3 Reasons to Look at Local Finance Companies
Captive (OE) finance channels and local banks/CU’s that have indirect lending available are always strong sources of auto financing and for many dealerships, they are the easiest way to secure approvals. But don’t discount another often overlooked source for lending…the independent finance company.
There are likely many finance companies in your local market that could be in a better position to help some borrowers based on creditworthiness and other factors.
Outside the Box Approvals
Independent lenders are more likely to have more ‘creative’ programs to help a broader subsection of borrowers than captives or banks/CUs. If your current lenders shy away from C-D paper or overload those approvals with an avalanche of stips, a local finance company could come to the rescue and save your deal with an easier approval.F&I Flexibility = More Sales Having more financing options will almost always translate to more units sold. If your local car shoppers know that you have a finance option for everyone regardless of credit or situation, that will help bring more traffic to your store. You position your dealership as the one place where everyone can get approved simply because you have more channels to help rather than simply relying on more traditional lending institutions.
Not All Indirect is a Fit
In the case with credit unions as an indirect financing option, not all CU’s are a viable option. If they are closed membership and your borrower is not a member, they won’t get approved. They are immediately locked out of that option. With an independent finance company, this is not an issue as they will look at every borrower equally regardless of their banking relationship.
TruFinance, powered by TruWarranty, sets up your dealership to offer a broad variety of local lending options so every buyer has the most options based on their specific situation. With high LTV’s, generous ancillary allowances, and high profit paid per deal, it’s a win-win for you and your customers.
Car buyers often cite their biggest complaint with the F&I process is the time it takes to walk through paperwork, financing options, DMV forms, and the hard-sell of aftermarket products and protections.
Most credit unions offer aftermarket products like VSC and GAP and market them as a lower cost than the dealer. If the customer does go with dealer financing, they will often decline coverages saying they can get it from their credit union.