Timing Of The Turn To F&I
When dealing with less-than-perfect credit scores, the steps to a sale may need to be adjusted to fit the situation.
Normally the steps to a sale are:
1) Greeting – Build rapport with the customer.
2) Interview – Establish the needs of the customer.
3) Product selection – Choose three units; begin with the lowest priced unit that meets the needs of the customer.
4) Product demonstration ride.
5) Financial presentation – Write up.
6) Negotiate the figures.
7) Close the sale.
8) Introduce to the F&I manager for financial documentation.
9) World-class delivery.
10) Follow up –How are things working out? Ask for referrals.
With this in mind, when should the customer be introduced to the finance manager?
The answer is not as simple as one might think. First, let’s consider the interview, which should take place after the greeting. Suppose the customer makes statements such as “I’ve been all over town and no one can get me approved by a lender”, “My credit should be great now – the credit counselor said the collectors could not call us any more,” “What is the lowest credit score you have ever gotten approved?” or “Where is Captain Credit?” One of my personal favorites is when the customer shows up on the lot with a file of pay stubs, phone bills, and a list of ten references and asks to see the finance manager.
All of these comments are red flags and signal that a turn to the finance manager is in order.
The 10 steps have been the game plan for as long as I can recall. And every successful sales representative follows the order of things except when working with credit- challenged customers. Following the traditional 10 steps can embarrass these customers and cause them to lose face. Few customers enjoy switching from a preferred vehicle to a lower-priced model. Once they get a taste of a 35-45K unit, credit-challenged customers are usually offended when the sales representative shows them a more affordable version at 15K.
The typical result of this “switch drill” is that the customer leaves without purchasing a vehicle. Then they stop at the next dealership and run into a salesperson much like yours. The difference is now the customer has some education, and they ask the new salesperson to show them what they have for 15-20K. Now the salesperson introduces the F&I manager to the customer earlier in the deal, so that the finance representative can obtain and verify the customer’s story and present the documented facts to the lender.
The key to successful sales with credit-challenged customers is to get the finance manager involved early, before vehicle selection. The finance manager must secure all the normal documentation prior to delivery – current pay stubs, verification of residency, and at least 10 references. I like to ask the customer to write a story about the reasons the credit difficulties occurred. After I review the story I ask for documentation to verify it so that we can submit the facts with a deal structure that makes sense to the lender. An appropriate structure will allow the lender to say yes.
It is not always the vehicle; it is how we introduce the vehicle to the customer that determines success. Rather than, “Here is what you deserve,” how about “Come with me and we can view the vehicles that will meet your needs”?
It is critical to place credit-challenged customers in a face-saving environment. They have friends and relatives, and they talk to everyone about their car-buying experience. You want them to say great things about you and your team. Referrals are the best way to grow your business.
I have one client who refers to their special finance department as the “Auto Loans Department.” The mainstream finance center is referred to as the “Sales Business Office.” In this dealership, as soon as the sales manager determines the customer has credit challenges, the customer meets the auto loans department representative. A change of names can equal a change in attitudes and increased business. For this dealership, as it can be for yours, early action yields more sales and more customers.
World of Special Finance – Canada, March 2006, p. 7