Breaking In To Indirect Lending

Working in and around dealerships most of my adult life,  I have come away with so much information from my dealer friends over the years.  Of course, owning my own dealership helped tremendously in the fact that it enabled me to fully understand what the dealerships have to do in order to keep their lights on and their staffed paid.  The business is complex and it’s hard work and I never really knew this until I had to get my feet wet in the business.  Lenders want to be a part of the indirect lending game but the majority of them do not know the art behind indirect lending.  Your customer is no longer that person that walks into your office to ask for a loan, your customer IS the dealer.  It’s a balancing act for managers of lending institutions as they not only have to follow their own regulations in lending and keep their personal customer base happy, but now they are being told to go out and get business from dealerships with little to no training.  I can only name a handful of lenders that somewhat have it right and these guys are the major players in the indirect lending market and to try to compete against these guys is a daunting task for the direct lender. 

Understanding a dealerships needs varies from dealer to dealer and if you are not equipped with the training to read the dealer needs then you are fighting a losing battle.  Dealers are fickle when it comes to their lenders and though some have loyalty to certain one’s that can change with the wind depending on circumstance.  The reason behind this is money…plain and simple.  If you are a lender that is making the dealership money you are in, but if you start costing them money you are out as fast as you got in the door (no offense to the dealers).  It’s business and every business wants to make the most money they can and this holds true to dealerships. 

When I trained under some of the best sales directors in the industry I learned how to sell my program, but in essence I learned the most from the dealerships themselves.  The problem is you have to ask the right questions but first you have to build a trusting relationship with the dealer in order to get their advise and expertise.  To my dismay, I have seen indirect and direct lenders treat their dealerships as if they were ignorant, spoiled, and needy individuals, this is simply not true however, they can be demanding and rightfully so.  These guys and ladies know what they are doing and they know their job and can do it with their eyes closed.  I have often said they can smell a deal coming.  They have an uncanny ability to read their customers wants and needs and they can read a dealer sales rep even easier.   They know immediately if you know your business.  They know if you can deliver and they know within minutes if you are even worth their time and their time is PRECIOUS.  

A dealer will dismiss you and your program if you are going in “glad handing” them.  You aren’t spending the quality time with them that they deserve and you aren’t building a relationship, but I promise you the reps that do this are getting the business.   These reps have learned that a dealers time is precious because while they are sitting there talking with them they could be losing business.  As a rep you should first ask them if they have time to sit down with you to go over your program with them.  If they say they are too busy, don’t walk away..tell them you will wait until they are free and park it.  If that’s not feasible and you need to move on, just dive in right there with the program in front of them and schedule an appointment to talk with them more but if you are selling a good program and you quickly run through those highlights often times you will peak their interest and they won’t let you out the door without learning more about it.  The key is to read the dealer and don’t walk away. NEVER…and I mean NEVER just hand them a business card and walk away.  Dealers are visual people and you need to be armed with your program and you need to hand it to them and point to the highlights of the program.  Watch their eyes light up.  You are now tenacious and they know you mean to earn their business. 

I used to smile at people that said they wanted to be a dealer rep.  In their mind you get to work from home, you have all the time in the world and you don’t have to do anything much. Ha! That my friend is a joke and a bad one.  Dealer reps that are worth their salt are working when you are snug in your bed.  They are analyzing their prospects, they are working late into the night to learn as much as they can about that new dealer they are about to walk into in the morning.  Their hours are not 8-5, their hours are whenever the dealer needs them.  Their phones are on 24/7 and they are working deals at 11pm at night.  Burn out is common, but the adrenaline rush keeps many of us in this business.  NOTHING thrilled me more than to steal a deal from my competitor.  It’s a game that I love playing and most successful reps are driven this way. 

  A rep is at the mercy of the dealer and their underwriter, so I highly suggest that if you are a rep that has no lending authority your best friend needs to be your underwriter.  You NEVER question the underwriter in a way that makes them feel like they don’t know their job but you do question them respectfully on ways to make the deal work.  You work as a team and the quicker you establish that relationship with your underwriter the better.  Ultimately your goal is their goal.  They have to buy business to stay out of the limelight and I have great respect for underwriters because they are walking a tightrope every day and when every deal counts they are measured on their ability to make sound profitable decisions.  It’s not an easy job either but it can be easier if you are there to support them as well.

Lastly, I will give you one strategy that I have used when “cold calling”;  I walk onto a lot an start looking at cars.  The salesperson walks up and I strike up a conversation about the vehicle. I love cars, so it’s great for me and I get to talk with salespeople about business.   I have learned that the sales person is pretty straight up when you ask them questions about how their month is going. How many cars they have out for the month and how many do they need  to sell to hit their pay.  They figure out I am a rep and they still will talk to me.   I am genuinely interested in their lives, and I let them know that I am here to help.  They will lead me to who I need to talk to every time and I seek them out as I am leaving and give them my card and THANK them for their help.  It’s okay to discuss some of the program with them but don’t put it all out there because the last thing you want to do is cause a problem with sales and finance.  Never discount the salespeople and once you meet the finance manager, sales managers or whomever you are initially introduced too ask to meet the other managers.  Even if it’s to say hello and tell them who you are and grab a card.   The next visit make a point to talk to as many managers as you can.

That’s it for now..hope this helps and to all my dealer friends, thank you for your knowledge, guidance and most of all your loyal friendships.

Donna Weir

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