Mike Colabucci had a problem common to many auto dealers. His salespeople were losing too many prospects who filled out credit applications by misjudging the customers' ability or readiness to buy vehicles.
"They would say the customer did not have the money — the typical answer everyone gives you on why they didn't sell a car," says Colabucci, dealer principal at Southern Subaru-Volkswagen in Waldorf, Md.
Colabucci resolved to take credit data away from his salespeople and get it quickly to experienced finance and insurance managers who could get customers loans. So he developed an electronic credit application process that uses handheld computers to transmit data wirelessly.
Since Colabucci started using the system in 2005, the results have been dramatic. He says that at his dealership and three used-car lots, the closing rate — the share of credit applicants who end up buying vehicles — has risen to 35 percent from 15 percent. His franchised dealership sells about 85 new and used vehicles a month.