Archive for the ‘Finance & Insight’ Category

How dealers can minimize fees on deals with Santander Auto Finance

032415 IL How dealers can minimize fees on deals with Santander Auto FinanceOne of the great things about tax season at the auto dealership is the opportunity to increase sales. More customers + tax refunds = profit.

Obvious, right?

Sometimes, different fees can cut into the bottom line. When working with nonprime customers, avoiding fees may seem like an impossible feat. Discrepancies in everything from collateral to contracting can cost dealers additional time and money. However, Santander Auto Finance (SAF) has ways to minimize fees when working with your deals.

Here are nine steps in the right direction toward reducing fees:

  1. Structure deals with the lowest LTV possible

Low LTV deals have our lowest fees.

  1. Avoid high depreciating collateral

Honda, Toyota, Nissan, Infiniti, Lexus and Acura have higher recovery rates. Saturn, Kia, Suzuki, Mitsubishi, Oldsmobile, Plymouth, Pontiac, Hummer, Saab, Daewoo, Mercury and Isuzu vehicles have low recovery rates and may be subject to additional fees.

  1. Submit full deal structures

Submit deals that include collateral (vehicle make, model, mileage, and book), down payment, LTV and amount financed.

  1. Follow your approval terms

Contract your deals according to approval terms and financial section of your callback. Fees may be assessed if your contract does not exactly match your approval.

  1. Avoid expired approvals

Send complete funding packets with all documents to ensure that the contract moves quickly and smoothly through funding. Expired approvals may be rejected or subject to additional fees.

  1. Stay within state maximum interest rate limits

Contract using approved rate on callback. Rates contracted higher or lower than approved may be subject to re-contracting.

  1. Submit clean contracts

Clean contracts help prevent them from being “kicked” and thus avoid fees upon resubmission.

  1. Minimize exceptions

Exceptions to SAF’s underwriting and funding guidelines may result in additional fees. Work with your buyer to structure the best possible deal.

  1. Minimize rate buy down

Knowing the usury laws in your state will help you select the best collateral to structure a deal with lower fees.

If you have questions about structuring the best deal, contact your Area Sales Manager. You can also log in to the Dealer Extranet and take advantage of our Rehash Tool to adjust your structure and get real-time results.

Getting your deals through the Santander funding process

032515 IL Getting your deals through the Santander funding processTax season is near the end of its run, but there is no slowdown in sight for dealers. The customers just keep on coming.

Not only are dealers working hard, but so are auto lenders nationwide which are at capacity with contracts needing to be funded.

Santander Auto Finance (SAF) is no different.

In February alone, SAF funded more than 55,000 loans for our dealers and their customers.

“We’re accustomed to being busy this time of year,” explains Assistant Vice President of Funding Dina Vanea.  “This season, we’ve seen a record number of applications coming through our doors, and we still have about a month to go.”

The goal at SAF is to have deals funded and out the door in 24 hours. Yet, with so many contracts, there are bound to be some small hiccups here and there. Here are the top five mistakes that dealers make when submitting deals to funding.

We can’t get in touch with the applicant.

When funding receives a deal in-house, 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 we need to.

Submitting incomplete contract packages

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

The 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 value on 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 what the changes will mean.

Tax time is the right time to see your bottom line move to the top of the charts. So don’t let small mistakes keep you from reaching your goals.

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

What you need to know about how online research puts car shoppers in control

022315 IL What You Need to Know AboutAh, the good old days.

A bygone era when a car shopper would:

  • see a newspaper ad or TV commercial
  • visit the dealership to troll your lot for the right model and color
  • listen to the sales pitch (whether or not he/she wanted to)
  • suffer through price and trade-in negotiations
  • drive away with a new vehicle

Much of the process was under the control of the dealer and sales team.

Now, a lot happens before a prospect ever gets to your dealership – with that shopper taking advantage of at least some of the two-dozen available information categories, many beyond your control.

A recent study for, The digital influence: How online research puts auto shoppers in control, lays out 14 pages of insights into the current consumer shopping experience online and offline. Less than a third of those sources are controlled by the dealership, including five advertising channels. Almost half of the information sources are online with nine of 11 largely beyond your control.

“It’s clear that more than ever, consumers are in control of the process – they’re curating all the available information down to the sources they deem to be the most influential on their purchasing decisions,” according to the study conducted for by C+R Research.

Besides more traditional offline resources, such as advertising through various media, publications, recommendations by friends and family, auto shows and dealership visits, shoppers are drawing information from website advertising, dealership websites, expert review sites, social media, search engines, newspaper websites, online discussion boards, manufacturer websites, independent research sites, online vehicle-focused and non-vehicle-focused websites.

Dealerships and sales personnel fail to recognize the shift in the process at their own peril.

“On average, shoppers are influenced by six to seven different information sources but rely on just one or two resources as their main, go-to sources,” reported C+R. “They place the greatest weight on sources that they consider the most influential, helpful and trustworthy.”

The top two sources cited by shoppers, according to the study, are independent research sites such as, Kelley Blue Book (,, as well as search engines.

So what does this mean for dealerships and sales teams, whether they’re selling new or used vehicles?

“It’s only when you understand how consumers shop for cars – the sources they consult, when they consult those sources and why they favor certain sources over others – that you can reach car shoppers at the right time and attract them to your dealership,” C+R advised.

Still, not everything is out of your control. “Dealer interaction and post-purchase experiences matter,” search engine Google reported in its study, Digital Drives Auto Shopping. “Sixty-two percent of the vehicle owners [surveyed] said customer service could influence future purchases.”

Through thick and thin: A look at approvals with thin-file customers

021915 IL Through Thick and ThinMost times, being considered thin is a good thing.

Not so when it refers to your customers who want to purchase a vehicle.

Credit Karma says a thin file is “when there’s not enough information on your credit report to generate a score.” There could be several reasons why a customer doesn’t have enough credit. He or she may not have any lines of credit like mortgage, credit cards or loans.

The lenders you work with may have their own definitions of what makes a thin-file customer. Santander Auto Finance defines a thin file as having fewer than four lines of credit.

In a previous blog, Making the Most of Shoppers’ Tax Refunds, you see how the extra cash from tax refunds will bring more customers to your dealerships to buy vehicles. Some of them may be of the thin-file variety. They have cash but no credit. Even though getting an approval for a thin-file applicant may be challenging, it’s not impossible with SAF.  It’s all in how you structure the deal.

If you realize that your customers are a little light in the credit history department, you can still get a great call back from SAF by making the following adjustments to the deal structure. The ideal structure would consist of:

  • 12 percent or less PTI
  • $1,000 or more cash down or trade equity
  • 100 percent or less LTV

Why all of the work for what is seemingly a smaller group of applicants?

Thin-file applicants are considered somewhat of a risk for many lending institutions, However, SAF is willing to take a leap of faith to help dealers get their customers approved. The deal structure is the key.

SAF approvals are at their highest levels in years. Don’t let the fear of declines keep you from submitting a thin-file application. SAF also has enhanced other aspects of its credit policy. The blog, Santander Auto Finance ready to make it happen for tax season, talks about ways SAF has worked to create better callbacks and increased approvals.

Through thick and thin, SAF wants to help put deals together.

For more information on how to work your thin-file applicants, contact your Area Sales Manager.

‘Convergence’ expected to push vehicle sales to pre-recession levels in 2015

2015 Audi A3  Photo:

2015 Audi A3

The auto industry is poised to enjoy its best year in nearly a decade in 2015 with combined sales of new and used cars exceeding 55 million.

That total will comprise 38.4 million used vehicles and 17 million new vehicles, which translates into $1.2 trillion in revenue, according to TrueCar Inc., the online car buying and selling platform.

New car revenue alone is expected to reach $553 billion this year, a five percent increase over 2014.

“We see a convergence of favorable economic circumstances pushing auto demand up to pre-recession levels, including continued gains in the job market, the best consumer sentiment in eight years and low fuel prices,” said John Krafcik, president of TrueCar.

Those projected total sales would be the highest since 2007, according to CNW Market Research data. And sales of new cars would be highest since 2005, The Detroit News reported online.

The record for annual new vehicle sales is 17.4 million in 2000, an industry source reported.

Meanwhile, the average transaction price of new vehicles this year is expected to rise to a record $32,589, based on TrueCar data, with the average used car price rising to $16,678.

“Mass-market cars, pickups, utility vehicles and premium autos – the four ‘super segments’ – will grow,” TrueCar said, “though cars will cede market share as more consumers move to utilities and luxury.”

TrueCar expects luxury auto sales to lead the way with 9.8 percent segment growth, followed by non-luxury utility vehicles at 5 percent growth and pickups at 4.5 percent.

“The U.S. auto industry surprised many with a better-than-expected 2014, and closed on a high note, which bodes well for 2015,” said Michelle Krebs, senior analyst for Still, anticipated growth “won’t be at the pace we’ve seen in recent years,” she said.

The new and used car markets bottomed out in 2009 at about 46 million vehicles, including about 10.5 million new vehicles and 35.5 million used, according to data from CNW and The Detroit News.

How F&I managers can build trust with shoppers and why it’s important

011215 IL How F-I Managers Can Build Trust_fi-magazine.comThe customer doesn’t trust you.

So says Jenn Reid, senior director of product marketing at Equifax Automotive Services, who received that guidance when she began her career in finance and insurance at an auto dealership.

Reid and Rebecca Chernek, founder of Chernek Consulting, recently spoke with Automotive News about their experiences for a webinar called, “What I Wish I Knew When I Started in F&I.”

The reason the customer doesn’t trust you, Reid explained, is that he is making a large financial decision he does not make every day, and you as the F&I officer are trying to make the deal. Reid also warned that a customer who had a bad experience before will bring that baggage into your office.

So how do you combat consumer distrust?

Get the customer to like you. That’s the advice from Chernek, who provides F&I training to automotive, RV powersport and marine dealers. “You’ve got to know that people buy from people that they like,” she said. “So you want to reduce that sales resistance.”

And make sure the products you offer bring value to the customer, she said.

Although such advice seems simple, Reid said she constantly sees that it is not followed in the field:

“It’s really shocking. I found that making some simple adjustments paid great dividends on my PVR [profit per vehicle retailed]. Getting out of the office and establishing that relationship up front with the customer really helped lower the defensiveness they had when they came into the office.”

Reid also offered two tips that she learned “the hard way”:

  1. Read the contract from start to finish to make sure you understand what your customer is signing. Not only will you be able to answer any of your customer’s questions, but you can also find additional value about the product you are selling.
  2. Get stipulations clear before the deal goes to the underwriter for funding.

In what Reid calls one of her “aha moments,” she learned that just because you print a contract from a computer, doesn’t mean a lender is going to accept it. In one experience Reid shared, she printed 34 contracts for GM, only to have 30 returned because they were not printed clearly. Practice printing a contract when you don’t have a live deal in front of you, she now advises.

“By getting involved in the deals early on, setting realistic expectations with the customers on the delivery, and double-checking to ensure that everything was accurate,” Reid said, “we were able to help get the dealership paid faster and improve customer satisfaction, which allowed me to focus on the next deal and have a total view of the customer.”

 – Larissa Padden

How franchised dealers benefit consumers, communities, automakers

Franchise dealerThe rise of Tesla Motors and its model of direct-to-consumer sales is animating a new debate over the value of traditional franchised vehicle-sales operations over stores run by the automakers themselves.

And the National Automotive Dealers Association (NADA) isn’t waiting for the issue to resolve itself judging from a detailed report from consulting firm Maryann Keller & Associates.

In the 34-page report titled, “Consumer Benefits of the Dealer Franchise System,” Keller and Kenneth Elias identify strengths of the current dealership system, which includes benefits to both consumers and manufacturers, and contrasts that system with a factory-owned-dealer model.

In their executive summary, the consultants write of the overall positive effect of the current model:

“The separation of the retail sale and service functions apart from the design and production of vehicles enables free and open competition among different brands as well as among dealers of the same brand. This translates into a marketplace where national, regional, and local factors are permitted to influence transaction prices for new and used vehicles as well as for service.”

“Experiments in factory ownership in the United States and elsewhere reveal the weaknesses in the direct sales model,” the consultants wrote, referencing previous efforts by Ford and General Motors involving factory-direct sales online or through factory-owned and operated retail outlets.

Here are the benefits to consumers of an independent franchise system Keller and Elias write report:

Franchise networks facilitate competition in vehicle pricing and drive consumer prices down.

Franchise dealers provide access to financing at competitive rates.

Dealers compete against each other and independent repair provides for service business.

Franchised dealers perform warranty and recall work on behalf of automakers.

Dealers serve as advocates between the customer and the factory.

Dealers offer market values on trades and provide liquidity in the wholesale marketplace.

NADA additionally suggests that local franchised dealers simplify an otherwise complex car-buying experience and create good-paying local jobs and significant local tax revenue.

“The current franchised new-car dealer model has benefited consumers, manufacturers and local communities for nearly a century,” said NADA on its “Get the Facts” webpage, which includes a video, infographic and other resources. “It is supported by both dealers and factories as the best and most efficient way to buy, sell service and finance cars in the marketplace.”

Nearly 18,000 franchised dealers currently operate in the United States, and Santander Consumer USA through Santander Auto Finance works with more than 14,000.

Dealertrack anticipates more growth in e-contracting for vehicle sales, leases

SantanderThe benefits of e-contracting can include a positive customer experience, increased confidence that the contract will be funded, and less lead time required to complete the sale, according to the NADA. Perhaps the most important benefit is that the platforms often enable the OEM to realize the vehicle sale or lease sooner.

While e-contracts are widely used and appreciated today, that wasn’t always the case.

Dealertrack Technologies of Lake Success, N.Y., is one of e-contracting’s most prominent success stories, operating what it says is the largest online credit application network in the country.

Dealertrack and RouteOne are Santander Consumer USA’s principal e-contract providers, enabling the auto finance company to support dealers by funding purchases quicker.

When Dealertrack launched the auto industry’s first e-contracting solution in 2002, skeptics worried that a paperless finance system wouldn’t fly. Dealers worried that digital signatures on contracts would not be accepted by either banks or customers.  But, those fears have proven groundless, and now e-contracting is an increasingly important tool for dealers.

Dealertrack has penetration in all 50 states for both lease and retail contracts, according to the company. The company currently has 19 participating lenders, with several more in the process of being implemented, according to Michael Collins, Dealertrack’s vice president of lender solutions.

“In regards to how Dealertrack e-contracting is growing, we continue to hear from dealers and lenders that they are looking to incorporate electronic contracting into their process,” said Collins.

In the days before e-contracting, it could take as long as five or ten days to get a deal funded. With e-contracting, that time has been slashed to as little as a few hours.

In a recent customer survey of e contracting subscribers, 93 percent of dealers who use Dealertrack’s service said they would recommend the use of e-contracting to other dealers.

The company’s vice president said dealers are seeing the product’s value – faster funding, reduced re-contracting and higher CSI scores from customers. About 98 percent of survey respondents that use e-contracting plan to continue using the technology going forward.

“We have seen from the utilization data that there is an uptick in the use of e-contracting,” said Collins. “Dealers and lender partners committed to the process and technology, are seeing the benefits.”

Dealertrack does not comment on volume or amounts of loans issued, said a company spokesperson.

– Cody Lyon


GreenLight Remarketing: Foreign exchange, inventory essentials, more …

SantanderGreenLight Remarketing, Issue 21, is brought to you by the premier magazine about innovative automotive remarketing and Santander Consumer USA. This edition features: Foreign sales of used vehicles, an interview with ADESA’s new chief executive, social media impact on remarketing and more …

Foreign exchange

Wholesale prices in the U.S. are making used vehicles an attractive buy – especially to foreign buyers. More than half of used vehicles sold to buyers abroad head to Mexico and Canada, but there is a growing market in countries such as Brazil, Russia, India and China. With the right knowledge, American sellers can take advantage of this lucrative and growing market. READ MORE

Inventory essentials

Inventory management systems have been essential tools since remarketing went digital, and the recent economic slump only highlighted their importance to dealers. The systems help dealers keep their wheels turning by providing market intelligence and enhanced organizational tools. And the latest developments take inventory management from the desktop to the palm of your hand. READ MORE

Executive action

How is the head of one of the largest auto auction services in the country looking at the year ahead? GreenLight Remarketing had an opportunity to ask Stéphane St-Hilaire, who took the reins as president and CEO at ADESA on Jan. 6, where he plans to lead the company. St-Hilaire talked about mobile apps, condition reporting and more in this exclusive interview. READ MORE

Friend, follow… sell?

Effective use of social media such as Facebook and Twitter is relatively rare in remarketing, but that may be changing. Signs point to a bigger role in the auction experience with developing technologies leading to new uses for social media – although it won’t happen overnight. READ MORE

And more …

Read our listings of Active Auctions, a note from Brent Huisman, SVP of Asset Remarketing at Santander Consumer USA Inc., and a report on pricing from ADESA’s Tom Kontos. Download your issue of GreenLight Remarketing and keep up with remarketing trends and opportunities.



Tax season is here

While many will be filing taxes and looking forward to a refund, we know that dealers count on the first quarter and tax season to finance more customers. Quick funding is key in making that happen. Funding deals with Santander Auto Finance normally occurs within 24 hours, as long as funding packets are complete and error free. The main reasons for delays in funding include:

  • Incomplete packets
  • Blank entries on the contract
  • Not sending in the approval letter on a new deal

We offer many online resources to assist dealers in providing the necessary documents for a quick trip through funding. Yes, with the hustle and bustle that accompanies funding during tax season, Santander Auto Finance has some additional information on what paperwork can be accepted from your customers.