The terms, conditions and criteria placed upon such an acceptance are very different to prime and can be seen by a dealer as too restrictive. Also the subsequent conversations with the customer are too easily mishandled by sales staff who may be disappointed that the original deal has fallen through. In most cases the deal fails at this point.
Those deals that do go ahead are almost certainly at a reduction in profitability for the dealer, according to Optima Sales Solutions managing director Richard Lebeter.
Optima offers a service that takes over from the retailer when a deal is not suitable for the prime finance suppliers. Unlike some sub-prime finance providers, Optima does not just return an acceptance fax to the dealer, it sends back a re-qualified customer who is appointed to test drive pre-selected vehicles from the dealer’s own stock. Lebeter, previously training manager at Perrys, says all customers are vetted and the work carried out for the dealer, ensuring that the cars fit with the finance companies criteria and the deal is profitable.
This service reduces the amount of time dealer staff spend on sub-prime deals by ensuring that they are placed with the right finance supplier, reducing administration. Optima claims it improves customer understanding, resulting in someone more likely to proceed with the transaction.
The company has been working with a number of dealers which are now pro-actively advertising for credit problem customers. These leads go directly through the Optima process. Dealers have increased their sales and F&I profitability without detriment to their core business or additional expense.
Franchised dealers and independents are able capture more of the sub prime finance market than they currently service.