F&I Solutions: Financing as Part of the Sales Cycle
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F&I Solutions: Financing as Part of the Sales Cycle

The traditional dealership sales process excludes the financing from the sales cycle, treating it as a separate process after closing the deal. There is a better way of revising it that increases the closing ratio, and the profit per unit while lowering the total time it takes to complete the transaction.

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The traditional dealership sales process excludes the financing from the sales cycle, treating it as a separate process after closing the deal.

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Even though that may work fine for many dealers, there is a better way of revising it that increases the closing ratio, and the profit per unit while lowering the total time it takes to complete the transaction. The earlier you introduce the financing process as part of the sales cycle, the more chances you’ll have to close the sale with larger margins in less time.

Financing Pre-Qualification Before Choosing a Unit
Most finance companies are able to provide instant pre-approvals based on limited information (name, monthly income, SSN, etc.). The pre-approvals typically come with an estimated credit limit so that you can define the budget for your customer. This will allow you to focus on the units within their budget and increase your chance of closing.

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If you can pre-qualify your customer very early in the process after having a quick initial conversation about the vehicle type that they are interested in, you can immediately focus on the units that they can afford, save time and set the expectation right from the beginning, which will increase your chance of closing the sale.

Affordable Monthly Payments Instead of Discounting
It’s not uncommon for a customer to ask for a discount. They have the misconception that you have huge margins and you can afford to discount deeply. The requested discount on the price may represent only a few dollars deduction in the monthly payment.

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If you introduce financing early in the sales cycle, you may move your customer’s focus from the price to monthly payments that they can afford. If you provide details on different financing options and the required down payment/monthly payment combinations, the discounting will no longer be part of the conversation. You should try to reach their desired payment level by adjusting the financial attributes such as repayment term, required down payment and/or dealer participation so that discounting is not required to satisfy your customer’s goals.

It’s all about how you introduce financing to your customers and make it a positive experience as early as possible in the process after the initial conversation to gage their interest level. Instead of saying something like, “Let’s submit a financial application and see if you get approved,” which may scare your customer away, you may want to use an approach such as, “We have some great promotional offers this month and I would love to show you some of the low monthly payment options.”

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Sales associates should work with the finance managers as a team behind the scenes to determine the best financing options when still working on their sales. Overlapping the sales and finance functions will help you save time, increase profits and close more sales. Emre Ucer

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