Archive for the ‘Finance & Insight’ Category

Billions of $$$ at risk on electric, autonomous vehicles – consulting firm

It could be a “pile-up of epic proportions.”

That is what a global consulting firm imagines could happen as vast sums of money pour into electric- and autonomous-vehicle technology without a clear road to a return on that investment.

“A pile-up of epic proportions awaits this industry as hundreds of players are spending hundreds of billions of dollars on electric and autonomous technologies as they rush to stake a claim on the biggest change to hit this industry in a hundred years,” said John Hoffecker of AlixPartners consulting firm.

071018 IL Billions of $$$ at risk on electric, autonomous vehicles – consulting firm

“The winners in this free-for-all will be those who have the right strategies and, equally important, execute on those strategies to their fullest potential – as billions will be lost by many.”

A press release about the study says:

“The automotive industry faces the possibility of a monumental capital drain in the near term as hundreds of players, including non-traditional ones, are pouring unprecedented sums into electric and autonomous vehicles years before those technologies are fully cost-competitive in the market, when consumers are questioning the cost and safety of some of the [autonomous-vehicle] technologies, and just as the market itself is set to continue a cyclical downturn.”

“In truth, this industry has been operating ‘above the clouds’ in terms of industry volumes for a number of years now,” said Mark Wakefield of AlixPartners’ automotive practice. “But those volumes are likely to edge down further, just as spending for things like electrification and autonomy need to ramp up.”

The study finds that a “whopping $255 billion” in research and development and in capital expenditures will be spent globally on electric vehicles by 2023 bringing some 207 models to the market, “many destined to be unprofitable due to currently high systems costs, low volumes and intense competition.”

Meanwhile, the consulting firm says, another $61 billion is just “the opening ante” on the autonomous-vehicle front, “even though consumers say they are willing to pay just $2,300 extra for autonomy – compared with current industry costs of around $22,900.”

“Industry players are sort of caught between a rock and a hard place,” said Shiv Shivaraman, also from the consulting firm’s automotive practice. “If they don’t participate in some way in the ‘new-mobility’ revolution that’s coming, they stand to lose out on what might be the biggest thing ever in this industry. If they do participate, as so many are, they have the chance of benefitting from first-mover advantages, but they also face the possibility of going broke in the process.”

The study predicts that “full battery-electric vehicles will reach about 20 percent of the U.S. market by 2030,” while a second survey by the consulting group found that almost a quarter of Americans – about 22.5 percent – say they are likely to purchase a plug-in electric vehicle as their next car.

Autonomous vehicles will account for three million in sales in the U.S. by 2030, the consulting firm said.

How your ASM can help you make more deals with Santander

Santander Consumer USA area and regional sales managers want you to make more money.

It doesn’t take long to see that there are a number of ways they accomplish that, according to some of the company’s top-performing ASMs around the country.

Problem-solving. Demonstrating the Extranet. Explaining products. Building relationships. It’s all part of the job of Santander Consumer USA’s well-trained, knowledgeable ASMs and RSMs, and it’s all aimed at helping dealerships accomplish their business goals.


“My overall objective is to seek and build strong relationships with all personnel streams within the dealership – sales, finance, accounting and service departments,” said BILLY BURLESON, ASM in North Texas. “This allows me to have multiple contact points, so if any critical issues arise that need special attention I can navigate through these streams to solve the problem.”

“I work diligently to keep the doors of communication open so dealers understand they have a partner they can trust that will be there when they are in need,” added Burleson.

Invaluable partners

“My overall goal is to make doing business with Santander easy, efficient and profitable,” explained ASHLEY QUICK, Senior ASM in East Atlanta, GA, who also cited spending as much time in the management “tower” as possible. “I want to help my dealers sell more cars and make more money.”

And it’s not just the field sales team that takes this approach.

“My mission is to help my area managers’ and inside sales managers’ dealers grow their businesses,” commented YOLANDA AVALOS, a Santander Consumer USA regional sales manager of inside sales. “I want those dealers to see my ASMs and ISMs as an invaluable partners in their dealerships that is a value add, not just another rep.”

Your area and regional sales managers are dynamic resources in putting deals together with Santander.

Boosting results

You also can boost numbers and build business with help from your ASM on things like:

  • Educating your team on any new programs or products offered by Santander.
  • Advising you on current inventory that holds auction value and equates to strong deals.
  • Showing you how to structure the best deals using our Dealer Extranet and Rehash Tool.
  • Answering any questions you have about the SAF platform.

“My goal with all my dealerships is to educate them on all aspects of Santander program and provide as much value to their bottom line as possible,” said DAMIAN CANTU, an ASM in Santander’s South Texas region.  “I also like to provide assistance during those instances when a dealer of mine needs help and is having a tough time finding closure with an issue.”

Something extra

“One of our greatest assets is our dealer Extranet, especially for high-volume dealers,” said STEPHEN RIVELLI, an ASM in the Bronx, NY. “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.”

“Helping them use the Extranet is crucial to a dealer’s success,” added Quick in East Atlanta.

Building value

“I try to build value with my dealers on every visit,” said BILL SMITH, the ASM in Allentown, PA. “Some of the tactics I implement are showing dealers recent approvals. This shows dealers in black and white exactly what we are doing from a credit standpoint.  The more value we build and the dealer see from Santander, the deeper our business relationship will grow.”

“I look for ways to help my ASMs and the dealerships in Florida continue to grow in their success and partnership with SC,” said NANCY BLOOM, regional sales manager.

“My team and I look for ways to increase applications and contracts, to improve portfolio performance and to be up front with the dealerships, who need to see Santander as a top lender with leading technology and a strong focus on customer service.”

Obviously, Santander’s sales managers know the ropes when it comes to closing deals, so don’t be afraid to use them as a resource to help you reach your goals.

They can make a big difference.

Rate this one a no-brainer

Have you seen our new national rate sheet yet?

If not, this would be a good time to ask for it from your Santander Consumer USA area sales manager, since we recently updated it in a single easy-to-read chart and contact sheet.

On credit scores from prime to subprime, Santander Consumer USA offers competitive market pricing for any application with no look-to-book through our Santander Auto Finance programs (SAF), because we want to make it simple for you to send all your applications through SAF.


Play it smart, dealers: 8 ways to reduce fees on your deals

The fast track to funding: Using your ASM as a resource (including video)

Answers to the most taxing questions asked about credit and underwriting

The rate sheet provides the FICO range Santander considers, plus buy rate, discount fee, flat fee, participation and details on buying terms such as maximum term, advance, LTV, PTI and DTI.

Santander finances new or quality pre-owned vehicles nine years old or newer, and financing may range from $5,000 to $75,000 with a monthly applicant income minimum of $1,000.

We’ll finance a vehicle with mileage:

  • Up to 80,000 to a maximum term of 72 months.
  • 80,001 to 90,000 up to 60 months.
  • 90,001 to 100,000 up to 48 months.
  • 100,001 to 110,000 up to 36 months.
  • 110,001 to 120,000 miles up to 24 months.

The new rate sheet also provides Santander Consumer USA contact information – mailing addresses, email addresses, websites – that can help with many of your needs, especially in the areas of funding and servicing, as well as phone numbers and websites for RoadLoans and SGuard.

And checking your funding status is as simple as logging in to our Dealer Extranet at, where you also can find our rehash tool to rework your deals.

Of course, our ASMs are well versed in our SAF program and can answer any questions you have. Look for their contact information, including phone number, fax number and email address on the sheet, whenever you need help working through a deal.

Then, let’s make a deal – or more.

How a digital F&I experience may drive customer satisfaction

Digitizing the finance and insurance (F&I) process can have a lasting, positive effect on customer satisfaction for automotive retailers.

Those are the findings of “The Digital F&I Experience Study” from F&I Express and MakeMyDeal.

The two companies have a vested interest in the results since they both operate in the digital F&I space, but that doesn’t mean the study results aren’t worth consideration.

They are consistent with consumers’ shift to digital channels in other parts of the car-buying process.

The Smart Dealer Logo 300x300While much of the car-shopping process has been digitized, either through online tools or desktop tools at the dealership, the companies said, a significant portion of the process for automotive aftermarket insurance products still involves cumbersome printed documents and manually signed forms.

A more detailed look at the issues involved was covered in an article The Online F&I Dilemma: F&I providers talk about the pros and cons of taking the F&I office online at P&A magazine online.

Meanwhile, the study – a survey, actually, of 500 recent vehicle purchasers – found that “consumers who had one or more digital elements in the F&I experience were more likely to purchase F&I products, more satisfied with the experience and more likely to recommend the dealership.”

And, of course, that could mean adding dollars to your dealership’s bottom line.

“As an industry, we know that the F&I experience is more difficult than it should be, but what we haven’t had until now are the numbers to show how that experience could be affecting the long-term profit potential for the dealership,” said Mike Burgiss of MakeMyDeal.

“By digitizing the experience, dealers will not only have happier customers, but they’ll also reap the benefits of more word-of-mouth recommendations and repeat business.”

“F&I is one of the few remaining areas of the dealership that hasn’t been digitized, and this study clearly shows that there is a real need – and opportunity – for more of the process to be brought online,” said Brian Reed, President and CEO of F&I Express, which was named 2015 Dealers’ Choice Award winner in F&I technology by publishers of “Auto Dealer Monthly” and “F&I and Showroom” magazine.

“Consumers have an expectation to have digital options for just about anything they are shopping for,” Reed said. “Auto dealers have a chance to strengthen relationships with existing customers, and ultimately improve their profitability by shifting to a digital F&I strategy.”

The study was designed to understand consumer feelings toward the current in-dealership purchase process of F&I products and how it affects their perception of the dealership.

Participants were 400 car buyers who had a traditional F&I experience and 100 who had a digital one.

A digital experience was defined as engaging in at least one of the following activities: providing an electronic signature for a vehicle, completing an entire purchase online without having to go into a dealership, completing the entire vehicle purchase electronically inside of the dealership, and/or reviewing a list of products and services on an electronic device provided by a dealership.


IL-BLOG_60212-1 (Digital Experience Infographic)_Final

It’s not too early to start thinking about your sales in 2016

If you thought 2015 was a good year to be in the automobile business, you’ll love prospects for 2016. And December is a good time to start gearing up.

Typically one of the best months of the year for selling cars, December is expected to top off a record year after a very strong November and set the table for another possible record next year.

“U.S. auto sales are now clearly on the path to set a record in 2015, with volume we haven’t seen in 15 years,” said Jeff Schuster of LMC Automotive, a marketing intelligence firm.



But there’s little time to relax afterward with tax season and the big month of March around the corner.

While 2015 has seen tremendous and consistent growth in new-vehicle sales, new-car and light-truck sales should go even higher in 2016, Steven Szakaly, National Automobile Dealers Association chief economist, said during a recent press conference, according to F&I Showroom.

“New light-vehicle sales will rise to 17.71 million units in 2016, a 2.3 percent increase from our forecast of 17.3 million sales in 2015 … the seventh straight year of increasing new-vehicle sales,” said Szakaly.

Some experts say 2017 will be even better for light-vehicle sales, hitting 18 million before leveling off.

And the positive outlook isn’t limited to new-vehicle sales, according to industry experts.

“We are looking for used-vehicle sales to continue to grow as we move into 2016,” Tim Fleming, Kelley Blue Book analyst, recently told Auto Remarketing. “Prices should continue to ease from record highs seen a few years ago, making the used market even more attractive to consumers.”

Overall, franchise dealers sell nearly as many used cars, trucks, SUVs and minivans as new vehicles – more than one-third of all used vehicles sold – based on data from CNW Marketing Research. The remainder is sold by independent dealerships and in private-party transactions.

Santander Consumer USA plans to help franchise dealers make the most of the 2016 opportunity by providing support through our knowledgeable sales-and-marketing team, email content and blog posts. If you have questions about working with Santander Consumer USA and Santander Auto Finance, talk to your sales representative or area sales manager or request a visit from a representative online.

Cautionary tale where nobody gets hurt – except the dealership

This actually happened.

A couple recently goes into a dealership knowing exactly what vehicle they want to purchase (a 2015 SUV with leather interior, large touchscreen and sunroof).

In less than an hour, they’re ready to go – except for the visit with the F&I guy.

And that’s where things start to go a bit pear shaped. About 90 minutes later, after they escape, the salesman runs through the vehicle’s electronics in the service area and turns the couple loose.

What’s wrong with this picture of couple driving off in their new car?

Completed sale, right? Commission earned, profit made. Mic drop. Over and out.

So, what’s wrong with the dealership’s performance – aside from the 90 minutes the couple spent in the F&I office (which shoppers say they hate about the car-buying experience)?

Your time is up. If you couldn’t answer the question, go to the back of the line for now.

In this story, nobody – salesman, sales manager, F&I guy, receptionist, night watchman – introduced the couple, who had just purchased a $38,000 vehicle, to someone from the service department. That department, where a most new-car dealerships make a high percentage of their profit, was closed, although it was early evening and the sales team still was working.

This is not a good thing, according to experts cited by Jim Leman at Ward’s Auto online.

Take the measure of your sales-to-service, new-customer handoff.

“The first place we stumble in establishing a long-term relationship with the customer is at vehicle delivery, the sales-to-service turnover,” consultant Dean Estep recently told Ward’s Auto.

“It isn’t done, period, at many dealerships, because the sales person’s pay is not tied to service-customer retention,” consultant Gary Edwards said to Ward’s. “Where sales and service staffs do this well, nine out of 10 new buyers come back to the dealership for that first important appointment.”

It seems so simple, doesn’t it? But there’s one big problem for dealerships, according to Edwards.

“We know that 55 percent of cars delivered today are delivered after the service department is already closed. That’s a problem for first-service success. If your dealership is going to be open to sell customers a vehicle, your service department should also be open to service customer’s vehicles.”

Introducing a new customer to the service department is not an option.

One solution is to make sure salespeople “take an active interest in working with the service department to get the car buyer in to meet the service department as soon as possible.”

“Requiring sales staff to participate in getting every new-vehicle purchaser introduced to the service department must be a condition of employment,” Edwards told Ward’s. “And the sales and service staffs must be held accountable for complying.”

“This drives the importance of dealers working with their sales and adviser teams to create the kind of delivery attitude and messaging that conveys the importance to the team and to the buyer,” said Estep.

Or not, as in the case of the couple above, which didn’t hear from the dealership until it was time for the vehicle’s 5,000-mile checkup. Months later. By email.

When you have questions, Santander Consumer USA has answers

Santander Consumer USA is ready to do business with you.

But we expect that you, like any good business owner or manager, may have several important questions about SCUSA funding programs before you jump in with both feet.

We’ll always do our best to answer your questions, providing you the information you need.

050615 IL When you have questions, Santander Consumer USA has answers (1)But based on our years of experience in auto lending – we’ve been in business since 1995 – here are some of the most frequently asked questions about SCUSA funding programs:

Q. What financing options are available?

A. We have multiple tiers of funding options that include financing solutions for customers with all types of credit, including nonprime customers with the most severely stressed credit histories.

Q. Is your scorecard primarily beacon score driven?

A. Our custom scorecard system is not powered by beacon scores. The scorecard takes into account a number of factors, but beacon scores do not drive the outcome. Credit analysts work each deal individually to determine its appropriate funding tier.

Q. What is your participation split?

A. The split varies by tier, so please check final approval for actual participation.

Q. Do you have a look/book?

A. Specifics vary from deal to deal, but dealers can monitor their deal history for general trends by logging onto our Dealer Extranet for which your sales representative will supply a login ID and password.

Q. How can I view the status of my deals?

A. Go to and enter your username and password.

Q. How do I get a username and password for the Dealer Extranet?

A. Please contact your Area Sales Manager. They will be able to get you up and running.

Of course, you need to be part of our franchise dealer network, which you can accomplish easily by requesting a visit from a representative who will contact you promptly. As soon as we have confirmed your application process is complete, you can start submitting contracts to us.


Take these seven key steps to funding with Santander Consumer USA

Our first funding guideline describing a “typical customer” says a lot about Santander Consumer USA: We are a full-spectrum lender, and will accept all applications.

That kind of assurance means a lot to the dealers who regularly do business with us.

“We want to tell you how much Santander has stepped up,” said one dealership. “You guys are a relationship bank, and we know that no matter what the scenario is that’s presented, there is someone we can contact and work with. In our business, that type of reassurance is priceless.”

042915 IL Take these seven key steps to funding with Santander Consumer USA_1

That being said, here are some key lending program guidelines, general rules determining what type of contract Santander Consumer USA will approve and purchase:

We prefer customers with one year at their current residence, and we may request a five-year history of residence on each buyer. Each customer must have a phone.

042915 IL Take these seven key steps to funding with Santander Consumer USA_2

We prefer a customer have one year with their current employer. Customers must be employed when they sign their contract(s) unless they are on a permanent fixed income. Generally, self-employed customers are acceptable if they can prove their income. And military customers may need to provide a copy of their current Leave and Earnings Statement, which indicates dates of service, a valid military identification and valid state driver’s license.

Minimum income required, Debt-to-Income / Payment-to-Income, Loan-to-Value (LTV) and amount financed and term all vary by program. Down payment is required for some programs.

A completed checklist, a buyer’s order and stipulations may be required for contract funding. Upon receipt of the completed contract package from the dealer, we will verify the application. All employment, residence and other applicable information on the application should be correct as of the day the papers were signed. All contracts must be simple interest (see video below).

Customers may be contacted to verify the information submitted in the deal documents.

The number requested references varies by tier.

No RVs, van conversions, vehicles made by defunct manufacturers or “Gray Market” vehicles (salvage or reconditioned titled vehicles) are acceptable.

For more details see the Santander Consumer USA underwriting guidelines on our website.

Then get ready to do some business and put customers in cars.

Smarter car shoppers (millennials) ‘healthy’ for industry, says

If millennials are right – that they’re smarter car shoppers than previous generations – car dealers have their work cut out for them.

But that’s good news, according to an executive with

“Since a smart car buyer is a quality car buyer, it all points to an optimistic and healthy future for the auto industry,” said Avi Steinlauf, CEO of, a car-shopping website.


Smarter car shoppers?

Millennials also see value in what dealers can bring to the car-buying process, Edmunds said. reached those conclusions after combining responses from a January survey involving 1,500 adults ages 18 and older and a March survey of 1,000 adults ages 18-34. Generation Y adults, millennials, were born from 1977-94, making them 21 to 38 years old now.

Remember when some said that generation wasn’t going to be interested in buying cars?

Now, it appears, millennials not only are interested in purchasing cars, but three-quarters of those surveyed by Edmunds believe they are better car shoppers than the older generation thanks to their “prolific” use of mobile technology during the car-buying process.

“But while millennials have a propensity toward using mobile devices during the car-shopping experience, the study also pointed out that this group still heavily values the in-dealership experience,” according to Edmunds. “The study found that 64 percent of millennials said that they prefer face-to-face interaction with dealers as opposed to remote communications … debunking the myth that millennials are making all of their car-buying decisions on their phones.”

Among other findings of the surveys:

  • Millennials skew toward used cars when they buy, with used comprising 78 percent of the group’s car purchases compared to 68 percent of adults age 35 and older.
  • Four of every five millennials, a whopping 80 percent, want their smartphone features integrated into their car, and 62 percent said they would pay more for a WiFi-connected vehicle.
  • Nearly three-quarters of millennials (72 percent) said they have considered buying a hybrid or electric vehicle, and 66 percent said they would consider buying a self-driving vehicle.
  • But technology features ranked behind price, fuel economy and performance in the age group.
  • About 70 percent of recent millennial car buyers said they contacted a dealer via text message during the shopping process, compared to just 43 percent of all other adults.

“Millennials today are informed car buyers,” said Steinlauf. “They’re making the most out of the volume of information available at their fingertips, and it’s helping them to make a smarter car purchase.”

Two-thirds of car buyers want to see financing options online before purchase

During a traditional car purchase, customers will select a vehicle and only afterward go to the F&I office to learn about their financing options. But a recent survey from leasing marketplace Swapalease suggests most buyers would like to reverse that process.

Two out of three American car buyers would like to see all their financing options online before visiting a dealership, according to the recent survey, which polled 2,500 drivers.



An increasing level of comfort using technology in the car-buying process has shifted buyer habits on car selection, financing and purchasing, the study suggests, with survey respondents showing a strong preference for completing at least some of the process online or on a mobile device.

“Technology is allowing customers to make more decisions online, and this improves the process for them,” said Scot Hall, Swapalease’s executive vice president of operations. “Dealers need to be prepared for these customers and make allowances for them.”

According to the Swapalease survey, 65.9 percent of respondents would like to see their financing options online to begin the car-buying process, and nearly half would like to secure their financing online before arriving at the dealership to complete a deal.

In terms of purchasing a vehicle, one-third of respondents (33.3 percent) said they would like to continue buying vehicles the traditional way from dealers, with no part of the process online, and about a third were okay with some combination of traditional and online process.

About 32 percent would like to buy cars completely online with no role for a dealership.

“The data show buyers are becoming more comfortable buying online,” Hall said. “The fact that people want to buy online is no surprise to me whatever. They’re used to Amazon and eBay, and are slowly coming to the conclusion that they can buy a car there, as well.”

Tesla’s direct-to-consumer model, which overcame strong dealer resistance to be signed into law recently in the state of New Jersey, speaks to the 32 percent. New Jersey is one of just a handful of states to allow direct-to-consumer purchases from auto manufacturers.

Philip Ryan