How to put subprime customers into the "right" vehicle

The sooner you can identify a secondary finance customer in the sales process, the greater the odds you will deliver a vehicle and the greater the profit will be.

In spite of this, most dealerships keep using a sales process designed to support primary customers, not the special needs and considerations of secondary customers.

The primary sales process requires salespeople to assume that every customer can buy just about anything they want.

Once greeted, the salesperson does a interview, assists with vehicle selection, does a presentation, demonstration and asks the customer for a commitment to buy. The salesperson then brings the customer inside, completes a credit application and a buyer's order and takes it to a sales manager to pull a credit bureau.

So far, so good. But often the sales manager looks at the bureau and realizes the customer can't buy the car they selected because of adverse credit.

With more and more customers unable to buy the car they have selected because of bad credit, it is becoming increasingly frustrating and non-productive to invest time with customers who need special consideration due to their credit situation.

Step one: Pre-approve your prospects If you are tired of working secondary customers through the primary sales process, I suggest that you amend your sales process and invite your customers to get pre-approved for financing.

The key is to identify secondary candidates at the point of contact and do it without offending your prime customers. Here's how:

Greet your customer the same way you always have. "Welcome to _____, my name is _____." Conduct your normal interview asking questions relative to vehicle selection. At the end of the interview, ask one last question. "Before we select a vehicle that is perfect for you and your family, would you like to get pre-approved for financing?"

If the answer is no, you don't offend your prime customers and you simply continue with the primary sales process. If the answer is yes, invite them into the showroom, sit them down and begin with a credit interview, not vehicle selection.

Step two: Vehicle selection It has been said that the biggest mistake made in retail car sales and secondary finance in particular, is landing the customer on the wrong car, more specifically too much car.

When this happens it can be very difficult to switch the customer to the right car, a car that meets the customers needs, not necessarily their wants.

When your customer lands on too much car, the odds are better you will teach them how to buy a car from someone down the street and not deliver the car yourself. To avoid this from happening to you, you must take the time to determine deal structure prior to vehicle selection, then show only those vehicles that will work for your customer.

Prior to presenting any vehicles to the customer, you should get a down payment and monthly payment commitment from the customer and should determine in advance which banks and which vehicles the customer will qualify for.

A secondary finance computer program can be helpful. It matches your customers to your lenders, and your lenders to every car in inventory, then sorts by the most profitable deals to the least profitable deals in seconds.

Once you identify two or three cars that will work and the customer has committed to a down payment and monthly payment, you are ready to present vehicles they will qualify for.

Sit the customer down, buy them a Coke and bring the two or three cars you have selected to the side of the building. Only show them cars they can buy. Don't walk them past all the cars they can't buy.

Lets say the customer committed to $1,000 down and $300 per month. When you present the two or three cars, show only cars that can be purchased for $1,000 down and $300 per month or less. Then present each car by telling the customer that those are all $1,000 down, $300 month. This keeps the selection process within its necessary limits.

This process will educate your customer on which vehicles they qualify for and allow them to choose from a small group of vehicles they can buy, not a large group of vehicles they can't buy. In addition, this process will make it easier for you and your customer to work together to select a vehicle that makes sense for them and maximizes gross profit to you.

Doing this also eliminates the need for salespeople to be experts at assisting secondary customers. All they need to be able to do is help their customer select a vehicle, build value through a presentation and demonstration, get a commitment and bring the customer back inside for delivery.

Step three: Deliver the car The only thing left to do is the paperwork. Often, you will find that even though the customer committed to $300 month, the car will book out at a lower payment, creating a spread for you or your F&I manager to upsell add-ons.

The secondary sales process is not difficult to master when you determine up front whether the customer is a secondary candidate or not.

Avoid the wasted time and effort of letting the customer select a vehicle they can't buy, then try to put a deal together using the traditional desking process.

Instead, get a down payment, monthly payment commitment during the credit interview, then help the customer select a vehicle they can buy.

Following these steps will eliminate desking, avoid the mistake of landing the customer in too much car and allow you to sell more cars in less time for more money.

David Bartels is vice president and director of sales and marketing for Diamond Technology Inc. of Longwood, FL, developers of The Secondary Finance Wizard computer program. For more information, call 1-800-863-4632.