Car buyers love paying for a car with cash.
For some people, it is a dream come true. Imagine saving $40,000, walking into a dealership, picking out the car you want and driving away free and clear. It is a moment in a car buyer’s life that instills self-esteem and personal pride – two very positive things.
However, in today’s world of financing, paying cash isn’t always the best scenario and can actually cost the purchaser money. It is for the financial experts of the dealership to look out for their customer’s best interests and present options that the car buyer may not have considered. Ask the customer if they would agree to a half hour consultation where you describe the ways they can make the most of their purchase, and get the most bang for their buck. Ensure that they know that no high-pressure sales tactics will be used, and that you just want to share the information that you have so that they can make their own best decision.
Become well-versed in interest rates and create two simple calculator tools to show the customer (Excel spreadsheets will do). In one calculator, show the customer how much money they could save by putting their saved money into an appreciating asset like their home, using their cash to pay down their mortgage (or high interest credit card debt) instead of into their car purchase. In the second calculation, show the customer an example without a mortgage or debt, showing them how their cash could be growing through a standard bank while they finance their car through you. Share with them the universal truth that capital builds capital, and that they would be best served using their money to reduce debt or grow more money. In so many words, you are guiding them to invest their hard-earned money in a vehicle for growth, and use your financing for their vehicle. Throughout this conversation, be sure to congratulate them for their ability to save such a wonderful nest egg that gives them so many options and opportunities! Often, when customers have the “dollars & sense” in front of them, financing through your dealership becomes more attractive – and for good reason. The result of this approach is converting a cash customer to a financed one. This brings additional revenue into your dealership and savings to the customer – a win-win for both parties.
Another idea to increase the customer’s value, and your average, is to offer tools that protect their vehicle.
If someone has $40,000 sitting in the bank to purchase a vehicle, that means they have more available cash to protect their new investment. Explain value-added enhancements, like SmartProgram, that make the car safer, keep it in great shape and maintain high resale value.
In the finance office, there are a multitude of products that a finance manager can utilize to increase their per car average. Remember to be compassionate with your own goals and open to what the customer truly wants. You may only convert 10% of your cash customers to finance, but even that 10% will make a difference to your dealership and keep your average up. Remember that you have planted a seed in the minds of the other 90%, and, by not resorting to high-pressure tactics, you are honouring your customer’s wishes – something they will respect you for. Genuinely having your customers’ best interest in mind creates rapport and builds trust, making that customer a return customer down the road and one that will likely refer his or her friends in the meantime.