3 key areas dealers are missing out on that are critical to boosting sales

Renowned investor, Warren Buffet, is credited with saying:

“It’s only when the tide goes out, that you can see who’s been swimming naked”.

This analogy is used to demonstrate that when business conditions are easy or favorable, companies can look good and may not pay much attention to areas for improvement – and that it’s only when trading conditions worsen, that more time is devoted to reviewing processes and opportunities.

With this quote in mind and considering the current used car market, it’s critical for dealerships to maintain a strong focus on business improvement regardless of market conditions.

This is why DSG regularly help dealer groups identify specific areas where incremental sales and improved results can be achieved without undermining any commitments to a dealer’s existing lender relationships. Below we’ve outlined 3 areas to focus on.

DSG Finance provides motor finance solutions that benefit dealers and customers. If your goals for 2022 are to maximise vehicle sales, get in touch [email protected] or 0161 406 3931

1. Ensure that every proposal receives full underwriting consideration

Our research shows that the dealer network loses hundreds of sales each month as a result of proposals not being forwarded on to another lender once one decline has been received.

The number one reason dealerships do not forward declined proposals is due to dealership personnel incorrectly prejudging and assuming one of three outcomes:

  • The customer will just be declined again
  • The customer doesn’t qualify for ‘prime’ terms
  • If the customer were to get accepted, then the APR and repayment will go up

If one or two lenders have already declined a customer’s application – then this represents only one or two ‘opinions’ and is not necessarily a true reflection of the customer’s creditworthiness. Each lender has their own individual scorecard and customer criteria which is unique to them – so what might be right for one lender, won’t necessarily be right for another.

During a recent survey, DSG established that one dealer group had missed out on 45 additional vehicle sales in one month – which if annualised, would equate to over £500,000 in lost revenue.

The solution

The ability to compare an application with a broader selection of lenders is in the favour of both dealer and customer. For example, with 7 different prime lenders on our panel, DSG are effectively able to compare the market, ensuring that any customers who qualify for the optimum terms – goes on to actually receive them.

DSG Finance provides motor finance solutions that benefit dealers and customers. If your goals for 2022 are to maximise vehicle sales, get in touch [email protected] or 0161 406 3931

2. Review the effectiveness of your lender portfolio

Increasing used car finance penetration is always a key area of focus in the year ahead for dealer group senior management.

Having lenders or product ranges that simply mirror what is already in place from the manufacturer makes it difficult to improve finance penetration due to the underwriting and product criteria being limited to certain customers, as opposed to catering for most customers.

By adding a range of ‘niche’ products, which can fit seamlessly around existing funder relationships, dealer groups can cater for every possible customer funding requirement. As a result, used car finance penetration can be increased by 10% or more, making a significant difference to a dealerships’ overall performance.

3. Maximise the conversion of digital leads

Compared to customers who visit a showroom, digital enquiries tend to be less efficient – meaning a lower percentage of opportunities getting converted into paid-out transactions.

A key factor here is most online dealer groups only cater for ‘prime’ customers – and therefore exclude people with any other type of credit profile. This is why the decline rate for proposals generated online tends to be higher than proposals generated from the showroom.

Designing and implementing a fully digitalized ‘rate for risk’ solution is key to maximising online conversions, enabling customers to instantly assess their own individual creditworthiness through a dealer’s website. By appealing to a wider range of customers, dealers achieve higher acceptance rates, improved conversion efficiency, ultimately selling more cars.

DSG’s proprietary technology has helped a number of dealer groups double the conversion of their online proposals into actual sales – the option of DSG ‘back office’ support also frees up dealership capacity and time by liaising directly with customers on behalf of the dealership.

DSG Finance provides motor finance solutions that benefit dealers and customers. If your goals for 2022 are to maximise vehicle sales, get in touch [email protected] or 0161 406 3931.

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