There’s no doubt that tax season at the dealership is a welcome invasion of selling potential.
But with the increase in volume, obstacles are sure to pop up.
Never fear. Your Santander Consumer USA area sales manager (ASM) has the answers to any questions that may arise when trying to close a deal. Whether it’s assistance in structuring a deal or advising on the best inventory, your ASM is there.
With the knowledgeable, training and experience in putting deals together, your ASM can guide you through the toughest of deals. And the right input can lead to fewer mistakes and faster funding.
Don’t let unanswered questions keep you from making the sale.
Our sales force can be a resource for you during this busy season.
Car shopping often begins online, so the earlier dealers can connect with prospective buyers, the better.
That initial contact, done right, can help develop a relationship of trust that will pay off down the line. In particular, it is useful for dealers to get financing terms in front of buyers as soon as possible.
Otherwise, buyers can arrive at the dealership with rates and terms they found online or saw on TV, and these deals may not be suited for that customer or the dealer’s market. That causes headaches for F&I managers and can damage the customer relationship on top of it.
Several companies are now equipping dealers to make productive contact with buyers early by allowing extensive customization of online vehicle detail pages (VDP), often the first point of contact with customers. VDP pageviews and time spent on detail pages are two of the top four sales predictors, according to automotive marketing specialists CDK Digital Marketing.
“The vehicle detail page is the most visited page in all of automotive,” said Mike Burgiss, founder and vice president of MakeMyDeal, a Cox Automotive company. “And vehicle detail pages usually ask a customer to go first. What we believe is a dealer should go first – that puts the customer at ease. They [should] say the price, financing, cash down, monthly payment, all up front.”
Up to 90 percent of car buyers are payment buyers, according to Burgiss, so putting the exact payment terms in front of customers early is an important first step dealers should take to begin sales relationships “in a happy place.” Dealers also should list relevant terms and conditions in a transparent, straightforward manner in order to build trust, Burgiss said.
Dealer e-Process also emphasizes vehicle detail pages in starting customers on the right path.
“Leads and sales to shoppers visiting the dealer’s website are closely correlated to VDP views,” said Dennis Galbraith, chief marketing officer for Dealer e-Process.
Galbraith’s company offers complete VDP builds, with sophisticated analytics and marketing tools, as well as soft credit report pulls, which do not require Social Security numbers or affect visitors’ credit ratings, to get a better idea of what kind of deal may be appropriate.
Analytics and pageviews often are overlooked by dealers, or looked at simplistically, Galbraith said.
“It is one thing to obtain a great deal of inventory exposure,” he said. “But if 80 percent of the VDP views are for 20 percent of the inventory, then marketing adjustments must be made.”
Where Dealer e-Process focuses on hard data, MakeMyDeal emphasizes customer comfort.
“Let them start the deal in their own home,” Burgiss said. “They have a chance to tell their car-buying story – perhaps it’s a couple with a baby due soon that needs a larger vehicle, for example. Build up the relationship. This is still a relationship business, and this accelerates the purchase.”
Being able to instantly verify customer information such as employment record and income sometimes can make the difference between closing a deal and losing the customer, according to Equifax.
The reason is that sending customers home to retrieve their information greatly increases the chance that they won’t be back, the credit reporting agency said.
But dealers are faced with a difficult choice, because it’s also the case, according to Equifax research, that nearly 25 percent of borrowers purposely or inadvertently inflate their stated income on auto finance applications by 15 percent or more. That increases the possibility of delinquencies and charge-offs for dealers and their lender partners, such as Santander Auto Finance.
Equifax’s proposed solution to this dilemma is The Work Number, a proprietary database of more than 248 million employer-direct payroll records. Currently, the credit agency provides income and employment information to banks, mortgage companies, auto dealerships and other commercial entities when authorized by the consumer in compliance with the Fair Credit Reporting Act.
In the future, more information may be added to the database, as more data is collected on customers.
Employers such as Home Depot, the IRS, Gap Inc. and many others provide employment information for Equifax’s verification systems. That allows automotive dealers with a permissible purpose and consumer consent to verify their consumers’ reported income and employment.
Verifying this information helps the dealer clear up common lender stipulations generated during the auto financing process and ensures accurate information on loan applications. This removes roadblocks for the 75 percent of consumers that Equifax estimates accurately report their income on applications.
Equifax recently partnered with Credit Bureau Connection, a company that provides web-based solutions software to dealers, allowing their clients access to The Work Number’s data.
“We understand the odds of a buyer returning to complete a vehicle purchase decrease substantially if they are forced to leave the dealership to obtain necessary income and employment proof,” said Mike Green, president and CEO of Credit Bureau Connection, in a press release. “Having the ability to satisfy this requirement while the buyer is in the buying mode is vital to a dealership’s closing ratio.”
Having the ability to instantly verify information also should help dealers make their own decisions about the customer standing in front of them.
Dealers buying vehicles at Manheim auctions can rest easier.
That’s because the Pennsylvania-based auction company recently introduced a product that allows dealers to return vehicles to the auction they were bought from for a full refund, including buyer’s fees.
The product, known as DealShield, gives buyers of most vehicles sold at Manheim auctions the opportunity to return vehicles for any reason. DealShield operates as a sister company to Manheim.
“The mission was to improve the confidence in the marketplace,” says Stu Dressler, DealShield’s interim COO. “What product would provide buyers with confidence on the lanes?”
The idea was hatched in 2011 by DealShield founder Matt Trapp, who observed that dealers, unlike retail consumers, are often required to act fast and make quick decisions when buying at auction.
The program is a way Manheim is trying to guarantee the value of the cars on their lanes in a business where, historically, buyers have “bought with their eyes” and the notion of “buyer beware” applied.
The auction company began testing the service at its Statesville, NC, facility in 2012 and rolled it out nationwide in September.
DealShield covers up to 97 percent of vehicles crossing the lanes at Manheim locations, the company says. Vehicles that don’t qualify tend to be higher risk vehicles that would be out- of-the-norm purchases for most dealers anyway, such as salvage vehicles, pre-1995 models, or cars with extremely high mileage or price tags.
Buyers can opt for coverage for individual vehicles or sign onto the DealShield360° program, which provides purchase guarantees on all vehicles and carries no up-front charge.
For more on this story, see Greenlight Remarketing magazine, available at some auctions, or the online PDF at the Inside Lane blog.
The world of auto auctions, much like that of car dealerships, is a hotbed of competition. And that’s not likely to change.
But over the past few years, the auction industry has experienced a watershed moment, especially among the independently owned businesses that now face unprecedented competition from larger corporations.
As owners of the independents have gotten older, an entire generation of auction operators is starting to step back and is taking on less day-to-day work. Some owners are even ready to pass the mantle to the next generation.
Enter Auction Academy, based in Franklin, TN.
Here, the younger generation can learn the business firsthand from top experts in the field, and learn the challenges colleagues from other parts of the country are facing – and perhaps solving – as well.
An education at Auction Academy doesn’t come cheap, but the experience it offers can’t be obtained anywhere else.
Students sign on for eight sessions over the course of two years. Each session takes the students to a different city for a few days to learn how auctions are run there, as well as get exposure to ancillary industries such auction insurance companies.
The most valuable aspect of the academy may the way it develops camaraderie in an intensely competitive space.
Auction Academy President Richard Curtis says of his students:
“Take them out of an insular market and throw them in with their peers or people like them, and you start to see the exchanges of ideas, real bonding, and networking.”
The inaugural academy class is about to graduate, while the second and third classes continue to meet.
For more on this story, see Greenlight Remarketing magazine, available at some auctions, or the online PDF at the Inside Lane blog. And for more information on the academy visit its website.
When most people talk about Sunday service, very rarely are they referring to a trip to the service center of their favorite dealership. According to an article in Automotive News, a few dealerships across the country have seen the light and are opening their doors for additional weekend business.
Vista BMW Pompano started Sunday service center hours about 18 months ago in its suburban Miami store. According to Assistant Store Manager Frank De Varona, the new option is an answered prayer for some of his customers.
“Many customers prefer the convenience of dropping off their cars on a Sunday for an oil change or other light maintenance,” Frank De Varona, assistant store manager at Vista BMW Pompano, said in the Automotive News article.
“In the event they have a battery or a tire that needs to be replaced, we are here to do it, and they don’t have to wait until Monday.”
Common practice among these stores is to offer just the basics, saving major repairs for regular business hours, Monday through Friday. Customers also are asked to make appointments due to the shortened hours, usually between 10 a.m. until 3 p.m.
While Vista BMW is reaping the benefits of the added business, dealerships offering Sunday service are still few and far between, according to Automotive News.
In 2012, the last time this was reported, The National Automobile Dealers Association said that only 7 percent of the nation’s new car dealers opened their service centers on Sunday. More than half of those dealerships are considered high-volume stores, moving more than 1900 units a year.
The majority of dealerships setting the trend are in the Atlantic Coast region.
Despite the fact that Sunday service center hours haven’t reached biblical proportions, Vista BMW says they have drummed up a faithful following.
“It is really starting to catch on, going pretty good,” De Varona told Automotive News. “This is something we’ll stick with. The business is there.”
So if you’re dealership is looking for ways build a loyal congregation of customers, you may not want to rest on the Seventh Day. Instead, grant your customers a little grace and provide services on Sunday.
If any dealer doubted that the Internet can have a significant impact on vehicle sales, let us be among those to dispel that doubt.
Not only are more and more shoppers getting information online, but positive online reviews are driving them to dealer websites, and those shoppers also are more likely to convert to actual leads.
“The Internet continues to drive traffic to used car sellers,” said Art Spinella of CNW Research. “In April, the number of shoppers that went to a dealership because of something seen on the Internet jumped 116 percent versus a year ago and nearly 28 percent versus March of this year.”
And a recent study from DealerRater and Dataium showed that Internet shoppers were 90 percent more likely to visit a dealer website and 5.3 times more likely to convert to a lead with a good online rating (3.5 of 5 stars or higher at DealerRater), according to a report at AutoRemarketing.com.
Shoppers reacted even stronger to dealers that provided employee profiles online as they were more than 12 times as likely to submit a lead to dealers, reported DealerRater, a car dealer review website.
“The study validates what we’ve advised dealers for years,” said Gary Tucker, DealerRater’s chief executive, in the story at AutoRemarketing.com. “Dealer reviews have a clear impact on the behavior of today’s auto shoppers. And the fact that automobile shoppers are more engaged … reveals that consumers are looking for more transparency as they research dealers.”
That transparency comes in the form of “detailed reviews that provide a clear idea of what to expect from the car-buying process” when comparing multiple dealerships, Tucker said.
“Online reviews have already helped consumers in the car-buying process, but now we’re looking at the other side of the relationship by showing how dealers can benefit from reviews,” Eric Brown of Dataium told AutoRemarketing. “The numbers speak for themselves: Dealers that provide great customer service are receiving positive online reviews that, in turn, attract and convert more shoppers.”
While the study was based on Dataium’s analysis of dealership website traffic and DealerRater review profiles for more than 1,000 dealers, it seems to hold useful insight for all dealers.
Dealers that aren’t effectively using the Internet to attract shoppers are leaving sales on the table.
With technology leading the way, lenders can now tap into more nontraditional forms of credit data that can shed light on someone’s debt management skills. Today, there are more details available about a customer’s spending and payment habits than just what is on a credit report. That’s good news for consumers and auto dealers. Why? Because lenders become more confident when they know more about a consumer’s spending.
Nontraditional data “expands the universe of potential borrowers for lenders,” according to Peter Turek, vice president of TransUnion’s automotive division.
Turek says you can get a clearer picture of a person’s credit history by using utility payment information like:
Cell phone bills
Lou Loquasto with Equifax believes that reviewing alternative credit is a must because someone may still be a good risk even if he or she doesn’t have a credit score.
“A lot of customers out there don’t have credit scores,” says Loquasto. “Maybe some of the younger folks are going longer without opening up traditional lines of credit,” he suggests.
Low credit scores don’t tell the entire story either.
Experian Automotive reports that subprime loans have climbed to more than 36 percent of all outstanding loans in the fourth quarter. While not attractive, low scores on a credit report are just a snapshot of the full picture. Some customers may have subprime credit ratings, but are not subprime individuals.
“After what we’ve seen with the recession, a lot of people fell on hard times,” says Dennis Carlson, an Equifax deputy chief economist. “Bad things happen to good people, and a lot of it is out of their control.”
One solution – lenders should see where a customer’s credit is going rather than where it’s been.
“We can show that trended data – where 24 months ago they were at 580, 12 months ago they were at 640, and now they’re a 690. That guy is trending in the right direction,” Loquasto says.
A lender like Santander Consumer USA, which provides full-spectrum auto financing, gives dealers more options for their credit-challenged customers.
In today’s economy, options are what customers and dealers need.
Automobile dealers who work with Santander Consumer USA Inc. already know the value of the Dealer Extranet – a useful tool for funding loans, managing applications, and working referrals.
But your feedback helped us understand that it could be improved as a dealer portal.
So that’s exactly what we did in the new version of the Dealer Extranet that we’ve just launched. It is loaded with improved features that will help dealers get more value for their businesses.
The redesign tailors the experience more toward how dealers will most often interact with the Extranet. It also introduces some new features that make doing business with us more transparent.
Once you’ve logged in, you’ll find the following upgrades to the Extranet:
Updated Grid View—get all your app details and manage your CIT in one, easy-to-read display
Improved Smart/Search Filter—to help you find what you’re looking for faster
Improved System Performance and Response Time
Newly designed App Details Panel—organizes all the applicant and deal status information for you, allowing you to work the deal without having to navigate off the page to look up the applicant’s personal information or vehicle details at any time
New Dealer Quick Look Section—added to the Dashboard; for when you just need a snapshot of what your contracts in-house and app status’ look like
Improved Dealer Performance Summary—for when you want an overall view of your dealerships performance for a specified date range
New Blog Section—added to the Dashboard to pass along information from the SCUSA Dealer Blog.
Improved Date Picker—allows a wide date range to be selected
Pagination and extended display of apps
Addition of Customized Filters for all columns
Overall, we hope you will find the updated site extremely clean, easy to navigate and with data displays that are in an easy-to-read format.
Please use the Feedback tab in the Dealer Extranet to provide us your valued feedback, so we can continue to improve the site for you and other dealers.
When it comes to boosting profits at the dealership, it’s all in the presentation.
“We offer customers a menu of packages, so they can pick and choose whatever they want,” says Alla Tripolsky, finance director at Osborn Automotive. The Lakewood, Colo., dealership starts by enticing car buyers with maintenance products. “If the customer prepays for oil changes, they get a discount. It certainly helps with customer retention,” she says, because customers who return for maintenance establish a relationship with the dealership.
Last November, the dealership sold 108 cars, 68% of which were tied to maintenance products. “We guarantee ourselves that 74 of those 108 customers will come back,” she says.
“If we can get them in for an oil change, at some point theyhave to change that air filter,” she says. “They’ll have to change those tires.”
The maintenance offerings often have a trickle-down effect. If a customer has a particularly large bill or needs a new car, the salesperson can educate the customer about the dealership’s financing programs. Plus, the maintenance coverage is financed into the loan and has an added benefit of facilitating warranty sales. “We usually couple the maintenance products with extended service contracts, which help sell the service product,” Tripolsky says.
Osborn Automotive’s integrated sales and service process has paid off: half of the dealership’s business comes from repeat customers and referrals, she says.
ORDERING OFF THE MENU
Saturn of Lancaster uses the menu approach, too. Rather than just quoting a payment, the Lancaster, Pa., dealership relies on its salespeople to present finance and insurance options. “If you have a menu in front of [customers], you can talk them through it,” says John Anastos, the dealership’s F&I manager. “When a customer sees a description of what they get, the process is easier.”
The dealership, which sells about 90 cars per month, utilizes technology provider DealerTrack to create personalized menus for each customer. “You can show four options, you can show three options, multiple terms, and multiple interest rates,” Anastos says. “You can make it exactly what the customer is looking for.”
Since implementing the system in 2005, profits from ancillary sales have shot up 60%, he says.
Meanwhile, Osborn Automotive uses a similar software solution called MenuVantage. “It’s customizable, and it allows us to present 100% of the products to 100% of the customers,” Tripolsky says.
MINDING THE GAP
Among specific products, guaranteed asset protection (GAP) is one of the most profitable for dealers, especially as loan terms lengthen.
“I’m seeing more 72-month as opposed to 60-month loans, so due to that, GAP insurance is becoming more popular,” says Orlando Cadiz, finance manager at Phoenix Motor Co. The longer terms increase chances that cars may be totaled.
“It has a huge value to customers, and it’s a very easy sell,” Anastos says. “It’s not an expensive policy. Selling someone a $400 investment on a $30,000 loan is not too difficult.”
Plus, the longer the loan term, the higher the price for GAP coverage.
Some states restrict the amount that dealers can mark up the GAP coverage they sell, but not Pennsylvania, Anastos says. The average markup could be anywhere from 50% to 100%.