The Subprime Auto Report

The Economy is Bad.  Business is slow.  What Are You Going to do About It?

I’ve been talking to a lot of dealers lately, and with very few exceptions, business seems to be way down (unless you’re a Toyota dealer).  Even if your last name isn’t Bernanke, it’s not hard to see why.  With the subprime housing crash, stock market instability, a credit crunch in the making, employment numbers down and many other ominous reasons, most consumers are putting big purchases on hold.  Finding ways to succeed in this market is becoming difficult.

I want to talk about that.  So, I’m going to start a series, a survival guide, discussing what successful special finance departments are doing today to navigate through the difficult waters we find ourselves in.  In every down market, somebody is succeeding, right?.  Let’s find out why.  Before we get to nuts and bolts, let’s talk about mindset.

Special Finance Managers: Bury Yourself in Your Office and Get Your Attitude in Line

If you’re like most everyone in the retail auto business, you will have a sales meeting this Saturday morning.  I think no matter where in this country your store is located, dealer sales meetings are all pretty much the same.  Salespeople stumble in, management gathers in the front of the room and at 8:30 or whatever it is, you sit through a series of rah rah “Let’s sell some cars!” speeches.  Everyone plays the game, acts positive, and gets involved in the excitement. Right?

After the meeting, after moving some cars around, grabbing a coffee and bagel or whatever, salespeople start to gather in their favorite spots. Managers huddle in theirs.  Here’s where the real meetings take place.  In a down market, in the privacy of their groups, what do most people do? They bitch.  They complain about business.  They blame.  They spread negativity.  If I’m wrong, ignore me.  If I’m right, do me a favor: walk away.  Close your ears.  Dummy up. 

Our Business is Changing.  Old School is Out.  You’re Going to Have to Wear Many Hats to Succeed.

Dummy up.  Forget everything you’ve learned in the car business.  Stop pretending that you know everything (even if you do). Understand that our business is changing quickly, and you’ve got to change along with it.  Consumers today are more educated than ever.  Banks are tightening up.  If you’re going to succeed, realise that you’re going to have to find new ways to make your numbers.  If you’re unfamiliar with the internet, you’re going to have to educate yourself quickly.  If you don’t have an advertising budget, you’re going to have to learn how to pry that money from your dealer principle or GM.  If your captives are buying deep into your business, there’s some political moves you need to make.  If your website isn’t generating leads, you’re going to have to take care of that.  Whatever it is that you’re doing today, unless you are knocking the cover off the ball, it’s probably not going to work tomorrow. 

The good news is, if you change your mindset and stop listening to garbage, you’re already a step above the crowd.  In this business, it’s not hard to be a 5 in a sea of 2’s.  Understand that you spend most of your time at the dealership, probably more time than with your family.  You might as well make better use of it.  I hope I can help make that happen.

In the next few weeks, I’m going to discuss ways to take your business to the next level.   I don’t know everything, so I’m going to reach out to dealers, lenders and vendors and start a discussion on how to turn this down market into an opportunity for yourself and your family.

Clean Office, Clear Mind

Before we get started on the Survival Guide, do me a favor: clean your office.  Go through your drawers, get rid of old deal jackets, wrap up any deals that are hanging around (get them done or kill them off).  Get yourself organized.  Trust me, it will help get you focused.

If you’d like to contribute to these posts, please contact me here.  I’d love to hear what you’re doing to stand out.  If I’m annoying you or you’d like to tell me to shut up, you can do that too.

Next topic: Ten Questions Special Finance Managers Should Ask Themselves

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