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Brien Joyce Vice President EFG Companies

Contributing Author:
Brien Joyce
Vice President
EFG Companies

You’ve implemented strong technology solutions to provide dealers with automatic approvals and denials. You’ve created robust mobile applications to foster strong relationships with consumers. You might even have gone completely digital with all loan services. In the race to provide dealers and consumers with instant credit descisioning, have you lost the human element of building relationships?

According to J.D. Power and Associates’ 2017 U.S. Dealer Financing Satisfaction Study, lenders need to refocus on communication and dealer relationships. This annual study measures dealer satisfaction with auto financing providers, based on application and approval processes, provider offerings, and sales rep relationships among other factors.

It’s time to get back to basics when it comes to developing business relationships, especially with auto loan originations on the decline. TransUnion announced that auto originations fell for the third consecutive quarter in their most recent quarterly Industry Insights Report.

So, what does it take to develop strong dealer relationships? When pondering this question think beyond quick loan descisioning and interest rates. It takes superior service and a strong value proposition.

  • When an F&I manager calls about an application, are they met with a phone tree or an actual person?
  • Are your loan officers courteous and respectful when speaking with dealership personnel?
  • If your system flags a loan application as incomplete, do your loan officers just ignore it and assume the dealer will figure out the mistake when no funding decision is made, or do they proactively call dealers to address the application?
  • Does your auto financing department operate on dealership hours or banking hours?
  • When your representatives visit dealerships, do they just drop off donuts and coffee, or do they make a point to sit down with dealership management and discuss how your institution can be a better partner?
  • How often does your institution proactively provide in-person training and updates on your loan requirements, taking into account the high-turnover nature of retail automotive?
  • Aside from APR, how is your auto loan different from the competition?
  • Do your loans make it easier for F&I managers to upsell consumer protection products to boost their margins?
  • Do your loans provide consumers with value that insulates them from significant impacts to their savings?

By focusing on your service model, rather than just numbers and rates, you are more likely to close more loans, increase your indirect lending market share, and cement your relationships with your dealer partners.

In addition to a strong service model, it’s imperative that you address the question of whether you are providing tangible value to both dealers and consumers. One of the best ways to accomplish this is through the use of complimentary consumer protection products, such as a limited powertrain warranty, vehicle service contracts, GAP, tire and wheel protection, paintless dent protection, or vehicle return.

Structuring your loans with strategic F&I products makes it possible for dealers to increase their PRU through upsell opportunities, which in turn:

  • Attract and retain dealership partners
  • Increase year-over-year auto loan volume and financial control
  • Expand per month income
  • Reduce default rates
  • Decrease repossessions and collection costs

With more than 40 years in administering consumer protection products and working hand-in-hand with dealers across the U.S., EFG Companies knows how to structure your loans to be more attractive in the F&I office with F&I products custom-tailored to match your dealership-partner’s demographics. Contact us today to find out how.

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