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Evaluate Technology That Sharpens Or Simplifies F&I-Related Activities

Latest software is scaled to dealership size and segments target customers, verifies income and employment, reports to credit bureaus.


Technology is affecting every aspect of the vehicle-buying process at a dizzying pace, and consumers are not the only ones benefiting. Your dealership has access to an expanding array of dealership software and services that can help grow your business and streamline processes, especially in the F&I department.

Even if you don’t enjoy the vast network of resources typically employed by a large dealership group, you can afford certain tools that provide in-depth information about a potential customer’s financial standing. You may be familiar with some of these tools, but with technology solutions launching nearly every day, it’s quite possible that you’re missing out on a treasure trove of data and analytics that can help you compete more effectively.

Just to cite a few benefits, your dealership could micro-target its marketing messages to specific customer segments, verify income and employment to help shepherd a customer through loan approval procedures, and – if yours is a buy here, pay here (BHPH) dealership – report payments to a credit bureau. Below, I describe a few tools and services that can help you in these activities.

Pre-Sale: Reaching Right Customers

Depending on your dealership’s size, it may cater to customers with very specific financial standings, such as people whose credit ratings lie at either the prime or subprime ends of the spectrum. The Fair Credit Reporting Act (FCRA) regulates how companies, and especially marketers, can access or use consumer credit information. This can make it difficult to strategically identify customers and prospects with the most accurate advertisements regarding offers for a specific range of credit or loan rate.

As a result, data providers have developed alternative versions of the traditional credit score, such as Equifax’s aggregated FICO Scores for auto dealerships. Aggregated FICO scores use credit information that is anonymized (i.e., does not include an individual’s name or other identifying information) and compiled by micro-neighborhood (meaning data is accurate for areas within a ZIP code. With that level of segmented data, the scores are designed specifically for use in non-traditional marketing applications, such as highly customized direct-mail advertisements.

With alternatives such as aggregated FICO scores, your dealership can build prospect and acquisition lists to market more efficiently. Segmenting your lists to advertise the right message to the right consumers should help you bring more prospects through the door.

During Sale: Verify Income, Job

Verifying income and employment has typically been regarded as activities conducted by lenders. However, vendors are offering verification solutions specifically tailored to dealership use.

Verifying a customer’s income early in the sales process can prove invaluable in assessing the needs of prospective buyers. For BHPH dealers, a complete understanding of the customer’s financial capabilities can better help you place him or her in a vehicle priced for their financing abilities.

Running an instant verification of income and employment as you pull a potential customer’s credit report also removes or minimizes logistical obstacles, such as having to send customers home for a pay stub (and praying they even return at all); as well as legal obstacles, such as a customer potentially giving you a fraudulent pay stub. Some verification services are built around databases that are updated every pay period, so you can rest assured that the income figure listed on a credit report is up to date.

When your dealership staff searches for lenders to finance your customers’ purchases, they can use instant verifications of income and employment to position loan applicants for consideration by lenders that offer the best rates (but, in return, impose stricter requirements for proof of income and employment). These lenders will, of course, conduct their own verifications. However, taking the initiative to run your own verification lets your dealership offer customers the best financial options available early in the sales process, which can produce considerable time savings.

Ultimately, verification services can help your dealership provide the quickest, most convenient buying experience possible – improving customer satisfaction.

dealership softwarePost-Sale: Reporting Customer Payments

If yours is a BHPH dealership, once a customer has signed on the dotted line for his or her vehicle, in some cases you have the option to report customer payments to credit bureaus. Reporting customers’ payment histories not only improves the data available to dealers for qualifying future potential buyers, but also encourages customers to make timely payments, since their credit rating may be directly affected by how they perform on their loan.

In addition, dealer reporting includes the auto loan trade lines on consumers’ credit files, to accurately reflect their handling of debt. This may grant customers even more opportunities for competitive terms based on their credit histories.

Most large BHPH dealers furnish their credit data to credit reporting agencies, but if you operate a smaller dealership, you may have limited time and resources to report customer payments to credit bureaus. Now, there are more options available for smaller BHPH dealerships to report credit data. For example, Equifax has partnered with the National Independent Automotive Dealer Association (NIADA) and the National Association of Buy Here Pay Here Dealerships (NABD) to allow its dealer members to report their loan portfolios to Equifax, regardless of how many accounts those dealerships have in their portfolio.

Programs such as this can help your dealership – no matter how large or small – become a data-furnisher to credit bureaus.

Looking Ahead

The tools and services I’ve mentioned are only the tip of the iceberg, and you can expect even more options to hit the marketplace in coming months. For example, the dealership industry may soon see plug-ins for dealer websites that let consumers submit their basic financial information and receive a range of firm credit offers. Imagine how much easier it would be to structure deals when your staff have an idea of customers’ financial standings before they even walk through your front door.

In the end, technological advances will continue to help everyone in the industry work together to provide the best car-buying experience possible.

Angelica Jeffreys
Angelica Jeffreys
Angelica has more than 25 years of experience helping dealers to drive growth and improve business performance. Previously in her career, she was vice president of strategic partnerships at DealerRater and held several sales leadership roles at Autotrader.

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