Are you an automotive dealer new to the industry debating whether to provide financing to customers? Great! – Let’s talk about why you should absolutely offer dealer finance.
1. Customer Convenience
I’m sure you understand that after the worldwide pandemic and the current cost of living; some people have been struggling to say the least. If your potential customers are already struggling, how are they going to come up with the money to purchase a new vehicle in full? It’s an inconvenience. And for some, it will be completely out of the question due to financial hardship. Now, as an automotive dealer- something that can set you apart from the rest is offering finance. This will drive customers in and ultimately grow your business which will in turn, benefit you just as much as it benefits others. It's a win, win!
2. Increased Sales volume
To emphasise more on the point I just touched on, when it comes to driving customers in, not all used automotive dealerships offer car finance. Offering Car loans and different types of finance will make your dealership stand out from all the other local dealerships who may choose not to. Not to mention, word of mouth from all your happy customers who have just financed their new vehicle. Statistics have found that 14% of Australians use car loans to buy, when put into context this equates to approximately 2.7 million of us. To put it simply, if your dealership doesn't offer car finance you are cutting yourself off from thousands of potential customers. Offering finance at your dealership you will be able to cater to a wider audience. Hence, the increase of sales!
3. Competitive Advantages
Are any of the local used car dealerships in your area offering finance? Probably not, it’s not as common in used dealerships. This is why you will have the upper hand! Your dealership is automatically going to be more appealing to a high volume of customers. Ensure your financing is flexible- Interest free, for example. Analyse your customer and build rapport, in doing so you will find out exactly what your customer needs and you will then be able to choose a suited vehicle accommodating your potential buyer’s budget for repayment fees.
4. Increased Profits
Let’s not forget... PROFIT! Some providers like drive-on finance will offer you $1,016 per deal. If you’re making just 5 deals a month, you could make over $60,000+ annually! As previously stated, ensure your car sales finance is flexible; While you can have fixed interest free finance, you can also increase profits by making money from your finances - By setting competitive interest rates you can generate profit through the interest accrued on purchased financed vehicles.
Although financing has interest rate changes, it can also provide significant profits for your business. You can make extra money over the course of the loan by adding interest to financed autos. The profitability of your dealership may benefit from this.
5. The Advantage to upsell!
My next point is, the advantage to upsell- If your customer is going on an fixed rate finance loan, why wouldn't they upgrade the vehicle with extra’s? Extras can include extended warranty and maintenance plans.
6. Building Customer Loyalty
To conclude why your dealership should offer finance, let’s talk building customer loyalty! You’re going to have repeat clients the better you look after them. Word of mouth is free advertising and if you’re willing to go the extra mile for your customer, they’re able to communicate to their friends, family and colleagues about your services which will bring you in positive exposure and grow your business massively.
We hope you enjoyed reading this article. To read more articles like this, please visit the EasyCars latest news page here.
EasyCars by Jeal is an Australian, web-based, dealer management system that automates the buying and selling of motor vehicles. Using the latest technologies, EasyCars removes frustrations experienced at the dealership and opens your doors for greater growth.
EasyCars features include Simple Stock Management, Automated Advertising, Integrated Accounting, Government Compliance, Business Reporting, Facebook Automotive Inventory Ads, Reviews Management, Dealership Websites and more.
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