How does a reposession effect the dealer that sold the card?

[CreditDrama85]

i know that most dealers can approve bad credit sub prime loans if they want to and that the bank or finance company usually charges the dealer a fee.

i thought it would be in the best interest for dealerships to close as many deals as they could. right? SO, why do we see some dealerships turning people away and they go to another dealership and get approved?

does a reposession come back to somehow bite the dealership that sold the car? or is there another reason some dealers close bad credit loans in a subjective manner?

[JackStraw]

I think if there is a good F&I person who has good relationships with a lot of credit analysts at different banks he/she can call in more 'favors'. I've also heard of some dealership personnel being able to structure deals better, although I'm not sure what that means.

As far as repos go, I would think that if a particular F&I person sends a lot of deals through and a lot of those deals end up becoming repos, the banks will become less likely to buy deals from him/her.

I should note that I am not part of the industry or anything like that. These are just thoughts based on things I've heard from people who do work at dealerships.

[Anonymous]

Jack, you are correct in your posting.  You can also factor in that Dealer "A" may have access to abank that Dealer "B" doesn't.  Especially when it comes to sub-prime.

The dealer can also be affected by a prorated chargeback of profit if the loan were to go bad.  Though they usually do not take this into consideration when making the sale. 

[Anonymous]

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@JackStraw wrote:
I think if there is a good F&I person who has good relationships with a lot of credit analysts at different banks he/she can call in more 'favors'. I've also heard of some dealership personnel being able to structure deals better, although I'm not sure what that means.

As far as repos go, I would think that if a particular F&I person sends a lot of deals through and a lot of those deals end up becoming repos, the banks will become less likely to buy deals from him/her.

I should note that I am not part of the industry or anything like that. These are just thoughts based on things I've heard from people who do work at dealerships.

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as for structuring deals goes. all that means is simply the structure they think you NEED to get bought by a bank. if for instance you are A tier (750 or above) then you structure is usually non existent. you can buy most cars with no money down and OAC apr up to 130% LTV.

but if you have a good finance director to call in a favor. then even if your d tier of first time buyer they can structure your deal b tier ive even sold a car to a first time buyer and got her done a tier as a favor but she had close to 6 figure income and long job time. so that helps alot.

now when i sold my brother a car he had a few derogs and was a first time buyer. his auto fico scores where in the 580's across the board his income was 20,000 gross yearly. first time buyer structure for my store was no derogs,1 year on the job 10% down, LTV could not exceed 90% , payment could not exceed 15% of your gross monthly income, cannot lease, and apr is also 18%

but i had my finance director talk to the banks and got him bought b tier with nothing down as a first time buyer at 11% ...arent i a nice brother lol

Message Edited by nandrolone on 08-18-2008 11:40 AM

[Anonymous]

Some dealers just don't want to be known as the "budget" dealer.  You get that alot out here in California.  Also, timing is critical.  Walk in on a big weekend where the have all kinds of incentives for the dealers going on, or even better yeat....Go in the last day of the month...You are guaranteed a sale if you are reasonable about it and are breathing.

Also, some dealers that sell alot of cars just have the ability to "push" a weak file through just based on their volume.

Last summer I traded in my car on a new Camry.  I have weak credit and got approved through Toyota Financial on the MOnday of memorial day weekend at 12% for 6 years (will be paid off in about 4)  1 Day later my Montero blew an engine.  Patched it up and drove it straight to the same dealership.  I told them get me into a 4 runner.  Now mind you, my income is about 50K per year and the 2 cars sticker prices topped 54K combined.  I didn;t think they would be able to do it, but they got them both on my credit alone.  I wanted this fro 2 reasons....My wife was out of town and I didn't want to wait (they had extended the memorial day sale...)  and I knew we were going to buy a house and her income and credit were stronger.  Now becuase of doing that,  we are getting a great rate on a house loan because she has no debt, decent income, and high 600 credit scores.....