The Subprime industry is now the majority in financing. There is no doubting the fallout from all of the Subprime mortgage business is deeply affected the Subprime Automotive world.
I have the lucky privilege of cold calling on dealerships to see about helping them sell more cars to the Subprime market. I have discovered that there are a few types of dealerships. The first is the dealerships that want to be known as a Subprime superstar. They advertise for it and stock almost their entire inventory for it. Then there is the dealership that wants to do it but does not want to hurt their reputation. The third type is the most troublesome. They are the ones that say "We do not do any of that."
My question is, "What happens when half of your given market is classified Subprime?" Does that mean that you turn away half of your customers that walk in the door? Who would put any business in a market where they know that half their customers are not going to being able to do business with them?
Here is what I suggest to any dealership that thinks they are not in the Subprime business or they do not want to bother with it. First thing is to get a new pair of eyes. Better yet, just open the current ones. Subprime customers are now the majority and they need the most help. It is time to look at your current business model and evaluate where you are losing business. If one Subprime customer a day comes to the dealership and leaves without a car, how much does that mean in real dollars? For the average dealership that is open six days a week, that is 306 customers at $3,000 a deal, which breaks down to $918,000 a year in lost gross profit.
Let me know if you could use an extra 'mil a year.
I know that Subprime can be more work than the easy prime deals, but I am a firm believer in hard work. Especially when it pays a million bucks a year.
'Til next time.
Christopher Blackburn
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