Savvy dealers take advantage of profit management tools to match the customer’s maximum monthly payment with all available vehicles, increasing the chances of finding one the customer will want. Through systematic screening, the right software program can quickly show which vehicles match both the customer’s needs and the dealership’s profit goals. These systems should also integrate into the F&I office systems to avoid duplicate entry of information and reduce errors that can result in deals unwinding.
Look for systems that will enable sales managers and Special Finance managers to run different scenarios based on vehicle type, inventory age, dealer gross profit or other custom criteria. Book-out data for valuing the customer’s trade-in and the profit potential of the dealer’s inventory should also be integrated.
“People like to have a choice, so out of about a hundred cars in our used car inventory, ideally we can show them five or six,” says Paul Schmaeling, general manager of Burgunder Dodge of Bridgeville. Pa. With the Special Finance functionality software, it is easy for your dealership to see not only where you are from a gross-per-vehicle standpoint, but also to jump between deal structures to see how that profit changes.
Quick tips for starting a Special Finance Department
1. Choose a “yes” manager who has a combination of attributes like exceptional relationship skills and a never-say-die attitude. Both are needed to get difficult deals bought, while generating a strong referral and repeat-buyer base.
2. Invest in training, since Special Finance managers are hybrids of sales and finance managers. Also, the subject matter can be difficult to master, since non-prime programs can be more complicated than prime programs.
3. Develop a detailed checklist for the steps required with Special Finance contracts. This will keep financing sources happy, reduce contract delays and get deals funded faster.
4. Beef up your used vehicle inventory to ensure you can give customers a choice of cars for which they qualify. Focus on vehicles with sales prices below $12,000 so the car is affordable and provides adequate gross profits.
5. Invest in technology that allows you to exhaust your inventory and present customers with multiple options while analyzing the profitability of each deal.
Vol 3, Issue 10