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Payment Call and Inventory:

A payment call is an approved solution that a Non-Prime lender offers to a customer. It is up to the Special Finance Manager to calculate how much vehicle the payment call will advance. Let’s look at an example:
Payment Call: $400 per month @ 21% for 60 months
Enter the term and interest rate in your computer and roll the payment back to calculate the total amount that can be financed.
Maximum amount financed = $14,750
Add the down payment              2,500
Total                                       $17,250
Deduct taxes                           $ 2,119
Deduct admin fees                       500
Deduct an E.S.P.                       1,500
Net Selling Price                    $13,131
If the lender has an advance limit of 120% of Black Book’s ‘CLEAN” value, then the vehicles that you pick out for the customer based on their needs must fall within the maximum advance as calculated by the payment call. Many of your existing vehicles that you have in inventory will fall within the payment call parameters from your non-prime lenders however, savvy Special Finance and Used Vehicle Managers will seek to acquire inventory that satisfies customers’ needs and also ’book out’ well. Now go and find a vehicle in your inventory that can be sold for that amount based on the lender’s advance limits.

Stocking inventory that meets with your lenders’ parameters will be one of the greatest challenges that a Special Finance department will encounter. There is a myth that non-prime deals involve delivering cheap, older or higher mileage vehicles - this is far from reality. You will find that the majority of your Special Finance units are less than 4 years old with 60,000 km’s. Many new vehicle franchises have allowed their used vehicle departments to become  “Almost New Vehicle Departments.” While many of your Special Finance models will fall into this category, huge opportunities lie with vehicles of older vintage and mileage.

Many new vehicle franchises have adopted “Certified Plus” marketing strategies and have significantly reduced stocking older vehicles with higher mileages because of the greater reconditioning costs. This is generally an internal dealership policy issue that many dealerships have addressed. Many dealerships will continue to support their “Certified Plus” brand but will also stock older vehicles that are certified and reconditioned but do not offer extended warranties, exchange privileges and other value-added features. These vehicles are made available to the Special Finance department and a happy compromise is achieved. What we do hear however, is Special Finance Managers complaining about their inventory being sold by the sales consultants to regular prime customers. There is obviously a lesson to be learned here.


“One man’s garbage is another man’s treasure.”

This holds true for the used vehicle marketplace as well. Too many quality vehicles are wholesaled from new vehicle dealerships today only to be purchased by independent used vehicle operators or savvy used vehicle managers at new vehicle dealerships that will eventually be sold to customers. Some of them will be sold to Special Finance customers. 

For more information about payment calls and inventory, contact Hector Bosotti, National Trainer & Consultant with Wye Managemenet.


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