Issue link: https://read.dmtmag.com/i/316641
FINANCIAL In the last two articles we reviewed two of the most important steps in the sales and finance process — the salesperson turnover and the customer interview. The salesperson had just completed a proper turnover, and the finance manager was then able to do a complete customer interview. Now we'll review some best practices on struc- turing a deal that banks can approve, and then the setup of the menu for presentation. STRUCTURING THE DEAL By reviewing the cus- tomer's credit appli- cation, pulling the customer's credit, review- ing the deal file, completing a thorough cus- tomer interview, having a brief discussion with the salesperson and sending the deal to some banks for at least one approval, the finance manager is then ready to set up the menu. Let's take a look at these individual steps and the information gained from each, which are all integral to setting up the right menu for each customer. CUSTOMER CREDIT: LONGEVITY, ABILITY, WILLINGNESS First, review the deal packet and what is loaded into the computer for the deal. Ensure the NADA book value is included, make sure the down payment is recorded properly, as well as any trade-ins, rebates and the actual sales price. The customer is the first one to know if his information is not accurately recorded. When the finance manager gets to the menu, he or she should review this infor- mation with the customer to ensure accuracy again. Accuracy is important; the deal should be sent back to the sales manager if this infor- mation is not accurate. Review the credit score at each bureau — some banks accept more than one, and some only need one. If a Transunion score is over 700, and the Equifax is only 690, you may have an instant approval without even sending to a variety of banks; just send in the Transunion score for funding if it is accepted at that bank. Make sure there are no derogatory items on the credit bureaus. If there is one, review that item with the customer to determine why, and see if it has already been fixed. Some banks will reverse their decisions with proof that the STOCK MARKET WATCH DEALER FINANCIAL SNAPSHOT APRIL 2014 April 2014 was a positive month in Same Store Sales for 1,400 ADP Lightspeed dealers, with overall sales increasing 10.7 percent. Four of the five U.S. regions reported double-digit sales growth, while the Northeast was up 3.1 percent. Major units saw the biggest increase, up 12.2 percent over April 2013. The West reported the largest overall sales increase, up 12.9 percent and the largest unit sales improve- ment, up 15.7 percent. PARTS SALES In parts, 769 dealers were up, and 631 were down. SERVICE SALES 852 dealers were up, and 484 were down in service. MAJOR UNIT SALES 766 dealers were up in unit sales, while 433 were down. NORTHWEST 5.4% Parts Department 9.5% Service Department 12.9% Major Units 11.8% Overall MIDWEST 4.0% Parts Department 12.1% Service Department 12.8% Major Units 11.7% Overall NORTHEAST 0.2% Parts Department 4.5% Service Department 3.3% Major Units 3.1% Overall SOUTH 2.9% Parts Department 8.9% Service Department 14.7% Major Units 12.8% Overall WEST 2.0% Parts Department 11.5% Service Department 15.7% Major Units 12.9% Overall UNITED STATES 2.6% Parts Department 9.5% Service Department 12.2% Major Units 10.7% Overall Stock Price Percent Company Ticker 5/2/14 Change ArvinMeritor ARM $13.83 23.8% Cooper Tire & Rubber CTB $27.48 15.4% Harley-Davidson, Inc. HOG $72.68 10.9% Marinemax, Inc. HZO $16.66 10.6% Carlisle Companies CSL $82.71 8.9% TCF Financial Corporation TCB $15.51 -1.4% Orbital Engine Corp. Ltd. ADR OE $2.59 -1.5% Universal Technical Institute UTI $12.00 -1.6% Intl. Speedway Corp. Cl. A ISCA $31.29 -2.2% Arctic Cat, Inc. ACAT $41.54 -5.6% POWERSPORTS BUSINESS WINNERS AND LOSERS FOR MORE ON THE SAME STORE SALES DATA For more information on this report and other industry data, contact: adplightspeed.com/dataservices MARKET WATCH Change 5/2/14 from 4/11 % Change Powersports Business Index 302.733 8.38 2.85% Dow Jones Index 143.626 4.23 3.03% S&P 500 Index 128.034 4.46 3.6% Source: Wells Fargo Securities LLC 80 100 120 140 160 180 200 220 240 260 280 300 320 9/16/13 10/14/13 11/8/13 12/9/13 1/6/14 1/27/14 2/25/14 3/14/14 4/11/14 5/2/14 PSB INDEX* DOW JONES INDEX S&P 500 INDEX STOCK MARKET ACTIVITY * The Powersports Business Index has been adjusted to reflect the addition of TCF Financial Corporation (TCB) on 2/25/14. Structuring the deal for menu setup F&I SOLUTIONS BRIAN GALLMEIER derogatory item has been cleared up, and oth- ers might approve even with the derogatory with a solid explanation from the customer. Pay special attention to the customer's monthly income, monthly fixed expenses according to the bureau and application, including monthly rent or mortgage, child support, any fixed credit payments and revolv- ing credit. For lower credit scores, banks might not approve any deal based on debt-to- income ratios. For exceptional credit scores, banks might approve regardless of the amount owed. The credit bureau might give the finance manager additional clues that might benefit during the actual menu presentation. If a customer is coming up slightly short on either debt-to-income or down payment, a second customer interview might help the finance manager discover something that will help with the ratios. Many times income is understated, and many times debts such as monthly rent are shared with others. Also, most customers can come up with a slightly higher down payment. For those customers who simply do not have the longevity, ability or willingness to pay on their own, a second customer inter- view will help determine if the customer has a viable co-buyer who can be applied to the See Gallmeier, Page 10 www.PowersportsBusiness.com Powersports Business • May 26, 2014 • 9 P09x11-PSB7-Finance.indd 9 5/14/14 2:02 PM