Offering financing options to your customers can be a powerful strategy for driving sales at your dealership. In this complete article, we will explore the advantages and key aspects you should consider when providing vehicle financing solutions.

Benefits of offering finance at your dealership

Increase your sales and the average value of each transaction. By allowing buyers to pay in instalments, 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 beyond their budget.

In a highly competitive market, offering flexible payment options can be the deciding factor that makes customers choose you over other dealerships. You can adapt the payment terms to the specific needs of each buyer, increasing the chances of closing the sale. Some customers may prefer lower instalments over a longer term, while others opt for shorter terms with higher instalments.

Vehicle financing strategies

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

Standard finance without discount

This is the most basic and traditional option. The customer can pay an initial deposit and then make fixed monthly instalments over a set period, generally from 4 to 10 years. Sometimes that cash deposit can be replaced by a trade-in vehicle. Usually, these types of transactions should be accompanied by a low interest rate and no lock-in period.

This option is our recommendation for non-franchised used-car dealerships that are unable to sell finance. Although the commissions are considerably lower than in other strategies, we can create a stronger sense of opportunity for the customer, and the convenience of doing everything in one place can be key to the decision-making process.

Standard finance with discount

In this option, the customer can pay an initial deposit and then make fixed monthly instalments over a set period, generally from 3 to 7 years. On many occasions, as these are highly calculated transactions, they will need to be more restrictive. It may be necessary to finance 100% of the transaction or even apply a minimum lock-in period. As a general rule, these transactions are linked to fairly high interest rates.

This option is very common in large dealerships and forms part of their marketing strategy, lowering prices and adding additional services conditional on finance. This strategy is considered quite aggressive and should be accompanied by a major branding and marketing campaign.

How to implement finance at your dealership

To offer finance effectively, you should follow these steps:

1. Partner with financial institutions: Establish partnership agreements with banks, finance companies or businesses specialised in vehicle finance. They will take care of the paperwork and loan management.

2. Train the sales team: Make sure your salespeople fully understand the different financing options, their conditions and benefits. They should be prepared to advise customers properly.

3. Integrate finance into the sales process with Dealcar: From the very first contact with the customer, offer the option 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. Analyse the specific situation of each buyer and recommend the financing option that best suits their needs and repayment capacity.

5. Stop advertising prices and advertise instalments: In the American style, any price presented as an instalment seems more within our reach

Communicating financing options effectively

Once you have implemented finance 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, emphasise the advantages finance offers, such as the convenience of paying in instalments, the flexibility of the payments and the possibility of accessing higher-value vehicles.

2. Use examples and practical case studies: Customers relate more easily when they see real situations. Include concrete examples of how finance has benefited other buyers, with figures and specific details.

3. Compare it with cash payment: Clearly show the differences between financing and paying for the vehicle in one go. Highlight the savings and additional benefits that finance provides.

4. Marketing and advertising materials: In addition to your usual channels, consider creating specific content about finance, such as explanatory videos, infographics or downloadable guides. You can make use of your website and blog for this. Don’t let finance become a taboo!

Best practices for vehicle finance

To ensure the success of your finance programme and customer satisfaction, follow these best practices:

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

2. Personalised advice: Do not treat finance as a generic product. Take the time to understand each customer’s specific needs and circumstances in order to recommend the best solution.

3. After-sales follow-up: Stay in touch with your customers after the sale. Make sure they are satisfied with the finance option chosen and offer assistance if there are any questions or issues.

Conclusions

In short, by implementing an effective finance programme in a vehicle dealership, it is possible to increase sales, improve customer satisfaction and build strong long-term relationships. Transparency, personalisation and communication are essential for success in this area.