As an auto service provider, you’ve likely come across many customers who are in need of your help but don’t have the necessary funds to pay upfront. You may try to assist them by offering your own in-store credit program. Unfortunately, only offering this option can result in missed sales and dissatisfied customers unable to get what they need.
The reason? Consumers with less-than-ideal credit may have a hard time getting approved for traditional financing. In fact, 42% of Americans say they were recently denied credit because of their credit score.
Fortunately, there’s a way you can help these customers get the financing they need. By partnering with a lease-to-own financing provider, you can reach more consumers and grow your business.
Lease-to-Own Financing Defined
A lease-to-own option is not credit or a loan. Instead, a lease-to-own finance company purchases the merchandise and leases it back to your customer. The company pays you when the merchandise is delivered, and the customer makes budget-friendly payments over time until they’ve completed the terms of their lease. At that point, the customer obtains full ownership.
Even better, you don’t take on any risk that could come from a customer defaulting. The lease agreement is between the consumer and the financing provider. If a customer defaults, the provider takes the hit – not your business.
The Perks of Lease-to-Own Financing
Lease-to-own financing can prevent missed sales opportunities and turn dissatisfied shoppers into loyal customers. Here are three powerful examples on how it can give your auto business a boost:
1. Reach More Customers
A recent Oliver Wyman report found that 28 million Americans are credit invisible, and 57 million have subprime credit scores. That’s a total of 85
Qualifying for lease-to-own financing is easy. It does not require a credit check from the three major credit bureaus (Experian, TransUnion, and Equifax). Instead, the applicant has their credit report pulled from special providers and additional data (such as monthly income and have an active checking account) is looked at as well. These qualifiers significantly increase the approval odds. This allows you to tap into an underserved customer segment who want to make a purchase but are unable to pay in a single transaction.
2. More Sales at Higher Amounts
Lease-to-own financing empowers shoppers to get more of what they want and need. When your customers no longer have to pay for everything in one lump sum and, instead, make manageable payments that coincide with their paydays, they may decide to add on additional items or choose a higher ticket item. This means satisfied customers getting the products they love and more closed sales for you at higher amounts.
3. Drive Repeat Customers
In addition to bringing in more customers and improving your average order value, lease-to-own financing can drive repeat business. Since it gives people of all credit types the financial flexibility to enjoy high-price items, it can greatly improve your customer experience and retention rate. Snap Finance, a lease-to-own provider, even markets directly to new and existing customers through their Snap EDGE program, encouraging people to come back to your store again and again. Lease-to-own financing can go a long way in driving incremental sales and cementing customer loyalty. If you’re ready to unlock your business’s full sales potential, visit https://learn.snapfinance.com/become-a-partner to get started on partnering with Snap Finance.
