Dalton says the Miller group, which ranks No. 10 on Automotive News' list of the top 125 U.S. dealership groups with 39,596 new units retailed in 2012, doesn't prescribe best practices for the F&I process. But he offers dealerships five tips to smoothing the process when working with credit-challenged customers.
1. Get an interview done early, so the customer has reasonable expectations.
"The important thing is that engagement should happen before the car is selected and sold," Dalton says. "If the car is sold and then you engage them, sometimes when they get to the desk that 700 FICO score turns out to be a 550. That's a very, very, detrimental situation."
2. Get as much information as possible so the lender doesn't have to ask.
"In prime, the verifications a lender does or a bank does are not as robust as those associated with a subprime contract. So if you get all the information upfront -- if you go through employment history, income, etc. -- you're going to have fewer issues arise when that transaction reaches the bank," Dalton says.
"It's also going to help the dealership get the most accurate call, the most accurate approval. If you send a lender a five-liner -- a five-line credit app -- when push comes to shove, the information on a five-liner may not have painted a true picture of that applicant's profile. Things are more likely to go sideways in the long run."
3. Explain how the process works.
Tell customers: "This is going to take Step A through Step K. Steps A through D will take 15 minutes, then we'll go on to the next thing," Dalton says. "If you explain what you're doing and why, the customer sees milestones along the way and they see the process happening. They're not out there in the lobby assuming the worst."
4. Warn customers it may take a while.
"If the process is shrouded in mystery, the customer starts wondering why it's taking too long," he says. "They're getting antsy and they're running out of free popcorn. They're going to get up and go. They will just leave because they convince themselves that what's taking so long is that nobody wants to come out and tell them the bad news."
5. All dealerships should be prepared to interview customers with subprime credit.
"For subprime, an interview should be done all the time," Dalton says. "I would consider it mandatory if you really are serious about subprime. I suppose there could be some dealerships -- because maybe they're only selling Maybachs or something -- where subprime is just never going to come up. But a huge proportion of the population is credit-challenged; 30 to 50 percent have credit we would consider below prime."