1. Automotive News Page 1 of 3
Web-savvy dealers target creditworthy
customers
Some sellers find Internet credit applicants are serious buyers
Donna Harris
Automotive News | April 23, 2007 - 12:01 am EST
The Conant Auto Retail Group has seen a 50 percent jump in online credit applications since August when it started
offering instant credit preapproval on its Web site.
"We are getting more than ever before," says Richard Fisler, corporate projects manager for the nine-store dealership
group in Cerritos, Calif.
Some experts say most prospects who apply online have risky credit. But Web-savvy dealerships, such as Conant, are
trying to appeal to creditworthy customers. And they say they are succeeding.
Online credit applications can save time for customers and dealerships. And dealers believe online applicants are serious
car buyers.
For example, 27 percent of prospects who use Conant's online preapproval buy vehicles, Fisler says. That's much higher
than the 10 to 13 percent close ratio typical of other Internet leads, he says. He declined to give application volume.
In 2006, 76 percent of dealership Web sites offered credit applications, according to the National Automobile Dealers
Association. That was up from 40 percent seven years earlier. NADA surveyed 375 dealers last year.
That percentage grew more in 2006 than in any other single year since NADA launched the survey in 1999.
Dealers say consumers are growing more comfortable with online financing. Some are successfully targeting prospects
with better credit. And vendors are providing improved credit application products.
On the rise
Why online credit applications are growing
Consumers are more comfortable with online financing.
Dealerships target creditworthy customers in promotions.
Vendors supply better credit application software.
Better prospects
But some experts say only a small percentage of prospects
complete Web credit applications, and those customers are
hard to finance.
"The majority of people willing to use an online credit
application service have had very bad credit," says Cheril
Hendry, CEO of HLF Brandtailers. The Irvine, Calif., ad agency
consults with dealers on Internet marketing.
"They're not worried about privacy issues, nor are they worried
about having their credit report pulled numerous times,"
http://www.autonews.com/apps/pbcs.dll/article?AID=/20070423/SUB/70419037&templat... 9/28/2007

2. Automotive News Page 2 of 3
Hendry says. "They're just looking for someone -- anyone -- to
finance them."
Out of 891,211 unique visitors so far this year on her clients'
Web sites, Hendry says, less than 2 percent completed credit
applications online.
But other dealerships are getting higher volume and better-
quality credit applications on their sites. Fisler says Conant
attracts creditworthy customers "all day long."
Ralph Paglia, e-business director for Courtesy Chevrolet of
Phoenix, says even though most of his dealership's 600 to 800
online credit applicants a month have some credit blemishes,
they can still get financed.
The dealership sold 11,000 new and used vehicles in 2006,
including fleet business, Paglia says.
Five years ago, he says, "online credit applicants were people with horrible credit."
Short forms
Courtesy Chevrolet and other dealerships are turning to shorter, less intrusive application forms. Dealership Web site
credit forms typically have been long and cumbersome, says consulting firm J.D. Power and Associates in its February
2007 "Online Automotive Review" report.
Now some dealerships offer instant preapproval, and they are designing promotions aimed at prospects with good credit.
One of Paglia's Web promotions says: "Great Credit? Looking for a car?" The Web page asks for contact information,
gross monthly income, date of birth and Social Security number.
J.D. Power and Associates, in its report "The Changing Landscape of the Automotive Finance Industry," says online
applications can be "an effective tool to attract and convert shoppers to buyers."
One-third of consumers who arrange loans through new-vehicle dealerships say they use the Internet to research
financing, the report says.
New and improved
Improved technology also makes online credit applications easier, quicker and more customer-friendly.
Hendry says computer vendors ADP Dealer Services and Reynolds and Reynolds Co. are hosting and managing more
dealership Web sites. They are improving integration between the sites and dealership management systems. That eases
the transfer of information from applications directly into the customer database, she says.
Pete MacInnis, CEO of DealerCentric Solutions Inc. in Rancho Santa Margarita, Calif., says online security has improved.
So more consumers are comfortable with the applications.
Software vendor DealerCentric offers a talking credit application. A representative talks prospects through the process on
a video.
The company's "instant credit preapproval" software allows the dealership to set credit parameters. It automatically taps
the credit bureau's records to see whether prospects meet the dealership's requirements. It also gives customers an
immediate answer.
"It's an instant, real-time approval," MacInnis says. "The dealer knows the customer is ready to buy."
You may e-mail Donna Harris at dharris@crain.com">dharris@crain.com
PRINTED FROM: http://www.autonews.com/apps/pbcs.dll/article?AID=/20070423/SUB/70419037&template=printart
Entire contents ©2007 Crain Communications, Inc.
http://www.autonews.com/apps/pbcs.dll/article?AID=/20070423/SUB/70419037&templat... 9/28/2007

3. Automotive News Page 3 of 3
http://www.autonews.com/apps/pbcs.dll/article?AID=/20070423/SUB/70419037&templat... 9/28/2007