RV Weekly

We recently launched a new “Ask Jan” F&I column on our web site and newsletter. We intend to feature dealer’s questions and Jan Kelly of Kelly Enterprise’s answers each month starting in the January issue of RV Trade Digest. I thought a couple questions recently posed to Jan were very interesting. Read the questions and her answers below:

Hello Jan,

I hope all is well in your marketplace. I have a question I know only you may be able to answer . In today’s marketplace, RV sales have tightened tremendously in placing A+ loans through your major players. The downturn has recently hit RV dealers harder than ever. Your main players of course being Bank of America and Bank of the West. With the credit standards today, and the major player being Bank of America, will they ever consider bringing back to the industry “Empower Programs” or is this a thing of the past?

Kind Regards,

Ron

Ron,

What I gather you are asking about is will the lenders bring back instant approvals to the RV industry?
History has shown that when any lender pulls something away, it is because whatever it was had a history of being abused by the client. No one knows the future, realistically; all we can deal with is the present. At present the lenders want each customer to have an equity position in the deal. That means sales personnel are going to have to ask for down payment.

In working with sales consultants, I realize that they do not want to ask any questions that open the door to a negative answer from the customer. Rather than asking “Do you have anything that can be used as a down payment? Perhaps a better way would be a question like this: “The lenders would like to see customers in an equity position, they would like to see 25-30 down, how close to that can you come?” The question is worded in such a way as the response is something other than a negative. The sales consultant can quantify what the customer has.

Keep in mind, just because the sales consultant does not have anything in savings, does not mean their customers do not have resources. I think quite often the sales consultant places their own economic situation into the mind of the customer.

Ron, let us remember the past fondly, work in the present to make something happen, and hope for a better brighter future!

Jan,

With credit scores trending downward, traditional banks tightening up their approval thresholds, where do we go to get “Joe Plummer” funded for his RV without resorting to a blood bank? Joe would have been tier 1 two years ago, tier 2 last year and today he’s a TD with his 650 FICO, which had been 720 in not so many months ago.

Regards,

Bill

Dear Bill,

This market requires F&I managers to look to local lenders to fund the loans. You will need to create the relationships with the local credit unions, and local banks, thrift and loans offices. Opportunities are in the market place, they simply are not knocking on your door. You must get up and go out and discover them yourself.

You are also not going to be in a position to object to the rates the lenders are charging. If you want to make the deals, your reserve income will be lower than previous years. All that means is that you will need to sell more ancillary products and services.

Many dealership are looking for the magic solution for this lending crisis. The magic is this customer must have down payment. Lenders want equity, and they do not care if the customer is “Joe the Plumber, or ?”

The question I have for dealers today is are you seeing some of the things these dealers are? Do your salespeople balk at asking for a down payment or is this something they do with every customer? If you have questions for Jan, don’t hesitate to write her at jankelly@rvtradedigest.com

This entry was posted on Wednesday, October 22nd, 2008 at 12:11 pm and is filed under Dana Nelsen. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.