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Subprime Credit – Asking The Right Questions

Are Your Sales People Asking The Right Subprime Credit Questions ?

Statistics show that somewhere between 30% and 60% of those walking onto your lot have subprime credit.. A few simple questions can help determine if you are talking to a customer who has subprime credit and needs sub-prime lending.

This will make a tremendous difference in your closing ratio. Working with the right Finance Manager who is trained in the right methods can greatly increase the profitability of your dealership. That will increase the rate at which you sell your sub-prime and used inventory.

  1. Where did you purchase your current vehicle?
    In most cases, the subprime credit customer will not have a problem sharing this information with you, but the answers can tell you a lot. For example, a customer that went to a dealership known for special finance, there’s a good chance the customer may still need some help with their credit.
    If the last car purchased at a dealership that does not do subprime ,you know there is a good chance you are dealing with a prime prospect. What if they  purchased their car for cash outright? That is another sign they may have little to no or bad credit that may need the special handling of a Finance Manager.
  • Was it a franchised store like Chevrolet, Ford or Chrysler or a Buy Here Pay Here dealership.?
  • Why did they choose that place to go ?
  1. Which company financed your current vehicle?

Make sure your salespeople have a list of the subprime lenders. A good follow-up question might be “What other finance companies did you look at when purchasing the vehicle?”

  • For example: Did the subprime credit customer use a deep lender such as Westlake Financial or Credit Acceptance or did they go through a captive lender such as General Motors or Ford Motor Credit ?
  1. What is your opinion of that finance company?

The third question is a real giveaway. When customer tells you they do not like the current finance company because they call all of the time, take that customer directly to your finance manager. We all know finance companies only call for one reason – to collect payments. Those of us who make our payments on time never hear from our lenders and most likely have no positive or negative opinion of the lender.


Once your customer is in the right place, closing the deal becomes that much easier. Your Finance Manager can handle the harder questions involving credit, get scores, and discuss options. Customers fell more comfortable when they are talking not only to some one that can help them but with someone who cares.Not to mention, you did not potentially embarrass a customer by drilling them about income and credit as soon as they walked in the door to make the right determination.

Simple Methods to Increasing Appointments

According to most experts and sources, you will set appointments with 50% of your leads, 50% of those appointments will show, and you will deliver a vehicle to 50% of those that show for their appointment. Given that, if you start with 100 leads, you will set 50 appointments, 25 of those will show, and you will deliver 12.5 vehicles. If you raise the appointments set by 10% to a 60% ratio, 50% or 30 show, and you sell 50% or 15 vehicles, you go from 12.5 to 15 vehicles delivered or an increase of 20%. These simple methods to increasing appointments can help you accomplish this 10% jump, however? It is easier than you might think.

You should first make a list of the questions most frequently asked by your customers during the appointment setting process. Next, you need to prepare answers that are effective at overcoming the objection. When answering the question, state that you understand their question. Then you should let the customer know that they are not alone in asking that exact question to make them feel comfortable. Now, answer the question and again try to set the appointment. Here’s an example:

Question: What will my interest rate be?

  • Bad Answer: Well, your credit is not so good, so you will probably pay around 22%.
  • Good Answer: That is a question I hear a lot. I understand your concern about interest rates, like most of our other customers. As you probably know, interest rates vary between new cars and used cars. Our Finance Managers are the best in the industry at finding the lowest interest rates possible for each of our customers. We also have a special computer program that will match each customer with the best finance source to achieve the lowest rate available. You will not find this combination of systems at most dealerships, only here at Johnson Ford. You are going to love the way this system works. Can you come in this evening or would tomorrow morning be better?

Are your people using good answers or bad answers? As you can see, with the good answer we have overcome the objection and most likely caused the customer to get excited that they contacted the right dealership that has a system to find the best interest rate. There’s a good chance this customer accepted the appointment and came into the dealership. If they come into the store, there’s at least a 50% chance of making the sale. If they do not come to the store, the chance of a sale is zero.

  • Here is a short list of other questions you may want to add to your list:
  • How much will I need as a down payment?
  • What will my monthly payment be?
  • I do not want to drive that far to buy a vehicle.
  • Will I need a co-signer?
  • I want to refinance my current vehicle.
  • I cannot come in this week.

That should get you started with your own list of questions. Once you have all of the answers prepared, make sure that everyone involved in the appointment setting process can respond to each question without hesitation. The best way to do that is by role playing.

By the way, if you really get good at overcoming objections you may also increase your appointment-to-show ratio. If you increase your lead-to-appointment ratio by 10% and your appointment-to-show ratio by 10%, you will increase sales by 44%. That is not an increase to scoff at!

Working the Lead: Days 1 through 120

You pay good money for the leads you purchase. It does not matter if they come from direct mail, the Internet, television, radio, newspaper, or any other source. Unfortunately, most of the leads many dealerships receive get worked once and then tossed in a pile, never to be touched again, whether it is just one lead or 100 leads .I hope this is not the case at your store, but if it is, you need to read on.

This process is the one taken by David Basha, the owner of Carriage Nissan and Carriage Mitsubishi in Gainesville, GA. It is the most comprehensive and thorough working of leads I have found after 20 years in the industry.

Day 1 – The lead is sent directly to the appointment setter, either a salesman or the BDC. They immediately call the prospect to make the first attempt at setting an in-store appointment. We all know that you do not get through to 100% of the leads on the first attempt. The lead does not go into the “dead” file until personal contact is made and disposition (interested or not interested) can be made.

Knowing that hot leads must be contacted immediately, his team sends the first letter the same day. This letter acknowledges the prospect’s information has been received and this dealership seriously wants their business. It covers the basics of financing options and inventory selection.

Day 7 – If an in-store appointment has not been set and kept, letter #2 is sent out. This letter covers the reasons the dealership and the prospect may not have been able to get together yet and offers new and compelling reasons to call for an appointment today.

Day 14 – Most dealerships have long forgotten about this lead by now, and most prospects have started shopping elsewhere. But not David, because he and his team are just getting started working these leads. It is time for letter #3, which reminds the prospect that Carriage wants their business and even has a special gift waiting for them at the dealership. Not relying on just a gift, the letter also reminds the prospect why Carriage is the right dealership to help with their credit situation.

Day 30 – Letter #4 goes out on this day with an urgent message that now is the time to make that purchase. Special financing options and new inventory selection are discussed.

Day 60 – It is time for letter #5 to hit the mail. This letter offers a free oil change while the prospect is weighing the opportunity to explore options for replacing that vehicle.

Day 90 – You guessed it; it is time for letter #6. Fear of rejection is the main reason why people ignore offers of help for this long. In this letter, the dealership explains how easy the credit interview appointment is in an attempt to remove that fear.

Day 120 – Letter #7 offers the prospect automotive financing and the opportunity to get a nationally accepted credit card. The dealership again stresses that they want the prospect’s business and are willing to work for it.

Now that is how to work every lead to the fullest extent! At the end of each month, they take one more shot at the leads that they weren’t able to reach. In one month, that stack included 180 leads. From that she was able to set 20 additional appointments. If half of those 20 people keep their appointment and Carriage can deliver vehicles to half of those that keep their appointment, they will deliver 5 additional cars.

It’s time to stop allowing your leads to become orphans. Go for it and make more money.

Please contact us at or visit us at if you would like free copies of the letters mentioned in this article

5 Ways to Improve your Subprime Vehicle Sales

There is no doubt that subprime financing is not the easiest department to run at your dealership. Getting the right customers by buying subprime leads and using subprime marketing is a great way to find the right customers , but that’s not all.There is also no doubt that it can be the most profitable department at the dealership. Without all the right pieces, however, you will never maximize the potential of this part of the industry.

However, what are the right pieces ?


There is a huge opportunity to make lots of money in subprime sales, but you will never find out how close you can go to the edge without training for your entire staff. There are national, regional, and local events that can be a great help. Your lenders and vendors may also offer special training to maximize the use of their products. Take advantage of every opportunity to learn.


It is very important to have the right combination of lenders for the prospects in your area. It seems like no two lenders today buy the same customer, especially when you are working below the 550 level. Some lenders even have their own scoring system, which can be a huge benefit. They may buy someone with a score of 460 based on the person’s job longevity, the length of residency at the same address, or if the person has shown improvement in the way he conducts his financial affairs. For example, lower score customers could be financed at companies such as Credit Acceptance, UACC or Westlake Financial and Bankruptcy customers at Prestige Financial or AFS.


The right inventory can vary greatly based on the economic conditions in your area. Over a 30-day period, keep track of the number of sales lost due to not having the right vehicle. If you lost more than a few deals, it is time to make some inventory changes. Remember, gross profit is seldom determined by the selling price. In many cases, it is just as easy to make a $3,000 gross on a $7,000 vehicle as it is with a $12,000 vehicle.

Appointment Setting

This very well may be the weakest link in many stores. It also may be the most important step in the entire process. The person or persons setting your appointments should be trained to work with all types of individuals at every level of credit. You should consider a compensation package that rewards them not only for appointments set, but also vehicles sold. If you do not have the right people inside the dealership to do this, you should hire a professional company that specializes in appointment setting.

Subprime Marketing

Although this is the first step to selling a vehicle to a new prospect, this is last on the list, since your ability to perform in the other areas discussed should dictate who you target for your marketing. It is very important to go after the right target audience. Trigger Mail also called Active Shoppers, Bankruptcy and Data Based response marketing are some of the ways to get that customers that need the extra ” push”.,Targeting those with lower credit scores will achieve a higher response rate, but also a lower delivery ratio due to the amount of applications you are unable to bank in this group. Subprime marketing requires some time to develop The bottom line: don’t waste your money going too high or too low. Find your “sweet spot” and work that group hard.

Increasing Sales

We all want to increase sales.

We are constantly looking for new marketing techniques that will increase sales. In many cases, those additional sales are ready and waiting for someone to reach out and grab them. You just need to do the right things. Here’s the great news: You don’t need to spend a lot more money. Try these four methods to help in your quest.

Method 1 – This method works for the entire dealership, not just the Special Finance Department.
A recent study showed 90% of prospects who walk into a dealership claim they never receive a follow-up call or letter after the initial visit. That same study shows that if those same people did receive a follow-up call or letter, 33% would return to that dealership and 67% of those would make a purchase. This is a powerful way to simply and easily increase sales at virtually no additional cost.

Let’s use some big round numbers to show the impact of this. Say your dealership sells 100 vehicles per month. If you close 25% of your prospects, you would have seen 400 people in that month. Simple math shows that 300 of those prospects did not buy. If 33% would return to the dealership because they received a follow-up call or letter, you would get 100 be-backs. If 67% of those be-backs purchase a vehicle, you would sell 67 vehicles. Add that to the original 100 vehicles sold, and you’re up to 167 for the month. You increase sales by 67%.

Method 2 – I’ve mentioned this method, based on an article by Paul Snider, many times.
Most dealerships get at least five references for each vehicle sold. Because birds of a feather flock together, many of these references are in the same negative credit situation as the customer who gave them to you. Although your lenders don’t require that you verify these references, doing so will produce many additional sales.

Here’s a short version of the script: “Hi, this is Denny from USA Motors. I’m calling because we’re helping your friend, Joe Smith, get the financing he needs for his new vehicle. Our lenders require that Joe give us a few references, and he gave us your name. We’re just calling to verify that your information is correct.” A percentage of those references will respond, “You’re helping Joe get a vehicle? If you can help him, can you help me?” I’m sure you can see how effective this could be. To maximize this method, why not ask for 10 references? That would give you 100 references for every 10 vehicles delivered. On average, you will sell 4 additional vehicles from every 100 references. That means that you will turn 10 sales into 14, or an increase of 40%.

Method 3 – We mentioned following up on your in-store appointments in Method 1.
Let’s not forget about all of the leads you receive that don’t come into the store. A series of follow-up letters and calls to these “lost leads” will prove to be quite profitable to you.

Method 4 – Once again, let’s not forget that “birds of a feather flock together.”
Once again, let’s not forget that “birds of a feather flock together.” Make sure that with every vehicle sale, your new customer drives away with at least 10 of your business cards in the glove box. Your new customer will be showing off his new vehicle to all of his friends, some of whom will be asking where he made his purchase and what are the chances they could help him as well. Your customer will be proud to grab one of your cards and hand it to his friend.

Some of these methods might sound simple, but in reality, they are simply effective. None of these methods will cost you more than a few dollars. With the right systems and processes in place, it can be almost automatic. How can you lose? Spend a little and sell a lot more. Do the right things and steal a bunch of sales from your competitors. Good Luck and Good Selling!

Denny Long | President and Head Credit Mail Expert.

Former 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