Sales professionals from auto dealerships explain how they choose lenders for financing during a panel discussion at CU Direct’s Drive 17 Conference in Las Vegas.
They also share what credit unions must do to “get inside the mind of the dealer” and become a preferred lender.
Build many relationships. Sean Sellers, general manager at Gabus Automotive Group in Des Moines, Iowa, says lenders need to focus on building relationships not only with the finance and insurance (F&I) manager, but also staff throughout the entire dealership. If the credit union is only focusing its relationship building efforts on one person, “you’re missing something,” Sellers says.
Establish clear standards. Dave Jones, finance manager at Findlay Kia in St. George, Utah, says when a dealership develops a strong relationship with a lender, the dealership begins to understand what kind of loans and individual characteristics the lender is willing to undertake. “You get to the point where you look at a deal and you know if a credit union will take it,” he says.
Expand risk tolerance. Randall Bowser, F&I manager for Plaza Chrysler Dodge in Inverness, Fla., says credit unions can have the opportunity to fund more automobile loans if they adjust the FICO scores they’re willing to accept. Instead of capping the low end of acceptable FICO scores at 600, Bowser says credit unions should consider making loans to individuals with scores as low as 540 to win more loan business from auto dealers. “You’re missing the boat and missing money you can make,” he says.
Speed and style matter: Neil Goldman, president and CEO of Goldman Consulting & Strategy, says dealers want the “5SPs” from financial institutions that are vying to become a preferred lender.
Spiff: money from markup, reserve, or the backend.
Speed: fast approvals, fast funding, or an easy, responsive process.
Spectrum: purchasing a full spectrum of loans and consistency in buying loans.
Space: having flexibility to work with the dealer in rates or the advance.
"Spouse": a partner who understands, communicates, and is committed.
The Winter 2023 issue of Credit Union Magazine explores award-winning marketing, board training on a budget, developments in instant payments, service to small businesses, and NCUA’s final rule on member expulsion.
