Dealer finds financial advice on LinkedIn
Liz Hochstedler, Associate Editor
October 31, 2011
Filed under Features
Chip Cooper had a dilemma faced by many powersports dealers: he had customers, but the retail lenders were lacking.
“We missed a lot of customers,” he said. “We were getting 40 percent bought. The lower end of the non-prime and the sub-prime — there was just not a buyer there. And these are the people that really want to do [financing].”
As a veteran Chrysler automotive dealer, Cooper was accustomed to having about 20 institutions providing retail financing to his customers, but after three years at the helm of Destination Honda, a Honda Powerhouse dealership in Clinton, S.C., he wasn’t finding as much luck in the powersports industry. So he sought help through the Internet and was able to significantly expand his retail financing network.
Destination Honda only had the option of qualifying customers under loans provided by American Honda Finance and a regional bank in his area. Unfortunately, that meant 60 percent of his customers were being denied. Those customers then weren’t able to complete their purchases, and they were his key market.
“There are the hunters or the workers that may not have the credit that your businessman has or your guy that has been working in the plant for 20 years has. They just don’t have that type of credit,” he explained. “A lot of these people used to have good credit. You can see their payment history.”
Because of the financial history of Cooper’s prospects and what he saw as a likeliness for them to make the required payments, Cooper wanted to make a bigger effort to get these customers financed. After all, he was losing 60 percent of his business based solely on loan rejections.
So Cooper went to the Internet with his issue, starting with researching lenders on his own.
“What happened is I, of course, used the Googles and Bings and Yahoos, trying to put in what I considered keywords and trying to find lending institutions,” he said. “Certain ones would come up, but many didn’t deal with our area.”
With search engine attempts turning up futile, Cooper turned to another online resource —LinkedIn. He searched for powersports groups and discovered the Powersports Business group. He joined and immediately posed the question, “I am in need of additional finance sources for my Honda powersports store. Honda Finance will handle new and great credit, but I am missing used and lower score buyers. Are there more sources?” His hopes to find some advice were quickly answered.
“The first day I got in the group, I asked the question, and the next day, Jim Anderson from GoPro Powersports [Services] called me,” Cooper recalled.
Within a week, Cooper had signed on with GoPro Powersports Services and First Community Bank in Batesville, Ark., with Anderson’s help. But his request also spurred others to reply to his post, which led him to sign with Sparta Commercial Services and another lender.
“All of a sudden instead of having two lending sources, now I’ve got six,” he said.
With the deals only being cemented for a couple weeks, Cooper isn’t sure how many more of his customers will have the opportunity to be financed. He does know, however, that their odds have increased with the additional financial institutions that he discovered. Also, by sending in his denied applications, he’s learning more about his new partners.
“It’s giving us an idea of what they will buy, how we need to structure the deals when we send them into the company and what kind of detail they want,” Cooper said.
Cooper is already glad he went to the Powersports Business group for help.
“I would have never found these sources,” he said. “You couldn’t have put it on Facebook or Twitter. You couldn’t put it on any other social media, but LinkedIn is purely for businesses.”
He advises other dealers and industry members to join the group in the hopes of sharing ideas among each other.
“I think that the more people that get involved in a group like this, you can pass ideas back and forth,” he said. “What someone may be doing in Texas may be working in Texas, and I can use it in South Carolina. Maybe they’re selling different products, but we’re all in the same industry. We’re in the powersports industry, so we can share some of these ideas.”