Posted on: 23 December 2015
If you own a car dealership, working with a lender to pre-qualify customers for a loan can help make it easier for customers to buy a car on your lot. A lending partner can also give you with an additional profit stream through commissions. However, it can be a challenge to choose a lender to partner up with. Here are some things you should be looking for when seeking out a lender for your dealership.
Deals and Promotions
For those customers with good credit, lenders should be able to offer deals and promotions that further entice them to buy a car from your dealership. For instance, the lender might be able to offer those with high credit scores a month of low or no interest on the loan. Because those with good credit can get decent deals from a number of auto dealerships, seek out lenders who can offer them deals that stand out from the rest, even if your dealership's commission on the loan might not be that high.
Reasonable Terms for Poor Credit Customers
While you might be focused on how much your dealership can earn when working with a lender, you need to convince buyers to take the deal. This can be particularly difficult when a customer has poor credit. Typically those with bad credit end up paying higher percentage points; while this is one of the ways that the lender justifies their risk, you need to be sure that the rates are not exorbitant or else customers may buy elsewhere.
To get an idea of the interest range that someone with poor credit might pay for the cars on your lot, check with a number of lenders in the area so you know if a particular lender's rates are wildly out of range.
Good Customer Service for Customers
Another thing to look for when selecting a lending partner is to choose one that offers them good customer service throughout the life of their car loan. Does the lender offer a variety of online payment options? Are call wait times very long? These are the kinds of questions you need to know the answer to so that you can determine whether the lender will offer your customers a good experience.
Now that you know a few of the things you ought to consider when choosing a lending partner, use the information above to help you make smart decisions. Consult a few lenders and companies that offer credit reports for auto dealers so that you can find a good partner to work well with you and your customers.Share