What’s included: Funding for receivables You collect or We collect Floorplan Lines Simplified Insurance tracking
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performance to incomplete, poorly completed, or credit applications that are not conducive to BHPH. I teach a BHPH specific sales training class and we spend two hours of the twelve total hour class on how to complete a credit application. In the collections and underwriting class I teach, we dedicate the same amount of time as well. It impacts both equally, positively and negatively. The other issue I see with credit applications is they are not geared to BHPH. I see too many dealers using a Ford or GMAC credit application. Those types of applications are typically too lengthy and ask questions that are irrelevant to what we need and are missing questions that we DO need. The best credit applications I’ve seen ask for information like number and age of dependents, co-workers names and contact information, and “Goes By” in the name line. Information that can help us get a better idea of what the customer needs and even a few more leads for sales. The credit application, if structured and completed correctly, gives us a better understanding of the customer’s “story.” Direct verification is the other important thing before I breakdown the SAWS. A well-structured and complete credit application and good implementation of the SAWS are worthless unless you verify the information provided on the credit application. You want to make sure that the information is accurate since you will be starting a long term relationship with the customer. Relationships built on misinformation typically don’t last. And when I say direct verification I mean actually calling the landlord, place of employment, credit references and even the personal references. Utility bills and paystubs can easily be faked. I have seen a website where you can not only generate a paystub with at least five different templates that accurately
calculates all deductions, but also create a utility bill as well. The biggest push back I get when it comes to direct verification is that it slows down the deal. If you have a well-structured and complete credit application, the verification process should be no more than 30 minutes. When it comes to the SAWS, stability is first and is the most important when it comes to our customer base. Obviously this refers to how stable the customer is. This will include the time at residence and time at job. Through surveys and analysis we do as part of our 20 Groups, we have found that the BHPH customer averages 2-3 years at the residence and their jobs. This means that the average customer will change both residence and job at least once in the term of their note. So you should always get a residence and job history from the customer that is at least as long as your note will be. The important thing here is not just time at current job and residence, but time at previous and any breaks in either. I don’t mind a customer having six months at their current job, six months at their previous job, and six months at the job before that if there is little to no breaks in between. I get more concerned with a customer who has 6 months at their current job and one year at their previous job, but had a six week gap in between. The first customer shows they have consistently been employed for 18 months. The second has shown they are willing to not work for an extended period of time. When it comes to residence, I am seeing more and more customers who state they live with family or friends. I believe this is more of a millennial trend. In most cases using a question simply worded “how long have they lived with you THIS time” will reveal the truth to their actual time living with that family member or friend. I always recommend contact landlords directly. If they are paying rent, it can be a good credit reference as well as verifying their T e x a s
D e a l e r
March 2018