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From the NCM Institute: The Sales Process in BHPH is Underwriting Written by: Gene Daughtry

Written by: Gene Daughtry

In BHPH, like any other automobile dealer, you’ll start the sales process out with a meet and greet. From there you should go in a different direction from other retail outlets. If you have been on a franchise dealer sales floor I am sure you or your sales staffs have joked about wanting a screening machine that they could walk a customer through for an instant credit reading. Since that doesn’t exist, your sales process is probably similar to: 1. “up” your customer;  2. meet-and-greet; 3. qualify; 4. land them on a rig; 5. proper walk-around; 6. trial close; 7. work the numbers; 8. ask for the sale.

In a BHPH operation, after you greet the customer, you do qualify them. Qualifying is the beginning of your underwriting process and helps your customer understand what you do. In my BHPH operations, we would ask customers to come inside and fill out a credit application before we began selling a car. Generally our salespeople would say, “Let’s go inside and see how we can help you, then we’ll look at vehicles you can drive home today.”

In BHPH, the sales process is really more of a sales outline and should be more about underwriting than selling. Frankly, selling cars is the easy part. In BHPH, information-gathering is a large part of the salesperson’s job description. No matter what the customer wants, the salesperson should go back to the outline and gather what the underwriter needs to make a decision. In BHPH, you are in the loan business and the focus is to build a successful portfolio. As a BHPH dealer the best information-gathering you will do is when your customer wants your help and is hoping for an approval.

No, every customer is not coming inside before picking a car. A few customers resist giving information until they are comfortable you have “the” vehicle they want. A few want details of your transaction before they will provide you with personal information and documents for verification. But the majority will come in, especially when your salesperson knows that selling before taking an application can be a huge waste of time.

Having this type of sales process requires flexibility and perception on the part of the salesperson. Any time you are dealing in sales, you have to be flexible. In my operations, our people were trained to understand and work with customers’ perceptions of car sales. Most customers coming to the store are uncomfortable. They are afraid of confrontation. They don’t want to tell the bad news story again, or they have a chip on their shoulder from their last experience trying to buy. Our salespeople were always working to get the customer inside so we could begin to determine what we had. Good underwriting helps you see who you are dealing with before the vehicle hits the street. The sales process is where that begins to take place.

Our basic underwriting rules were:

  1. Don’t sell them something they cannot afford.
  2. Don’t take the customer’s word for anything – always verify.
  3. Only sell to people from the surrounding area.
  4. Be honest with ourselves when underwriting.

In our operation, we filled out a detailed credit application and pulled a bureau. We required proof of income for the household (no proof, no deal). We asked for utility bills to help verify residence and we could see how they paid for the basics. Seven to 10 personal references (name, address, phone numbers and relationship) were required, and we checked them. Jobs and landlords were verified on every new customer. We used an internal score sheet as a guideline that included cash flow to help us understand the customer’s tolerance for new debt. Nobody rolled without verbal verification of full-coverage insurance. Obviously, we did not spot cars.

There are BHPH dealers that sell lower price cars and roll almost anyone that says yes. Other dealers use ignition shut-off devices or GPS units to increase confidence in their loan approvals; we did not. There are 1,000 ways to operate BHPH, so your process and underwriting should reflect your risk tolerance.

No matter what price vehicle you are selling or what your risk tolerance, your sales process should be considered an important part of underwriting and collections.

Gene Daughtry is a BHPH 20 Group moderator, trainer and consultant. To learn more about the opportunities in BHPH/LHPH, visit with Gene at the NCM open house next month at the National Alliance for Buy Here, Pay Here Dealer Conference in Las Vegas. To RSVP you can email him directly at

Views: 66

Tags: Automotive, BHPH, Buy, Collections, Daughtry, Financial, Financing, Gene, Here, In-House, More…Lease, Management, NCM, Pay, Training, Underwriting, Used, Vehicle, and


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