Is your point of sale on the money?

By Ian Allen

The number of lenders in the motor finance sector has reduced dramatically due to the state of the financial markets, and the supply and demand swingometer of available funding has completely reversed from just a few years ago.

So, how do we maximise our point-of-sale opportunities and, just as important, ensure our customers are treated both fairly and responsibly – thus creating goodwill for the future? Here’s a few suggestions …

Customers first
Ensure your finance offering have your customers’ best interest in mind. Interest-free deals offers are often seen as a low-value incentive, on the grounds that they are normally paid for somewhere else in the transaction. Equally ‘pause’ deals, while easing the customer into the agreement, can also serve to extend the term of the loan.

Manufacturer offers
Manufacturer-based finance offers should be embraced and encouraged, as they are normally quite well thought-out. The commissions aren’t that great, but there is normally considerable back-end volume bonus available if you achieve your targets.

Consider alternatives
Conventional HP is obviously the main method used, but some customers’ needs are better suited to PCP, which can reduce the monthly payment and also the term of the loan – thus speeding up replacement cycles.

Soft sell
Customers make better decisions when they are relaxed. If you are totally comfortable that your F&I offerings are competitive and have your customers’ interests in mind, there is no need to over sell them. Equally, don’t over-incentivise staff to sell these products as it can lead to the wrong customer feel about the whole buying experience.

Get certified
Ensure your business managers have as many qualifications and accreditations as possible. SFA membership is a must, for example. Qualifications will both lift your staff and reassure your customers that they are speaking to professional, knowledgeable staff.

Use brokers
Many auto retailers tend to use mainstream lenders only, and if they decline a transaction the trail goes cold. Brokers have access to niche funders and, although the commissions paid may be low or even nil, a successful finance placing – even at a slightly higher rate – means another car sold.

Key imperative
The key to success with point of sale finance is the convenience and efficiency with which customers are made aware of your offerings.

Think about how you tell customers that your dealership is a ‘one stop’ shopping facility for their next car and their funding arrangements – and that, although they may look elsewhere, they will find it difficult to better your all round deal. There is no better time to demonstrate this than when you have them in your showroom.
 

Online finance applications
Ensure that any potential customers can apply online for finance, prior to visiting the showroom. Quite often, there can be some embarrassment when asking customers confidential questions at a time when they are making a key decision to purchase a replacement vehicle.

Your action plan

•Stress the convenience factor to customers
•Allow them to apply online for finance
•Don’t rely too heavily on traditional HP
•Cultivate relationships with brokers
•Encourage staff to gain F&I qualifications