The Art Of Funding

August 2006, Auto Dealer Today - WebXclusive

by Ben Misra - Also by this author

There is truly an art when it comes to fast funding. Here are 10 common sense steps to accomplish it at your dealership.

1) Make sure the car matches the callback.

One of the biggest mistakes in this business is the payment call. After you sell the correct vehicle to the customer, call the lender to give them the specific vehicle and sale details. Then ask the lender to send you back the approval on that specific vehicle. Deals get sent back to the buyer for structure a,pproval when vehicles are changed. This delays your funding.

2) Make sure your advances, both front and back, are correct.

The front end advance is the most important thing to watch. If your front end advance is over the call, it may be returned for you. Never overbook the car; customers will not lie for you. Make sure that you stay within the total advance as well after tax, title, license, warranty, gap and CL/AH. Your funding may be delayed or your deal cut short if your front and back are not correct. Neither will make your dealer happy.

3) Make sure you have collected all stips in advance.

“IF YOU DON’T HAVE THE STIP, GET IT WAIVED OR DON’T SEND THE PACKAGE”. Stips are designed to catch you doing something stupid, as well as verify the application. The lender will not be flexible if the stip is on the approval sheet and you don’t send it, it implies that you’re hiding something or just not following instructions. Either way, it puts your deal in the bottom of the pile for processing later.

4) Make sure the rate, term and payments are correct.

Don’t make up terms, rates and payments. Many rates are now dictated by the company that invests in your lender. If the term is 24 months on a car with 85K miles and you contract at 36 months, it will not just slide by the funder. The contract can be returned for you to re-contract, or worse they charge you additional fees. The payment needs to be what the lender wanted and what was on the approval. That’s another reason to get a firm approval the way you have it contracted prior to sending the contract.

5) Make sure the package is in order.

Use the same form the lender uses to review the package when it comes in. Ask the funder for it; it’s really not a secret document. By putting the paperwork in the order they want it, the funder can quickly check off the package and send it to verifications. We all know that we send docs that end up missing once it gets to the lender. When the funder rips apart your package to put the docs in order, the odds increase that a document will be misplaced.

6) Make sure all down payments are in order.

This should be obvious. The customer will be asked by the finance company.

7) Make sure all the phone numbers on the application work.

Call all the numbers on the application the day you send the package to the lender to make sure they still work.

8) Send all packages by overnight delivery, preferably a.m. delivery.

Call the funder the next day to verify that they have received the package (you can track it with the carrier however it doesn’t guarantee it gets to your funders desk) and it is complete.

9) Treat your funder with respect.

They probably look at 20 packages or more each day. If your packages are complete and in order consistently, they will want to process yours first.

10) Follow up every day until it’s funded.

Ask the funder if your deal is complete and if there is anything you can do to help to get it to funding. Remember that the funder has to call every dealer, when something is missing. If they can’t get a hold of someone at the dealer the package goes to the bottom of the stack.

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