. In reality, debt settlement negotiations can drag on much longer, with each missed payment taking another chunk out of your score.

Settling a debt with a collection agency would hurt less, probably much less, because the FICO formula is set up to weigh more heavily what the original creditor says about you than what a collection agency reports. But if our borrowers were settling with a collection agency instead, their scores would be lower to begin with, because they would have collection accounts on their records.

Also, you should know that the amount of debt your creditor "forgives" in a debt settlement solution is typically added to your taxable income. So you may save some money by settling a debt, but you'll give some of it back to Uncle Sam in higher taxes.


4. Losing a property to foreclosure

Foreclosure deals a severe blow to your credit score: 85 to 105 points for our person with the 680 score and 140 to 160 points for the one with the 780 score.

Foreclosures have implications for your future ability to get a mortgage as well. Although your score may start to improve as soon as the house is gone, mortgage lenders may not be willing to extend you another home loan until two to four years have elapsed.

In an attempt to protect their credit, many people attempt short sales, selling their houses for less than what's owed, with the lenders' permission. Unfortunately, these transactions, even if successful, are often reported as settlements. And a settlement, as you've seen, is pretty bad for credit scores.

To lenders, a short sale isn’t quite as bad as a foreclosure, though, and it may be easier to get another mortgage once you’ve rebuilt your credit.


5. Filing for bankruptcy

FICO spokesman Craig Watts once called bankruptcy the nuclear bomb of credit actions. Filing for bankruptcy would shave 130 to 150 points from the 680 score and 220 to 240 points from the 780 score.

This is different from the other black marks, where the higher scorer was still left with better numbers than the lower scorer. In this case, both would wind up near the bottom of the credit barrel. Getting new credit, particularly in the current credit-crunch environment, would be extremely tough.

Sometimes, of course, bankruptcy is the best of bad options. (See "Quiz: Should you file for bankruptcy?") But if you can't pay your bills, you should at least explore the other possibilities: forbearance, credit counseling or even debt settlement.


Finally, if you have any of these five black marks on your record, remember two things: The impact on your score may differ from what's shown above, and regardless of how many points you lost, you can rebuild your FICO score over time.

You can buy your Equifax or TransUnion FICO score from MyFICO.com. (Experian no longer sells FICO scores to consumers, although it continues to sell the scores to lenders.) With paid scores, you'll get specific advice about how to improve your numbers.

myFICO May Sale - Save 20% on FICO scores & credit reports

myFICO - Official Site



In general, when you're trying to build a credit score, you should:


1. Pay your bills on time, all the time.

2. Reduce your credit utilization; below 30% is good, below 10% is better.

3. Have a mix of credit on your reports, including installment loans (mortgages, auto loans and personal loans) and revolving accounts (credit cards and lines of credit).

4. Refrain from closing accounts.

5. Apply for new credit sparingly.


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How much is an inaccurate score costing you?




Tags: Automotive Finance, F&I, Finance & Insurance,
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Monday, September 14, 2009

Guide to Handling Objections: Identity Theft Protection




Objection: I monitor my credit reports on my own. I don't need it.


Response: Seventy-one percent of fraud happens within a week of the theft of your personal data.

How often do you monitor your credit reports?

For a small increase in your monthly payment, wouldn't you want the peace of mind that Identity Theft Protection provides?



Objection: If this would happen to me, I could fix it on my own.


Response: Did you know that most victims of identity theft lose thousands of dollars and lost wages, not to mention legal fees, trying to deal with their cases? It's awful.

You can spend months trying to repair the financial damage caused by identity theft.

It's not easy to remove the negative information from your credit reports.

Doing it on your own is very time consuming and will make you angry, irritated and depressed.

With Identity Theft Protection, you are assigned a personal recovery representative to manage your identity theft recovery and follow up for a year.



Objection: Identity theft happens to people who shop online. I never shop online, and I am very protective of my Internet passwords.


Response: According to identity theft experts, the Javelin Strategy & Research Center, low-tech methods for stealing personal information are still the most popular method of identity theft.

Stolen wallets and physical documents accounted for 43 percent of all identity theft last year, while online theft only accounted for 11 percent.

This program I am offering to you protects you from ALL TYPES of identity theft.


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Monday, August 31, 2009

Sometimes we are our own worst enemy - 2

by Gil Van Over

This week’s news flash was not published in the conventional news media, rather in one of the online forums I periodically lurk on.

The poster, a finance manager, was extremely upset over a scenario at his dealership that day. The conflict was with a sales manager and the topic was whether to deliver a potential straw purchase.

The finance manager was adamant that the deal not go through while the sales manager was just as adamant that the car started moving down the road. The General Manager’s response? Defer.

This scenario could just as easily been the finance manager holding up a deal because of other potential bank fraud, such as power booking, credit application fraud or manufactured stipulations.

The sales manager kept pushing the “we’re all here to sell cars” theorem while the finance manager valiantly resisted with the “I ain’t doing the perp walk for anyone” argument.

In the end, the General Manager did not take a position, but rather deferred to the dealer’s attorney.

What should he have done?

I am not an attorney, but do occasionally get these type of phone calls, asking my opinion.

With the assumption that the information relayed by the poster was the complete story, my recommendation would have been to let the lender know the complete story and if the lender decides to buy the deal, document the decision and move forward (if the lender knows about the transaction, it is not technically a straw).

Otherwise, do not sell the car to a straw purchaser.

Sometimes we all need to just get back to the basics - AFI


Gil Van Over is the President and founder of gvo3 & Associates, a nationally recognized F&I, Sales and Red Flag Rule compliance consulting and training firm (www.gvo3.com).


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Thursday, August 27, 2009

F&I Training Cash Conversion Video

Here is a good technique for cash conversions that is worth a look - but someone please tell this guy to throw away that chair!!!




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Friday, August 14, 2009

Cash For Clunkers

by Troy Spring

With all the "Cash For Clunkers" madness going on, (I have not talked to one manager who wasn't at least a little frustrated with all the paperwork and effort it takes to do a deal.) I thought it was especially a good time to talk about this subject.

The major reason is how much a mistake cost the Dealership and Owners in time and cash flow. If a mistake is made and you have re-submit at the "end of the line" and it the cash flow losses will add up quick. With the additional hours it takes to make a deal, the additional mental fortitude it takes to cross all the T's and dot all the I's for this program it is easy to get frustrated and disenchanted.

Many managers with that aggressive A type personality which makes them great at the job of selling and delivering cars on a daily basis are finding that channeling the B type personality and the anal retentive side of the brain is hard work, I know I would would be one of them if I was to sit in that seat. So it is without any reservation I say that this could cost people their jobs making mistakes and not getting funded by the government on deals that were contracted and spotted with $4500 on the line.

So slow the process way down, Ask for help, have someone double check the work before you click submit, make sure you take a little time to yourself and get refreshed (maybe take your day off) and not getting to overloaded and "fried". Notice: Fried and Fired use the same letters!!!!! If you are "Fried", you (or your managers) will make mistakes, a lot of them. This will only lead to you becoming more fried, and lead to getting fired because of all the meetings, efforts, yelling, etc it will take to clean up the mistakes while trying to conduct new business. It will be a vicious cycle that will not end for a lonnnggggg time.

Have a plan to do it right the first time and you will find you have a boat load of more time on your hands. With that extra time you will find you will sell more cars, deliver more cars and be much happier.

Thoughts from the author:

I agree it isn't rocket science but it was written from the heart ( after hearing some of my dealers frustrations) and thought it if it helps one dealer have less cash flow issues because he is waiting on $200k from the government for a month longer than he needs to, one guy to not lose his job over it, one manager to say, hmmmm good thinking from an outsiders point of view (in the heat of battle you can't always see every angle) than I will be one happy guy for the risks I took writing this. Troy Spring


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Thursday, June 11, 2009

F&I Objection Handling: Roadside Assistance with Tire and Wheel Road hazard Protection




Objection: I have roadside assistance with AAA.

Response: Excellent. Obviously you already see the benefits of roadside assistance.

"Which AAA coverage plan do you have? AAA standard @ $64* per year? Or, AAA Plus @ $97* per year?"

"With AAA, you’ll be paying approximately $500* over 5 years, and you still won’t have protection from roadside hazards. For only $_____ per month you can have both the Roadside Assistance and Tire & Wheel Road Hazard Protection. Your tires are the only parts of your vehicle that touch the ground, and tire and wheel repairs are the most expensive repairs you will have that are not covered by the manufacturer’s warranty."

Best Practices:

1. Know your product! Many manufacturers do not provide towing unless the breakdown is due to failure of a covered part. Towing is only available if the vehicle is still under factory warranty. How much factory bumper - to - bumper is still left on the vehicle?

2. Present your customer with a copy of owner’s manual detailing what’s covered by factory roadside assistance and present it as an “upgrade” to limited factory coverage.

3. Sell it as a combo. It is the Roadside Assistance and Tire & Wheel Road Hazard Protection Plan. Point out that the factory offers NO coverage for roadside hazards.

4. Stay current on AAA Membership Benefits and rates. For example, in the South, AAA’s Membership Benefits Chart can be found online at www.aaasouth.com/membership.asp.*


!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

*** If anyone would like to offer this fantastic product in the F&I office, I am also the acting rep! Call 1-800-671-1454 or send an email to autofinanceinsider@yahoo.com. The incentive / rewards program for the F&I managers will blow your mind. LET"S TALK! --- AFI

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!



Check out Tire and Wheel objection handling on this You-Tube Video:


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Tags: Automotive Finance F&I Finance & Insurance
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Sunday, May 3, 2009

Handling F&I Objections: Combination Products

Tire & Wheel, PDR and Windshield



Objection: I don’t want to raise my payments anymore

Response: I understand … what you are saying is that you are on a budget and staying within it is important, correct?

Customer: Yes, that is correct.

Response: You will notice that with this protection, your payment is $548 per month and without it is $529 per month. So, for only $19 per month, you are budgeting for any future expenses and the peace of mind that goes along with that. Wouldn’t you agree that the $548 payment makes more sense for your long term budget?



Objection: I already have insurance.

Response: I understand … Unfortunately, many of the perils that UVP protects you from will cost less than your deductible. Not to mention the fact that your insurance company will not replace or repair a rim or tire damaged by a road hazard. With UVP, you are protecting yourself from the three most common perils of owning an automobile. With this protection, you are buying not only peace of mind but convenience as well. Would you prefer the 3 year, or would you like to upgrade to the 5 year?



Objection: I just don't think I need it.

Response: I understand. Earlier you told me that you plan to trade this vehicle in 3 years like you have with your previous vehicles. Many factors go into the value of a trade-in such as: mileage, color, tire wear and body condition. The UVP coverage can easily increase the value of your trade because it’s going to cover the three most common perils of automobile ownership, and they will have been taken care of prior to trading your vehicle. Do you want to take advantage of the 3 year option or upgrade to the 5 just in case you keep this one a little longer then the last?



Objection: I can afford to pay for these items as they happen.

Response: I understand … and it is nice to know you have that to fall back on. But, if you don’t mind, could I ask you a question?

Customer: Sure.

Response: Why would you want to spend your time and energy on something you probably don’t really have time for? (Short pause)

With UVP, repairs can be made on your schedule and at the locations that allow better utilization of your time. UVP covers the three most common perils of owning an automobile and it’s not going to be a question of if they happen but when. Let me simplify your life today with the UVP program for only $19 a month or a single payment of ______.


PRINT THIS FOR YOUR RECORDS:


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Tags: Automotive Finance F&I Finance & Insurance
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Handling F&I Objections: Paintless Dent Repair

Objection: My insurance will cover it.

Response: I understand … unfortunately, the cost of most body panel repairs are less than your deductible. This program covers those common and frustrating dents and dings that are unsightly and although expensive to repair, would usually cost less than your deductible.

Would you prefer the three-year, or would you like to upgrade to the five-year?


Objection: I don't think it's important.

Response: Do you remember how you felt when you discovered the first scratch or dent on a previous new car? As you were first getting out of your car, intuition probably told you that the person in the parking space next to you was going to open his car door into yours.

Seeing the ding probably drove you crazy.

Right now your new vehicle is perfect, but inevitably, normal wear and tear, not to mention the itiots in parking lots, will cause numerous dings and dents on your brand new car. With the Dent & Ding Protection, you can keep your car looking new for much longer and eliminate lots of frustration.


Objection: I just don't think I need it.

Response: Earlier, you told me that you plan to trade this vehicle in three years like you have with your previous vehicles. Many factors go into the value of a trade-in such as mileage, color, tire wear and body shape.

This coverage can easily increase the value of your trade because the dent and dings will have been taken care of prior to trading your vehicle.



PRINT THIS FOR YOUR RECORDS:


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Tags: Automotive Finance F&I Finance & Insurance
Credit Repair va, Credit Repair blog, Credit Restoration

Friday, April 10, 2009

Handling F&I Objections: Key / Remote Replacement Plan




Objection: That seems expensive.

Response: The plan basically costs $49 per year (six-year finance) or $59 per year (five-year finance). People pay that for AAA for peace of mind, and AAA doesn’t cover the one loss you are most likely to have with your car. This way, you have a roadside plan that can save you a lot of time and money. Doesn't that make sense?


Objection: (For Leases) That seems expensive.

Response: Did you know that the most likely charge you would get at the end of your lease is a charge for around $375 to replace a key? Most people only turn in one key at the end of their lease. Let’s face it, a lot can happen in three years, and they usually misplace the spare. Isn't an extra $6.00 a month a good value?


Objection: I never lose my keys. I don’t think I need that.

Response: I’m sure you’ve misplaced them before and had to search the house, your office or your bag for them, right? Most people do that hundreds of times. Did you know that our parts department cuts more than 150 keys per month?

Just imagine the added stress knowing that it could cost you up to $700 for the key replacement, tow and rental. I really think you should go with it.


Objection: I wanted to keep the payment at what I was quoted.

Response: No problem at all. You must have your budget well planned. The $279 is what you pay for the car. Our Key Replacement Plan prevents the car from costing you more down the road. What if you experienced, say a $500 loss from losing your keys? Take that $500 for one year and divide it by 12 – that’s more than $40 per month added to your payment. Now you are at $319 per month for that year. Adding the Key Replacement Plan only brings your payment to $289. Does that make sense? What if I can work with you a little to allow you to get the plan and still keep your payment at $285? Would you go with that?


Opportunity: I don’t need it, but my wife, daughter or son could use key replacement. He/she always loses her keys.

Response: Great, we can offer the program to any family member. We just need to fill in his/her information. We can give him/her a set of key tags now. You get the new car, and he/she walks away with something for his/herself. The best news is that you can pay for it for him/her.


Opportunity: Key Replacement Plan has a high-perceived value and low cost making it perfect as a closing tool for other products.


EXAMPLE 1

F&I Manager: You like the parts and labor agreement I mentioned to you right? It covers the car, bumper to bumper, for 6 years and 100,000 miles?

Customer: Yes

F&I Manager: What if I was able to include the Key protection in the cost, and your payment was only $279 – would you go with that? (Ex - Add another month to the term).


EXAMPLE 2

F&I Manager: Of the products I mentioned, which ones interest you the most?

Customer: Appearance Protection, the LoJack, the GAP, etc.

F&I Manager: What if I was able to give you the Key Replacement and the pro-pack (or the GAP), and keep your payment at $289? (Slightly reduce product prices and/or increase loan term).


PRINT THIS FOR YOUR RECORDS:


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Tags: Automotive Finance F&I Finance & Insurance
Credit Repair va, Credit Repair blog, Credit Restoration

Friday, March 20, 2009

Automotive Finance Department Video on Menu Presentation

Here is a fantastic F&I menu presentation (other than his cell phone ringing in the middle of it) by a guy named Jim Brink. I found it on YouTube during a brutally slow bell to bell.

The objection handling by this guy is excellent! Check it out.




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Tags: Automotive Finance F&I Finance & Insurance
Credit Repair va, Credit Repair blog, Credit Restoration

Wednesday, March 18, 2009

The TOP TEN STUPID Things Said To a Lender When Re-hashing a Deal

Posted by Marla Belson on Selling Iron

The Parody continues……


10) After he moved they never forwarded his payment statements so he didn’t know where to send it or when it was due.... Really!

9) He went through a really bad divorce; she ran up alllll his credit cards and left him.
That @#(&%^*!!!!!

8) What, you see bad checks???? I didn’t catch that on my TU..... We must pull different credit reports.... Hmmm...... So, what is the rate????

7) Hey what are a few repos and bad checks amongst friends.... So, what is the rate???

6) Oh really I didn't know what that meant....so a tax lien for $10,000 isn't that good I suppose. So anyway, what’s the rate????

5) This guy has so much money down you should hope he goes bad, you will MAKE MONEY!

4) I have it approved everywhere as-is, I just need you to make an exception because I really want you to have it.

3) (The always friendly) Buy/fund this deal or you will never see another contract from me. I know a lot of people in this business I'll tell everyone your company $#%Q.

2) Well....can you waive POI... I can't prove it.


AND THE NUMBER ONE LINE STUPID LINE DELIVERED DURING A REHASH SESSION IS….


1) The infamous.....I really need a favor on this ONE deal. He's a friend of the owner. We aren't making ANY money on this ONE. No, I mean really we aren’t!!!!!


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Tags: Automotive Finance F&I Finance & Insurance
Credit Repair va, Credit Repair blog, Credit Restoration

The TOP TEN Things That Crack-Up a Special Finance Manager During a Credit Interview with a Customer.

Posted by Marla Belson on Selling Iron

The TOP TEN things that crack up a Special Finance Manager during a credit interview with a customer.

10) I didn’t know where to send my payments after I moved.

9) My ex-wife/husband ran up all my credit cards before we got divorced.
That @#$%^#^&!!!!!!

8) What, all those checks really bounced?

7) I didn’t know all those charged off phone companies where on my credit, I don’t know
anything about it! But I do have a “pay as you go” phone now!!!

6) That car was a lemon it needed too much work so I gave it back.

5) If I gave the car back and I drove it to them, that isn’t really a repo, is it?????

4) Hey, what are two or three repos and a few bad checks amongst friends???
So, what is my interest rate?

3) I never saw those charge offs before, they can not be mine?

2) “Hey, it isn’t my fault!!!!!”

AND THE #1 STATEMENT MADE……..

1) I am not going to pay for something I do not like!!!!

Ok, but everything you liked in the past, never got “paid for” either?????


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Tags: Automotive Finance F&I Finance & Insurance
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Thursday, March 5, 2009

Day In The Life Of a Car Salesman

Author unknown. This was forwarded to me in an email. Post a comment if anyone knows the author.



So you want to be a Car Salesman!


6:00 Alarm goes off.

6:00 Hit Snooze on Alarm.

6:15 Hit Snooze on Alarm.

6:30 Hit Snooze on Alarm.

6:45 Wife punched me in back yelling "You are going to be late for work."

6:55 Stagger to bathroom to shower and shave.

7:00 All the sales Guru's tell you to look yourself in the mirror and say, "I am GREAT!" "I am the BEST!" Maybe tomorrow I can do it without laughing.

7:30 Can't be late for work again, put shirt in dryer instead of ironing.

8:00 Leave for work to get there early, they tell me I will sell more cars if I am early.

8:10 Return home to get cell phone.

8:30 Leave for work again after stalling for another 20 minutes.

9:10 Walk into sales meeting 10 minutes late, Sales Manager makes an example out of me. Tells new Sales Reps that early birds always get the worm, bla, bla, bla. I got a worm for ya is what I wanted to say. He must have had knee pads on during his interview to get a Managers Job!

10:30 Finally get out of meeting after hearing the same story, "When I was selling cars...." When you was selling cars, you could get a homeless person approved for a loan.

11:00 Walk almost a mile around the car lot trying to shake off another negative meeting.

11:30 Finally have time to get a cup of coffee, this will surely make me feel better.

11:45 Sit coffee down outside to catch a customer--Reach to shake hands--customer says "I am not buying anything, I am picking someone up from your service Department." Ok, Ok, I guess you can do that dude!

11:50 Coffee should be cooled enough to drink-Forget about rude old man-Wow, coffee has a cigarette butt floating in it!

12:00 Go to lunch to keep from strangling someone.

1:00 Get back to work--Your cousin is talking to another salesman. (in car sales if a customer does not ask for you, it is not your customer.) Cousin sees you and says "I didn't know this was the dealership you worked at."

1:30 Salesman sales car to your cousin. Wow, I will never live this down, but try to lessen the impact by saying "it was a distant cousin," I have not seen them in years!

2:00 Catch cousin alone and tell them "Give me my house key, you are going to have to find you another place to live!"

2:30 Finally catch a customer that seems very interested in a GMC Yukon. After the test drive, the customer says, "My company is buying the vehicle for me and they usually get it directly from the factory, I just wanted to make sure I liked it."

3:30 Catch another customer that is very interested in a used car, test drive, write up, appraise trade, present numbers....Customer says, "I just got hired at XYZ Motors and they told me to mystery shop to see how the process goes. Thanks for your time." OH, not today! You may want to call XYZ Motors to come and get you because Its a MYSTERY as to where your trade in keys are!

4:00 Get paged to back lot (Customer Waiting) which is not uncommon, but it is about 1/2 mile walk and golf carts are nowhere to be found so take off walking. See Salesman hiding behind cars laughing because they made up the fake page!

4:30 Call doctor and ask him symptoms of high blood pressure!

5:00 All Sales Personnel are needed on showroom floor. Sales Manager says, "We are going to have a lot party." Great finally something fun for today! I find out a lot party is where you rearrange all cars on the lot. You have got to be kidding!

5:30 to 9:00 work with customer on a new GMC Acadia--had trouble closing the deal and had to split with another salesman to close the deal. I was supposed to get off at 8:00, but at least I sold one. The other salesman tells me, "Your part of the commission is $50 dollars!

9:30 Go to Wal-Mart pharmacy to use their blood pressure machine

9:45 See your cousin that purchased a car from your dealership. Told him the car he bought had been wrecked! Maybe his blood pressure will be as high as mine.

The next time you go to your local dealership and it seems if all the salesman are not in the best of moods, realize customers do come first, but it could have been a rough day!


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Sunday, February 22, 2009

The Golden Skate Award Part 2

Car sales reality imortalized in print by David Teves. Read on:


Back in the 70’s at Hayward Ford we used to have a kangaroo court. If you thought someone had skated you, you could ask for a hearing after the morning sales meeting. This happened a couple of times a month. These mini-trials were wildly popular if only for their entertainment value. Here you would have two impassioned opponents each ready for bear hunting but in this case instead of bear it was each other.

When the sales meeting was over the managers would clear out. They rarely wanted anything to do with this, but they agreed to honor the outcome. The salesmen would stay. We had a big crew so sometimes there’d be twenty or thirty Car Men in there, downing coffee, smoking cigarettes and ready for a show.

Two or three of the senior Car Men would act as judges.

The accuser would point out the guilty party and state his case. Both sides would tell their version of the events, most of the time wildly different from each other. If there were witness they would testify. Then the judges would deliberate. Keep in mind that the sales managers would only tolerate us being off the floor for fifteen or twenty minutes, so there was no Perry Mason oratory going on in there.

The judge’s decision was final.

Sometimes you won; sometimes you lost. (I always seemed to lose, but as stated earlier, I got all the spoons.) It was accepted that this was the end of the issue until, of course, the guy who lost managed to get the other guy back. Car Man justice!

It was out of this that The Golden Skate Award came to surface. It was quickly decided that Mike Aahl’s find would be given out monthly to the man who best exemplified not only skating, but also the spirit of skating. In some ways a Car Man who was a little out of control was admired. Sheer craziness, if controlled, was something grand to watch in a weird, sick way. Car Men were always into weird and sick.

Like the kangaroo court, The Golden Skate Award was given out at a meeting at the first of the month. A few days before, a panel headed by our salesman emeritus, Hank Mederios, would gather to choose the man they deemed worthy to be singled out for this honor.

The much anticipated morning would come. Everyone would be in high spirits. Even some of the Grand Old Men of the dealership, some of who had been selling cars there since the 40’s when Hayward Ford was nothing but an old gas station on the corner of Mission Blvd. and “A” Street, would come to witness the proceedings. In my twenty-one-year-old mind I always imagined them muttering things like, “Young wipper snappers!”

Hank Medeiros was the perfect MC for the job. He was by all accounts a natural born ham. He’d been selling Fords in the East Bay for years. He loved to be in the limelight, tell a few jokes, and have a good time. He set the perfect tone for The Golden Skate Award ceremonies.

I wish I could tell you the names of some of the winners, but the sad fact is that skaters, though entertaining in a weird way, never last long in a dealership. They were like the itinerant gamblers of the Old West, always drifting from one place to another to apply their trade and getting out when the citizens got wind of the cheating.

Hank would tell his jokes, run down a list of the dirty deeds of the award’s winner. When it was finally presented it was met with laughter by all and the red face of the thought-he-was-clever winner. Busted! A second prize was give out, The Golden Key Award, to the guy who tried hard but came in second best. The glittering key was decked out with a fancy ribbon and presented with as much good-natured malice as the skate itself.

Prizewinners were required to keep their trophies in their office on prominent display for the next thirty days. There it could be seen by all, questioned by customers, and a little reminder that they weren’t as smart as they thought they were.

“The Golden Skate Award” is a cherished memory of my youth. These days, working mostly alone, there is no one to skate me—though I have to keep an eye on my boss, another Hayward Ford veteran. But I am certain that the practice sill goes on because skating is part of our tradition, and for Car Men, traditions run deep.


Talk to you later,

David


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The Golden Skate Award" Part 1

Car sales reality imortalized in print by David Teves. Read on:


On a bright summer morning in 1971, Mike Aahl was rooting around in the trunk of old Buick trade-in along the back fence of Hayward Ford. As his hands moved piles of old newspapers, crumpled cigarette packages, and empty oil bottles his eyes brightened. There in front of him was quite a find. It was an old roller skate.

Mike withdrew his prize, his mind reeling with the possibilities. The skate itself was a scruffy, white leather affair, definitely something worn by a girl. It had old-fashioned steel wheels. Its metal frame was spotted with dust. Mike discovered an equally crusty skate key inside of it. All in all, it was perfect!

The plan for the skate’s resurrection started off simple enough; a quick clean up and a visit to the local hardware store for some gold spray paint. Within a couple of hours it was finished and set to dry along the warm western wall of the parts department. Beside it was the key, also sprayed gold, for it, too, was part of plan.

Things then got a little more complicated. Someone suggested, “Let’s take it to a trophy shop and have it mounted on a nice slab of wood.” It was a great idea, no doubt. By the time it hit the local shop another great idea was hatched and added to the plan.

In a couple of days it was done. Mike went to retreat it, and we all gathered around in his office to admire the results. There it was, a beautiful bright gold, looking like a bronzed baby shoe from hell. It had been mounted on an oak platform befitting its importance. The small gold place on the mountains base said, “The Golden Skate Award.”

It was ready to go, all we had to do was wait for the results.

Skating is a term used by car salesmen to signify, and there’s no polite way of saying this, stealing all or part of a car deal from another salesman.

In the bad old days of the car business salesmen skating each other was almost like a national sport. This was particularly true in big dealerships where there were large crews of guys fighting for survival each month.

There are different levels of skating.

In it’s most common form, another salesman would somehow manage to get on your deal after you had done all the work.

Any old Car Man can tell a story of going out to lunch only to return to discover that their appointment had shown up early. In those days the desk did not hold your customer, and whoever was there to slap the report of sale on the window got half a deal regardless of his previous involvement in the deal.

At least in this situation things managed to even themselves out over time. You couldn’t be there protecting your ass all the time Occasionally lost a half, but occasionally you got a half and the order of the universe was once more restored.

Then there was the out-and-out, you-lost-a-deal skate.

If it’s done correctly many times you never know about it. The guy you sold that 280Z to sends in his buddy to see you on your day off, and another guy sells him a car and doesn’t put your name on it. If you discover the evil deed the usual reply was, “He didn’t ask for you.”

I’ve known salesman to tell customers that the guy they asked for didn’t work there anymore, or “Bill doesn’t sell used cars. I’ll have to be the one to help out with that.” Being the clever bastards we are, there were dozens of lies you could tell a customer to get him away from you.

Management never condoned skating, but there’s not a lot they would do about it. A little skating toughens everyone up, and that’s the way they like it. They prefer to let the salesman work it out (or in some cases duke it out) on their own. The general rule: If he got you, you get him twice. It became a competition among thieves.

Skating is one of those things that The Others could never understand. They mostly live in a world governed by fairness, a place where Car Men only have a marginal acquaintance. That’s why the first rule of our business is, “The Car Business Isn’t Fair.” It is something Car Men have to accept if they are to survive. It’s not something your average schoolteacher or government worker could ever accept.

Getting skated does tend to piss you off.

I remember once a guy telling me with more than a little glee that he had gotten to me dozens of times. This was said with the rancor of, “I hate you ‘cause your brother owns the place.” That’s okay. I got all the spoons.

I’m not a saint, but I’ve never been one to skate people. You see, the third rule of the business is, “What goes around, comes around.” It’s kind of like Car Man Karma. That and my Portuguese/Catholic upbringing always prevented me from being a skater. But I will admit, I have been sorely tempted. Like our former President, Jimmie Carter, I’ve lusted in my heart.

More to come.

David


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Thursday, February 19, 2009

Financing Customers With Pre-Discharge Bankruptcies

By: Rob Hagen


For special finance managers who are willing to listen and learn, pre-discharge BKs can be a source of growth and profit for any dealership.


AFI - Interesting article with decent info on BK's.


Dealers are looking everywhere they can to find profits to boost their bottom lines and return to profitability, and special finance is going to play a huge part in achieving that goal. With the limited number of funding sources, booking deals for credit-challenged customers has become harder, even as that sector continues to grow. To really ramp up sales, experienced special finance managers get good at selling to “niche” markets. One such market that has been a source of profits for many dealers is customers who have recently filed for bankruptcy.


Bankruptcies have always been a fundamental part of any well-run special finance department, but most dealers tend to wait until a customer’s bankruptcy has been discharged — that is, their debts have been cleared — before they’ll make a move. One way to gain market share is to work with “pre-discharge” customers who are still in the process of Chapter 7 bankruptcy.


Going after this market requires a little extra work, but it pays off in the margins. Grosses, for instance, are much higher due to the fact you don’t have to worry about negative equity from trade-ins. But to do it right, a special finance manager will first need to learn how bankruptcies work.


Bankruptcy basics:


Dealers who work with pre-discharge buyers often have to take on two roles: credit counselor and dealmaker. That requires extensive knowledge of how bankruptcies work. For starters, let’s define the two main forms of individual bankruptcy protection:


• Chapter 7: This is the most common form of bankruptcy for individuals. Often referred to as a ‘liquidation,’ the debtor’s non-exempt property — the guidelines for which vary from state to state — goes toward repaying his or her creditors, after which most remaining debts are discharged, typically within 90 to 120 days. Certain debts such as income and property tax, child support and student loans typically cannot be discharged.


• Chapter 13: This less-common filing is, on the surface, somewhat more like debt consolidation. An income-earning individual can file for protection under Chapter 13 and set up a plan to repay his or her creditors, typically over a period of three to five years.


The Administrative Office of the United States Courts reports that bankruptcy filings and discharges are escalating. 101,753 American households filed or discharged a bankruptcy between Jan. 1–23, 2009, compared to 78,278 during the same period in 2008.


“The good news is that franchise dealers are working with lenders like Tidewater, CapOne, AmeriCredit, Wachovia and many others to offer loans to these individuals,” says Robert Davies, president of OnlineBKmanager.com. “It’s a win-win situation. Families are buying quality automobiles while re-establishing their credit with firms that report to the credit bureaus.”


The numbers project to at least 101,753 bankruptcy cases filed in January 2009, including 52,207 discharged Chapter 7s and 13s, a 20 percent increase from 2008. Chapter 7s accounted for more than 70 percent of all bankruptcies. As of January 6, 2009, there were nearly 1 million open bankruptcies being processed for discharge in the U.S.



Source: OnlineBKmanager.com


When it comes to their vehicles, filers often don’t know what they should do. They need their cars and they fear they’ll never be approved for another purchase. This may lead them to reaffirm outstanding debt on a vehicle that may have mechanical problems or they owe way too much on. For that reason alone, special finance managers who want to tap into the bankruptcy market must also take on a third role: marketing expert.


Marketing to the pre-discharge customer:


Ideally, your first mailer will reach a pre-discharge customer within a few days of his or her filing. With a lot of other matters to cover, bankruptcy attorneys aren’t always able to convey all the pertinent information an individual needs to decide how to handle their vehicle situation.


You want to get them on the phone as close to the filing date as possible.


“Getting on these customers early and often is the key to advertising to the bankruptcy customers,” says J.P. Miller Jr., vice president of Paul Miller Ford Mazda in Lexington, Ky. “We start to send mail to them starting the day after filing and continue till discharge. It pays huge dividends for us as we average much higher grosses on these customers.”


Auto retail veteran Tom Martin agrees. He spent 10 years working with bankruptcy customers — at one point mailing 10,000 to 15,000 letters each month for a single Ford dealership in Ohio. He then founded Columbus, Ohio-based ACH Consulting LLC, a consulting firm that specializes in helping auto dealers start their own dedicated bankruptcy departments.


“The latest phase of this business has gone to the ’Net,” Martin says. “We’re trying to lead customers to a Website that will capture their information. We send out a mailer called The Top 5 Things Your Attorney Did Not Tell You. They log onto our site and submit their names, phone numbers and e-mail addresses before they can continue. Then we take their e-mails and put them into a series of auto responders to keep us in front of customers.”


Another part of Martin’s marketing plan is to get to know bankruptcy attorneys.


“Attorneys have been one of my best sources for leads throughout the years,” he says. “I have even done credit-building seminars for several attorneys’ clients so they could understand how to build their credit the right way.”


A sympathetic ear


In the counselor role, a special finance manager must be willing to get to the bottom of each customer’s credit situation. Bankruptcies, more than any other form of negative credit, are influenced by outside factors. Whether it’s an unexpected medical expense, job loss or divorce, many of your pre-discharge customers never planned to file for bankruptcy — they just ran out of options.


In 1993, one of the first special finance customers I ever worked with walked into my office with a perfect credit bureau report … except for a Chapter 7 bankruptcy. Everything else was paid on time, and I had to ask what led to the filing. He and his wife explained that their daughter was born with a hole in her heart and they had racked up $500,000 in medical bills almost overnight. They tried to work out some kind of settlement, but the hospital was preparing to sue them and they had to seek protection.


Every time I start to get frustrated by the job, I remember how I helped those people and how grateful they were. There are a lot of people who have to file bankruptcy for similar reasons. They’re not all deadbeats or career debtors, and a good special finance manager will be ready with a sympathetic ear. Remember that these customers are under a lot of stress and can lose sight of their goals.


“Whenever I hire someone for a bankruptcy department, I look for a person who is not a car person, and I typically prefer to hire ladies,” Tom Martin says. “I find that women are more willing and able to gain the trust of customers in bankruptcy.”


Specialty lenders (and this is a key)!


The last part of the equation is having lenders that will approve these customers. Just about every subprime lender has programs for recently discharged customers, but far fewer are equipped to handle a pre-discharge.


Virginia Beach, Va.-based Tidewater Motor Credit has been financing pre-discharge customers for many years. The performance of those loans over time has justified their focus on that market.


“We are still buying open Chapter 7s and discharged BKs,” says Dedra Muffley, Tidewater’s marketing supervisor. “In fact, the open BKs represented the majority of our business last month. In this critical time, it became necessary for all of us to re-evaluate how we are operating and become as efficient and effective as possible. During this evaluation, we had to make some painful decisions regarding staffing and dealer clients.


“We confirmed for ourselves that lending to those people whose credit problems are behind them is what makes the best business sense for us and what pays out better. Generally, we are still buying those customers in the same way.”


When asked if that strategy will hold up through what promises to be a difficult year, Muffley is adamant.


“We absolutely expect this to be the bread and butter for ’09,” she says, “and we hope that those slices become loaves as we are able to add more dealers little by little. We remain hopeful that in the coming months, we will once again have a ‘green light’ as far as growth is concerned.”


Due to an expanding market for dealers and high profitability for lenders, bankruptcy business is sure to be an area that grows faster than other areas of the special finance business as it rebounds from a shaky 2008.


Rob Hagen is the founder of SpecialFinanceCoach.com, a Houston-based consulting firm specializing in department setup and growth. E-mail Rob at rhagen@special-finance.com.



AFI's take on this:


I hope re-printing this article doesn't sound like a plug for Tidewater Finance. As a franchised dealer, I get my share of bankrupt customers. Finding a lender to buy the paper of an un-discharged BK is the key to whether or not the customers will roll off my lot in anything.


My unbiased review of the experience I will have with Tidewater Finance will be published in a future post.


Anyway - it's 5 o'clock somewhere.


AFI


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Thursday, January 29, 2009

Guide to Handling Objections: Tire & Wheel, Paintless Dent (Combination Products)

Thanks to Safe-Guard Products International:

Objection: I don’t want to raise my payments anymore

Response: I understand … what you are saying is that you are on a budget and staying within it is important, correct?

Customer: Yes, that is correct.

Response: You will notice that with this protection, your payment is $548 per month and without it is $529 per month. So, for only $19 per month, you are budgeting for any future expenses and the peace of mind that goes with it. Wouldn’t you agree that the $548 payment makes more sense for your long term budget?

Objection: I already have insurance.

Response: I understand … Unfortunately, many of the perils that UVP protects you from will cost less than your deductible. Not to mention the fact that your insurance company will not replace or repair a rim or tire damaged by a road hazard. With UVP, you are protecting yourself from the three most common perils of owning an automobile. With this protection, you are buying not only peace of mind but convenience as well. Would you prefer the 3 year, or would you like to upgrade to the 5 year?

Objection: I just don't think I need it.

Response: I understand. Earlier you told me that you plan to trade this vehicle in 3 years like you have with your previous vehicles. Many factors go into the value of a trade-in such as: mileage, color, tire wear and body condition. The UVP coverage can easily increase the value of your trade because it’s going to cover the three most common perils of automobile ownership, and they will have been taken care of prior to trading your vehicle. Do you want to take advantage of the 3 year option or upgrade to the 5 just in case you keep this one a little longer then the last?

Objection: I can afford to pay for these items as they happen.

Response: I understand … and it is nice to know you have that to fall back on. But, if you don’t mind, could I ask you a question?

Customer: Sure.

Response: Why would you want to spend your time and energy on something you probably don’t really have time for? (Short pause)

With UVP, repairs can be made on your schedule and at the locations that allow better utilization of your time. UVP covers the three most common perils of owning an automobile and it’s not going to be a question of if they happen but when. Let me simplify your life today with the UVP program for only $19 a month or a single payment of ______.


Not bad.


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Sunday, January 4, 2009

Where Did The Income Go In F&I?

by Jan Kelly

AFI - I have always liked Jan's articles.

LEAVE A COMMENT:. Is the F&I office becoming an accessory sales center?

The profit streams in F&I are once again changing. There is a lack of reserve and the lenders are limiting the traditional, F&I products and services. This can be traced to lack of cash down payment and the fact that a good portion of customers are suffering from a negative equity position from the beginning of the financial transaction.

These problems, however, are not insurmountable - There is nothing wrong with the level of income in F&I that more cash involvement from the customer cannot cure. Who needs to ask for this investment? The line of communication between the dealership and the customer begin with the sales consultant.

Thirty years ago when the finance department was young, the sales consultants were all educated to work the customer for cash down. In fact the sales department profit was defined by the amount of cash down the sales consultant and sale manager were able to obtain. The rule was simple; the gross profit of the deal was equal to the initial investment by the customer.

Time is the catalyst that brings about new strategies

In the auto industry, those changes were zero down, long-term financing, which created huge amounts of negative equity for many customers. Along with the importance of cash down, the products of the F&I office have changed. Credit life, accident, and health insurance are almost non-existent, those dollars were switched long ago to protective coatings that maintain the appearance of the vehicle.

The F&I office will become the accessory center. (Wow - AFI)

In addition to the financing being tighter, deals are fewer, and the importance of maximizing the transaction has never been greater. Customers are still looking for dependable transportation.

The heyday of SUVs is over

American customers are looking for fuel-efficient vehicles, but that doesn’t mean they don’t want to accessorize their rides. We are accustomed to having high technology, convenience, and stylish looking vehicles and we will spend money for things we want; and we want bells and whistles.

Best opportunities (New Menus?)

A great use of those first few minutes in the F&I office could be to give the customer a simple one page sheet (menu?) of things that could be included in the financing as approved add on items, such as cargo organizers, DVD players for the back seat, iPod/MP3 player recharging stations, special wheels, pin striping, tinted windows, and enhanced security systems.

Make up a page for sedans, one for trucks, and one for SUVs. Use different color paper and keep the list limited to the most commonly requested items in your market place. The first step in capturing these accessories dollars is to recognize that your customers are already making these purchases, they’re just doing it elsewhere.

Accessorizing is big business!

This is a great way to use those first few quiet minutes when the customer and the F&I professional begin the F&I process. The list could be viewed as the F&I professional is entering the deal information or checking the spelling of the names.

Selling additional accessories must be done after the commitment to purchase the vehicle but before the financing is arranged. Keep in mind that nothing will be added to the vehicle until the funding is secure and the dealership is paid. You can work out those details between departments.

In these times flexibility is the key to growing the income and building happy, loyal customers. Keep the process simple and keep the customers coming back by becoming a one stop shop for all the things that make a fun driving experience.


Jan Kelly is the president of Kelly Enterprises. She is a sales trainer and consultant, convention speaker, and writes frequently for industry publications. Call Jan at 800-336-4275, or visit at www.JLKelly.com.

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Saturday, January 3, 2009

Four Ways to Put Your Customer at Ease in the F&I Office

Here is some fantastic F&I training by Ron Reahard

With all the warnings customers get from 20/20, consumer reports and their local credit union about deceptive sales practices and “hidden profits” dealers make in the F&I department, some days it feels like there is a big yellow warning sign outside the F&I office that reads “Caution: F&I Manager Ahead!” I travel in airplanes all the time. Occasionally, I’ll get into a conversation with my seatmate. Invariably, at some point, they all ask the same question,“So, what do you do for a living?”You ought to see the look I get when I tell them I train finance managers for car dealers.You’d think I was a terrorist. Their eyes get big, they swallow hard and they start looking around for a U.S.Marshal to throw me off the plane. After a few seconds of awkward silence, they feel compelled to relate the sordid tale of the last time they bought a car, and the horrible experience they had in the F&I office.

Many complain about having been forced to wait 20 to 60 minutes just to get into the finance office. Once they are finally allowed an audience with the F&I “god,” they perceive him to be pushy, less than honest and focused on his own agenda (i.e., trying to sell them something). Often, they describe F&I managers as unprofessional and confrontational.

Even worse, if the customer doesn’t immediately agree to buy what he is selling, the F&I professional becomes downright rude.

Today’s customers don’t want to wait 30 minutes just to get into the finance office. They want the paperwork to be easy to complete and understand, and they want their questions answered. They want to deal with a knowledgeable able professional who treats them with courtesy and respect, whether they buy anything or not. Customers expect to be able to choose from a variety of financing plans and options, and they want to feel like they got a “fair deal.” They don’t want to feel pressured to buy something they don’t want.

The only way to change the customer’s perception of the financial services process, as well as the media’s perception of F&I,is by changing the way we do business. We must create a measurable difference in the mind of the customer that separates us from the competition in a positive way.

Today’s financial services professional must utilize a dialogue approach to sales, as opposed to a memorized or canned product “sales pitch.” You can’t just whip out a brochure and launch into a sales pitch if the customer isn’t interested in the product. A financial services professional must focus on the customer and their unique needs,not merely product benefits. We want to exceed customer expectations and delight customers by providing a more satisfying and enjoyable purchase experience, while increasing dealer profits through a customer-focused financial services process.

Every dealership, every customer, every sale is unique; and every F&I presentation must be tailored to that customer’s unique needs. To ensure every customer receives a thorough explanation of their options in the minimum amount of time, with the maximum chance of F&I product sales, there are four keys to ensuring a customer focused financial services experience. Let’s explore each one.

GET DOWN OFF YOUR THRONE

For a customer, going back to the F&I office is like going to see the Wizard of Oz. Remember that scene, when Dorothy, the Tin Man, the Lion and the Scarecrow shook and trembled as they walked down that ominous hall to see the Wizard? We can eliminate the customer’s fear of the unknown by getting down off our throne, coming out from behind the curtain and greeting them where they’re relaxed and comfortable (i.e., in the salesperson’s office).

Sometimes, greeting the customer is the hardest part of your entire presentation, especially if it’s 9:30 at night and you were supposed to get off at six. But when you have a customer, it’s “Showtime at the Apollo.” Every customer deserves a good show. The customer’s first impression of you is critical because it sets the tone for your entire interaction with that customer. Be enthusiastic. Put on a smile and have a spring in you step. Shake everyone’s hand. Get on a first name basis if at all possible. More importantly, have FUN with the customer!

Have you ever walked by a salesperson’s office and heard a customer laughing and talking? You know the next place you’ll see that customer is in your office to discuss how they’ll finance the vehicle. It’s no different in the F&I office. If you can get a customer to laugh in the first two minutes, they’ll buy F&I products!

DON’T MAKE CUSTOMERS WAIT

One of the most important things you can do to change the customer’s perception of the financial services process is to stop making them wait to come into the F&I office. Unless you already have someone in your office, there is no excuse for making a customer wait. As soon as the salesperson completes the buyer’s order or worksheet, go out and greet the customer in the salesperson’s office. Put the customer at ease immediately. Introduce yourself. Tell them who you are, what you’re going to do, how long it’s going to take, and offer them something to drink.

“Hi, I’m John Smith, the financial services anager here at ABC Motors. It’s my job to complete the paperwork for the Department of Motor Vehicles, arrange your financing, if any, and take care of all the legal documents. This should take about 30 or 40 minutes. Before we get started, what can I get you to drink: coffee, bottled water, a soft drink, maybe something with an umbrella in it?” The key here is to be urgent to serve —not urgent to sell!

Now it’s time to bring them back to your office. Remember, you’re not on some top secret assignment back there. So, let them see what you’re doing. Examine the buyer’s order and let them see you verify that all the figures and information are correct. It’s also a good idea to review the customer’s statement and credit bureau report. The key here is to understand the circumstances and details surrounding any adverse credit information disclosed by the customer or the credit bureau report. And this needs to be done prior to submitting the credit application.

Why? You need to find the reasons why this customer is a good risk to help your paper-buyer justify an approval or a changing of the tier level.

Ask open-ended, needs-discovery questions as you enter customer information into the computer to understand their wants, needs and concerns. The key is to be genuinely interested in the customer. You can do this by engaging the customer in a conversation. Do this to find out why your customer needs your products. Remember, if you expect a customer to be interested in what you have to say, you must first be interested in what they have to say!

CHANGE THE ENVIRONMENT

Changing customer perceptions also demands a change in environment. I’ve told dealers for years to make sure there’s a distinct difference from the tiled showroom floor and the floor inside the F&I office. Often, I suggest that dealers add a one-inch pad under the carpet inside the F&I office. That way the customer knows they’ve left the sales environment once their feet touch that soft, padded carpet.

Your office must also contain a picture of your family. A customer needs to know you’re just like him or her.He or she needs to know you also have a family, a brother, a sister, a spouse, kids, a dog and a cat. If you don’t have a family, go down to Walgreen’s and buy a frame. It’ll have a family in it.

Your office should also contain a conversation starter; something unique or unusual that will help you break the ice with the customer. It could be an autographed picture of someone famous, a baseball or golf club. It can even be that “computer on wheels”device that helps customers understand the need to buy a vehicle service contract. A scenic picture on the wall will help relax the customer.A live plant also helps change the environment. It tells a customer a lot about you. The great thing about having a healthy plant in your office is you have to take care of it. This makes you a caregiver. A candy dish makes a customer feel welcome. It says,“We’re glad you’re here!”

Some things your office should NOT contain include manufacturer’s promotional materials or sales awards. And there should be absolutely NO product brochures
visible when they walk into your office. A brochure immediately tells a customer you’re going to try and sell them something. It’s also a ticket for the be-back bus because it communicates the fact they don’t have to buy today. What it says is they can take the brochure home and think about it.

CHANGE THE EXPERIENCE

Selling our products isn’t something we do to someone, it’s something we do for and with them. In the F&I office, understanding a customer’s wants, needs and concerns must always precede any attempt to sell them something. Selling F&I products isn’t just about helping the dealership, it’s about helping the customer! Selling F&I products to an informed consumer depends upon your ability to find and fill his or her needs … NOT on your ability to get people to buy something they don’t want, and don’t think they need. If you’re not genuinely trying to help the customer, then the F&I process is adding no value to his or her purchase experience. If the F&I process is not adding value to the purchase experience, then it is alienating your customers. And that hurts customer satisfaction. There are two questions you need to answer: How can you ensure you’re helping as many customers as possible, and how can you remove the pressure customers feel when going through the F&I process?

Easy … use a menu to present every product to every customer every time. Give the customer options, not sales pitches. The use of a menu can dramatically reduce the amount of time customers spend in the F&I office. A menu allows customers to select the products they want,and ask questions or voice concerns about the ones they don’t think they need. This allows us to focus on what is important to the customer, and give him or her a chance to discuss why that product may be especially important to them. Rather than “selling,” you’re simply reviewing options, and trying to help the customer make the right decision based upon their unique situation. Getting rid of that warning sign requires the F&I process to be an enjoyable part of the purchase experience.

A financial services professional must get down off his or her throne, bring that customer back to the F&I office as quickly as possible and remember the most important part of your job is to help customers. This is achieved by changing the environment, as well as changing the experience. That means helping every customer make the best decision for him or her and his or her family. If your customer doesn’t leave your office with a smile, there’s a good chance that warning sign might just be outside your office the next time he or she is looking for a vehicle.

Ron Reahard is president of Reahard & Associates Inc., an F&I training and consulting company. You can contact Ron at 866 REAHARD. On the web at: http://www.go-reahard.com/home.html

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