Captive Lending for Used Vehicle Sales is a Big Upside for Dealerships - AutoSuccessOnline

Captive Lending for Used Vehicle Sales is a Big Upside for Dealerships

Offering a white label finance brand streamlines the purchasing process for the customer and puts you in the driver’s seat with the client throughout the life of their lease or loan.

Used car financing is dominated by banks, credit unions and finance companies. On average, only 9% of used car loans come from captive financing. Who owns a customer when the sale is complete and the customer drives away? There is a good chance you won’t see that customer again. Dealers spend a fortune on branding, data mining and other means to try to retain that customer. The truth is that finance companies take your customer after the sale with no real loyalty to the originating dealership. Many will sell your customer’s information to your competitors, and that is one of the reasons why used vehicle retention is so low for most dealers. 

White label financing and payment portals have the potential to increase customer loyalty and simultaneously promote your brand. Offering a white label finance brand streamlines the purchasing process for the customer and puts you in the driver’s seat with the client throughout the life of that person’s lease or loan. You can incentivize customers to create an account and pay on your site or portal, which strengthens your dealership’s relationship with the customer and drives repeat business. You will get all the benefits without the risk. 

An established program, branded and tailored by you, lets you focus on your core products and services, improvement of the customer experience, growth strategies and more while the finance company does the work for the loan. This type of program comes at no cost to the dealer and offers customization services and branded marketing opportunities. 

Importance of Customer Retention

Dealerships with high retention rates will exponentially increase their business year after year. Customer retention is the least expensive way to advertise and has the most long-lasting effects on profitability. When I ask dealerships about their new vehicle retention, they are so quick to answer. When I ask them about their used car retention — they usually are still trying to figure it out. Most dealerships rely on what the manufacturer tells them, and that information usually only includes new vehicles. Retention is a game changer for dealerships. The dealers that develop a strong program today will do far better in the future. 

Now is the time to own the used finance road map. Dealerships should offer a seamless, branded, digitized experience along the entire vehicle purchase and ownership experience to create stickiness and continuously link the customer to the dealership. 

It’s important to connect auto lending sources to dealerships’ customers. Dealerships should offer more direct consumer-feeling products that keep the dealership at the center of the transaction during and after the sale. There is a reason why companies like Carvana are growing in sales and profitability — we could all learn from what they are doing. Digital retailing companies make sure they own the customer during and after the sale. 

Dealerships can customize the finance product with their own brands, logos and identities. 

Benefits of White Label Programs

Boost Brand Affinity: Creating a successful brand is essential to the success of any business, and having a white label loan program can help you achieve that goal. Your customer won’t have to look at another company for financing needs; instead that person will associate his or her financing with your business. When you create a loan program with a trusted finance partner, your name is front and center, and your brand is amplified as the only name your customers need to know. Stay top-of-mind, and brand your dealership during the entire vehicle purchase and ownership experience. 

Enhance Customer Experience: When you create a white label lease/loan program, you strengthen the idea that the financial offerings belong to you and not some third-party vendor. Integrating the loan as part of the sales process helps the customer feel like you can make the decisions on approval.

Remain Visible After the Sale: You will get notifications when a customer wants to refinance or is calling for payoff information. This allows you to work with the customer before that person goes to your competitor. When you have multiple dealer brands, you can keep the sale in the same ownership group. 

With white label programs, dealers own customers throughout the entire sales process — something all dealers try to do yet few truly accomplish.

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