Special Finance Insider

It’s a Win-Win-Win

Special finance guru breaks down his process for desking a deal that works for you, your customer and the finance company. He also delves into lender relations and more.

August 2013, Auto Dealer Today - Feature

by Greg Goebel

One of the biggest challenges for special finance pros is desking a “win-win-win” deal — one that works for the customer, the finance company and, of course, the dealership. Without direction, a subprime customer can inadvertently be steered toward a vehicle that just doesn’t work. So what should you do?

Let’s assume that your salesperson has properly asked a qualifying question or questions and determined that his or her customer does not have prime credit. He or she has brought the customer inside, completed a credit statement and conducted a quick credit interview. The deal then goes to the desk, which could be the sales manager, finance or special finance manager. This person must be aware of which finance companies are not concerned with look-to-book or approval-to-book ratios. They should also know which companies will give you a quick decision.

Now it is time to pull the applicant’s credit report from the bureau that is predominantly used in the area where you and your customer are located. Depending on the customer or the information on the first bureau, you may need to pull multiple reports. At this point, savvier managers will almost instantly have an idea of who will approve the deal and at what terms. For others, the credit app and bureaus may simply indicate how tough it will be to get an approval.

Structural Concerns

Regardless of the level of experience, deal submission portals such as Dealertrack and RouteOne really make the process easy. I suggest using a generic deal structure to submit applicants to the companies that can provide an instant approval. This generic structure would be on a vehicle with a $14,000 sale price — use a much less costly vehicle for very low income customers — and a loan-to-value (LTV) ratio of no more than 104 percent.

Keeping in mind the various companies’ minimum credit cutoff score and the finance companies in your arsenal, send it to Capital One and at least one of the following: Ally, GM Financial/Americredit, Exeter, Santander and Wells Fargo. If I wasn’t sure the deal would be approved by one of those companies, and assuming I had a lower-tier national or regional specialist in my arsenal, I would submit the deal to one of them as well.

By this time, you will have an answer back from at least one (and likely more) of the top-tier finance companies. At this point, especially for those less experienced desk managers, you should have the direction you need. If it’s a top-tier, you should have an idea of what type of deal the customer is going to qualify for. If not, you know you have more work to do.

Meanwhile, the salesperson should be sitting with the customer, not camped out with the manager. If you have a top-tier approval, the manager can then propose a price range or a group of vehicles the salesperson can suggest to the customer. In other words, don’t show them the steak if all they can qualify for is a hamburger. It is quite possible your only option will be through a lower-tier specialist, which means you will most likely focus on a lower priced (and lower payment) vehicle.

If a top-tier finance company does not make an offer, or it is an offer on a less desirable tier or structure, then it is time to dig deeper. Again, using the generic structure and your knowledge of the programs of other companies, submit them to the two companies most likely to approve under the most favorable terms. These call-backs will generally take longer as well.

Once the salesperson and the customer have found a vehicle the customer is excited about buying, the desk should structure the deal, and it should do so based on the dealership’s sale price, the chosen finance company’s approved LTV structure, and the down payment needed to make up the difference. This is the first offer.

The salesperson will learn how much cash the customer has to put down; obviously, the more the better. Then it is time to get a final approval by rehashing the deal with the chosen company’s credit analyst. During this time, the deal will most likely get tweaked. It could be the finance company enhancing its approval, the dealer cutting the deal, or the now-motivated customer bringing more cash to the table or selecting another vehicle. Once you have a structure that is acceptable to the finance company, the customer and the dealership, you have your “win-win-win” deal — one that all parties are happy with.

Is it always this simple? Certainly not. But this approach will help avoid upsetting your customers by trying to sell them a vehicle for which they can never be approved. You will also be less likely to poison your relationships with your finance companies by “shot-gunning” deals, and in the end, optimizing every opportunity that comes to your store.

Until next month, great selling!


  1. 1. Dan Schultz [ August 28, 2013 @ 08:37AM ]

    quite a 'guru".More like elementary teacher

  2. 2. William V. Fowler [ August 30, 2013 @ 06:00AM ]

    I smell a major problem for the dealers lenders reference: U.S. banks may be sued by the Consumer Financial Protection Bureau if they fund discriminatory vehicle loans made by auto dealers, according to new guidance released by the agency.

    Banks are legally liable for unfair lending under the Equal Credit Opportunity Act of 1974, the CFPB said yesterday in a statement. The fact that the improper decisions may be made by auto dealers -- who are exempt from consumer bureau oversight -- doesn’t absolve lenders of responsibility for resulting racial disparities, the agency said.


    There is a way to originate loans in a compliant manner.

  3. 3. Kevin Ellis [ October 05, 2013 @ 11:38AM ]

    This is another government relgulation that will cost the banks more to do business and these expenses will be passed on to all consumers that finance cars...I am really not sure how the banks will be able to audit every transaction and stay within the guidlines setforth by this agency...The government has a history of passing laws and then later they will worry about how they will facillatate, regulated, and of course fine the violators... Which everyone knows this is just another tax that the consumer will ultimately pay...

  4. 4. PAUL SMITH [ October 19, 2013 @ 10:24AM ]


  5. 5. William V. Fowler [ March 05, 2014 @ 02:26PM ]

    I'm amazed that no one realizes that the old process of auto loan origination has completely changed and the process that Greg described is riddle with pot holes and major CFPB problems. There is a process developed in which all the financing sources multiple risk models are pre-loaded into this special loan origination system so that after the Sales or F&I manager has put the loan package together, that whole package is run against the CB report as well as all the other service and insurance products included in the package, to see which of the financing sources would have a 95% probability of approving the loam or lease.

    Greg or anyone else contact me and I will discuss the whole process with you

  6. 6. Bryan Swan [ August 04, 2014 @ 12:30PM ]

    Mr Fowler, I would love to contact you to pick your brain on somethings. Do you have an email address?

  7. 7. Craig Blevins [ October 04, 2014 @ 07:59AM ]

    We don't need a new special system and an additional cost for the Dealership. We have enough leeches and parasites involved with our business as it is. What Dealers need are competent employees that know what they are doing.


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