GM Financial is putting much of the deal structure into F&I managers' hands to speed up the car-financing process and make financing available to dealers and most customers any time of day.
GM Financial's Approval Center tool allows dealers to adjust the deal structure after General Motors' captive approves customers' credit applications. GM Financial's underwriting guidelines and policies are built into the tool so a call in to the lender is typically unnecessary. The tool is available 24/7 — even when call centers are closed at night and on Sundays — and has helped some dealers sell more vehicles and transition traditionally used-vehicle buyers into new vehicles.
"We give the dealer the ability to restructure the deal on their own," Jonas Hollandsworth, COO for GM Financial, told Automotive News.
As of late March, about 1,800 GM dealers had signed up to use the tool, surpassing GM Financial's goal of 1,500 dealerships adopting it this year.
Dealer Keith McCluskey began using a beta version of the tool in early 2019 before it was launched nationally in June. Prior to the tool, "we were simply saying to GM Financial that having access to deal approvals from GM Financial 24/7 would be a big benefit to GM dealers nationwide. And we needed to create a digital portal on the home page that gave us all of those tools," said McCluskey, owner of McCluskey Chevrolet in Cincinnati.
After GM Financial approves the credit application, the dealer can go back into a deal and experiment with how the monthly payment would change if the down payment was bigger, if the customer added F&I products or if the loan term was extended, for example, Hollandsworth said.
"It significantly has sped up the car-buying and financing process. It is amazingly quicker and it's simple to use," said McCluskey.
He has sold about 100 more vehicles per month because of the tool, and he's switched many customers who planned to buy used vehicles to purchasing new vehicles.
"If the customer came in looking at a 2014 used Jeep Grand Cherokee, the desk can go in and say, 'Let's put in a 2019 brand-new [Chevrolet] Equinox.' And essentially the tool will restructure the deal, restructure the terms for that vehicle," said Hollandsworth.
In 2019, McCluskey's store sold 8,000 vehicles. This year, without factoring in the impact of the coronavirus, he expects to sell 10,000, largely driven by the Approval Center.
"All of a sudden, you're selling a [new] vehicle to someone that maybe previously was a lifetime used-car buyer or maybe they were somebody who had A or B credit and life threw a tough chapter at them," said McCluskey.
The tool also connects with the dealership's inventory management tool, incentives look-up platform and dealer dividends — or cash dealers can put toward the transaction.
Dealer feedback was a significant factor in developing the platform, GM Financial said. The tool was named after McCluskey's sales area, where sales and F&I teams structure deals. McCluskey named the area the Approval Center with the idea that his store would strive to get every customer approved, rather than calling it the sales tower — a name many dealers use.
"You're trying to go in there and in a matter of seconds or minutes — 24/7 — structure a deal and figure out how you can earn that customer's business," McCluskey said.