Providing Quality In-House Car Financing Options

In-house financing is an excellent solution for customers with bad credit or no credit. Generally, credit unions and banks will not approve these individuals for most loan options. Although you carry some risks by offering in-house financing to customers with low credit scores, you can reap several rewards. 

First, you attract more people to your dealership. Customers are more likely to visit locations that make purchasing a new or used car more accessible. Additionally, you can earn more from long-term monthly payments than selling the vehicle outright.

Still, the poor reputations of dealers who try to exploit customers make some people skeptical of in-house financing. You can help eliminate these concerns by offering a reasonable contract.

Setting Interest Rates

High interest rates are the most discouraging factor for customers seeking to finance a vehicle. Some in-house dealerships have a reputation for gouging customers with high monthly payments, knowing they have few other options. The best way to attract more business, and earn money off your contract, is to make the proper calculations when setting vehicle interest rates.

Understanding the Value of the Vehicle

How does in-house car financing work for new and used cars?

Customers do not want to pay more for a vehicle than it is worth. If you have a large inventory of used cars, ensure that your financing options correspond appropriately with their age and model. While you should still try and profit off the interest rates you set, don’t turn customers away with unreasonable price tags.

Adjusting your financing options to encourage customers to sign up can be like walking a tightrope. Still, you can make the deal worth it to buyers by setting up an easy-to-pay system at your dealership or online.

Advertise Your In-House Financing Deal

“We Strive To Help Everyone” is a great tagline that can attract buyers from all walks of life. By making your in-house financing dealership offers public, you may be able to outshine your competition. Furthermore, you may consider bundling other items into the deal as well. 

However, avoid advertising too much in a single package. Many customers view this method as a clever way to exploit them by offering a deal too good to be true.

Security Features

If you worry that customers with low credit will not continue making their payments, install GPS features into your vehicles. These tracking devices will locate the car for repossession if the payments stop coming. 

This method is entirely legal and a great way to mitigate some potential risks that come with offering in-house car financing. Ensure that your customers are aware of the penalties for late payments.

Learn More About Financing With 1803 Capital

Finding the financing options for your dealership can be challenging without the correct information. Our experts at 1803 Capital provide everything you need to understand your target market. We specialize in finding the right solutions for those who struggle with low credit.

Our specialists help clients learn the difference between financing and leasing a vehicle, so they make smart financial decisions.

Are you still wondering, “How does in-house car financing work?” Contact our representative at 1803 Capital for more information. Call us at 866-890-2415 today!