25 May Subprime Buyers are People, Too.
If your dealership offers any subprime lending programs, you already understand the challenges that come with these deals. Tighter restrictions on payment, income verification, and a sometimes hostile or uncomfortable exchange between F&I and the borrower.
How can this process be easier for both and still result in a car delivered and a decent PVR? Let’s take a look at 3 ways F&I can help make this already difficult buying scenario a little easier for everyone…
1) You’re There to Help – Your role is to execute the paperwork, sell aftermarket products, and make sure the deal is airtight for the lender. The customer may not know how bad their credit is and if so, they can become hostile if this information is presented in a way that makes them defensive.
Don’t treat them any differently than you would treat an A-paper buyer. Talk to them with respect and have all the tools you need to help walk them through their options. Show empathy and approach every subprime borrower as the person who can best help them drive off in the car they need.
2) Be Clear on Stips – Stips are a necessary evil for nearly all of your subprime lenders. Collect as much income information as you can. Don’t be afraid to ask the more uncomfortable questions regarding additional sources of income from child support, alimony, or other monthly sources that could help. Don’t take the initial credit application at face value. Your job is to educate them on this process and help them create a favorable outcome with the lender.
3) Think Outside the Box – Even though there may be little room in the payment for products, don’t be afraid to be creative when positioning it to the buyer. Go through the same selling steps you would with any other A-paper buyer.
If you have asked all the right questions, you can still hold a solid PVR even with a subprime loan and do it in a way that reduces the chance for a chargeback. Maybe only one product will ‘fit’ with the payment…so make sure it is a product the borrower feels will help them the most.