How much do you really know about Santander Consumer USA?

So you think you know Santander Consumer USA.

That might be true.

But if you pigeonhole the company as a subprime lender, which many dealerships still do, you will want to reconsider, because it may be costing you deals.

“We still have dealers putting us in the subprime-only box when submitting applications,” said one of 350-plus dealer relationship managers (DRM) at Santander Consumer USA (SC).

And that looks like a mistake.

 

 

Santander now finances deals across the credit spectrum, from prime to subprime, with competitive buying rates available on current rate sheets.

That means the lender gives you more options to put deals together.

SC may not be the only lender to which you submit deals, but it should be one of them:

Our pricing strategy has been calibrated to a dealer-favorable call, and we have instituted lower price and discount fees, refreshed our approach to credit underwriting, increased flexibility on financing terms and offer competitive dealer participation.

Dealers should consult their credit analyst and DRM with any questions related to underwriting policies.

But doing business with a lender is not totally about dealer participation percentages and split.

“SC has represented financial strength and stability, having provided sound programs and unsurpassed support to our dealer associates for more than a decade,” said one sales executive. “That means you can count on SC to be working hard for your success wherever the economy goes.”

And that’s reassuring considering the sales challenges the automotive industry faces in 2019.

Santander Consumer USA is majority owned and supported by Santander Holdings USA, a group of diversified financial businesses with more than 16,800 employees, five million customers and $130 billion in assets. Santander Holdings is a wholly owned subsidiary of Banco Santander S.A., an international banking and finance institution with headquarters in Santander, Spain.

Santander Consumer, comprising about 5,000 Associates with headquarters in Dallas, TX, services $50 billion in assets and about 2.7 million customers, along with a national auto dealership base.

Here’s what dealers are saying about Santander Consumer USA:

“In today’s automotive industry, relationships are more meaningful than ever,” said Carey Gavito, finance manager at Landers Chrysler Dodge Jeep Ram Fiat in Benton, AR. “Santander Consumer USA does an outstanding job of maintaining and developing its relationships with dealers. Constant contact and willingness to help are some key factors that keep our dealership in business with Santander.”

Dan Campano, general manager of Seacoast Mazda, Portsmouth, NH, holds a similar view: “Santander has always been one of our go-to lenders … They give us quick, competitive approvals and make it simple to rehash via the Dealer Extranet. They fund deals quick and our rep is always available.”

“Long gone are the days when we looked at Santander only for the subprime customers,” said Carlos Pedre of AutoNation Chevrolet Doral in Florida. “Definitely a much larger credit spectrum lender now.”

These dealers – and a lot of others around the country – know that Santander Consumer USA is a consistent lender they can count month in and month out, and that Santander gives them a chance to make a deal with almost any customer that walks through the door.

So you think you know Santander Consumer USA?

Now you do.

SC Dealer Advocacy team looks for win-win solutions

Supporting your team.

That is what Santander Consumer USA’s Dealer Advocacy group is all about.

With all of the information and paperwork flowing back and forth between Santander Consumer and as many as 15,000 franchise dealerships, the number of auto-finance deals executed smoothly could be viewed as something of a miracle.

But once and a while it’s possible for an especially difficult problem to arise.

At Santander Consumer USA (SC), we know problems can occur, so our Dealer Advocacy group is central part of making sure that our dealers get the help they need when issues are uncovered.

The Santander Consumer Dealer Advocacy group, which is composed of 10 people, has nearly 200 years of combined experience in the auto finance industry. “The group leverages that experience along with superior customer service and de-escalation skills to assist our dealer partners with resolutions to their concerns,” according to one team member.

“Dealer Advocacy is a one-stop resource for OEM relationships to help dealership personnel with a single point of contact inside corporate offices that can research, provide guidance or explain company processes within the loan life cycle,” said Jim Taylor, an SC senior director.

“The Santander Consumer Dealer Advocacy team can use interdepartmental contacts within the entire organization to handle most issues that impact the OEM dealer,” he said. Those internal contacts include Accounting, Dealer Operations, Funding Support, Titles, Credit, Customer Service, Sales, Dealer Maintenance, Funding and Office of the President.

Getting the support you need

Of course, the first step to issue resolution is through a Dealer Relationship Manager (DRM), but it isn’t necessary for a dealership to go through their DRM to contact Dealer Advocacy.

“Dealer Relationship Managers are the go-to resource to help with most dealer matters,” the SC website explains. “However, our Dealer Advocacy group makes sure our dealers get the support they need to resolve the most difficult issues by looking for win-win solutions.”

“We’re a collaborative support group for our dealers,” said another SC Associate. “We actively research concerns, issues, feedback and deliver a timely resolution to our dealer client.”

Dealerships can contact the Dealer Advocacy team through the website, via email at a dedicated mailbox, DealerAdvocacySC@santanderconsumerusa.com, or by phone at 866.577.8428 from 8 a.m. to 9 p.m. Central Time, Monday through Friday.

We’re with you on the front lines

“Dealer Advocacy is often on the front lines of issues affecting multiple dealers, such as dealers having system issues with our Extranet,” said Shari Armstrong, a senior specialist.

“When a dealer is transferred to Dealer Advocacy, we are able to listen, research, provide a single point of contact and deliver a follow-up resolution. Sometimes we just need to provide accurate direction to the correct department, but we don’t just transfer and drop [an issue]. We make sure the dealer gets to speak with a person in the department before we release the call.”

“If our normal businesses process, service or products are not meeting our dealers’ needs, Dealer Advocacy is on the case,” according to the team.

It’s our simple, personal and fair way of doing business with your dealership.

Why you should use direct mail NOW to boost results up to 90 days

Santander Consumer USA’s Preapproved Direct Mail Program is the gift that keeps on giving – for up to 90 days.

And isn’t that what you like to hear when you’re allocating marketing dollars?

It’s not a “weekend barn-burner,” but a tactic you can deploy regularly to generate store traffic comprising motivated, qualified prospects. Mailers may generate results for up to 90 days, based on results from nearly 1,000 direct mail campaigns.

042319 IL Why you should use direct mail NOW to boost results up to 90 days

However, you can’t wait until the last minute to make a decision. For example, the deadline for next month’s mailer is early this month.

Here are a few things you need to know to make your decision:

Why you should use our Direct Mail program

  1. The Santander Consumer USA Preapproved Direct Mail Program is designed to drive quality, preapproved consumers to your dealership.
  2. It targets consumers with established payment histories at key points in the ownership cycle.
  3. Recipients are reviewed based on our lending guidelines and receive personalized letters.
  4. Consumers can access offers by phone or online via personal webpage. Leads are then funneled to your CRM and email addresses.

What you need to know about our Direct Mail program

  1. It’s a “conquest” mailer that targets consumers with established payment histories at key points in the ownership cycle.
  2. We use specific criteria to pull well-qualified candidates:
  • 550-700 FICO scores
  • Open auto financing with a minimum 30 months of payment history
  • No bankruptcies and no repossessions
  1. We pull names from a targeted radius around your dealership, or you choose your own ZIP codes.
  2. Consumers can access offers by phone or online via personal webpage. Leads are then funneled to your CRM and email addresses.

Why our new Direct Mail piece makes things happen

  1. Highlights easy ways recipients can find the amount of preapproved financing.
  2. Adds a convenient QR code so recipients can use their phones to scan for preapproval.
  3. Grabs attention better with “preapproved certificate” at the top of the letter.
  4. Promotes your dealership specifically throughout the letter.
  5. Pushes recipients online where detailed financing offer and dealership information is provided.

How to make the most of your Direct Mail leads

  1. Make sure everyone at the dealership knows a direct mailer is going out.
  2. Follow up all leads via phone, email, postcards, etc., to maximize ROI.
  3. Put your prospect in the right car for their lifestyle and finances!
  4. It’s OK to push for immediate results, but don’t think of this as a “weekend barn burner.” You should continue to see results into the hot summer sales season.

Watch for emails from Santander Consumer USA that provide additional details about the program, including pricing for a range of campaign packages.

Or contact your DRM, call program headquarters at 844.596.5575, or email santandersupport@rrd.com.

The infographic below – Direct Mail Advantage – also provides additional details.

 

042319 IL Why you should use direct mail NOW to boost results up to 90 days

12 of the best ways to boost your dealership’s used-car results

How does your used-car operation measure up?

The way you answer that question may matter more than ever with used-vehicle sales expected to surpass last year and help sustain overall results, despite the forecast of a dip in new-car sales.

“We expect a pullback in the new-car market as rising prices and interest rates push many potential buyers out of the market,” according to Edmunds’ Used Vehicle Outlook 2019. “As a result, we expect there will be renewed interest in the used-car market as a substitute.”

A dozen key performance indicators (KPI) here should begin to give you an idea of where your dealership stands compared to thousands of others, including high performers.

 

043019 IL 12 of the best ways to boost your dealership’s used-car results

 

Cox Automotive addressed KPIs in “Metrics That Matter for Best Dealership Performance,” compiling a list of 12 KPI and best-in-class benchmarks from “vast amounts of data” it collected for the report.

Here is a summary of the 12 indicators that could set your dealership apart:

  1. Used-to-new ratio

“Used retail unit volume equaling or surpassing new retail volume is a foundational correlation of highly successful used-vehicle departments, assuming the dealership is meeting new-vehicle volume goals.”

A great result is 1.25 used vehicle sales to every one new-vehicle sale.

  1. Inventory turn rate

“The highest performers turn inventory every 20 days … Fast inventory turns maximize high-gross opportunities associated with fresh inventory and drive profits in other dealership departments.”

  1. Price to market/market days’ supply

“Top performers embrace the balance between a vehicle’s desirability and its price. They use data to dictate when it is appropriate to ‘go for the gross’ and when the window for profit is short … The data is also a foundational element in inventory acquisition and appraisal processes.”

  1. Mechanical and cosmetic reconditioning time

“Top performers solve reconditioning delays … Speed is paramount.”

  1. Reduced reconditioning markup for older vehicles

“Retail reconditioning hinders vehicle acquisition, especially on older vehicles that tend to be some of the most desirable but also have the highest reconditioning costs.”

  1. Changing dynamic

“High performers understand the drag that packs place on their used car operations. They slow down acquisition, including reducing new car appraisals.” The Internet has changed this dynamic.

  1. Immediate wholesale volume

The best used-car departments “separate the measurements of immediate wholesale, that is, a vehicle never offered for retail from aged wholesale. They look for ways to keep trades … [and] typically have discounted recon rates for older vehicles and few to no packs.” This should be “under 33 percent.”

  1. Immediate wholesale profit/loss per vehicle

“The goal is a small profit/loss per vehicle [about $150], an indication that appraisers are accurately assessing valuations and assumes no inventory adjustments or pack adjustments.”

  1. Aged wholesale loss per vehicle

“Vehicles that were reconditioned and offered for retail but did not sell are likely to lose money.” Top performers separate these “from the ones that were wholesaled immediately and set a KPI for the average wholesale loss on these units. A benchmark of 5 percent wholesale loss allowance is common.”

  1. Appraisal-to-trade ratio

“[This] is the ratio of all vehicles appraised to how many were traded … It is a key indicator of the support the used-car department provides to the new-car department.” It should exceed 50 percent.

  1. Gross return on investment

“GROI is the product of the gross as percentage of the sale multiplied by turn rate. … For a vehicle to make financial sense, the goal is a minimum GROI of 120.” This can be applied to an entire inventory.

  1. Cost to market

“The highest achievers monitor cost to market, which compares the retail value of a vehicle to the total investment in a vehicle, including acquisition cost, reconditioning, transportation, pack, etc. … Minimize costs to enable aggressive acquisition of inventory and deliver maximum ROI.”

For more details, download the report.

The party may be over: What’s happening to truck owners’ brand loyalty?

Brand loyalty makes a big difference in your business.

If you have any doubt, just imagine how difficult it would be to replace as much as 60 percent of the customers who return to your store when they are ready to purchase or lease a new vehicle.

Then apply that to the fastest-growing, perhaps most competitive, segment of your business – trucks.

Photo credit: Chevrolet via Newspress USA
Is truck owners’ brand loyalty changing with the times?

“Truck owners are perceived [to be] some of the most loyal customers in the automotive industry,” said CarGurus, an online automotive marketplace, in their 2019 Truck Sentiment Survey. But that appears to be changing as brands fight for market share with forecasts of leaner times ahead.

“As pickup trucks are impacting bottom lines across the automotive industry, brand loyalty is becoming that much more important,” reported CarGurus. “The survey uncovered that brand loyalty among pickup truck owners is down compared to one year ago. This becomes especially true when truck owners are asked about their brand loyalty in conjunction with increased price.”

Impact of truck prices

The survey shows that a significant price increase – whether that’s based on lower incentives or increasing technology – would cause 70 percent of truck owners to consider switching brands. That’s an increase of 6 percent over last year’s 64 percent, according to CarGurus.

The survey also reports that 68 percent of truck owners “believe that the vehicles are overpriced.”

While price is the No. 1 reason truck owners would consider other brands (54 percent), lower fuel efficiency also plays a part, with 47 percent of truck owners citing it as a major concern.

And the CarGurus survey isn’t the only indication of softening brand loyalties.

‘Flattening loyalty rates’

Data analytics firm IHS Markit found “a flattening of loyalty rates (overall) in the industry after years of increase” because of growing competition, based on an analysis of about 17.6 million new-vehicle registrations during the last model year.

IHS Markit annually recognizes brands and models with awards for the highest loyalty rates.

The truck sentiment survey may be especially important information for dealerships with Ford, Chevrolet and Ram representing far and away the top pickup truck models in the country. Ford F-series (909,330 units), Chevrolet Silverado (585,581 units or 825,125 total if you include the GMC Sierra) and Ram (536,980 units) were the top-selling vehicles overall in 2018, Car and Driver reports.

To pickup or not pickup?

But the results matter to Toyota dealerships, as well, with their No. 14 vehicle overall and No. 4 truck, the Tacoma (245,659 units sold) – beating out mid-size models from Chevrolet, GMC and Honda – which showed the greatest loyalty, “with 41 percent not willing to consider another pickup truck brand.”

“With pickup truck prices on the rise, many owners are reconsidering their current brand, or in some cases whether they will repurchase a pickup at all,” said a spokeswoman for CarGurus. “While truck owners still have strong brand and category loyalty, the challenge for car manufacturers and dealerships is that loyalty is less reliable as a driver of sales.”

About that there seems little doubt.

Toyota, Lexus, Porsche top J.D. Power, owner dependability ratings

Dependable cars make dependable customers.

That’s the bottom line in a recent J.D. Power survey of owners with three-year-old vehicles.

“Flawless dependability is a determining factor in whether customers remain loyal to a brand,” said Dave Sargent based on results of the J.D. Power 2019 U.S. Vehicle Dependability Study.

And while no brand literally is flawless, three fare better than the other 28 in both J.D. Power ratings and fewest problems reported by the original owners of three-year-old vehicles (2016).

Photo credit: Lexus via Newspress USA Lexus rated as one of the best used-car brands for 2016 by J.D. Power.

Photo credit: Lexus via Newspress USA
Lexus rated as one of the best used-car brands for 2016 by J.D. Power.

They are Toyota, Lexus and Porsche.

Toyota and Porsche came closest to flawless with 39 of 40 points in J.D. Power ratings of mechanical systems, exterior and interior, features and controls, and overall, each with three perfect 10s. Toyota’s luxury brand, Lexus, came in second with 38 of 40 points, including three 10s.

All three brands rated 10s overall, according to J.D. Power, a consumer data and analysis firm, but Toyota and Lexus received the overall J.D. Power awards.

None of the 31 other brands rated 10 overall, although several scored 10s in other categories.

Following are the top brands based on a 40-point scale along with the number of 10s they scored: Porsche (3) and Toyota (3), 39 points; Lexus (3), 38 points; Chevrolet (2), 37 points; Audi (2), BMW (1), Hyundai (1) and MINI (1), all 36 points; Buick, 36 points; Infiniti, Kia and Volkswagen, all 35 points.

The full rankings are available on the J.D. Power website.

The J.D. Power ratings are similar to brand rankings based on reporting of vehicle problems over the last 12 months by nearly 33,000 original owners of three-year-old vehicles (2016).

Those rankings scored Lexus at No. 1, with 106 problems per 100 vehicles (PP100), according to survey respondents, followed by Toyota, the top mainstream brand, and Porsche at 108 PP100.

Here is the complete list of brands that scored at least the industry average of 136 PP100:

Lexus, 106

Porsche and Toyota, 108

Chevrolet, 115

Buick, 118

MINI, 119

BMW, 122

Audi and Hyundai, 124

Kia, 126

Infiniti, 128

Volkswagen, 131

Mercedes-Benz, 134

Subaru, 136

“Vehicle dependability continues to improve, but I wouldn’t say that everything is rosy,” said J.D. Power’s Sargent. “Vehicles are more reliable than ever, but automakers are wrestling with problems such as voice recognition, transmission shifts and battery failures.”

And here’s why the dependability of three-year-old vehicles matters to dealerships.

“The used-vehicle market is where dealers can see increased profits this year,” said Jonathan Banks of J.D. Power. “Stocking dealership lots with vehicles having strong dependability scores will help support new-vehicle sales in the future, create a positive brand perception and drive foot traffic.”

The owner survey results also are available online.

Are you losing deals without enough women sales advisers?

Maybe it should come as no surprise.

Women shoppers – who represent nearly half of car buyers and influence most purchases – would rather deal with women sales people.

What does that mean for your dealership?

 

040219 IL Are you losing deals without enough women sales advisers

 

A lot, probably.

You may be losing business if your sales team is typical of the industry, with only about 8 percent of front-line positions held by women, according to JoinWomenDrivers.com.

The conclusion was drawn from a national survey based on 3,013 car dealer reviews at the website.

“Almost universally, women rated their satisfaction scores higher when dealing with female sales advisers,” said the survey report. The analysis potentially has identified two major areas of improvement for dealerships in attracting and retaining women shoppers:

  1. Hire and place the right women candidates in an effort to diversify the staff.
  2. Train male employees in the behaviors and outcomes most desired by women shoppers.

“Ultimately, the results gathered by [the survey] illustrate the need for significant culture shifts to address consumer experience concerns that directly impact sales success.”

If perception, indeed, is the shopper’s version of reality, then the gender gap is significant.

“Women consultants were rated higher in each part of creating a successful relationship – trustworthiness, being respectful, likable and understanding,” according to the JoinWomenDrivers.com report. “Price is very important, but women rate that lower, because they believe they can buy the same car elsewhere for within a relatively narrow price margin.”

The ability of a sales adviser to listen and not apply sales pressure also are valued by women shoppers.

“If a woman feels the consultant isn’t listening, she will simply find someone who will,” said the report. And “an approach that is perceived as high-pressure will send most consumers off to another dealership before the deal is done. … A successful sales consultant with a high EQ [Emotional Quotient] understands their job is to assist and guide the shopper, not convince.”

And, yet, one of the simplest behaviors turns out to be one of the biggest problems, with more than four in 10 survey respondents expressing dissatisfaction with the way they were greeted in the first place.

“This is a clear indicator there is tremendous room for improvement and making a more personal connection with guests at the store level and online,” said the report.

It was the one area where women were “slightly more satisfied” with male sales advisers.

But that may be small consolation considering the stakes.

First impressions in showroom, online the keys to women shoppers

Women shop for cars where they feel comfortable.

That comfort level begins with the greetings they receive and the way they are treated afterward.

And the sales adviser holds the key to that encounter, according to the 2019 Women’s Car Buying Report from a survey of almost 5,400 women shoppers by JoinWomenDrivers.com.

032619 IL First impressions in showroom, online the keys to women shoppers

 

All of this is significant for dealerships because women now account for 45 percent of new-car purchases – about 7.75 million in 2018 based on NADA’s report of total U.S. sales of 17.2 million.

(The Women’s Choice Award website suggests women currently represent 52 percent of buyers.)

“Their [sales] consultant is the No. 1 influencer at a dealer,” said the JoinWomenDrivers.com’s report.

“Price is still important, but not a differentiator, since women know they can find a car elsewhere within a narrow price margin.” In fact, that was true for all seven top brands – Chevrolet, Ford, Jeep, Honda, Nissan, Subaru and Toyota – represented in the buyers’ survey.

Impressions matter

“It is the consultant’s attitude and impression that makes all the difference. The initial contact and the creation of trust is critical to establishing credibility and making an outstanding first impression.” Dealer reputation is the second-most-important reason for buyers of four brands.

“While dealership culture has seen a shift, more must be done to [attract] and retain women buyers and for dealers to meet their unique expectations and needs,” said Anne Fleming, president and car buying advocate for JoinWomenDrivers.com.

A welcoming atmosphere

“Creating an atmosphere where the buyer feels welcome, understood, and has the experience of being in control of their buying experience are the ingredients to a successful sale.”

So what’s a savvy dealer to do to adapt to the changing marketplace?

“Dealers need to re-examine the one-size-fits-all approach to marketing and better tailor to an every-growing base of [women] customers,” said the report. “Valuing these buyers – through effective and creative marketing strategies – will increase dealers’ overall sales.”

“Training and coaching the frontline team to adopt attitudes and greetings that women consider trustworthy, engaging and respectful is paramount.”

First impression online

But creating a good first impression online also is important, the report said.

The report points out that dealership websites are either the first or second destination for six of seven of the manufacturers included in the website’s survey. Nationally, however, women shoppers graded dealership websites a “C” in being helpful and informative. “Collectively, OEMs, Web providers and dealers have work to do to bridge the gap to add value.”

“Most dealer websites continue to be pictorially product-centric,” said the JoinWomenDrivers.com report. “[But] consumers engage more fully when they feel welcomed by lifestyle images from various cultures, life stages and demographics. Informative content about car buying and the ownership experience draws viewers in and establishes credibility.”

Combined, these firsts leave powerful impressions on the consumer experience. Indeed, “Research shows the first engagement is the only one that matters – there are no second chances.”

Franchise dealers appear optimistic, but ‘euphoria’ of 2018 is gone

Auto dealers are an optimistic lot, it seems, even though sales for the first two months of 2019 were at their lowest level in five years.

And the outlook that new-car sales will fall short of recent years.

While describing a relatively “weak” market – 48 on a 100-point scale – in the first-quarter Cox Automotive Dealer Sentiment Index, those same dealers anticipate an uptick in business within the next three months – rating prospects a 63 on the same scale.

A slow start to 2019 has dealers pondering the future.

A slow start to 2019 has dealers pondering the future.

The overall expectations were about the same for franchise dealerships (62) as they are for independents (63), according to the Cox survey.

Both numbers were significantly higher than expectations reported last quarter.

But “gone is the euphoria we saw this time last year,” Cox reported, especially for new-car sales, which exceeded 17 million for the fourth consecutive year in 2018 despite earlier gloomy forecasts. Franchise dealers rated the current used-vehicle sales environment “good” at 66 on the 100-point scale, but the new-vehicle sales environment as pretty middling at only 53.

Still, franchise dealers were more positive about the current market than independent dealers, who anticipate used-car sales to be on the “poor” side of middling at 48 points.

Some caution would seem to be in order, though, as franchise dealerships are seeing inventories grow for both new and used cars creating pressure to lower prices, based on results of the Cox survey. Independent dealers indicate they also are feeling pressure to lower prices.

In fact, dealers are saddled with the most inventory since the Great Recession – more than four million new vehicles, a 79-day supply – Automotive News reports.

The quarterly survey is conducted online, with dealer responses weighted by dealership type and sales volume to reflect the national dealer population.

Nearly 1,200 dealers participated in the survey, which was conducted Jan. 28 to Feb. 8.

When was the last time that shoppers beat a path to your showroom?

It’s all in the numbers.

The Preapproved Direct Mail Program from Santander Consumer USA is making an impact for participating dealers across the country.

Results include a higher-than-average response rate, strong incremental sales and outstanding ROI.

“My store runs a 6,000 Santander direct mail piece every 30 to 60 days,” Jeff Belsky of Benson Hyundai in Spartanburg, SC, said recently. “Lead generation has been through the roof, with unprecedented numbers of leads and prospects increasing with each run.”

“The mailer was extremely successful and profitable for the store,” said Timmy Dickinson of Lia Hyundai in Enfield, CT. “It generated 63 leads, which resulted in 38 shows, 14 sold and a profit of around $30,000. It was our best used car month in a long time!”

The direct mailer is not a “weekend barn burner,” because leads will continue to come into your store for up to 90 days after the mailer drops.

There’s a lot to consider, including additional results, so we created the following infographic to help:

 

030719 IL When was the last time that shoppers beat a path to your showroom (1)