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5 mistakes to avoid when submitting deals to Santander – and a checklist

Don’t get burned when the heat is on.

That means doing what it takes this summer to get your deals through the funding process and keep business flowing smoothly through June, July and August.

No matter how challenging the sales environment is, especially for new cars.

Meanwhile, Santander Consumer USA (SC) will be working hard to ensure that tens of thousands of contracts to finance new and used vehicles are processed efficiently this summer to keep you on track.

The goal at SC is to have complete contract packages funded within 24 hours. Yet, with so many contracts there are bound to be small hiccups here and there.

For example, calling about a contract before 48 hours has passed actually slows processing of contracts to all dealers, and will not move the caller’s package ahead of others that have been in house longer. But you can get updates through the Dealer Extranet 24/7.

Otherwise, here are the top five mistakes some dealerships make and you can avoid so you don’t slow down the process when submitting deals to SC funding:

We can’t get in touch with the applicant

When funding receives a deal, chances are that some information will need to be verified before the deal is given the green light. If funding doesn’t have the correct contact information for your customer, the deal can’t be finalized. It’s critical that phone numbers and/or contact people are correct so that funding can reach them if necessary.

Submitting incomplete contract packages

Our funding team can’t complete your deals until all of the documents in the package are received. By using SC’s funding checklist below, it’s easier to ensure your funding package is complete.

Approval terms don’t match the contract

If multiple approvals have been received for the same customer, double-check your documents to make sure the correct approval sheet is attached to the contract package. In addition, check with your buyer before making changes to the approval terms. These two steps can save a significant amount of time and confusion once the package hits funding.

Income is not verifiable

Reviewing the customer’s paystub prior to completing and submitting an application can save time down the road. A lot of customers will provide their net income versus gross, and some just take a wild guess when completing a credit application. Request a check stub from your customer, and review it with them to ensure the proper monthly income is entered on the application.

Vehicle value does not match the approval

If a customer changes his/her mind about which vehicle to purchase, it’s critical to update the vehicle with your buyer. Send an update via Dealertrack or RouteOne alerting your buyer to the change, and get an updated approval so there won’t be issues that delay your funding. You also have the option of updating the vehicle in our Rehash Tool. Just log in to the Dealer Extranet to update your structure for a quick look at changes that will affect your deal.

Summer provides a wealth of opportunities to boost your bottom line to the top of the charts. So don’t let small pitfalls keep your dealership from achieving your goals.

If you have questions, contact SC funding from 8 a.m. to 7 p.m. CT, Monday through Friday, at funding@santanderconsumerusa.com or 800-877-4696.

 

Turning recall pain into an experience that can boost your dealership’s results

A vehicle recall doesn’t have to pain your customers – or your dealership.

Viewed another way, you can turn what appears to be a negative into a positive experience for your customers while making an impression that will last long after recall repairs are completed.

“With the right approach, dealerships can make the most out of recalls,” wrote David Foutz of Xtime for WardsAuto. “While some people may view recalls as a hassle, dealerships using the right approach can turn these events into another customer touchpoint that leads to more service and sales revenue.”

 

 

Foutz suggested that recalls often are met with “a heightened sense of urgency by customers since they see them as public issues that raise questions about vehicle safety.”

“Dealerships can turn these potentially tense events into a great experience, building trust and long-term connections,” according to the WardsAuto report.

A report by Recall Masters earlier this year revealed that nearly 33 million vehicles were subject to mandatory recalls by the National Highway Traffic Safety Administration (NHTSA) in 2018. Another 14.5 million vehicles were affected by “voluntary” manufacturer recalls.

With recall completion rates estimated at 70-75 percent by the Consumer Federation of America (CFA), that means there are about 12-14 million vehicles on the road with open recalls from last year alone. Based on the CFA’s percentage estimates, about 70 million vehicles need recall repairs out of 276 million total on the road in the United States resulting from 280 million vehicles recalled the last 10 years.

That represents a lot of revenue potential for dealerships that take recall repairs seriously as a revenue stream that also includes regular warranty work, customer-paid repairs and used-car reconditioning.

Here are Foutz’s thoughts on how dealerships can make the most out of recall opportunities:

Ensure employees make good impressions

“Dealerships need to arm their staff to deal with customer inquiries even when they do not yet have all the specific recall details. Once they have the information, they need to quickly prepare their technical and customer service staff with the proper processes.”

“To succeed, dealers must meet customer expectations on a recall service visit as they do for every other service appointment. That means easy scheduling, quick check-in, complete vehicle inspections and professional delivery … Think about each repair as an audition for future business.”

Technology plays an integral role

“The insights delivered by a well-designed service information tool can help in each customer interaction, even during the craziness of a large recall. Instead of waiting for a customer’s call, dealerships can proactively communicate by utilizing reports on VINs in their area to identify affected vehicles. Once identified, dealerships can use technology that automatically sends messages.”

“These messages should include a link to the dealership’s online service scheduling tool, removing bottlenecks created by a flood of calls.”

Creative solutions are the key to success

“Creative solutions can make recall service visits as enjoyable as possible. For example, one dealership implemented ‘recall Saturdays and Sundays,’ where it dedicated fixed-operations work to recalls.”

“Dealership employees plan ahead for recall work by arranging loaner vehicles ahead of time. Technicians are scheduled in advance … so recall work doesn’t disrupt their typical earnings during the week. The dealership orders pizzas, plays music and turns the service visit into a fun experience.”

Dealers should view recalls as a way to retain customers and acquire new customers, according to a recent Cox Automotive survey of 3,550 consumers who had at least one service visit in the previous 12 months. With fixed operations representing about 50 percent of dealerships’ gross profit on average, it clearly is “critical to retaining customers for future vehicle sales,” Cox said.

Cox noted that about three-quarters of customers who came in for service within the past 12 months are “likely to return to the dealer of purchase for their next vehicle.”

Paying attention to recall repair business results in a win-win if your dealership handles it right.

These six things could help ensure a successful summer

Summer is a great time to set up your dealership for a successful 2019.

Memorial Day is in the rearview mirror, but Father’s Day, July 4, and Labor Day are still on the calendar, which means there are a lot of opportunities to heat up your results. However, that also means ensuring your applications for financing have the best chance of approval by Santander Consumer USA.

That’s where our best practices could factor into your calculations for summer and the rest of 2019. As always, your Dealer Relationship Manager can fill in the details.

 

021419 IL Checklist is the key to your 2019 tax season sales results

10 things your team needs to know about the Dealer Extranet

The Dealer Extranet should be part of your team’s everyday arsenal.

Fast and user-friendly, it is the best way to enhance your business with Santander Consumer USA (SC) – and make more money.

From the Rehash Tool, which provides the quickest possible turnaround time on new deal structures, to a customized dashboard that offers daily stats, notifications and reports on your deals with SC, the Dealer Extranet is designed to empower dealers to compete more effectively.

Those aren’t the only reasons, though.

“One of our greatest assets is our Dealer Extranet, especially for high-volume dealers,” said a dealer relationship manager (DRM) in New York.

“The ease of use and the multi-functionality of it, from rehashing an application to funding, allows my dealers a fast, user-friendly experience from application to funded. I stress the importance and use of the Extranet with all my dealers … [and] they usually see the light.”

In fact, thousands of dealership sales associates already have recognized the value of the Extranet and use it to maximize their results with SC and to manage their businesses better.

You can make the site an integral part of your dealership’s routine by asking your DRM to set up a new user login – or logins for multiple users at your store. Your DRM also can help you discover – or rediscover – the many features the Extranet provides your activated account. Your DRM also is available to answer any questions that might arise or to reset your password.

When you’re set up on the Dealer Extranet, you can log in here and use it whenever you want. And put the power of the Dealer Extranet in your competitive arsenal.

 

10 tips for using the Extranet

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.

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.

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

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.