Category: Business Growth

Navigating Subprime Paper

Post author By efgmarketing
Post date August 28, 2019

Contributing Author:
Glenice Wilder
Vice President
EFG Companies

In the last five years, lenders have been competing for more powersports business. Some loosened credit requirements and extended loan terms, while others evaluated the use of alternative data to more accurately determine a person’s creditworthiness.

However, powersports dealers still struggle getting subprime paper bought. When my team is in the store and we see this struggle play out, we always ask how much effort is being put into maintaining lender relationships. The simple fact is, the stronger the relationship, the more willing a lender will be to negotiate and buy outside of their criteria.

So what does it take to develop strong lender relationships? When pondering this question, think beyond complete and accurate applications. It takes communication and the ability to manage expectations.

Do all your team members know lender criteria like the back of their hands?

It’s never a good idea to randomly submit an application hoping for an approval. This process increases each lender’s Look-to-Book ratio, and angers customers when they start receiving a bunch of denial letters in the mail. Each team member needs to clearly understand each lender’s criteria and only submit loans they know will be approved.

Tags EFG, Glenice Wilder, Motorcycles, Powersports, subprime loans

Business Growth

Keep On Keeping On

Post author By efgmarketing
Post date July 10, 2019

Contributing Author:
Glenice Wilder
Vice President
EFG Companies

We are halfway through a very interesting year in retail powersports. If you had planned for continued low motorcycle sales and increased ATV, UTV sales, congratulations! You’ve planned successfully and hopefully are managing well. Going forward, you’ll need to stay the course. The forecast for the second half of this year and all of 2020 appears to be equally bumpy. In fact, Black Book recently questioned whether the powersports market would see its typical price spike in Q3.

The Economy

On June 19^th, the Federal Reserve chose to keep interest rates steady in the near term, but retained an option to cut rates as economic risks mount and inflation remains stuck below their target. Amid continuing trade tensions and slowing global economic growth, the Fed is preparing for the economy to take a hit and is keeping an interest rate ace up their sleeve.

There are other indicators of a stalling economy. A subdued global economy, increased corporate stock buybacks, and some spikes in lay-offs will keep business bumpy throughout 2019 and into 2020. Significant peaks and valleys in the stock market have caused unrest. The good news is that investors are predicting another recession in two to three years, meaning a recession may still be a few years off.

Tags Federal Reserve, Harley Davidson, Polaris, recession, Trump Administration

Business Growth

Details Matter: Pick the Right Product Administrator

Post author By efgmarketing
Post date May 1, 2019

Contributing Author:
Glenice Wilder
Vice President
EFG Companies

With powersports sales flat-to-down for the past couple of years, more dealerships are offering a variety consumer protection products to differentiate their business and generate more revenue. While this is certainly a sound strategic move, don’t rush to sign up the first product administrator you find. There are some big differences between providers. Make sure you properly vet your provider before they drain your profit – or ruin your reputation!

It’s You…Not Them

Because your customers are buying F&I products from you, their experience with those products will reflect back on you. You can have the greatest closing numbers in the world, but if your F&I product experience doesn’t reflect the service you provide in the dealership, your customers are not likely to return for their next purchase.

Essentially, your customers may associate their claims service experience with your dealership. A good experience could cement their loyalty and cultivate return business, whereas a bad experience could send the customer elsewhere when shopping for their next vehicle.