Common sense tells us that shooting ourselves in the foot is a bad idea. But we still do it.
It happens when we fail to attend to fundamentals. Fundamentals insure you have a foundation on which to build success. One fundamental states: Properly managed, subprime automotive customers are sold completely backwards from prime customers. They get financing, then select a vehicle from eligible offerings.
To sell those customers backwards, it is critical that you first take control of the sales process.
Control means that you direct the timing and choice of product decisions. When it is time to talk about product decisions, ask product questions properly. How can we do that without shooting ourselves in the foot?
The most important factor in controlling the product decision process is managing customer expectations. If a customer's final expectations for a product or payment are not met, it is unlikely they are going to buy a vehicle from you.
Some customers begin with reasonable expectations. However, it can seem like most come in with unrealistic ones.
It is your responsibility to lead your customers through the process. Your role is to educate, instruct and help them set realistic expectations. That means you help customers understand the realities of their current credit condition.
Begin by selling the credit program. Make sure they understand the concept of rebuilding credit, their need to do so and your expertise in helping them.
Don't shortchange this process. Remember, subprime is first about originating loans that re-establish credit and secondly about selling vehicles.
Explain: “We have programs that meet almost every credit situation. Once I've worked with our lenders to secure your approval and the program that best meets your needs, we will look the vehicles the lender has approved for your budget.”
Next, find out general information about what they are looking for. Build rapport while doing this. Don't interrogate customers. Be friendly as you talk with them.
Find out if they are married and how many children they have. This could help you learn that a subcompact vehicle may not work for them. Ask general questions about their vehicle choice. Avoid questions that lead them to specific vehicles. Here are questions to ask:
- “Are you replacing another vehicle? What type of vehicle was that?”
- “How will you be using your new vehicle?”
- “Are you looking for a small, midsize or fullsize vehicle?
- “2 or 4 doors? Automatic or manual transmission?”
- “What type of vehicle are you looking for: Car, truck, van or SUV?
- “What do you plan to use the vehicle for?
- “Will an economy car do or do you need more space?”
Asking general questions keeps options open when it comes time to meeting a particular payment call or structure.
The payment call provided by your lender will determine finance-appropriate prices and product decisions.
Whether you first submit the application to a lender that provides a payment call or estimate what payment the customer will qualify for, prevent customers from landing on cars they will not qualify for.
After a manager reviews the information, select vehicles that fit the general criteria, down payment and monthly payment range of your customer.
Tell the customer: “Congratulations we have three vehicles that are just what you are looking for. I will show them to you and you can pick which one you want to take home.” This gives the customer a choice and doesn't make them feel they are being forced to buy something they don't want.
Handled right, most customers adjust to reasonable expectations and gladly buy one of the vehicles you present to them. They grow to understand that what they need is reliable transportation that fits in their budget and the opportunity to rebuild their credit.
Tim Shea is President of Great Direct Concepts, a subprime consulting firm to auto dealers. He is at firstname.lastname@example.org and 800-430 5484.