Where does the finance process begin?

By Brian Gallmeier

Where does the finance process begin? Just a guess, but for 75 percent of powersport dealers, the finance process may not exist at all. For the other 25 percent, the ones with the highest PVR (profits per vehicle retailed), the highest Power Rating and the highest customer satisfaction, the finance process begins before the customer even walks in the door.

For the 25 percent that get it, THIS ARTICLE IS NOT FOR YOU!

Phone call for the owner/general manager of small multiline store: “This is Bob. Hi Steven, how are you? Yeah, I’ll be here. Come on out and take a look . We can probably get you into it for around $8,500; does that work for you? Yeah, there are some fees. Are you trading in your old one? Sure, $8,750 out the door. OK great, see you on Tuesday.”

Phone call for sales (answered by Jerry, in his first week on the job after reading his sales and finance process handbook): “FinanceMe Motors, this is Jerry, how may I help you? Yes, we have that one in stock. Have you been here before? And who am I speaking with? What’s your last name Steven? In case I lose you in a bad cell area, what’s your phone number? Yes, we have it listed at $9,999. Would you like to come in to try it out? Well, yes, absolutely that time works fine. When you get here we can sure finish our discussion about price. Let’s make sure that’s the right one for you, OK? Are you trading your old one in with us? And what is your payoff amount? OK great, when you’re here remind me to show you some of our great matching accessories and introduce you to our finance manager. We already do business with most of the banks in town and currently have some fantastic rates. Have you filled out our credit application?”

In this case, Jerry, the one-week old salesperson, did several things with one single phone call:

•  He got the customer’s name, phone number and an appointment with a specific time;
•  He confirmed he was willing to negotiate without agreeing to an out-the-door price (or could have confirmed “X” was the bottom line price);
•  He positioned the dealership as having sufficient inventory, in case this one isn’t exactly right;
•  He found out there is a trade and the customer financed with another bank last time;
•  He confirmed a need for financing and set the process to start right away with an online application.

The finance process truly begins before the customer ever walks in the door. Advertising and point of purchase displays also benefit the finance department: “Financing as low as 1.99 percent for approved buyers, this weekend only.”

While finance managers may cringe at the low rate, many banks still offer flat fees at a certain rate. The finance department benefits by getting a finance deal versus a cash deal, and they also have a better chance of selling some finance and aftermarket products.

Tent cards, handlebar hangers and windshield stickers — spread these throughout the showroom or where appropriate to give customers a chance to see a few things that will eventually be presented by the finance manager. Knowledgeable salespeople can also share a story or even some features and benefits of some finance or aftermarket products while they are waiting for finance to be ready.

Incentives to salespeople depend on knowledge and experience of both departments, on the volume of the store, on existing pay plans and the complexity of the products being sold.

Steps to a proper turnover

•  The salesperson has just completed the deal, both the manager and the customer have signed on the dotted line determining the price of the machine (before taxes and fees, accessories and any finance products) and a deposit has been received.

•  The customer’s internal clock has started ticking; they perceive that it will only be a few minutes before they will be out the door riding their new machine. It is crucial that the salesperson has instructed the customer that a normal time frame to purchase a machine can be 3-4 hours total.

•  The salesperson should have gathered all proper paperwork, if not, then now is the time: drivers license, insurance, credit cards, trade-ins, titles, customer information loaded into the computer and credit application.

•  Once all paperwork is completed, the salesperson explains what happens next. The deal packet is given to finance while the customer browses or waits in the waiting area.

•  If finance is available, the salesperson explains the deal’s details, and informs his colleague about conversations held thus far. In most instances the salesperson knows whether this is a cash or finance deal, and has done everything possible to make it a finance deal.

The turnover

Escort the finance manager back to the customer and introduce him/her by name and title.

It is critical that the salesperson be sympathetic to the finance manager’s time. Finance can be the greatest bottleneck in most stores. Now that he/she is introduced, finance will conduct a brief interview before returning to his/her office.

Finance will review the entire deal packet, ensuring all customer and unit information is correct, and then submitting the deal information to the proper bank for approval. This process may take 15 minutes, or a full day or more depending on the deal and finance workload.

The salesperson might have more than an hour before finance is ready. It is time to review any ancillary products, do an accessory tour, walk the entire dealership and provide a tour of service.

Once the bank approves the deal, finance returns to the customer or instructs the salesperson to escort the customer back to finance. The salesperson should not return to finance with customer in hand unless instructed. Customers may feel their deal is not important if finance has been interrupted and possibly they are speaking with another customer or salesperson.

Summary: “The turnover” itself is really just a brief introduction. However, it is what happens before “the turnover” that is much more important for the dealership to have strong finance department performance overall.

Brian Gallmeier, founder of Income Development Partners, uses his powersports experience at the retail level to train F&I departments. He can be reached at bgallmeier@charter.net or 612/616-8611.


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