Should Automotive Shops Offer Customer Financing?

Automotive shops play a vital and interesting role in our economy and society. They are both an enormous help in times of need for many drivers, and a regular part of an ongoing maintenance routine for others. The automotive field has many distinguishing factors that set it apart from other industries, but one of the main ones is the degree to which the customer puts their trust in their mechanic. The customer relationship in the automotive field is truly based on trust, and that extends to automotive consumer financing.

But is consumer financing really necessary for automotive businesses? And what is the benefit of a consumer finance program for auto shops? To answer those questions, let’s consider the following scenarios.

Scenario A – The Emergency

It’s the middle of the day. Someone has their vehicle towed into your shop. They are dealing with a serious mechanical problem, and, because of their schedule or obligations, this breakdown represents nothing short of an emergency for them. The need for the fix is urgent, and it’s also unexpected.

This is one of the most common scenarios where financing can be a huge boon for the customer. Here they are dealing with an unexpected cost that could be way outside of their regular budget, and what they need most is a little bit of wiggle room. Consumer financing provides that.

Scenario B – The Procrastinator

So, let’s say a customer comes into your shop and you identify an issue with their vehicle that is serious or perhaps even dire if left long enough, but which does not necessarily have to be fixed immediately. Here you might encounter the procrastinator. This customer wants to take advantage of your services, but they have the same cost concerns as the customer in scenario A. Unlike that customer, however, they aren’t dealing with an emergency, so they might not actively seek out financing.

That’s why your team should actively offer it to them. If they know they have an option for paying over time on flexible terms, rather than all up front, they are more likely to go ahead and get the problem taken care of, rather than dealing with that knocking noise for another month.

Scenario C – The Deals Shopper

Let’s say you have a customer come in who is shopping around. What is driving them? It’s not a pressing need, like in scenario A, and it’s perhaps not even something that’s bothering them, like in Scenario B. They are interested in your services, but they would just as soon walk out the door and head to your competitor. You need to offer something that shows them you care about their business, and the option to finance could be the thing that keeps them from looking any further.

Put Financing On the Table Every Time

Whatever the scenario, it’s clear that offering financing to your automotive customers is a great way to strengthen customer relationships and boost your revenue over time. That alone should be a good enough reason to establish a strong consumer finance program for your automotive business.


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