Consumer Financing: Knowledge = Sales - AutoSuccessOnline

Consumer Financing: Knowledge = Sales

Many customers will walk away without making a purchase if they don’t know about your credit options or they are somehow confused by the offer.

Are you leaving potential automotive sales on the table, so to speak?

Evidence suggests that automotive merchants may be missing out on sales because they are not optimizing their in-store financing program. By contrast, merchants who promote in-store credit may see average ticket sales improve due to the flexibility promotional financing can provide.

Our most recent consumer study revealed that 85% of our cardholders feel promotional financing makes their large purchases more affordable1. Those customers also are likely to be more satisfied with their purchase because they got the automotive products or services they really wanted.

Make It Known

Making customers aware of your financing program starts with advertising and marketing. Make sure financing information is featured on your website, in your advertising and at the point of sale. Then train your team to mention financing early and often in the conversation. Customers often rely on the salesperson for this valuable information.

Our study also showed that roughly 46% of our cardholders found out about in-store financing from the automotive sales associate. Many customers will walk away without making a purchase if they don’t know about your credit options or they are somehow confused by the offer.

Train Your Team

It’s essential that your sales team be knowledgeable and informed about all current financing offers. Credit providers offer online instructional programs to help merchants train their staff to use financing more effectively. Ongoing training will help your team become more comfortable with financing vocabulary so they can explain credit offers clearly and accurately to customers.

If you have never provided credit training, perhaps it is best to start with some words and phrases that often come up when discussing credit. While some people may be very knowledgeable of financing terminology, others may be confused by these phrases and are embarrassed to ask. It’s best to make sure everyone has a comfort level with the topic. Here are some of the most common financing phrases you are likely to hear:

Annual Percentage Rate (APR) – the interest rate charged annually for borrowing money. It is expressed as a percentage that represents the actual yearly cost of funds over the term of the loan.

Credit Rating or Credit Score – a number, assigned by a credit bureau, that indicates your ability to repay a loan. The scoring model weighs several factors, including payment history and current debt.

Deferred Interest – interest that accrues on a purchase during the promotional period. The interest is assessed if the purchase is not paid in full within the agreed-to promotional period. Minimum monthly payments are required.

Equal Payment, No Interest – no interest is assessed on a purchase and equal monthly payments are required until paid in full. The payments are a fixed percentage of the initial purchase amount.

“No Credit” Loans – a loan in which the lender does not conduct a credit history check, usually because the borrower may not qualify for an unsecured loan. These loans typically have higher interest rates than revolving loans.

Revolving Credit – a line or amount of credit that is automatically renewed as debts are paid off. A credit card is a revolving line of credit.

Terms and Conditions – the agreement (contract) between the borrower and lender includes a description of the payment obligations and duration of the loan period.

Unsecured Credit – not secured by collateral. Car loans and home loans are secured credit. Most credit cards are unsecured credit.

Change The Conversation

It can be difficult for consumers to focus on their complete automotive needs when they hear the price tag for some automotive services and products. It helps significantly if your sales team can change the conversation to help them prioritize the critical automotive services they need at this time, while also understanding the “big picture” of service needs that may be required in the future.

Overall, financing helps give the customer more options. It helps them make their decision on several factors, including short- and long-term needs. But unless you inform them about financing, they won’t have those options and you may lose the sale.

1. Synchrony’s Major Purchase Consumer Study, 2019

You May Also Like

Unlocking the Value of Your Data. Don’t Let it Go to Waste.

Explore expert Bobby Gaudreau’s insights on overcoming data challenges in auto dealerships, focusing on CRM and DMS optimization for marketing success.

Unlocking the Value of Your Data. Don't Let it Go to Waste.

The effective utilization of data is essential for driving successful automotive marketing strategies and fostering strong customer engagement. However, many dealerships encounter a significant challenge: their marketing campaigns often fall short due to disorganized and incomplete customer data.

Traditional Dealer Management Systems (DMS) and Customer Relationship Management (CRM) systems, while vital, are not inherently designed as marketing systems. They lack the necessary functionalities for easy list generation and segmentation, and are not equipped to share, understand or react in real-time to information. This limitation is especially evident when dealing with records that include customer interactions and behaviors, which are crucial for integrating with a marketing system. This gap in capability is where Customer Data Platforms (CDP) become crucial.

Is a Vehicle Test Drive Still Relevant Today?

An important part of the process, the test drive is the strongest opportunity to build the customer’s positive emotions around the vehicle.

Is a Vehicle Test Drive Still Relevant Today?
Protect Your Dealership

Thirty-four percent of dealers are still lost concerning certain key components of Safeguards law compliance.

Benefits of Outsourcing Title Work

If your dealership is struggling with turnover or having difficulty establishing an efficient tag and title process, one option is to outsource this task to a third party.

What’s Needed to Truly Establish a Digital Presence for Used Auto Dealers, Lenders and OEMs

The right pre-qualification tools will help dealers match the right customer with the right vehicle, early on in the sales process.

Other Posts

Ashlee Church: #NotLikeTheOtherGuys

This dealer is following her arrow and bringing change to the auto dealer industry.

Vehicle Care RockStar Ashlee Church
Used Car Sourcing and Predictable Appraisal Accuracy

Trade-ins remain essential, so when their owners walk through the door, give them the fairest offer you can — and be sure the spread you need isn’t diluted by appraisal oversights.

Used Car Sourcing and Predictable Appraisal Accuracy
You Want Me to Pay for WHAT?!

Arming yourself with this firsthand knowledge will let you make informed decisions and allocate your budget toward increased profitability in ways you simply cannot hope to when you’re playing telephone with your manager charged with executing on marketing.

Wikimotive, trade shows, marketing,
Latest Toyota Data Breach: Evidence of an Industry Under Attack

Hackers have identified the auto industry as ripe for the picking. Attackers often share information regarding potential targets and methods.

Latest Toyota Data Breach: Evidence of an Industry Under Attack