By Jeff Backus
So you’re working with a customer, and they have decided on the perfect boat. They are ready to buy, you submit to the banks, and boom: decline, decline, decline. Dead deal and everyone goes home unhappy. So what happened?
Let’s talk about everything you can do to get more deals bought and more customers out on the water. In particular, let’s cover subprime, or what many call “specialty financing.” Let’s make sure you never have to ask yourself, “Why couldn’t I get that deal done?!”
What is the last thing you do right before walking out the door? If you are like most people (including myself), you pat yourself down, and you say “Phone, Keys, and Wallet.”
When you receive a decline from a bank, you need to have a system for working and handling the deal that is so ingrained in your head that it feels like a natural habit – like always feeling for your phone, keys, and wallet.
So what is the “phone, keys, and wallet” equivalent in financing? The three things you always have to remember to check after receiving declines are Customer, Credit, and Banks.
First, double-check that you have everything right on the credit report. Make sure that the bureau is pulling the correct customer information. Having even one digit off can pull the incorrect information. After checking to make sure you have all of the customer info correct, look over the credit report and credit application. Hopefully, by this point in the deal, you have already reviewed the customer’s credit report. But, check one more time before giving up. Look for tradelines, derogatory tradelines, and slow pays that seem out of the ordinary. What you are trying to do here is create a list of everything you see on the credit report and credit application that might be hindering the deal. You will use this information in the next step, with the Customer.
Next, speaking with the customer. Hopefully, with the previous exercise, you have a few things to talk to the customer about and obtain clarification. If the deal had DTI issues be sure to ask the customer if they have more income, other income to claim, or a co-applicant to add to the submission. In many instances, we will even ask the customer to send over his or her proof of income so that we can have a look. We have had situations where a customer actually made a lot more than they thought and by sending the proof of income to the bank we were able to get the deal approved.
If they have high credit card balances or accounts that look like they could have been paid off recently go ahead and ask the customer if they have paid anything down in the past 3 weeks. If a customer paid a tradeline down in the past few weeks it might not be up to date on the report.
Remember, any of the conversations with the customer help build rapport and show them that you are on their side and truly care whether or not they get approved. Don’t allow yourself to come across as the person saying “No.” Even if the customer ultimately gets declined, they will remember that you went above and beyond for them. When they fix their credit issues down the road they will come back and purchase from you.
Finally, the third and final step is presenting everything you learned to the bank. We always say, “Get the loan officer involved!” Figure out what exactly is killing the deal. Don’t forget – loan officers are human. They can make mistakes, change their minds, and even make exceptions.
The point here is to do your due diligence. It is your job as a business manager to find the sweet spots in each of the bank programs. Don’t be afraid to involve a loan officer to help find a solution for your customer. Explain any of the information that you learned from your conversations with the customer that might help persuade the loan officer to make an exception.
Don’t forget, it is not your job to say no…it’s your job to get the loan officer to say yes without misleading or misrepresenting the customer’s information.
Jeff Backus is the Founder and COO of First Approval Source. He specializes in teaching Win-Win-Financing, where customers actually enjoy the finance process and dealerships can still meet their F&I departmental goals. For more information on First Approval Source and how they help out dealerships with financing, check out their website at www.firstapprovalsource.com.