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In today’s world, there is a fine line between marketing for a Special Finance department and a Buy-Here, Pay-Here (BHPH) operation. As a matter of fact, it is really an overlapping line. The number of banks that will buy subprime paper today has greatly increased over the last two years. This increases the competition for the BHPH operations. To be successful, you need to market smarter, and that means marketing to your best targets. Let’s look at a few target audiences and the opportunities for both Special Finance and BHPH.

Bankruptcies – The number of households in this country that have experienced a bankruptcy is growing rapidly.

At one time, this was the favorite target audience for Special Finance departments and BHPH operations. If you run a Special Finance department, you are missing the boat if you aren’t targeting this group. There are a number of good finance sources that will still buy this paper, and you have a better chance to get a response from this audience since you’ve lost most of your competitors. If you have a BHPH operation, you too can take advantage of the lower number of dealers going after this audience. For either group, it’s still a small investment that typically pays off.

Low Credit Score Vehicle Shoppers – Yes, there are still plenty of people out there that want to buy a vehicle.

These people were being turned down by banks at a higher rate than in the past, but that’s changing. Increased competition means smart marketers are turning to programs like Trigger Leads. Who better to target than an individual with a low credit score that was shopping yesterday, but might have been turned away? They still want a vehicle, but their assumption is that all dealers are created equal, so if one dealer could not get them approved for financing, it is likely that no dealer can help. Now, we know better than that, don’t we?

The fact that someone had their credit bureau report pulled within a score range you desire will “trigger” an offer of credit to be mailed on your behalf. If you’re in Special Finance and know the score ranges of individuals you can help that it is likely that your competitors can’t (say 550 to 630), then you should target this group. For BHPH, we all know that anyone shopping with a score below 550 should be shopping at your store. The big question is: does the consumer with a score below 550 know that they should be shopping at your store? Well, it’s your duty to let them know. Depending on your local Special Finance competition (or lack of competition), you may want to consider targeting the group all the way up to a 600 score. The response rate for this type of program is typically 5 to 10 times average, so the return on investment can be the best of any marketing program. The fact that this type of marketing is possible may be the best-kept secret in the industry. The secret’s out, so take advantage of this great opportunity.

Internet Leads – Again, it’s great when you can target a group that’s actually shopping for a vehicle, and that’s what you get when you purchase Internet leads.

Now, there are a couple of reasons that an individual would go shopping for vehicle financing on the Internet: Firstly, that they are too busy; secondly, that they shop for everything on the Internet. Then, more than likely, they are shopping on the Internet because they have credit problems. Now, there are benefits to both Special Finance and BHPH with Internet leads, and it really comes down to about a 50/50 gamble. About 50% of these shoppers will not qualify for conventional financing regardless of how many banks a Special Finance department has available. That leaves the other 50% that have no choice but to go to a BHPH operation. Whether you are Special Finance or BHPH, you will likely find that you can get a great deal on these leads right now, since the supply is high and the demand (number of dealerships competing for the leads) has dropped.

That’s just a small snapshot of the great marketing opportunities for the Special Finance department and the BHPH operation. Either way, the water is fine, so jump on in. Those that target these markets right now will be the big winners of the race to higher profits. Good Luck and Good Selling!

Denny Long | President and Head Credit Mail Expert.

Formerly lead writer for Special Finance Magazine for 15 years, he has watched the subprime market blossom and took note, He is one of the most recognized automotive marketing experts in the country.