When you are the owner or operator of a car dealership, offering rent-to-own auto financing is one of the easiest ways to attract a different sect of customers who may not have enough good credit to qualify for a loan through other lenders. Rent-to-own financing usually involves requiring the customer to make a substantial down payment, usually between 25 to 50 percent of the total purchase price, and then making payments until the vehicle is paid in full.
However, just as it is with any other financing option, there are some things that you should be doing with the rent-to-own option to make it even more desirable to potential buyers. Here are two simple ways you can completely evolve a rent-to-own financing option into an attractive service that works well for both you and the customers.
Offer Flexible Payment Options
A lot of dealerships that offer financing right on the spot require customers to make payments either bi-weekly or by the week as a form of protection of assets. Even though this may help a customer pay the vehicle off quicker and offer you more security as the financing agent, payments more than once a month can be hard for most consumers to manage. It is a much better idea to offer flexible payment options to coincide with a customer's needs. If they would prefer small weekly payments, make it happen, but if a rent-to-own customer wants to make monthly payments instead, make sure that is possible. The more flexible you are with payment plans, the less likely it will be that you have to retrieve a vehicle due to nonpayment.
Keep Financing Costs Easy to Understand for Customers
When a buyer is entering into a contract to rent-to-own a vehicle, they want terms that are easy to understand. Make sure that the financing costs that you charge are as easy to understand as possible. Give customers a detailed breakdown of what they will have to pay back exactly, with no seemingly hidden fees or costs involved. While most dealerships use a difficult to understand interest plan, it can be a better idea to instead offer a flat-rate financing charge. For example, you could charge a financing fee of a certain percentage for every $1000 you finance, which is much easier to calculate as an average customer.
Rent-to-own auto financing, like that offered by dealerships such as Rent To Town Autos, is just one thing you can add to your arsenal of attractive car dealership offerings to bring in new customers. Use these two techniques to help ensure you are bringing in as many new customers as possible, and always look for new opportunities by communicating with customers to better understanding their financing needs.