Increase your dealership's sales by offering financing

Offering financing options to your customers can be a powerful strategy to boost your dealership's sales. In this comprehensive article, we will explore the advantages and key aspects to consider when providing vehicle financing solutions.

Benefits of offering financing at your dealership

Increases your sales and the average value of each transaction. By allowing buyers to pay in installments, you expand their purchasing power, which translates into a higher sales volume and an increase in the average value of each sale. This is because customers can access vehicles that would otherwise be out of their budget.

In a highly competitive market, providing flexible payment options can be a deciding factor for customers to choose you over other dealerships. You can tailor the payment terms to the specific needs of each buyer, increasing the chances of closing the sale. Some customers may prefer lower long-term installments, while others opt for shorter terms with higher payments.

Financing strategies for vehicles

There are several financing options that you can offer to your customers. Some of the most common are:

Standard financing without discount

This is the most basic and traditional option. The customer can pay an initial down payment and then make fixed monthly payments over a specified period, usually from 4 to 10 years. Sometimes this down payment can be replaced with a vehicle in exchange. Typically, this type of operation should be accompanied by a low-interest rate and no lock-in period.

This option is our recommendation for unofficial used car dealerships that struggle to sell financing. Although the commissions are significantly lower than in other strategies, we can generate a greater sense of opportunity for the customer, and that convenience of doing everything in one place can be key in the decision-making process.

Standard financing with discount

In this modality, the customer can pay an initial down payment and then make fixed monthly payments over a specified period, usually from 3 to 7 years. Often, since these operations are very calculated, they tend to be more restrictive. You may need to finance 100% of the operation or even impose a minimum lock-in period. Generally, these operations are linked to relatively high interest rates.

This option is very widespread in large dealerships and is part of their marketing strategy, lowering prices and adding additional services dependent on financing. This strategy is considered quite aggressive and must be accompanied by a large image and marketing campaign.

How to implement financing at your dealership

To offer financing effectively, you should follow these steps:

1. Partner with financial entities: Establish collaboration agreements with banks, financial institutions, or companies specialized in vehicle financing. They will handle the paperwork and loan management.

2. Train the sales team: Ensure that your salespeople thoroughly understand the different financing options, their conditions, and benefits. They must be prepared to adequately advise customers.

3. Integrate financing into the sales process with Dealcar: From the first contact with the customer, offer the possibility of financing the vehicle. Explain the different alternatives, highlight their advantages, and send the payment link.

4. Offer options tailored to each customer: There is no one-size-fits-all solution. Analyze the specific situation of each buyer and recommend the financing option that best fits their needs and payment capacity.

5. Stop advertising prices and advertise installments: American style, any price presented in installments seems more within our reach.

Effectively communicate financing options

Once you have implemented financing at your dealership, it is crucial to communicate it effectively to your potential customers. Here are some recommendations:

1. Highlight the benefits for the customer: In your marketing and advertising materials, emphasize the advantages that financing offers, such as the convenience of paying in installments, the flexibility of payments, and the ability to access higher-value vehicles.

2. Use examples and practical cases: Customers feel more engaged when they see real situations. Include concrete examples of how financing has benefited other buyers, with specific figures and details.

3. Compare with cash payment: Clearly show the differences between financing and paying for the vehicle all at once. Highlight the savings and additional benefits that financing offers.

4. Marketing and advertising materials: In addition to your usual channels, consider creating specific content on financing, such as explanatory videos, infographics, or downloadable guides. You can leverage your website and blog for this. Let financing not be a taboo!

Best practices for vehicle financing

To ensure the success of your financing program and customer satisfaction, follow these best practices:

1. Transparency in the conditions: Be clear and honest when explaining the terms and conditions of each financing option. Highlight additional costs, such as interest, commissions, or insurance, to avoid misunderstandings.

2. Personalized advice: Do not treat financing as a generic product. Spend time understanding the specific needs and circumstances of each customer to recommend the best solution.

3. Post-sale follow-up: Keep in touch with your customers after the sale. Ensure they are satisfied with the financing option chosen and offer assistance in case of doubts or problems.

Conclusions

In summary, by implementing an effective financing program at a vehicle dealership, sales can be increased, customer satisfaction can be improved, and strong long-term relationships can be built. Transparency, personalization, and communication are fundamental to success in this area.