The ability to achieve maximum efficiency and profitability in the sales and finance department depends on the sales and finance team working together. Every department must identify who they service — who is their customer? For the finance department specifically, the sales managers, salespeople and people buying cars are their customers. Moreover, the finance department’s success or failure depends on how well they service the sales team and their customers.
Prior to my current role as general manager of McCarthy Chevrolet Lees Summit, my partner, Chris Savell, acted as the desk manager, finance director and finance producer of McCarthy Morse Chevrolet. We desked 85 percent of the car deals and collectively spun 100 percent. In order to do this, we had to be highly efficient, but more importantly, we had no other option than to get involved in every car deal start to finish. From this experience, we learned the benefits of getting involved early as the finance director/producer.
Here were our results from 2012 to 2016:
• In 2012 we sold 1,397 cars and ran $1,782 per finance transaction.
• In 2013 we sold 1,468 cars and ran $1,740 per finance transaction.
• In 2014 we sold 1,431 cars and ran $2,033 per finance transaction.
• In 2015 we sold 1,465 cars and ran $2,042 per finance transaction.
• In 2016 we sold 1,666 cars and ran $1,931 per finance transaction.
What the numbers don’t tell you is how much better the customer experience was. Once a customer agreed to terms, we could process all the paperwork, front and back, in less than 30 minutes. This practice led to extremely high repeat and referral rates; customers loved how quickly their paperwork was processed. Probably most important for the dealership, the vehicle that had the highest percentage of getting approved at terms agreeable to the customer was shown to the customer first, leading to higher profits, closing rates and maximized efficiency of the store.
Everyone in the car business has seen this before; a salesperson spends three hours with a customer who has less-than-perfect credit and is upside down in their current vehicle. Together, they pick out a four-year-old used vehicle. The desk manager desks the deal 84 months at 4.9 percent to keep the customer at a payment close to what they are currently paying and the customer agrees to buy the car.
Then, they send the deal back to finance, where the finance director and producer look at each other think “How could the salesperson and desk manager put this customer in this car?”
The deal has no chance of getting approved as structured; they needed to be on a new car with big rebates or a late-model used vehicle with a huge book. The finance team lets the sales team know this car deal is never going to happen unless they switch cars, effectively telling them that all the hard work they put in was for nothing. The customer, meanwhile, has to go pick up their kids from school, never to be seen again. This type of scenario is easily avoidable and 100 percent unacceptable.
How Do You Minimize the Occurrence?
You must implement a sales process that puts a high emphasis on vehicle selection. It starts with your initial meet and greet; help train your staff to ask specific, probing questions that help show them what path to take this customer down. So much of the sales and finance departments success relies upon proper vehicle selection.
How Do You Pick Out the Right Vehicle?
Start with the trade in; ask, “To who are you making payments and how much are your payments?” This alone will tell you 90 percent of what you need to know. Is the customer financed with a prime bank, subprime bank or is the vehicle free and clear? Does the customer know the payment to the penny or does the customer know or even care what the payment is? The customer’s response is your strongest indicator as to what direction to take the deal. From that point, the finance team and the desk manager need to be experts in deciphering the information obtained by the salesperson and put together a strategy that maximizes the opportunity.
How Do You Maximize Every Opportunity Possible?
The finance team needs to get out of their offices and involved in putting car deals together whenever possible — and the best will do so. They earned their role as a finance director/ producer because they are the best closers in the store. They need to be in front of the customers sooner rather than later handling customer finance-related objections.
Rather than the front-end desk manager giving away the finance reserve, the finance team should be on the sales floor justifying the interest rate used. The idea is, when the finance producer is involved sooner, they will already have some sort of rapport built with the customer. Additionally, they will have pertinent finance-related information sooner rather than later. They will know if the trade-in had a service contract, if the customer is highly concerned about the interest rate and be able to identify earlier what the customer really values.
Most important, the finance team will know when the customer agrees to buy the car and that it’s time for them to start preparing the finance documents. There is no reason why the finance producers shouldn’t be ready to bring that customer back to their office as soon as the sales team is finished with the front-end paperwork.
It’s no secret — happy customers are more profitable for dealerships than those who are upset. Customers are generally happier with their purchase when the car-buying process doesn’t take five hours; successful dealers make an efficient car-buying experience paramount. More important, customers are demanding dealers deliver information and services quicker. Failure to provide an efficient car buying experience and deliver vehicles quickly will drastically decrease the chances of seeing that customer again for sales or service. When the finance team is involved early, more-difficult car deals will be put together, less-profitable deals will be minimized, customers will be delivered their cars faster and customer retention will improve.
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