Adding up the reasons Santander Consumer will be good for your business in 2018

We will be “purpose driven.”

So said a Santander Consumer USA (SC) senior vice president of sales looking at 2018.

That means SC is doing everything possible to boost your results, which includes refreshing, even revamping, our programs to ensure that dealers who work with us see the difference.

We want your store’s business and will work harder than ever to earn it this year.

011118 IL Adding up the reasons Santander Consumer will be good for your business in 2018That includes better pricing across the credit spectrum with our new scorecard, and being “proactive to market conditions and the ever-growing needs of our dealer partners.”

Other program highlights are:

  • Fewer stips making it easier to submit more packages to SC.
  • Greater flexibility on financing terms.
  • More-efficient funding
  • Increased participation.
  • Higher LTV/PTI allowances with higher FICOs.
  • The opportunity for more backend in some tiers.
  • Decreasing fees on better-quality packages in most cases.

The program also includes access 24/7 to our Dealer Extranet and powerful Rehash Tool, and the opportunity to participate in SC’s direct mail program and revamped RoadLoans program.

And our sales team is empowered to work with dealers to make things happen.

Another executive called the approach “focused aggression,” with the aim of helping you build your business, because now more than ever, with new-vehicle sales plateauing and putting greater emphasis on used-vehicle sales, what’s good for our dealers is good for Santander Consumer USA.

“We’re lightening the load on our dealers,” said the sales VP. “If we don’t need it, we won’t ask. But when we ask, there’s a purpose.”

Our team of area sales managers (and regional sales managers) are knowledgeable auto-lending professionals who can help you navigate the process of securing more deals with SC across the credit spectrum, whether that involves assisting with setting up an account on the Dealer Extranet, explaining various other programs we provide or keeping an application on track with a buyer.

If you’re not getting the results you want, just ask your ASM how we can help accelerate your business. All we want is a chance to compete for more loan packages.

“Purpose driven” is especially relevant to your business when that purpose is you.

Customer’s ‘Road Ahead’ on redesigned SC website – and what’s in it for dealers

Am I in the right place?

Visitors to the Santander Consumer USA (SC) website could be forgiven for wondering when they arrive the first time at the redesigned homepage.

“The Road Ahead | Your Journey to Car Ownership” aims to provide millions of customers, the largest user group on the website, and other users a more straightforward experience, whether they have been with us for a long time or have just financed a new or used vehicle with us.

010918 IL Customer’s ‘Road Ahead’ on redesigned SC website – and what’s in it for dealers_IMAGE

Yet it still provides everything dealers need to do business with us in one convenient place, including the Extranet login, dealer agreement, dealer contact information, sales contact, FAQ and testimonials.

“Our number one goal in redesigning this website is to improve customer experience,” said Patrick Daly, SC’s director of digital strategy, who played a key role in the redesign.

“We didn’t set out to make a prettier version, but instead focused on clear design, providing customers with the information they’re seeking and representing our corporate values – Simple, Personal, Fair,” he explained. “The new site enables us to react to customer feedback quicker, so I’m looking forward to how we continue to refine our resources to set ourselves apart as one of the best auto lenders.”

One of the most attractive new features of the website is our Learning Center, which comprises finance education resources and courses on subjects from managing credit to maintaining financial health. Content includes useful articles, videos, tools, as well as a dealer locator.

Finance education courses cover broad subject areas such as “Managing Credit” and “Financial Health.” For example, through managing credit courses, visitors can:

  • Learn about different finance options and how monthly payments are calculated.
  • Learn the importance of a credit score, factors that impact it, and ways to protect your credit.
  • Investigate causes of consumer fraud and identity theft, and identify ways to protect yourself.
  • Find out how much interest you can save by using the avalanche payment method compared to the snowball method.

The redesign should provide customers a smoother trip down the road to car ownership, building relationships and loyalty that will benefit dealers and SC, alike, when those customers are planning to purchase their next car, truck or SUV from one of our dealer partners.

Daly called the redesign “an exciting milestone.”

Auto industry’s 2017 sales decline a glimpse of the future?

The year 2017 ended on a down note after several strong new-car sales months that rescued the auto industry from a disappointing year.

December sales were lower year-over-year, although all but one automaker beat Kelley Blue Book’s monthly estimate and the industry scored its biggest sales month of the year. At just over 1.6 million, December sales fell well short of the results needed to equal last year.

Still, 2017 was the fourth-best year ever, according to CoxAutomotive, boosted by the strength of September and November results that beat 2016 after eight months in a row of lower sales. In the end, sales fell more than 300,000 units shy of the 2016 record of 17.55 million.

Ford F-Series lead a winner with higher sales in December.

Ford F-Series a winner with higher sales in December.

The month’s sales also ensured 2017 would be the first down year since the Great Recession in 2009, and, unfortunately, some analysts suggest it’s the start of a longer slide.

“Most major automakers … look ahead to weaker sales in 2018 that will test pricing discipline in an industry where consumer discounts are already at elevated levels,” according to a Reuters report.

The National Automobile Dealers Association has predicted sales of 16.7 million this year, while AutoTrader.com and Kelley Blue Book anticipate sales of 16.6 million. Either way, that would represent a slide of about 800,000 vehicles from the 2016 high-water mark and around a half-million from 2017.

“The market is pretty saturated right now,” Edmunds.com’s Jessica Caldwell told The New York Times.

Major factors affecting new-vehicle vehicle sales in 2018 are expected to be a mixed bag. On the plus side of the ledger are:

Tax reform – “Many consumers will see their take-home pay rise” – GM chief economist

Buying incentives – Automakers will offer generous incentives to boost sales – J.D. Power

Consumer confidence – “Consumers’ expectations remain at historically strong levels, suggesting economic growth will continue well into 2018” – The Conference Board

Economic growth – The broad economy will continue to grow – GM chief economist

Unemployment rate – “Essentially near full employment” – Cox Automotive

One of the biggest worries is that pent-up consumer demand for new vehicles is winding down, according to BMI Research, after its eight-year winning streak, due at least in part to improved quality that is causing many Americans to keep their cars longer.

“People who wanted to buy new cars have already bought them,” Eddie Alterman, editor-in-chief of Car and Driver magazine recently told ABC News.

Other possible negative factors include:

Vehicle prices – “Average transaction prices closed the year … [at] a record high” – Kelley Blue Book

Interest rates – Income gains from tax reform will be offset by rising rates – GM chief economist

Gasoline prices – Prices in 2018 will be the highest since 2014, although they won’t come anywhere close to near-record prices – GasBuddy

Suggesting that 2018 would bring “robust” sales, Mark Scarpelli, National Automobile Dealers Association chairman, said: “Every dealer in America, myself included would be thrilled with a seasonally adjusted annualized rate of above 16 million. Because it means that, one, the market is stable, and two, that demand is still healthy … particularly for light trucks, SUVs and Crossovers.”

And now we just have 12 months to see what really happens.

The eyes have it: Here are 10 of our dealers’ most popular blog posts of 2017

Dealers like visuals.

If there ever was proof of this, it would be the Santander Consumer USA dealer blog, Inside Lane.

Nine of the top 10 destinations for visitors to the Inside Lane blog in 2017 feature infographics, video or graphic-like list.

The results might give dealers some idea of what their competitors are thinking about going into 2018.

110717 IL Personal touch important, even though car shoppers want digital optionsHere’s where to find the top-10 blogs and a little about each:

  1. Inside Lane homepage (frequently features an infographic) – The home page recently featured an infographic “Happy Holidays | 15 ways to light up more deals in December and beyond,” which you can find here. While holiday-themed, the information is evergreen.
  1. Launching pad for success … (infographic) which features “The Right Stuff | Six reminders to make this your best sales season yet!” that applies any time of the year.
  1. Top five uses of the Dealer Extranet (video) provides information on one of the most powerful tools in a dealer’s arsenal when working with Santander Consumer USA (SC).
  1. Eureka! The refunds are coming (infographic) – This was last year’s featured infographic about the 2017 tax season and “How Santander Consumer USA can help you mine the mother lode.” The information it provides still may be useful for tax season 2018.
  1. SC Dealer Advocacy group looks for win-win solutions describes the mission and customer-focus of the support group and what that means to dealerships – someone in their corner.
  1. Play it smart, dealers (infographic) – This is a golden oldie, and still is relevant, though posted in February 2016. The graphic suggests “8 ways to reduce fees on your deals” with SC.
  1. When you want to drive business (infographic) takes a look at the revamped RoadLoans lead-exchange program that rolled out last year and how it could affect your business.
  1. These two words have the power to remake your business (top-10 list) and Putting the power of the extranet to work for your dealership – More useful information about the SC Dealer Extranet, including “10 tips for using the Extranet” featured in our fall dealer-email campaign.
  1. When you want to boost results (infographic) offers a glimpse of SC’s Targeted Direct Mail Program with features that drive potential customers to your store.
  1. Dig for tax-season gold by harnessing the power of the Rehash Tool (video) is as timely now entering tax season as it was in January 2017 by offering dealers the “opportunity to boost their results during tax rush by digging for the right nuggets to make a deal.”

Of course, if there is ever a question about how SC can help you build your business in 2018, the best place to start is with your area sales manager or by contacting our sales department.

They are purpose-driven to support our dealer customers.

Used- and new-car margins continue under pressure but dealers optimistic

The pressure for car dealerships is “relentless.”

New-car sellers, used-car sellers, franchised dealer or independent, all are seeing their margins pinched in a competitive marketplace.

“Despite a healthy new-vehicle sales environment, dealers continue to feel pressure to lower prices,” according to results of a survey of nearly more than 900 dealers by Cox Automotive.

Cox reported that both new- and used-car dealers are feeling pressure to lower prices, scoring the concern at 67 on a scale of 0-100, or more than average. And, yet, dealers remain basically optimistic about the near-term future, Cox said.

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“Although price pressures and costs are working against them, we continue to be encouraged by the fact that dealers are optimistic about market prospects,” said Jonathan Smoke, Cox’s chief economist.

“Both franchise and independent dealers expect a stronger market in the first quarter of 2018,” said Cox in its “Key Takeaways” from the fourth-quarter survey.

And, yes, it could have been much different.

“Prices of used cars were expected to plummet starting in 2017 as millions of vehicle leases expired and people who bought during the financial crisis exchanged their old rides for new ones,” The Wall Street Journal reported recently. “But the predicted price collapse hasn’t happened.”

Indeed, franchise dealers rate the current used-vehicle sales environment as 67 (above average) on the 100-point scale, while independent dealers rate the sales environment 51 of 100 or about average.

Still, there are challenges on used cars, where most dealers earn a higher profit margin.

“Independents [in particular] are having to deal with the scarcity of five- to eight-year-old vehicles by shifting to what’s most available: less than four-year-old vehicles,” said Smoke. “By shifting to newer vehicles, they are paying higher prices yet they are also continuing to serve a value-seeking consumer who is more likely to have credit challenges. That translates into relentless pressure on price.”

Almost a third (31 percent) of independent dealers rank limited inventory as a top-five factor holding back their businesses, while only about 17 percent of franchise dealers feel the same.

Both groups rated market conditions, competition and expenses among their top five factors.

Market conditions (40 percent) and competition (32 percent) were far and away the most important factors for franchise dealers, with four of five dealers (or fewer) citing the other 12 factors.

Independent vehicle dealers scored market conditions (45 percent), credit availability for consumers (39 percent), competition (37 percent), expenses (33 percent) and limited inventory much bigger concerns than eight other factors that worry fewer than one in five dealers participating in the Cox survey.

‘Robust’ or not, here’s where auto sales are expected to go in 2018

There’s no sugar-coating it.

Most industry experts expect new-vehicle sales to decline in 2018.

Estimates so far are for new-vehicle sales about 750,000 units below the 17.35 million average of the last three years when sales reached an all-time high (2016).

If the forecasts hold, sales still would exceed 2014, according to those experts, led by trucks and SUVs.

Trucks and SUVs are expected to lead U.S. sales in 2018.

Trucks and SUVs are expected to lead U.S. sales in 2018.

However, franchise dealers may make up some lost ground with an increase in used-car sales.

The National Auto Dealers Association forecasts that new-car dealerships will retail 15.3 million used vehicles in 2018, compared to an expected 15.1 million used sales this year.

Overall, if you listen to Mark Scarpelli, NADA chairman and an Illinois multi-franchise dealer, the sales decline is not scaring anyone.

“We expect 2018 to be a robust year,” he said recently.

“Every dealer in America, myself included, would be thrilled with a seasonally adjusted annualized rate of above 16 million [new cars],” he said, “because it means that, one, the market is stable, and two, that demand is still healthy. And both factors are true in this case.”

The average estimate among 11 analysts and economists surveyed recently by Bloomberg News is that new-vehicle sales will decline to 16.7 million cars and light trucks in 2018. NADA has predicted 16.7 million in sales, while industry insiders such as AutoTrader.com, Kelley Blue Book and Cox Automotive are forecasting sales of around 16.6 million.

“The U.S. auto industry may be closing out the first annual decline since [The Great Recession], but it’s a long way from carmageddon,” according to Bloomberg.

Meanwhile, Toyota also believes the U.S. auto market is headed to a second-straight year of shrinking demand, but bringing sales back to “a level the industry can sustain.”

“We’re seeing indications that automakers could close 2018 in the mid-to-upper 16-million mark,” said Jack Hollis, group vice president of U.S. sales for Toyota. “That’s not a record-setting figure, but, like this year, it will give automakers a sustainable target.”

While analysts generally agree sales are weakening, there still is disagreement on where they will settle. Some forecast the plateau at more than 17 million vehicles, others a bit lower.

That’s still “an incredibly strong market,” said Cox, “so there’s no need to panic.”

Hiring for keeps: A four-part survival guide for 2018 and beyond

It’s never a bad time to get better at hiring great people for your business.

Sales associates, service technicians, back-office staff, other team members, it doesn’t matter. Getting better at hiring great people for your business probably will reduce your costs and boost your results.

“It’s no secret that employee turnover rate for certain positions in the auto industry is high,” David Druzynski, director of human resources at Auto/Mate Dealership Systems, wrote recently in Dealer Solutions Magazine. “Auto dealers keep making the same hiring mistakes over and over.”

But avoiding those all-too-frequent mistakes is exactly what our series, “Hiring for Keeps,” is about. And not missing out on “one of the biggest sources of operational opportunity” in your business.

Here is a quick guide to the four-part series:

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Calculating the cost to your dealership of high employee turnover

Employee turnover is a burden, costing the average dealership more than $1.5 million a year in replacement costs alone. That doesn’t count the dollars associated with leads (or customers) burned by inexperienced employees. And the biggest hit comes with your sales team.

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Don’t rush to judgment when you’re hiring for keeps

Nine of your dealership’s sales consultants quit in the last year. Not only does that mean your dealership will spend more money than you would like on hiring, onboarding and training, but it creates continual pressure to find consultants so your team isn’t left shorthanded, costing you sales opportunities. And your hiring process may be exactly where the trouble starts.

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Swim, don’t sink: Best practices for onboarding new hires at your dealership

Does your dealership have the right stuff to onboard new hires successfully? It’s not as simple as just assigning your new hire a desk and starting with administrative paperwork. The idea is to get that new hire up and running – and producing – for your business. And that may mean doing things differently than many dealerships are accustomed to operating.

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Our new hire is on board, now what? Four keys to an engaged employee

There’s more to onboarding a new hire at your dealership than what happens between the hire date and start date. The onboarding process should engage employees early on and keep them interested in staying for the long haul and driving your dealership’s growth.

Two of three dealerships don’t give themselves much of a chance to find – and keep – great people, according to a study from Cox Automotive.

Hiring for keeps means getting better at both and reaping the benefits for your business.

Why your dealership must connect online with sales prospects

121917 IL Why your dealership must connect online with sales prospects (1)

There’s no such thing as net neutrality when it involves reaching prospective customers.

And there is little margin for error.

You need to be on point whether prospects are coming to your website to shop for a specific vehicle or simply to get an idea of whether you can meet their needs when they are ready to buy.

A recent survey by Cox Automotive shows that more than half of vehicle shoppers visit dealership websites, and around half visit the websites of the dealerships where they ultimately purchase or lease. More than half of shoppers who visited the dealership website where they ultimately purchased a vehicle were influenced by the website, the survey showed.

IL-BLOG_70630-11 (The Net Effect Logo)_WordPressConsidering that data, there’s never a bad time to get your website locked down. Our five-part series, “The Net Effect,” should help point you in the right direction.

Here are links to the entire series:

Part 1

Why a great website is so important to the success of your dealership

The average car buyer spends nearly 15 hours shopping for a vehicle – a little less for new-car buyers, a little more for used-car buyers. And most of that time – about nine hours – is spent online, according to Cox Automotive. In other words, your ability to make a sale may hinge on how much of that time you capture online and the shopper’s experience when they get to your website.

Part 2

What your prospects are doing online before visiting your dealership

Americans want to car shop online. And that creates opportunities for dealerships to deliver online benefits that influence consumers’ decisions about where to purchase their new or used car, truck or SUV. But you can’t take advantage of the opportunity unless you know what your prospects are doing online. And then act on that knowledge to satisfy their needs.

Part 3

How to make your website stand out to shoppers exploring online landscape

Is your dealership’s website fit to be tried by online shoppers? If your website provides five basic shopper/buyer activities, you may be ready to take it to the next level – if you haven’t already. So don’t stop short and expect your website to stand out to shoppers exploring the online landscape.

Part 4

What your dealership’s website needs to deliver to online shoppers

You probably think your dealership has a good (even great) website. And maybe it does. But results of a Cox Automotive survey of 2,175 consumers who recently bought a vehicle suggest there’s little room for error. So, if your metrics leave any doubt, it might be time to take another look.

Part 5

Why you need to seal the deal on improving your website

Not everybody is coming to your website to buy a vehicle – right away. But if you provide a good online experience when they do visit your site, there’s a chance you will get them back and, perhaps, convert them to a customer later. “Building relationships with customers early in their process encourages loyalty and builds future sales,” suggests one report.

Most shoppers are coming to your website to learn, do research, and decide whether to visit your dealership for their next vehicle.

You don’t want them to leave feeling neutral about your store.

SC volunteers benefit Humanity through home-building project

SC volunteers at Habitat for Humanity project.

SC volunteers at Habitat for Humanity project.

Inspiring.

Habitat for Humanity’s recent build in one south Dallas neighborhood fit the description.

Volunteers from Santander Consumer USA (SC) were part of a Habitat group erecting one of more than a dozen homes over several days in a part of town known as Joppa.

“Some worked on the homes; framing, installing windows, roofing, cleaning or helping in the kitchen to feed them, but each person had a goal, and it was a success!” according to Jordan B., one of several SC volunteers who worked in the project kitchen.

“It was an amazing experience to see hundreds of people working together to build a whole street,” said Meredith G., another SC volunteer.

121417 IL SC volunteers benefit Humanity through home-building project_LOGO“Watching everyone out there work for a common goal was inspiring,” said Jordan B.

Habitat for Humanity is a non-profit organization that helps homeowners and communities build homes with the assistance of volunteers to improve the lives of the homeowners.

The SC group was working as part of the company’s Volunteer Paid Time Off (VPTO) program.  Through the program, the national auto lender encourages more than 5,000 employees to give back to their communities by participating in charitable events and activities.

Besides the volunteers, Habitat involves others in the community in their projects, which includes financial and other contributions from churches and businesses.

 

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Calling all volunteers: Santander Consumer associates making a difference

Volunteer ‘Life Changers’ provide help to hungry families

In Joppa, for example, the organization provided local elementary schools large pieces of plywood for students to draw on and paint. The plywood boards were placed on the sides of the houses before Habitat building crews put siding on them.

“Each house has unique boards filled with so much love for our community,” said Jennifer H.

The VPTO program represents no small commitment by the lender, which is based in Dallas, TX, affording employees the opportunity to take a full workday off to help those in need and also benefit personally from the experience.

It’s a win-win situation that has worked very successfully for the auto lender and the organizations that benefit from the help they receive, with SC employees volunteering almost 10,000 hours in the first nine months of 2017. The program is so successful, in fact, that SC has doubled Associates’ annual VPTO allowance to two days.

“I have volunteered for Habitat for Humanity many times in the past, and I always leave with a positive experience and a positive outlook on our community,” said volunteer Jennifer H. “They really make our community a better place.”

But it wasn’t just Habitat for Humanity that created the volunteers’ enthusiasm.

“SC’s program is amazing!” said Jennifer H. “I feel very lucky to work for a company that allows its employees to do work in the community and help in a greater way.”

Jordan B. said simply, “It was a wonderful experience.”

Habitat volunteers at work in Joppa.

Habitat volunteers at work in Joppa.

How SC can help your dealership hit accelerator for tax season and beyond

Get ahead of the curve.

That means not waiting too long to start planning for tax season.

Although “the 13th month” between Christmas and New Year’s Day can put your team to the test, getting ready for what comes next is a key to starting 2018 on the right foot.

There are a lot of reasons that Santander Consumer USA (SC) should be a resource in that planning.

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Here are the most important:

We’re hitting the accelerator in 2018 … which means we want your store’s business and will work harder than ever to earn it. If you’re not getting the results you want, just ask your area sales manager (ASM) – more on them later – how SC can help accelerate your business.

SC is a full-spectrum lender … Did you know that much of our business is done with credit scores over 600? That’s right, full spectrum. All we want is a chance to compete for your business.

We give you the tools to make more deals … SC’s direct mail program and revamped RoadLoans program both aim to drive more shoppers into your dealership, while the Dealer Extranet with Rehash Tool gives dealers the resources to originate, manage and finance more deals.

Here’s what a relationship with SC looks like during tax season and beyond:

  1. Competitive pricing across the credit spectrum.
  2. Funding in as little as one day with complete packages.
  3. Increased participation through SC’s enhanced program.
  4. Higher LTV/PTI allowances with higher FICOs.
  5. Fewer stips make it easier to submit more packages.
  6. The opportunity for more backend in some tiers.
  7. Fees decrease on better-quality packages in most cases.
  8. A better balance of business in your portfolio.
  9. Access 24/7 to our Dealer Extranet and powerful Rehash Tool.
  10. Access to our direct mailer program.

Of course, our team of ASMs (and regional sales managers) are knowledgeable auto-lending professionals who can help you navigate the process of securing more deals with SC across the credit spectrum, whether that involves assisting with setting up an account on the Dealer Extranet, explaining various other programs we provide or keeping an application on track with a buyer.

Before you know it, March, the high-water mark of tax season and one of the top three sales months of the year eight times in the past decade, will be here whether you’re ready or not.

It’s time to get ready.