Over the last few years, the auto industry has faced volatility due primarily to supply chain disruptions, the microchip shortage, and limited new vehicle availability driving up both new and used vehicle prices.
For consumers, these market conditions have made vehicle financing an even more important part of the vehicle purchasing process. For dealerships, offering financing opportunities can help drive business growth.
The Benefits of Dealership Financing
Opportunities to Earn Additional Revenue
Offering financing to customers can help dealerships earn additional revenue. In return for offering their products, banks and finance companies can provide finance income and other rewards.
Increased Vehicle Sales and Customer Retention
Many consumers can’t pay a lump sum cash payment for their vehicles. Without financing for a vehicle purchase, their vehicle options would likely be very limited, or they might not purchase a vehicle at all. Financing products can open buying options for these consumers that can help lead to increased sales at your dealership.
Providing vehicle financing can also establish a long-term relationship with customers. Over that course of time, you have the opportunity to build trust with them and create brand loyalty that could lead to future sales.
Improved Buying Experience
Offering vehicle financing options can make the vehicle buying process easier and more accessible for your customers.
How to Manage the Moving Parts of Financing
When you offer financing options at your dealership, you’ll be working with banks and/or finance companies and customers who have purchased your inventory. Each plays an important role in the process. Many dealerships also work with multiple product offerings at one time. Together, there are a lot of moving parts. Try these three steps to help manage them.
- Work with banks/finance companies. Working with a lender that offers a variety of financing options can make it easier for your customers to get into a vehicle based upon their needs and budget. It can be helpful to work with a lender that will explain their products to you, provide marketing materials on your behalf, and help you offer the products that satisfy your customers’ needs.
- Explain product offerings to consumers. Before you walk through the finance and product options, ask the customer what their financing goals are. You might ask questions like these;
- How many miles do you typically drive a year?
- How long do you plan on or how long do you typically keep your car?
- Who do you plan on using for your manufacturer recommended maintenance?
- Where do you normally park your car during the day or night?
- We typically see a down payment of 20%, how much do you plan on putting down?
- Manage the application and repayment process. The application and repayment process can be another opportunity to simplify the purchasing experience for your customers. This is where working with the right lender can be imperative. The most reputable providers will have tools your customer can use to apply for and pay back a lease or loan. Before selecting a lender, consider asking what tools they have to make these processes easier.
The Advantages of a Financing Ally
Forward-thinking dealerships that are focused on growth should consider a financing provider that offers a full spectrum of market-driven products, services, training, and support that can help drive more business to their dealership. Here are some qualities to look for.
Attractive Products and Services
An experienced finance company will help you increase your product offerings, gain efficiencies, and work to improve your revenue. At Ally, we provide financing options that meet the needs of your dealership and your customers. Our products make us one of the top auto finance companies in the country.
The more financial products you sell, the more you should be rewarded.
Ally’s Dealer Rewards program follows that model and is available to all eligible auto dealers doing business with Ally. Participating dealers selling qualifying Ally products receive rewards; as your sales volume grows, you can reach new program levels that allow you to earn greater rewards.
Beyond financing products, a provider that supplements your F&I program with training can help you maximize areas of growth and opportunity.
For instance, some of Ally’s dealership trainings include proper customer interviewing techniques, menu presentation, and overcoming customer concerns, all of which are designed to help dealers increase their profitability with an easy-to-understand process.
Ally has more than 100 years in the auto industry and a deep understanding of the dealer business – so we’re able to offer dealers unrivaled expertise and support. Our team includes specialists in retail finance, commercial finance, insurance, remarketing, wholesale, and dealer loans. These folks use their great depth of product knowledge and industry experience to help dealerships succeed.
With account executives averaging 15 years of dealer experience – and nearly 5,000 team members dedicated to auto finance operations – Ally provides unparalleled auto industry support.
A top-notch provider will provide supporting resources leading up to the sale and beyond.
Ally’s Customer Touchpoint ExperienceTM is a suite of resources that help you engage and inform customers at each point along their customer experience journey.
- Early shopping: Ally provides engaging digital content, targeted communications, in-store collateral, and event support to help dealers turn early shopping prospects into customers
- Early acquisition: New customers will get a welcome email and kit that features you, the selling dealer, and includes key information customers need to set up and maintain their account.
- Mid-cycle: Messaging to auto buyers about account and vehicle maintenance helps keep your dealership top-of-mind mid-cycle to help drive visits to your dealership.
- Trade cycle: Our contract maturity emails and lease-end kit help drive customers back to your dealership for their next lease or purchase.
These resources are intended to help you build brand equity with your customers and drive them back to your dealership for their next vehicle purchase or lease.
More Resources at Your Fingertips
If you’re ready to get started with dealer financing, more resources are available at allydealerbeyond.com.
About the Author
Tammy Linkfield was named the Senior Vice President of Ally Auto for the Central Region in May of 2018. In her current role, Tammy and the Central Region team are responsible for servicing over 3600 dealers in eleven Midwest states from Michigan, west to the Dakotas. Her Regional Business Center is located in the Chicago suburb of Downers Grove, IL. With over 33 years at Ally, Tammy has held several positions within the Auto business unit in every region of the country. Her areas of responsibility have been dealer-centric throughout her career, holding positions in consumer lending, commercial lending, asset management, and sales.