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Special Finance®

Need Analysis Checklist for Subprime Customers

July 2009, F&I and Showroom - WebXclusive

by Rob Hagen

Men are notorious for refusing to pull over and ask for directions. GPS navigation units have helped this road warrior avoid the issue altogether. But on the road to the sale, I ask for directions from every customer I meet. If I didn’t, I’d never reach my destination.

In my training sessions, I stress developing a sales process specific to special finance and sticking to it. This includes completing the qualifying stage up front. When a customer walks in and says “I have a few issues with my credit,” my response is always the same: “Great! Let me get some information from you so I can give you some options for financing.” At this point, I’ll have two pieces of paper on my desk: A credit application and my needs analysis checklist. My goal is to find the unit that fits the customer’s needs and comes as close to their wants as possible.

For instance, let’s say a loyal Ford driver walks in and you’ve got an Expedition, an Explorer and a Taurus on the lot. The customer wants the Expedition but you know she can’t afford it. You stand to make the most out of the deal by selling her the Taurus, but, for $500 less in gross, you could put her in the Explorer. To me, it’s a no-brainer. For $500, you can get that customer a heck of a lot closer to the vehicle she wanted. That creates a happier customer, more referrals and, if she pays her note, a stronger relationship with the lender.

With that said, let’s take a look at the needs analysis checklist I’ve developed along with a brief explanation of why each group of questions is important.

1. Are you a full-time or part-time employee?

2. Are you a W-2 or a 1099-MISC employee?

3. What was your date of hire for your current job?

4. Do you have any job gaps in the past three years?

Let’s find out up front if the customer is self-employed or part-time. There is no point to working on a deal for three hours only to find out at the end that the customer’s employment status will limit his financing options.

5. What is your total monthly income?

6. What is your total household income?

If a customer’s monthly income is $2,500 but his household income is $4,500, you can reasonably assume that there may be a relative or friend available to boost the income, improve the customer’s credit picture or add a second vehicle. It’s a subtle way to ask for a co-signer without offending your customer.

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