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Old 10-08-2008, 01:12 PM   #1
XDCX
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Default Great article about Automotive Credit - It's actually Good News

BusinessWeek has an excellent article that reviews the "Six Truths" about Automotive Credit.

If you're a Dealer Principal, GM or Sales Manager I think you need to get this article out to your salespeople so they can clear their heads of all the misinformation that's in the marketplace right now.

Here's a link to the BusinessWeek article: http://www.businessweek.com/lifestyl...107_076176.htm

Essentially the article states that AutoNation's Mike Jackson is wrong when he indicates that you nearly need to "walk on water" to get a car loan - he's simply WRONG.

The reason sales were horrible in September was a function of Showroom Traffic - NOT Automotive Credit. The reason Showroom Traffic was down is because people that follow the economy and stock market are less inclined to make major purchases when the economy is in turmoil. These are the exact same people that tend to have higher credit scores.

The article is very concise and well written - it will definitely help your Sales Staff put the current business environment into perspective.
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Old 10-09-2008, 07:30 PM   #2
okcarl
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I agree, I am getting tired of the mis-information in the press right now. We see this information trickling down to customers. We had a customer in today with a 808 score who was concerned that they may not be able to get financed. The press is scaring the customers. I get calls everyday it seem like from friends in the business who are complaining that they could not get this guy with a 700 score bought. When you start digging into the deal the customer either had a debt ratio problem or some other issue that would have been a problem anytime not just now. Sales people are starting to buy the hype as a way to justify why they are not selling. The truth is we need to as stated keep educating our sales staff on the reality and the true facts or we are all doomed.

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Old 10-09-2008, 10:22 PM   #3
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Sounds like the customers need to be educated in the facts as well. I'm seeing a lot of empty showrooms.
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Old 10-10-2008, 09:58 AM   #4
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Quote:
Originally Posted by okcarl View Post
I agree, I am getting tired of the mis-information in the press right now. We see this information trickling down to customers. We had a customer in today with a 808 score who was concerned that they may not be able to get financed. The press is scaring the customers. I get calls everyday it seem like from friends in the business who are complaining that they could not get this guy with a 700 score bought. When you start digging into the deal the customer either had a debt ratio problem or some other issue that would have been a problem anytime not just now. Sales people are starting to buy the hype as a way to justify why they are not selling. The truth is we need to as stated keep educating our sales staff on the reality and the true facts or we are all doomed.
Excellent post.

If you've got a customer with an 808 credit score that's worried about his ability to get credit you can bet there are thousands of people with credit scores in the 700s that don't even think it's worth a trip to the dealership.

Mike Jackson is NOT a good spokesperson for the retail auto industry. He spent several years trying to convince the media that we needed higher gas prices and now he's trying to tell the world that the credit markets are locked up and you need to "walk on water" to get a car loan.
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Old 10-10-2008, 10:04 AM   #5
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Originally Posted by SHACOS View Post
Sounds like the customers need to be educated in the facts as well. I'm seeing a lot of empty showrooms.
With all of the negative headlines about the economy and the stock market it's easy to see why people are reluctant to make a large purchase decision.

There's no question that the U.S. Economy has entered into a recession - the question is just how deep it will go and how long it will last.
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Old 10-21-2008, 02:45 PM   #6
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Default Good follow-up article in BusinessWeek

Here's a link to a follow-up article in BusinessWeek: http://www.businessweek.com/lifestyl...245_page_2.htm

The message is one that echos what has been stated here - the biggest problem that dealers are having right now is traffic. It's hard to sell a car when you don't have anyone to talk to.
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Old 10-22-2008, 12:32 PM   #7
dafuzz1956
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You are so right!!! And the biggest problem is the media right now, they seem to have always shot off thier mouth on speculation and because the general public is too ill-informed by some reporters guess work they panic and and stay out of the retail market. Then they report on every channel and in every piece of fish wrap that car dealers are not selling cars and if one out of 50 come in the first thing you hear is "It sure is quiet here are you open?"

HELP
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Old 10-22-2008, 04:23 PM   #8
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Originally Posted by dafuzz1956 View Post
You are so right!!! And the biggest problem is the media right now, they seem to have always shot off thier mouth on speculation and because the general public is too ill-informed by some reporters guess work they panic and and stay out of the retail market. Then they report on every channel and in every piece of fish wrap that car dealers are not selling cars and if one out of 50 come in the first thing you hear is "It sure is quiet here are you open?"

HELP
There's no question that the situation is just feeding on itself right now.

The fact that the economy is slowing is Front Page News and that just causes people to reduce their spending which slows the economy further.

That's why it's so frustrating to see AutoNation's CEO telling everyone that credit is a huge problem. If he really wants to be a spokesman for this industry, why doesn't he do an interview and tell the public that new and used car prices are at levels we haven't seen in years.

There are some incredible bargains out there right now.
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