Experts Tell How Auto Dealers Can Help Their Cause with Lenders These Days

Dealers seeking better access to credit for their customers and themselves should cultivate closer relations with lenders.

That ranges from sharing information to showing an interest in loan-portfolio performances to treating a creditor to a meal 舒 a reversal of roles from earlier times.

So say several attendees of the F&I Management and Technology conference this year in Orlando, FL.

It's different from a few years ago when dealers could pick and choose lenders, and play them off each other. No more, not with financial institutions becoming more risk adverse and insisting on greater creditworthiness, larger down payments and shorter loan terms.

“The days of jamming lenders are over,” says Glenn Roberts, national training and business development manager for Zurich Insurance.

He recommends asking lenders specifically what types of deal structures they are looking for. Gone are the days of expecting a lender to take one risky loan for every good one offered. “Now, they want all loans to be of a certain standard,” Roberts says.

Dealers and lenders should be partners, says Peter Biscardi, president of National Auto Care Corp. “If they get together for joint planning, they can be successful and bring services and quality to the industry.”

Lender relationships are “paramount” for dealers today, says Charlie Robinson, an executive vice president for Resource Automotive, who formerly worked for the Asbury Automotive dealership chain.

A dealership should designate “the right person” within the organization to interact with lenders, he says. “It's the key to getting more deals delivered.”

To expand financing options, dealers should form close relationships with as many lenders as possible, says Lewis Kuhl, a Miami attorney who represents dealerships.

He says: “I get calls from dealers that say, ‘I think my floorplan lender is going to pull the plug on me, can you find me a new one?’You can't develop a new relationship overnight. But you can start forming relationships with multiple lenders.”

It's time for dealers to take lenders out to lunch, says Rob Hagen, CEO of SpecialFinanceCoach.com. “It means a lot. When a business relationship turns into a personal relationship, it's harder to tell a friend, ‘No.’”

If a dealer really wants to surprise lenders, “call them up and ask what your deficiencies are,” he says. Believe me thay have that information daily. Show an interest in how your portfolios are performing. They don't get that call often, and they'll appreciate your interest.”

Dealers must be more risk aware for themselves and in the interest of their lenders, says Marguerite Watanabe, president of Connections Insights LLC.

Dealers wanting an easier time with creditors must have “a knowledgeable executive staff and a clear understanding of their customer base,” she says, adding that so much of success today involves access to funding.