Dealers, particularly in the Southeast, have struggled with American Honda Finance’s rollout of electronic contracts and rep turnover, Paul Ritchie, president of Hagerstown Honda and Kia, told Auto Finance News.
“They have a lot of new reps and new buyers and they seem to be in training a lot during the day when we need to get ahold of them,” Ritchie said, noting that it could just be his region’s Charlotte, North Carolina office. “It makes it tough for our guys to get additional information.”
Overall volumes have been good Ritchie said, but there are a few areas where he’d like to see the captive improve. “Honda knows about it and they are listening to the dealers,” he added.
For example, Honda recently rolled out electronic contracting, which has been helpful to reduce funding times to just a couple of days down from a couple of weeks with manual applications, he said. However, the system hasn’t been so reliable.
“We have [electronic contracting] now, but they can’t seem to make it always work,” he said. “If our guys in the finance office sell paint protection or something like that, it might get kicked out of the system and we have to go back to doing a manual contract. It’s been frustrating with how long it takes them to correct small issues like that, and I think they’ll get it, but we were promised electronic contracts a few years ago.”
At a recent National Dealer Advisory board meeting Ritchie attended, several dealers from the Northeast also noted that leasing packages haven’t been as aggressive as years past, which has hurt their sales.
“We’re more rural so we don’t get as much of that, but anywhere you have more public transit and you just need the car for the weekend, leasing is a very popular option,” he said. “When [a dealership] doesn’t have the competitive lease special it hurts.”
Auto Count Data provided by Experian shows that Honda’s loan volumes have been down in certain key states year over year through May, including a 5% and 28% drop in California and New York, respectively. However, month-over-month volumes are up higher than nearly all other lenders across the states.
A finance manager at Checkered Flag Honda in Norfolk, Virginia who preferred to be unnamed said that incentives in his area have been strong especially for some of its best selling models like the CR-V. He added that the captive is doing a good job of promoting the deals online.
In particular, the captive launched a program targeted at recent college graduates who have found employment and are looking to build their credit. The promotion includes a $500 credit towards the vehicle, a digital ad campaign, a quick video targeted at the demographic, and even a sponsorship of the pop artist Charlie Puth’s summer tour in which his social media accounts encourage followers to sign up for the financing or lease program.
Those new borrowers will be well taken care of if they sign up with Honda, Ritchie said.
“If Honda is looking at a previous Honda Finance customer, they go out of their way to make the deal happen with the dealer,” he said. “If that customer paid good, shown responsibility — and regardless of what they have done with other creditors — if they are a former Honda Finance customer they work with us to make that deal happen.”Like This Post