When I started working for IFMG in 2004, the basic sales pitch was something like “Someone in your town is going to make a killing on this, it may as well be you”.  Dealers were skittish to buy third party leads geared towards special finance customers, both because Internet leads were a new thing that people were just trying out, and Special Finance was still thought of as a necessary evil, to be dealt with when necessary, but certainly not specifically targeted.

Fast forward a couple years to the summer of ’06, and every dealer under the sun was beating down our door looking for leads.  The gravy train was rolling full steam, and no one wanted to miss the easy profits that huge advances the Special Finance banks were throwing out.    A quick review of our sales from June of that year shows that we signed up Lexus, BMW and Audi dealers, all of whom had heard in their 20 groups how profitable Sub Prime was for their buddies.

You know the rest of the story.  Like all bubbles, this one burst as banks realized that they were playing a little too fast and loose with their money.  It wasn’t a slow down, rather it was like someone pulled the emergency brake.  Dealers that were doing 50+ special units per month suddenly found themselves unable to get anyone under a 600 bought, and no inventory to fit the few calls that they did get.  Life wasn’t very much fun for anyone who made their living in the challenged credit world.

History is cyclical, and in many ways we’re right back in 2004.  Banks are back to buying properly structured deals that make sense, and there are some folks out there cornering the Special Finance market in their town.  Capital One just raised their advances, Drive’s fees have come down a little on some deals, and IFA has stepped up their calls with larger advances and less restricted vehicles.  Rental fleets have been replenished, and you can buy cars that will fit bank programs.  If you dove into a bunker when things got bad, take a couple minutes to pop your head up and look around.  Special Finance penetration is growing every month, don’t be the last to figure it out.