Get Down With The Down!

By Myril Shaw, Dealer Profit Services

"Can I get $0 down?"

How often do you hear that?

Here is the issue!

The natural instinct for every salesperson and for almost every finance person is to say, "Well, we'll see what we can do!"

While that may seem right…it is a horrible answer for the deal.

Of course, you need to be respectful to the customer.  You also have to be respectful of your store, your business and your job.

While the Hypocratic Oath of selling is, "First Do No Harm," the oath of the position is, "Lock It In and Maximize."

A large down-payment does so much for a deal…and a zero-down rarely does anything good.

When you say, in response to, "Can we get $0 down?", "We can look at that – although typically our lenders our looking for 20% down – this is a luxury purchase which is not like a Ford, so the requirements are different.  What can you put down?", this is game changing response.

What does a large down payment do for a deal?  Let's count the ways:

1)    A large down payment indicates commitment to the deal – you know that these people want to make the purchase and that they are financially prepared to;

2)    A large down payment decreases the Loan-to-Value is a very positive way and ensures that the terms on the balance will be as favorable as possible;

3)    A large down payment increase the amount available for backend sales in two ways: first, it simply opens up cash for backend sales; second, it indicates that you can have a conversation about increasing the down payment to include more backend that is effectively paid for with cash – or to reducing their large down payment and including more backend.

Offering $0 Down may be good for the car guys, and it may be polite for the rest of us…it is horrible business for the rest of us.

Reach for 20% down all the time, settle for 10% and politely grumble about less.  It reality, the customers' credit profile, or the price of the unit they are buying, may drive some of this in any case – the moral here is that when it comes to down payments, bigger is better!

I'm down with the down!

Sound familiar?  Let me know at myril@dealerprofit.com.

Make it a practice to do quarterly training with both Sales and F&I on best practices, and make sure to include these Top 10 warnings.

You maximize your F&I profits when you treat F&I as a full sales lifecycle process and not just a single point, isolated profit center event.

Dealer Profit Services, LLC can help.  Whether you want someone to take over your F&I and just drive profit to your store, help you some of the time, need some quick advice or just provide F&I Training/Consulting, we are here to help you.  Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.