Allied Auto Finance

[Brian Marchini]

My DP is being pitched this program. You basically pay them $12K, they contact folks who previously had issues with credit, but now are stable and offer them to refinance. If they decline the refinancing, they offer them to lower their current rate and buy a new car. They send to 6K and you get about 70 appointments.

To me this looks like a scam with no long term solution in terms of growth. I suggest that money be put to better use.

We currently use cars.com, dealix, newleadsplus, cargigi, our website, oem, newspaper, tv.

I am looking at edmunds, considering readding autotrader, going more into ebay, buying additional leads through autousa or expanding radius.

Any other suggestions of what to look at? We a Honda dealer in SE PA.

We were a long time autotrader subscriber, but the rates just became too much in comparison to the ROI. I also think there is a quite a bit of redundancy and that many online shoppers visit multiple sites anyway. I am on a limited budget as we are a mom and pop store.

 

[ddavis]

Brian, I always get plenty of bad credit people without trying. That business has been low percentage and marginally profitable, for me. Years ago, when I was a Used Car Director and prior to the internet it was a huge part of my business. I had great subprime lenders and people that were very good at working this type of customer. Many of those lenders are out of business and most salespeople do a poor job with subprime customers.

I don't buy leads so I wouldn't be considering Dealix, edmunds or newleadsplus. Cargigi likes to list your vehicles, without a price, on Craigslist. That will bring you a lot of leads and phone calls but many of them will hangup when you give them the price. A friend of mine does well with that but he has a dozen cars at under $5K. He doesn't sell the car but the dozen. Since the internet, I have only been in stores that required a high level of reconditioning. It was hard for me to get a "cheap" car through the shop and still be competitive. I like Craigslist but I am not a fan of cargigi. They pitch the number of leads that they generate.

My focus is quality not quantity of leads. I want those that close at a high percentage. My AutoTrader leads closed at well over 20% and it drove customers to my website at a similar closing ratio.

 

[bringles]

ddavis

Brian, I always get plenty of bad credit people without trying. That business has been low percentage and marginally profitable, for me. Years ago, when I was a Used Car Director and prior to the internet it was a huge part of my business. I had great subprime lenders and people that were very good at working this type of customer. Many of those lenders are out of business and most salespeople do a poor job with subprime customers.

I don't buy leads so I wouldn't be considering Dealix, edmunds or newleadsplus. Cargigi likes to list your vehicles, without a price, on Craigslist. That will bring you a lot of leads and phone calls but many of them will hangup when you give them the price. A friend of mine does well with that but he has a dozen cars at under $5K. He doesn't sell the car but the dozen. Since the internet, I have only been in stores that required a high level of reconditioning. It was hard for me to get a "cheap" car through the shop and still be competitive. I like Craigslist but I am not a fan of cargigi. They pitch the number of leads that they generate.

My focus is quality not quantity of leads. I want those that close at a high percentage. My AutoTrader leads closed at well over 20% and it drove customers to my website at a similar closing ratio.

You say that most of the subprime lenders are out of business. I am currently using westlake financial for most of my subprime deals, but I am losing a lot of business due to the down payment and discount being too high. I looked into credit acceptance, but it sounded like i dont get enough money up front on the deals. Can you recommend any other subprime lenders with reasonable discounts and down payments?