I recently sat in on an interview with GM Financial CEO Dan Berce and heard him echo others who have said federal regulation is jeopardizing dealers' finance profits.
I'd like to propose a plan to counter that attack.
First, recruit some satisfied customers as spokespersons. The consumer advocates going after dealers' finance profits normally get a few consumers to testify they've been charged inflated interest rates. What about lining up customers who believe the dealership finance manager found them a better deal than they could have obtained themselves?
Second, if there is a definitive study on how many auto loans are arranged through dealerships, those customers should be surveyed to find out why they financed through the dealer. Customers likely will say that the dealer's terms were competitive and that the financing was convenient. Dealers should use those statistics to make a case for indirect lending. If a study doesn't exist, one should be done.
Finally, dealers and their associations should develop advertising campaigns that encourage car shoppers to finance through the dealer. Make the point that dealerships have relationships with multiple lenders and can help customers shop around for the best rate. The advertising can include testimonials from customers who said they came to the dealership with their own financing, but the dealership beat the rate.
There have been plenty of media reports over the years depicting finance managers as rip-off artists. The industry needs to counter these blows with a media pitch of its own.