Vehicle dealership business stems mostly from people who have no problem qualifying for traditional manufacture or bank financing. Their credit scores are excellent, they have money for a down payment to lower the total amount financed, and they are seeking new vehicles. This is the perfect customer base but is limited because it applies to a small percentage of the population.
Cater to a Larger Customer Base
The opportunity to attract new customers lies in creating a program for those with difficulty being approved by banks. In many cases, people who will not qualify for traditional financing tend to look for vehicles sold by individuals because they can afford them more easily. The thought of going to a dealership may not even cross their minds.
A dealership that can advertise financing aimed at that demographic will attract more customers. Those with credit issues, such as lower credit scores or no credit history yet, still need reliable and safe transportation. This is ideal for standing out from the competition in any neighborhood.
Dealerships cannot take too many risks with financing because it will cause struggles to remain in business if some customers default on loans. Collection efforts and repossession costs add up quickly and reduce profits for small local dealers. Private lenders, such as Consumer Portfolio Services, can help the dealership attract customers with little to no risk.
The private lender that approves the dealership will buy financing contracts of people with credit issues who purchase late model vehicles. The reason late model vehicles are preferred by the lender is that the car or truck is put up as collateral. Credit applications submitted to the dealer are sent to the lender for their approval.
Credit Builder Programs
Dealing directly with an established private lender allows the dealership to offer programs that attract drivers with less than perfect credit. This expands the customer base substantially leading to higher revenues through vehicle sales. The situation is win-win because the dealership does more business and benefits from referrals of those helped. Drivers win because they have transportation that is safe and affordable without worrying about the condition of the vehicle.