Amid slowing new-vehicle sales and tighter margins, many dealers are seeking to broaden their customer base by catering to subprime shoppers.
Using soft-pull credit checks,monitoring all three credit bureaus and alerting specialized F&I managers earlier are among the ways dealers can streamline their subprime strategy, experts say.
More dealers have been approaching Cox Automotive about shifting focus to subprime customers, said Emil Banga, associate vice president of F&I dealer operations. Today dealers have more technology available to assist subprime shoppers, he said. The technology seeks to save time during the approval process and help F&I managers offer customers financing at competitive rates.
Stores without processes designed for subprime customers are building specialized F&I departments that focus on customers with credit scores at or below 620, he said. They are also hiring F&I managers with a keen understanding of what lenders are looking for, as well as how to expertly read and use a customer's credit report.
"Dealers are able to help get customers into the vehicle that they're hoping to [buy], around the payment they're also hoping [for]," Banga said.