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Old 09-08-2010, 02:08 PM   #1
ohiobuckeyes
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Default Credit Application Question

Had a customer visit today with a 550 becon score. The income was $950.00 which falls under any bank we use.

How does you dealership deal with these customers, do you still send it to the bank and let it decline or do you call the customer and say It can fly becuase your dont make any money.
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Old 09-08-2010, 02:26 PM   #2
Granch
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In CT if I dont send it in I have to do and "Adverse Action Notice". Its easier to just send it in and let the bank do the notice.
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Old 09-08-2010, 02:34 PM   #3
birch3x
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If you always submit the app, you'll never have to be concerned Adverse Action. The customer will get a letter, which you can see on Dealer Connect-CF Connect-Ace VIa Route One-Rates and Forms. If you tell someone you can't get them a loan and don't let a bank turn it dow, there's also the chance a savvy consumer can claim you violated the rule. Also, if you submit every app you'll get a surprise approval once in a while. It's best to submit apps you know will be turned down to a captive. They shouldn't use it against you, where it may annoy other banks.
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Old 09-08-2010, 02:46 PM   #4
ohiobuckeyes
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Thanks Gang!

I sent to Ally for Auto Decline. I was told in Ohio that "dealer" still has to still send a "Adverse Action Notice" to the customer if it was declined. I do it. (Former Aftermarket Vendor told me)
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Old 09-08-2010, 11:21 PM   #5
XDCX
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Quote:
Originally Posted by ohiobuckeyes View Post
I was told in Ohio that "dealer" still has to still send a "Adverse Action Notice" to the customer if it was declined.
I've heard that out on the West Coast too. Dealers need to send out an "Adverse Action Notice" even if they know the bank they submitted the application to is sending out a notice.

I wouldn't be surprised if this is a Federal Law covering all states.
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Old 09-27-2010, 05:42 AM   #6
SANDMAN
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Not sure if it is a federal law on this but I did it as a precaution. All deals that were marked as a FOB came through me before they were turned in. It gave me the opportunity to save a deal and if not I did a adverse action on it regardless of whether it was submitted or not as long as there was a credit app in the deal. Why risk the fine?
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Old 09-27-2010, 12:40 PM   #7
jadog1
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never spend the banks money you just never know!
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Old 09-28-2010, 10:08 AM   #8
XDCX
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Quote:
Originally Posted by SANDMAN View Post
Not sure if it is a federal law on this but I did it as a precaution. All deals that were marked as a FOB came through me before they were turned in. It gave me the opportunity to save a deal and if not I did a adverse action on it regardless of whether it was submitted or not as long as there was a credit app in the deal. Why risk the fine?
That's a good policy - especially the part about a second chance to save the deal.

I remember dealer who used to have a manager's meeting with his sales and finance staff each week where they would review the write-ups they had that didn't result in a car sale. All the managers got along but they were also very competitive - it was interesting how a different perspective could save a deal.

I thought the meetings were a great idea - it really forced the desk to be up to date on all the latest programs since they knew their write-ups would be reviewed if they didn't sell the car.
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Old 09-28-2010, 10:23 AM   #9
XDCX
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Quote:
Originally Posted by jadog1 View Post
never spend the banks money you just never know!
I've heard that line of thought before - mostly that you don't want to send applications that you know are going to be turned down to your key lenders. I don't think the postage cost was the issue, I think it was an issue concerning the lender's approval ratio or some other internal measure.

The person who mentioned that thought to me said he still processed the credit applications, he just sent them to sources he rarely used.
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