The Subprime Auto Report

Picking up where we left off in our first post on special finance leads, I’d like to give you a few tips on what to ask a lead generator who is looking for your business.

Question 1:

How Many of Your Own Leads Do You Generate?

You might have difficulty getting an exact answer to this question, but it’s worth asking anyway. In our last post, we talked about how pretty much every special finance auto lead generator does a certain amount of wholesale business. However, if a generator is relying on mostly other sources for leads, then your’re dealing more with a broker than a true generator. If that’s the case, more than likely you’re looking at higher prices, because there are more middle-men. Also, there’s more reason to be concerned about lead quality because they are not in control of the entire lead generation process. If the generator is up front with you, and tells you that they do some wholesale business, but that the majority of their leads are home-grown, you’re still doing ok.

Question 2:

Which websites do you use to harvest leads?

This is important because it reveals the process they use to generate their special finance lead volume. Don’t be shy about asking for the site addresses of each of their domains. This puts you in the shoes of the applicant. Take the time to research these landing pages for any kind of deceptive or confusing language designed to increase volume. Ask yourself if there is anything about the site that refers to offers not related to the auto business. Remember, you’ve agreed to purchase auto leads. If the average person might not be aware that they’re filling out an application for an auto loan, you might not want to purchase leads generated from that site. Application pages should be clearly designed for subprime auto buyers. The more pure the content the more pure your leads will be.

Question 3:

How Many Wholesale Partners Do You Have?

Your special finance lead salesperson might not know the answer to this question. If he doesn’t, ask to talk to his manager. Don’t imply that this is a deal killer for you. Just ask him who he’s buying leads from. Take the time to research his partners. Take a look at the websites they use to generate leads. Again, mostly everyone does a bit of wholesale business. But if most of their leads were generated by someone else, you might be better off going to the source.

Question 4:

Do You Scrub for Quality?

Not every lead generator scrubs leads. The simple reason is that it’s expensive. Enterprises with the resources to actively screen for credit score, contact information, and other variables probably have pretty strong war chests and are more interested in driving quality because they know that in the end quality trumps price or volume. Smaller companies really can’t afford to let any leads go unsold, and they are more likely to not scrub. However, be aware that scrubbing for Credit Score, income, bankruptcy, or anything else does not guarantee that your special finance auto leads will be of quality.

Question 5:

What is Your Credit Policy?

This is a big one. I believe that the credit policy of any lead provider should include the following:

1. Credits for duplicate leads regardless of the provider. If you see “Scott Smith” come through twice in the same week, for example, you shouldn’t pay for the lead twice even if it came from two companies. You should pay only for the lead that came to you first. Special finance lead generators that want to keep your business will work with you on this one. Even if you don’t see it on the credit policy ask for it, and get it in writing.
2. Credits for leads that have incorrect contact information. Some subprime lead generators say they will credit if both are incorrect, but I feel you should get credit if either are disconnected. However, make an honest effort to make contact with the customer. If you leave a message with a legit home number and don’t hear back, that’s not the fault of the special finance lead provider.
3. Refinance, private sale, or confused customers. If you call one of your leads and they are in the market to refinance, purchase a private automobile, or don’t understand why you’re calling, you should receive a credit for that lead. Don’t abuse this one. Most special finance lead generators will verify these; however, don’t hesitate to turn these in for a credit as soon as you see it. If this is happening frequently, then I would take another look at who you are doing business with.
4. Leads that have been sent to lenders. Check the credit reports of your leads to see if there is a pattern of inquiries to a specific lender right before the lead is sent to you. These are bad leads and are often unusable. If you see this happening frequently, you have a problem and should switch providers.

Question 6:

Are your prices based on geography?

Leads that are generated in Seattle, Washington are more expensive than leads generated in Miami, Florida. This is due to supply and demand. About half of special finance lead providers price their leads based on geography. Why ask this question? Personally I feel that companies that geotarget are more sophisticated about the realities of individual markets and pass that knowledge on to their customers. If they are pricing their leads differently for Florida than they are for Washington then at some point they have responded to their customer base in order to retain customers. That’s how I see it anyhow.

How Do I Cancel Your Service?

I let my dealers cancel as soon as they felt the need to. You should demand the same. Don’t sign any contracts that keep you on the hook for 90 days.  I would ask that they cancel you out immediately as long as you give them something in writing.

This list is not all inclusive. I’m sure there are many other relevant questions to ask special finance lead providers. I hope you found this article useful.