Pay A “Sales Call” To Your Bank
by Willie Grubaugh
Preferred Warranties, Inc.
Lending is off. So, what are you going to do about it? If you answer is, “Sit around and complain,” then join the crowd. I hear it all day long from dealers across Texas, from Cleburne out to Round Rock, and from Port Arthur down to Harlingen.
Will you be different? You can choose to set yourself apart from the crowd, and be proactive. Get out of your office, off the lot, and into the bank - lots of banks, finance companies, credit unions, any legitimate organization with money to lend. You need to put yourself across the desk from loan officers, VP’s, and branch managers and make their acquaintance.
Then what? Now you call upon your years of sales expertise - you do this for a living, remember? Except instead of selling a quality, pre-owned vehicle to a consumer, you need to sell yourself and your dealership to a banker so he wants to lend you money and wants you as a business associate. People buy from people they like, right? Tell them how you built your business, your personal success story, the ethical business practices you follow, and how you give back to the community. You need to build a relationship with the banker to the point where you can borrow his shovel if need be.
How often? You should pay a “Sales Call” to at least one banker a week. I can hear your excuse now, “I can’t afford to be away from the lot that much!” But you can easily accomplish this by making one “Sale Call” on your way to work in the morning. Most of your dealerships don’t even open until 9:30 or 10 am, while banks open at 9:00 am sharp. You need to make the commitment. How many bankers do you think you’ll see if you hurry right to your dealership instead?
Go see your banker. What’s the worst that could happen? So, you get a “no” or maybe a “not this month”. Go see a different banker, and then another, and another. You will get better at it with practice, and you will eventually find a banker who’s interested in building a lending relationship. It may happen because you discover you went through school together, or your kids play soccer in the same league, or you’re members of the same church, or it may simply happen because you do a darn good job of selling yourself and the banker likes the fact that you keep stopping in every month.
Have fun. Don’t put pressure on yourself. When they ask at the bank how they can help you, tell them, “I just came by for the free coffee! But while I’m here, I might as well talk to your loan officer.” Then, tell your story and start building a relationship.
Willie Grubaugh is Texas Regional Manager with Preferred Warranties, Inc. www.warrantys.com PWI service contracts are sold in more than a dozen states, available exclusively through quality dealerships. Willie Grubaugh can be reached via email @ wgrubaugh@warrantys.com or by phone at 214-244-3871
Thursday, March 29, 2012
What we did then that worked, don't stop doing it today. Complacent is no place to be in the auto world!
Here is an article I wrote in August 2009 and was published in the TIADA Dealer magazine. The idea was right for the time.
Now, lending is competitive once again. Why not use these same practices in order to have lenders continually compete for your business today?
It still makes sense today to developed new as well as nurture our existing banking relationships. No one bank is the end all solution for any car dealer.
Now, lending is competitive once again. Why not use these same practices in order to have lenders continually compete for your business today?
It still makes sense today to developed new as well as nurture our existing banking relationships. No one bank is the end all solution for any car dealer.
Wednesday, March 28, 2012
Article - Report: U.S. suggests Ally Financial breakup
NEW YORK — The U.S. Treasury Department, which put $17.2 billion into a bailout of Ally Financial Inc., has indicated it would prefer a breakup and sale of the lender — including selling the company's captive finance auto business back to General Motors Co., its original owner.
People familiar with the matter told Bloomberg that Treasury wants to make such moves because it no longer believes an initial public offering of Ally stock would succeed.
GM previously owned Ally when it was known as GMAC Financial Services. GM spokesman Jim Cain declined to comment on the report.
Treasury officials are telling Ally executives, directors and financial advisers that an IPO is unlikely soon because of the company’s high cost of capital relative to other banks, the potential bankruptcy of a mortgage unit, and its recent performance in Federal Reserve Board stress tests, said the people, who asked not to be identified because the talks are private.
Treasury instead is pushing for Ally to split into at least two pieces, the people said. One part would be Ally’s auto finance unit, one of the largest in the U.S., and the other would be its online banking business, which had almost $28 billion in retail deposits at year end. Ally shareholder Elliott Management Corp. also recommends a sale, according to a letter sent to the board by Elliott and obtained by Bloomberg News.
Ally CEO Michael Carpenter and its board have resisted Treasury’s call for a split, the people said, adding that the department is reluctant to press Carpenter too hard for a sale out of concern about appearing as a heavy-handed owner. The Treasury owns 74 percent of Ally.
“Every action the company has taken and contemplated has been with the objective to fulfill our mission to support the auto recovery and fully repay the taxpayer's investment,” Gina Proia, an Ally spokeswoman, said in an e-mailed statement. “This is what will guide our decisions going forward.”
Ally was found to have some of the lowest capital ratios among 19 lenders in Fed banking stress tests released March 13.
Ally is likely to put its Residential Capital mortgage unit into bankruptcy in the next few weeks and sell some assets in a court-supervised sale, people familiar with the matter said last month. The firm also may lose its preferred auto-lender agreement with Chrysler Group LLC, which is seeking out banks like Wells Fargo & Co. and Santander Holdings USA Inc. to potentially replace Ally, people with knowledge of the matter said last month.
The U.S. determined that Ally was crucial to the survival of the auto industry during the financial crisis in 2008 and 2009 and provided multiple bailouts in return for a 74 percent stake.
Last year, when Ally was close to a public offering, it considered a joint bid from GM and Toronto-Dominion Bank, Canada's second-largest lender, until those discussions fizzled, a person familiar with the matter said last month.
Ally has financed about 6.7 million GM or Chrysler vehicles for dealers since 2009 and 2.4 million for consumers, Proia said. Ally has so far paid $5.4 billion to the Treasury.
People familiar with the matter told Bloomberg that Treasury wants to make such moves because it no longer believes an initial public offering of Ally stock would succeed.
GM previously owned Ally when it was known as GMAC Financial Services. GM spokesman Jim Cain declined to comment on the report.
Treasury officials are telling Ally executives, directors and financial advisers that an IPO is unlikely soon because of the company’s high cost of capital relative to other banks, the potential bankruptcy of a mortgage unit, and its recent performance in Federal Reserve Board stress tests, said the people, who asked not to be identified because the talks are private.
Treasury instead is pushing for Ally to split into at least two pieces, the people said. One part would be Ally’s auto finance unit, one of the largest in the U.S., and the other would be its online banking business, which had almost $28 billion in retail deposits at year end. Ally shareholder Elliott Management Corp. also recommends a sale, according to a letter sent to the board by Elliott and obtained by Bloomberg News.
Ally CEO Michael Carpenter and its board have resisted Treasury’s call for a split, the people said, adding that the department is reluctant to press Carpenter too hard for a sale out of concern about appearing as a heavy-handed owner. The Treasury owns 74 percent of Ally.
“Every action the company has taken and contemplated has been with the objective to fulfill our mission to support the auto recovery and fully repay the taxpayer's investment,” Gina Proia, an Ally spokeswoman, said in an e-mailed statement. “This is what will guide our decisions going forward.”
Ally was found to have some of the lowest capital ratios among 19 lenders in Fed banking stress tests released March 13.
Ally is likely to put its Residential Capital mortgage unit into bankruptcy in the next few weeks and sell some assets in a court-supervised sale, people familiar with the matter said last month. The firm also may lose its preferred auto-lender agreement with Chrysler Group LLC, which is seeking out banks like Wells Fargo & Co. and Santander Holdings USA Inc. to potentially replace Ally, people with knowledge of the matter said last month.
The U.S. determined that Ally was crucial to the survival of the auto industry during the financial crisis in 2008 and 2009 and provided multiple bailouts in return for a 74 percent stake.
Last year, when Ally was close to a public offering, it considered a joint bid from GM and Toronto-Dominion Bank, Canada's second-largest lender, until those discussions fizzled, a person familiar with the matter said last month.
Ally has financed about 6.7 million GM or Chrysler vehicles for dealers since 2009 and 2.4 million for consumers, Proia said. Ally has so far paid $5.4 billion to the Treasury.
Interesting industry news regarding Ally
http://www.crainsdetroit.com/article/20120327/FREE/120329896#
Monday, March 26, 2012
Think of Your Bottom Line When Choosing a Vendor
Think of Your Bottom Line When Choosing a Vendor
By Willie Grubaugh
Strong vendor relationships can put your dealership in a position of competitive advantage—through better products, superior service, or lower rates and prices. On the other hand, weak vendors can be a drag on your business—tarnishing your image, eroding customer loyalty, and draining dollars from your bottom line. So, I think we can agree that choosing a vendor is an important business decision, right?
Your head may agree, but your handshake says otherwise. I’ve seen it all too often as I call on dealers around the state. You’re choosing a vendor--whether it’s a software package, a service contract or GAP provider, a lender, a floor planner, or a GPS company, and you do it for the wrong reasons. I’ve heard them all... “The rep is married to my cousin,…We grew up in the same neighborhood,…He’s going through a tough time and needs my business,…We’ve always dealt with that company.”
Give me a break! None of these reasons has anything to do with a smart business decision. Instead, I recommend you consider a more common sense approach to choosing a vendor. The following are a few basic steps toward making an informed and smart decision:
- Ask around for recommendations & referrals – Simply ask your peers. Talk to other dealers at association meetings and auctions. Pick up the phone and ask who they use currently. Ask them why. What did the company do to address that? Were they satisfied with the results? Have they had a bad experience with a company?
- Do some research – Ask the sales rep if the company operates under any other names, has done so in the past, and if there is a parent company name. Get the correct spelling to make your Internet search easier. Also, visit the company’s own website and look around. Search online, using Google.com, Yahoo.com, or another search engine, looking for articles, achievements, customer opinions, complaints or testimonials, etc. Finally, call the company’s toll-free customer hotline (after the rep leaves) to see what kind of service you or your customers can expect to receive.
- Pull a BBB report – Your customers turn to the Better Business Bureau for free reports on car dealers, now it’s your turn. Go to www.bbb.org and drill down to the information you want by following these steps:
· Select “USA
· Click on “Check Out A Business or Charity”
· Under Business/Charity name, enter the business name, city and state if known. This will bring up all businesses with that name in that area. Choose the right one.
· Select “View Report.” When this page comes up, you will see complaints filed, what was settled, satisfied, ignored, etc. No company is without a complaint somewhere. What to look for here is how the company responds to complaints. This page will also state if the company is an accredited member of the Better Business Bureau, and indicate a letter grade rating from A to F (A + being the best), or it will state the company is not rated.
- Ask the vendor for referrals – Naturally, you can expect referrals given to you by the sales rep to have a favorable opinion of the company. But you should call them anyway—especially those you know personally. Also, ask the sales rep if the company has received any notable awards or recognition from industry associations you can track. Ask how long the company has been in business. Keep in mind, however, that while years in business is important, it’s not nearly as important as how long they are going to be around, how well they treat their customers, and how financially stable they are.
These are just a few steps you can take to run a “background check” on a vendor before you make the handshake. Take the time to do research now and save yourself headaches later. It will help you avoid pitfalls such as getting caught up into liking someone and not realizing the low quality of his or her product until it is too late. At that point, your dealership is negatively impacted, your customers are inconvenienced, your claim didn’t get paid, and the vendor isn’t answering the phone or is even out of business. Too late now!
You can’t expect a sales rep to disclose negative information about the company. He’s there to get your business. Of course, he’ll tell you how great the company is, what his people can do, how much money they will make/save for you, and so on. Don’t expect him to tell you where they fall short. You’ll have to either do your own research for that, OR figure it out the hard way… and often at your expense. You need to do your homework and make smart business decisions when choosing a vendor. Think of your dealership’s bottom line before you sign on the dotted line.
Willie Grubaugh is Texas Regional Manager with Preferred Warranties, Inc. (www.warrantys.com) PWI brings the services of professional sales consultants to your dealership to help you increase F&I profits. Grubaugh can be reached at wgrubaugh@warrantys.com or call 469-835-4389.
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