Q: It's near the end of the year, and it's been a very tough
year for our special finance department. We've lost

many finance companies and grosses are way down. My

dealer has even talked about closing our SF department,
but we are hanging on by a thread. What is the best

advice you can give us during this frustrating time? And

do you see any end in sight to the difficulties of our

department?

My Grandmother used to always tell me, “You don’t throw the baby out with the bathwater!” Well, I understood the concept, but that didn’t mean I liked it. When I was eight, I didn’t like my baby sister. She captured more attention than me. Although I didn’t throw her out, I would drain the bathtub to see if she would go down the drain too. She wouldn’t. The water was gone, but the baby was still there. Now, don’t misunderstand me. I love my sister. But back then she just wouldn’t go anywhere.

The same goes for the special finance industry right now. It’s not going anywhere either. We can pull the plug and drain the water—or in this case, finance resources—but we are still left with the same problem. The baby, the special finance customer base, is still there. In fact, the “baby” is growing.

The special finance customer is not going anywhere. The percentage of people with less-than-perfect credit was high before this credit crunch and all the foreclosures, so it can only go higher. The question is, how are we going to take care of them? The answer lies in making sure we know the finance company programs better than ever. Everyone is watching their costs, including the finance companies, so we have to be cognizant of their bottom line as well by only sending deals that fit. We also have to watch our dealer’s pocket to make sure our marketing is in line and their return on investment makes sense. We do that with proper processes, training and utilization of the tools that already exist.

The industry isn’t going anywhere. People are still going to need transportation, and we are still going to be in the business of providing it. The best advice I can give is to hold on, know your programs, master the art of stocking proper inventory and set up proper processes. Lastly, continue doing what you just did. Ask plenty of questions from the pros and others in the trenches. We will get through this together. You can’t give up; otherwise, you won’t be ready when the industry comes back full force.

– Dan Henderson
Special Finance Concepts