The 2009 Special Finance Convention

Idea-Sharing and Quality Education at its Finest

Dealers who took the opportunity to attend the 2009 Special Finance Convention from August 9th to 11th in Dallas, Texas, came to the show with open minds and ears. They wanted to hear what people from all sides of the industry – finance company representatives, trainers, vendors and other dealers – had to say. One thing is certain, the atmosphere at the 2009 SF Convention was different compared to the 2008 SF Convention.

Last year, the winds of change had started blowing, and many in the special finance community were battening down the hatches, unsure of what lay ahead. This year, the SF community has had time to adjust to the market, which opened the doors for conversation about how everyone has adapted.

Finance companies are running tighter ships and are examining their dealer bases to see which dealers make the best partners. They have been evaluating the number of deals submitted, the approval rate of those deals and the deals funded with each dealer. Knowing what finance companies are evaluating for long-term partner relationships has led many dealers back to the basics of special finance, like smart deal structure submission and rehashing when necessary to make win-win deals for all parties (finance company, customer and dealer).

Dealers also attended the convention looking for new ideas. Mike Crane, managing partner of RightWay Automotive in Davison, Mich., attended the show with RightWay’s Regional Manager Doug White because they had several questions about transitioning from buy here pay here to lease here pay here and were looking to pick up some new best practices. Crane said, “If we can walk away with two or three ideas, [the convention] will much more than pay for itself.” He was quick to add that he already had a few new ideas that would help his 15-store group improve.

Finance Panels
The finance panel discussion was so popular last year that this year’s convention featured two finance panel discussions. Monday’s discussion included: Paul Gillespie, senior vice president of dealer services, AmeriCredit; Trip Hall, vice president of business analysis, Capital One; Gary Schultz, vice president and southwest regional executive, Chase Custom Finance; Mike Kane, senior vice president of client services, CitiFinancial Auto; and Ken Dundon, senior vice president of originations, Santander Consumer USA/Drive Financial.

While Convention Chairman Greg Goebel posed most of the questions to panelists, the dealers in the audience listened intently, picking up bits of information that could help them improve their business with those finance sources serving the more traditional subprime customer.

James McNutt, general manager of Kinsel Ford Lincoln Mercury Mazda in Beaumont, Texas, was very pleased with the information shared during the Finance Company Panel. “It was very informative. It opened my eyes, especially on the loan-to-value and the debt-to-income.” He added that back when he was working the desk, he didn’t get to hear this type of information, and being able to hear first-hand what the representatives said allows him to “immediately see” what he needs to go back and change.

The newly-added finance company panel discussion focused on a segment of the market that most of the finance companies mentioned above no longer work in—financing older, higher mileage vehicles. The panel featured Sara Upton, COO of Vehicle Acceptance Corporation; Dwight Cope, president of Western Funding Inc.; and Eric Eggebrecht, regional manager of Westlake Financial Services. This panel was clearly of interest to many attendees because it packed the house; there wasn’t an empty seat in the room.

BHPH and More
Another new Q&A panel entitled, “BHPH, LHPH, RTO, LTO: Which is Better for You?” focused on the different dealer controlled financing (DCF) options available to dealers. The experts on the panel included: David Keller, CPA and principal with LarsonAllen; Emily Beck, partner and attorney with HudsonCook; Terry O’Loughlin, director of compliance for Reynolds & Reynolds, and Mark Dubois, head of dealer education at CarBiz USA, Inc. During this panel, the experts discussed the differences between and legalities of these types of DCF operations and took questions from dealers who are considering DCF.

The final panel at the convention was a buy here pay here panel. Dubois of CarBiz and dealers Gene Daughtry of BestRide in Russellville, Ark., and Roy Carlson of Mike Carlson Motor Company in the Ft. Worth, Texas-area sat on the panel and fielded questions from attending dealers and Goebel, who moderated the discussion.

Quality Education
The structured education is the foundation on which the convention was built. The four moderators – Kevin Day, president of Executive Dealer Services; Goebel, president and CEO of Greg Goebel Training & Consulting; Tom Herald, partner of Benjamin Herald Associates; and Kris Wright, president of Secondary Solutions  – returned this year to provide attending dealers with SF educational classes based on best practices and industry statistics.  

“Optimal Phone Skills, Turning Leads into Optimally Structured Deals” was Day’s session. He covered the different types of incoming and outbound calls, best practices of handling calls and how to overcome common obstacles. He also handed out sample phone tracks to the attendees in his class.

Goebel’s session was, “2009 SF Benchmarks and Finance Companies – Who Works Best for Each Credit Tier?” He detailed the metrics of top SF dealers from ad spends to average gross per deal. He and the dealers in his session also discussed the different finance companies – both national and regional – that are players in the market today.

Herald covered department structure and personnel. He explained the differences of having a blended floor versus a separate SF department and the staffing required for each. The session detailed what factors a dealer should consider before deciding on a department structure.

Funding, always an important topic, was a part of Wright’s presentation. She spoke about the importance of verifying everything in a deal before sending it to finance companies and maintaining good relationships with finance companies. Also covered was how a good desking tool can help increase gross and tips for proper inventory management.

Dubois of CarBiz and Brent Carmichael, executive conference moderator of four BHPH 20 groups and one finance 20 group at NCM Associates, led the education sessions on dealer controlled financing. Dubois’s presentation, “The Four Pillars of BHPH – Best Practices for Success,” took place on Day Two of the convention, while Carmichael’s presentation, “NCM Collection Benchmarks and Trends” started off Day Three.

The DCF sessions were new to the convention this year. Over the past year, many dealers have been asking about the various dealer controlled finance options like BHPH, lease here pay here, rent-to-own and lease-to-own. Mike Anthony, SF manager at Van Devere Auto Group in Akron, Ohio, attended classes on SF and BHPH. “We’re interested [in BHPH]; we don’t know if we’re going to pull the trigger to do it. That’s part of the population that we cannot help, and we want to see if that’s one way we can help them.”

There were also a few guest speakers this year. Howard Polirer, director of industry relations for AutoTrader.com, Encouraged attendees to “Think Like a Car Shopper” while covering online advertising strategies. John Damschroder, senior product specialist at DealerTrack, and John Palmer, president and CEO of ProMax Online, led vendor presentations centered on improving processes in the dealership.

Lighter Atmosphere  
In addition to the panels and structured education sessions, the exhibit hall was a hub for networking and gathering information on products and services for the SF industry. All meals and receptions were held in the hall, which was lined with some of the industry’s top vendors and finance companies. When dealers were done with their meals, they could roam the hall to learn about what the providers had to offer.

Additionally, two awards were handed out at the 2009 Special Finance Convention. In July, David Andrews was named Auto Dealer Monthly’s Independent Retailer of the Year, and Goebel presented Andrews with a plaque signifying his award during the General Session of the convention.

Dwight Cope of Western Funding was officially inducted into the Special Finance Hall of Fame by Goebel for his unwavering dedication to the special finance industry. His induction was initially published in the July issue of Special Finance Insider.

Legal Jeopardy was also an entertaining, yet highly educational, aspect of the General Session. Attorneys Tom Hudson and Emily Beck of Hudson Cook put together several multiple-choice questions to test dealers’ knowledge of noteworthy compliance issues both present and pending.

Overall, the 2009 Special Finance Convention was a success. The dealers valued the education sessions, as well at the opportunities to network with other dealers and finance company representatives. Each year, dealers attend for different reasons—some to put their fingers on the pulse of the industry, some to pick up a new finance source or two, and others to brush up on their skills and learn a few new best practices. No matter why they attend, the dealers always leave happy because they’ve gained something valuable.

Dealer Curtis Mummert of Buchanan Auto Park in Waynesboro, Pa., attended the SF Convention for the third year in a row. What keeps him coming back is his thirst for knowledge. He wants to learn about “any new information or new ways of doing things.” In short, he attends the convention to stay “on top of the industry.”

Vol. 3, Issue 5