Auto Dealer Monthly Magazine is the daily operations publication serving the retail automotive industry. This automotive publication serves dealer principals, officers and general managers with the latest best practices.
Issue link: http://autodealermonthly.epubxp.com/i/146907
ON THE C OV E R Robert VonTempsky, Bryan Reese and Nick Walford man the special fnance department at Sill-TerHar Motors. Reese says bankruptcies represent the bulk of his special fnance business, and those customers get "the red-carpet treatment." water Finance Co. also ofer programs for recent bankruptcies. So what makes "BK" customers so creditworthy? WATCHING THE MARKET Bryan Reese, special fnance director at SillTerHar Motors in Broomfeld, Colo., says customers who recently f led for bankruptcy are a safer bet than those with other types of credit issues. "Tey don't owe anybody money, and they can't just fle for bankruptcy again," he says. "Tey pay their bills but something happened. It could be a divorce, loss of job or a medical issue." Sill-TerHar moves upward of 40 special fnance units each month, most of which are BKs. Reese partnered with Chandler, Ariz.based OnlineBKManager.com to funnel leads to the store. Tat company's president, Robert Davies, says those deals get funded 16 for one simple reason: Finance companies know they'll bolster their loan portfolios, and that increases their access to capital. Tat wasn't always the case, however, particularly afer the 18-month credit freeze that followed the burst of the housing bubble. Subprime mortgages, not auto loans, were to blame, but dealers and car buyers sufered. By the time capital began to fow back into the market, Davies says investors had come to their senses. "In 2009, Prestige Financial became the frst to do a securitization," he notes. "It was small, about a $150 million portfolio. But it showed the world that subprime automotive works." Sources and options for fnancing have multiplied ever since, and Davies says there is no shortage of customers looking for dealers who will work with them. His sources AUTO DE ALE R MONTHLY • AUGUST 2013 report a steady fow of 25,000 to 28,000 new bankruptcy flings and discharges each week this year. Skip Cowan has been fnancing bankruptcy customers at Rock Honda in Fontana, Calif., since 1994. Today, that's all he does, and his four-man department closes 35 to 45 deals every month. His title is "VIP services director." "Tat's how we look at those customers," he says. "We really think they are VIPs." Cowan makes a personal investment in each customer. He believes that people who are dealing with personal issues shouldn't be subjected to the standard sales process. Much of his time with customers is spent explaining how the deal they get today will lead to more favorable terms in the future. "I believe I have the highest repeat and referral rate in the store," Cowan says. "My