Running a successful used car dealership has changed a lot over the years. One of the biggest changes has been how important it is to offer financing. Without it, your used-car dealership is vulnerable to the competitors that do.
There is no shortage of used car dealer financing companies out there that can help with offering this essential service. The problem is that many of them don’t understand the unique challenges faced by independent dealers.
What to Look for in Used Car Dealer Financing Companies
Being able to offer your customers in house dealership financing is one of the easiest ways to boost your dealership’s bottom line, improve customer satisfaction, and simply stay on par with your competitors.
However, before you pick a financing company to partner with, there are a few aspects to consider.
1. A Track Record for Profitable Financing
As we just discussed, offering financing should be an easy way to drive greater profits. Unfortunately, as any used-car dealer can tell you, that’s rarely the case. This is because far too many of these dealers partner with companies that have little interest in helping their dealer clients see greater returns. Many finance companies focus on their own profit and end up with the lion’s share of the profit instead of sharing profits with the originating dealer. It’s easier for them to simply provide financing that the customer will accept right away to drive the car than to figure out the best way to maximize profit for their dealer client.
What’s worse is that the majority of dealers are fine with this because they don’t know any better. They’re just glad they sold another vehicle.
2. A Number of Different Financing Products
An easy way to lose an otherwise closed-sale is to lack financing options. You have a customer who’s excited to purchase the vehicle they’ve chosen. All they have to do now is secure the required financing.
Then, they sit down in your F&I department only to learn their options are severely limited. They may still go ahead with the purchase, but your customer-satisfaction rate has just dropped.
That’s why you need to look for a company with a wide selection of financing products you can offer your customers.
3. A Mix of Prime and Subprime Options
Most dealers will thrive if they pick lenders that can offer a mix of prime and subprime loans. This goes along with our earlier point about being able to offer variety.
Now, there’s no perfect mix of the two options. It will depend on your dealership’s unique market. It may also be a mix you have to adjust in the future. So, choose a lender that offers both, but be ready to make adjustments as necessary.
Ready to Look for Used Car Dealer Financing Companies?
If so, we think we can keep your search short.
At Vantage Finance, we focus solely on used car dealerships and their unique financing needs.
So, instead of researching countless used car dealer financing companies before making a choice, we’d love to sit down and talk you through the many important ways we help dealerships just like yours. Contact us today to find out more.