How to increase your finance qualification rate

If you have good dialogue with the customer, and they trust you enough to buy a car from you, it is fair to assume they will be comfortable discussing funding options with you as well. However, it is important at this stage to ensure you do not start talking about how brilliant your finance is compared to a personal loan.

Qualification is the next key step. Put your pen down, pay 100% attention to your customer, and ask them how they are going to fund their purchase. As they start to tell you, remain focussed on them and ask relevant open probing questions:

• Which bank are they using for the loan?
• Why are they using that bank?
• Is it their main bank?
• Have they been with them long?
• Do they use that bank for all their major purchases?

These lines may seem cheesy, but in the current climate they work and here’s why – your customers may have a 100% clean credit record, but for exactly that reason they will in all probability have lost the use of a couple of credit cards, or had credit limits reduced, or had their unused overdraft limit reduced. All of which will be undermining their confidence in their financial position.

“These lines may seem cheesy, but they work and here’s the reasons why”

Now is the time to tell them what the banks do, how they price on rate for risk and how the rate they advertise will only rarely be offered to the customer. This services their own fears and expectations of their financial standing and links in their mind to the ‘credit crunch’.

Tell them you offer a fixed-rate, fixed-term deal, with the security of the Data Protection Act – ensuring 100% confidentiality – plus full protection under the Consumer Credit Act, which they do not get with a personal loan. Tell them they will also get a guaranteed rebate on the outstanding interest if they decide to pay their loan off early.

That is protection your customers don’t get with a personal loan. It is purely at the banks’ discretion to offer rebates and, according to the regulator, in 2007 only 7% of all personal loans were rebated in the event of early settlement. Finance, which is what you are selling, has a 100% rebate record – because we have to under the Consumer Credit Act.

You may also want to reassure your customers that the funder you are using is owned by a major bank, or that if they fail to make the payments (job fears are creeping back into the media) the only thing that can be taken is the car.

Author Andy Tong is the managing director of Profit Training

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