Deal Pack Blog!
BHPH DMS: Prospect Scoring for Internal Financing
What makes a buy here pay here dealership successful? Part of that equation of course, is having the right cars to meet demand. However, the other and arguably more important side of the equation is having the right customers. What defines the right customer? For every dealership, that may be defined differently, but a few factors will remain constant. One part of the mixture is determining the credibility of a borrower. For instance, pulling credit data on a prospective customer is a necessary function before extending a borrower a loan. Analyzing the credit history and determining if your dealership is going to extend a loan to a sub-prime borrower, is a business skill that is essential and can inevitably make or break the success of a BHPH dealership.
Deal Pack offers the ability to pull credit history from three major bureau’s through integration with e-CBI. This information, however, is just the first ingredient in the recipe for a great applicant. As stated, the attributes of the “right customer” is not identical for every dealership.
Deal Pack offers a scoring model solution that can be tailored to each individual dealership. This ability to integrate their own business intelligence into the model, allows them the ability to hone in on the truly profitable applicants in the sub-prime market.
Deal Pack’s scoring model offers a variety of analysis tools. The first is the income analysis. The dealership will assign a custom “threshold” to their scoring model. The threshold will act as a payment guide, which will calculate based on the income and expense information. This is a great tool that can assist underwriting in determining payment terms, amounts and selecting the best car for the customer’s financial position.
Aside from the income analysis, the scoring model offers built in questions to be answered by the applicant. These questions include the industry standards, i.e. current job length, current time in area, etc. Each question that is answered is assigned points, depending on the answer. The benefit for the dealership comes in selecting the weights for questions in terms of point receiving. For example, current length of employment may be much more important than whether the applicant owns a home phone. In this scenario, you would assign a larger weight to the answer to length of employment, along with the other questions viewed as important by your dealership. As the applicant answers the questions, points are earned, and these points are calculated into a grade. This grade also takes in to account the income analysis.
However, the industry standards cannot replace years of industry knowledge. With that in mind, the scoring model offers an additional section for the dealership to create their own questions. The answers to these questions can also be weighted depending on the importance of the question to the decision of the dealership to extend a loan. Better yet, as your business changes the models are adaptive as well, allowing the dealerships to customize their credit scoring models at any time. If you are a current Deal Pack user, and have questions regarding the scoring models, call in to a support specialist and they will be happy to assist in helping you in customizing your scoring model to match your specifications.