GM Financial helps you connect with the subprime consumer
Published Feb. 2013
There's no doubt that there are more subprime shoppers visiting dealerships than ever before. Subprime auto loan approvals jumped by at least 40 percent during each of the last four months of 2012, according to CNW Research. Further, the market share for nonprime, subprime and deep subprime lending for new vehicles expanded 13.6 percent in the third quarter of 2012 over the same period in 2011, according to Experian Automotive. With the average car on the road in the United States being 11 years old, it's safe to say that more traffic will be moving through your dealership in 2013. Now is the time to truly understand the wants and needs of the subprime population.
Not all subprime customers are the same – when you hear the term subprime, many people think of a shopper who has a history of chronically late payments and over-extended credit. However, more and more subprime consumers are what we consider "situational." This may be the situational subprime consumer's first time in the subprime bucket, as a result of a job loss or drop in income. In the past, these situational consumers may have had more purchasing power, but now they are focused on reestablishing their credit. It's important to establish trust with this customer, as he or she may be embarrassed of their situation or afraid that a lender will take advantage of them.
In order to help dealers better understand situational subprime customers, GM Financial's dealer training team has begun developing a subprime training program. The program consists of a 2-1/2 hour presentation at the dealership and is currently being tested in the northeast region.
"Each of our Account Representatives in the Northeast have been trained on delivering the subprime training program to their dealer's management and sales teams," noted Joe Buslow, Senior Vice President of U.S. Regional Sales and Credit Operations. "Dealer feedback has been positive during the test phase and we're really seeing the dealer open their eyes to the subprime consumer's needs. They are especially interested in how subprime leasing can help increase their bottom line. This program really does add value at the dealership and it helps our representatives collaborate with the dealer while better understanding the in-store sales strategy."
Dealerships invest a tremendous amount of time and resources to make their business profitable. Adding a subprime program to your toolbox only helps the bottom line and provides the opportunity of increased new and used sales in both retail and lease, plus it maximizes the value of showroom and online traffic.
Bob Galletta, Sales Manager at Nesenger 112 Chevrolet in Medford, New York took advantage of the subprime training offered by GM Financial, "The past 90 days we have increased our subprime portfolio month after month. We have been most successful in changing the mentality of the salespeople when it comes to the subprime customer. Our niche has been in leasing and the attention given to our store to get the program off the ground has added to our success. One of our biggest wins was the fact that we put four non-Chevrolet customers in new Chevrolet leases this month alone!"
Credit quality is a challenge faced every day on the showroom floor. GM Financial can help you be prepared to discuss all options for all of your customers, from prime to subprime and lease to retail, when they visit your store. GM Financial has been a leader in subprime auto financing for more than twenty years. Through increased awareness, together we can help more customers get into more GM vehicles in 2013.
GM Financial is dedicated to building long-lasting relationships that add value to your business. If your dealership is interested in learning more about our subprime auto finance solutions, contact your Account Representative or nearest credit center at 888-556-4616 to get started today.