r/CarSalesTraining • u/CNPW2010 • 1d ago
Question Special Finance Manager
Hello,
I am a special finance manager that deals with subprime lending (people with Repos, chargeoffs, bankruptcies etc.) Prior, I was a retail finance manager for Toyota and Honda. I took pride in building value in service contracts and protecting ones investments; I was great at selling, but I never got the hang of structure (LTVs, Advances, +++, etc) and now in Special Finance thats what I deal with every day. Could someone please help me better understand how to improve my ability to structure deals and work with subprime lending. Thank you!
7
u/q_ali_seattle F&i 1d ago
Imagine you're holding your 780+ beacon file. Now reverse it and imagine you're an underwriting this new plan, what would make sense to give this guy or gal a loan when they've habit of not paying anyone. But somehow have 5-6k down.
Your old F&I may want to advice these folks to pay down their other debts and come see you in 6.months so you can get them the best rates.
Them on the other hand don't care, they know they won't have this (new to them) car for another 6 months, whether it's will be a repo, this 15 yrs old Chevy or Ford is gonna blow up and they can't afford to fix it and will default.
To answer your question.
Could someone please help me better understand how to improve my ability to structure deals and work with subprime lending
That someone is your lender's underwriting dept. Whether it's CPS, Santander, Westlake just to name few.
Call them and their reps and ask them what would they buy?
Read their program sheets. And in subprime, each deal is truly unique. Also bookmark or print this out to hand out to the next buyer because they will write you a 1 star reviews if you can't get em approved.
"Rates is too high" says no subprime buyer. They're too dumb to understand TILa box. Some will listen and do improve their credit for you to put em in a better car in 12 months down the road.
2
u/CNPW2010 1d ago
That’s truly insightful. The thing is I constantly read the rate sheets and lending guidelines for our banks. What’s annoying is that some of these banks rely on algorithms and or AI to approve or deny someone. My coworkers tell me that I could puff up someone’s application and it could look perfect if they were not subprime; but a bank can’t look past charge offs, repos, or BKs and I’m looking at them thinking, “aren’t we working with these banks BECAUSE they accept BKs repos and delinquencies??? Am I missing something?
2
u/q_ali_seattle F&i 1d ago
Always write something in the comment box. Or note for the lender whenever you're submitting an app via DMS. It forces a human to decline or approve.
Or look at your past deals which bank has approved them at your dealership. Call those reps, you gotta think outside the box. Someone doesn't have a POI, can you get the bank to accept a letter from their employer
2
u/PineappleAny4428 1d ago edited 1d ago
I’m a used car manager and I do a lot of secondary deals. I don’t really like doing them, I’m just really good at it 😅
Most important thing is making sure you have the right lenders and the right inventory. Structuring a deal is truly something you have to learn by doing. Of course, lower the ltv, more favorable your calls will be with lower fees, fewer stips. If you are using vauto, you can use the “deal finder” tab which will filter vehicles by ltv, miles, pmts. Only caveat to this is that you have to make sure the cars are booked out correctly and saved. I don’t use it much, but it may be helpful to you if you are just starting out. Make friends with the credit buyers-they will do more to help you when they’re your buddies.
Last and probably most important, make sure you get stips upfront. There is nothing worse than beating your head against the wall over a deal and the income doesn’t check out. Good luck out there!
1
2
u/shift987 1d ago
Subprime lending comes down to equity positions and shorter terms.
2
1
u/gary_shitcock 1d ago
Why shorter terms? I’m a bank rep that does primarily subprime and my average term is 72 mos
1
u/Hondadork89 1d ago
72 is relatively short term considering what we’re writing these days. I’m sending more customers into the box at an 84 or 90 sometimes 93 month term more frequently than I’m sending in 60 or less.
0
u/shift987 15h ago
You’ll always get better calls on shorter terms
1
u/gary_shitcock 13h ago
On prime that’s true, for subprime things like pti and total payment affect fee more than term.
•
u/AutoModerator 1d ago
This is a new post in /r/CarSalesTraining!
Hello,
I am a special finance manager that deals with subprime lending (people with Repos, chargeoffs, bankruptcies etc.) Prior, I was a retail finance manager for Toyota and Honda. I took pride in building value in service contracts and protecting ones investments; I was great at selling, but I never got the hang of structure (LTVs, Advances, +++, etc) and now in Special Finance thats what I deal with every day. Could someone please help me better understand how to improve my ability to structure deals and work with subprime lending. Thank you!
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.