If you're reading this article, you most likely service the sub-prime customer segment. In fact, these days it's almost impossible not to!
According to NIADA's 2017 Used Car Industry Report, 33.96% of these customers will default on their payments due to a loss of a job, an expensive health care bill, a divorce, or whatever the case may be. Something will cause 33.96% of them not to make their payments.
When this happens:
The dealer has to repossess the vehicle.
The customer now has a repossession on their credit report which destroys their credit even more.
The relationship between the dealer an the customer becomes adversarial and the dealer loses all chances of having a repeat customer or referral.
The dealership and finance company's average loss on a repossession is approximately $6,807.
This crazy cycle of high interest rates, high payments, defaults, repossessions, and strained relationships sets your customer up to fail and puts them further behind the credit 8-ball.
The good news is, there's a better way to do things!
Eliminate the high interest rate loan! With Lease'T'Own® you are allowing the customer to pay for the periodic use of a car with the option to purchase it at any time.
Eliminate Repossessions! If the customer runs into financial trouble they are able to return the car with no penalty. In fact, they can return the car at any time, for any reason without penalty. No costly and time consuming repossessions.
Maintain your Relationships! You work with the customers on the front end to set a payment structure that fits their realistic budget. Your customer knows if they get in financial bind, they can return the car to you, part ways on good terms, and are welcome to come back for another vehicle once they get back on their feet financially. Relationships remain positive.
Be the Hero! You are helping the customer when other dealers wouldn't. You are giving them a way to get to work, to get their kids to and from activities, and to move forward with their daily life. Word of mouth spreads like wildfire within the community. You become the HERO in the community!
BREAK THE CYCLE OF LOSS AND SET YOUR CUSTOMERS UP TO WIN!