Automotive Personnel, LLC has helped numerous of companies expand their geographic territory. Our clients include automotive finance providers, floor plan companies, service contract, software, and Internet providers among others.
We have found that it is important to help provide our clients with unique and comprehensive checklists to ensure controlled methodical expansion of their existing operation. The following checklist is tailored for finance companies, but provides solid basic framework for any company expanding into new markets. We focus on strategy, legal, sales, and operations.
- Business Development Strategy:
The automotive finance industry is quite competitive, and dealership personnel already have preferred lenders. F&I personnel need to know which applications are appropriate to send to you and have a reason to use you. To help F&I Personnel get “used to using your financing” , two strategies can be helpful:
- Strategy: Carve out a niche in the marketplace. Are you a “super-prime” lender for luxury vehicles? Or a deep subprime lender for 3 to 7 year-old vehicles offering medium terms? You must understand your institution’s needs. Does liquidity dictate acquiring assets so lower margins are acceptable? Or are you more ROA driven? Answers to these questions help define your niche.
- Attractive rates for a period of time to incentivize F&I Personnel to use your financing . This gives your Dealership Reps and F&I Personnel a “honeymoon period” to start doing business together and build a relationship.
Keep in mind markets do vary; in coastal markets, insurance coverage is a big issue for floorplan companies, some markets are 80% subprime retail financing while others 25%. Take the time to research the market so your products and approach make sense. A savvy local Sales Representative should help you with the particular “lay of the land” in a new territory.
- Legal services, including licensing, approved forms, insurance, DPI, VSI, local and state compliance.
- Sales Personnel, we look for sales representatives who:
- Are already in the geographic market
- Have at least 20 active dealers and relations with at least 50 auto dealers
- Have proven performance – above average success – high achievers
- Operations Credit – how many applications your staff reviews in a day varies with quality of applications, computer decisioned or manual , is the analyst required to load the application and pull the bureaus, any pre-investigations calls, does the analyst review deal structures or just issue payment calls?
Compliance personnel – enough trained staff for the new business?
Funding – Verification coverage
Collections – understand laws of the new areas?
Recovery – again, understand the laws of the new area?
Remarketing in the new area / auctions