By Nick Zulovich
BHPH Report Editor
DALLAS — Recently an operator came to Ken Shilson and told the founder of the National Alliance of Buy-Here, Pay-Here dealers that he found an easy way to save money on every sale he made at his dealership. Immediately after Shilson applauded the operator on the achievement, he asked the BHPH dealer how he did it.
The dealer indicated his operation doesn’t run a credit report on any potential buyers because “they all have bad credit anyway, so we couldn’t learn anything from it if we did,” according to Shilson’s recap of the encounter. That’s the point where Shilson’s cheering of the decision turned into a path of recommendations about how that operator could make better use of about $5 per deal.
“It’s not a crime in America not to run a credit report from a legal standpoint,” Shilson said. “But it is a crime from a financial standpoint because if you’re making a $10,000 lending decision without any information, you deserve what you get.
“We’ve just got to be more knowledgeable about what we’re doing if we’re expecting to make better decisions,” he continued.
The valuable information that can be gleaned from a credit report is just one of the many training sessions NABD has planned for its Best Practices Conference, a three-day event that begins on Jan. 18 at the Hilton DFW Lakes Executive Conference Center in Dallas. The credit report session will be hosted by Jennifer Reid, who is the senior director of product marketing for Equifax Automotive Services.
Before joining Equifax, Reid spent several years in the F&I o ce at franchised dealerships. Reid acknowledged that she, too, had to be trained on how to gather relevant information from a credit report that can give operators a better understanding of the deep subprime customer who might be arriving on their lots.
“It’s really kind of mind boggling as you think about a financial transaction; what is the easiest thing on the credit report? It’s the three-digit score,” Reid said.
“Sometimes dealers make the customer all about the score, which especially in the deep subprime space we know that it’s much more than a score,” she continued. “If you’re just using the score, you’re likely not getting the value out of the credit report.
“What is crucial and important is that we help bring the education to understand the data that’s feeding into that score. That’s what’s ultimately going to help dealers, especially buy-here, pay-here dealers, make the right decision,” Reid went on to say.
To peel back what formulated that credit score, Reid plans to explain how the report shows personal information, including address and phone number as well as employment history. She also intends to touch on how credit reports share details about when the customer opened other credit accounts andfor how much, as well as their balances and payment history. Furthermore, Reid plans to touch on how credit reports show any bankruptcies, judgments or other matters handled by a collection agency.
“The customer we see today in the deep subprime is more sophisticated than ever before in understanding what he has to tell you to get that loan,” Shilson said. “You have to be more sophisticated in mining through what he’s telling you and translating that into the credit underwriting decision.”
And Reid made a pledge to any operator who attends this session.
“I’m going to put my dealer hat on when we do this presentation. We want to show how the dealer can incorporate this on a dayto- day basis to help propel his business forward,” she said. “I make a pledge to make sure it’s easily digestible and attendees can walk out of session saying how can I bring this back to my business.”
Other Conference Highlights
For the last four years, NABD hosted a week long series of events in Las Vegas where operators can secure a wide array of training. Three of those sessions focused on best operating practices and the fourth on regulatory compliance.
In 2015, the alliance is approaching things a bit differently with this new Best Practices Conference, which has the theme, “Working Smarter and Avoiding Compliance Pitfalls.”
January’s dual-track conference program will include the most popular sessions from these past academies, and some new ones.
The compliance track will feature several of the nation’s leading attorneys and experts including Shaun Petersen, Tom Hudson, and several others who will help attendees learn how to comply with all of the latest legal and regulatory developments.
In the best practices track, some of the nation’s best operators will share their tips and techniques, which will help attendees overcome the competitive market challenges from the special finance industry, credit unions and others.
For more details or to register, go to www.bhphinfo.com