The automotive industry is changing. Profit margins are narrowing as the marketplace becomes increasingly competitive – and complex. Dealers are trying to find new ways to to sell more cars, minimize costs, develop additional profit centers and offer finance options that will meet consumer demands today and in the coming years.
Change is a precursor of advancement and growth. That’s particularly true in the automobile industry, which is evolving at a tremendous pace. The integration of new technologies are improving dealership’s cash flow and, ultimately, the bottom line.
For the consumer, choices are growing as well – not only in the myriad of products that have flooded the market – but in financing options, and the companies that offer them.
These choices have been trickling down to the nonprime market in a major way again. Want proof? Just see how many credit offers come flooding to those who have just had a bankruptcy discharged – and sometimes even before the discharge.
Dealers are aware of the new consumer trends, and have taken action by becoming more accommodating and flexible to their customer base. For the dealer, this is a time when even a slight competitive edge can mean significant profits. In an effort to gain such an edge, dealers have embraced the opportunity to serve the non-prime market. Dealers have recognized that appealing to this still growing segment of the population offers huge dividends, both financially and philosophically.
An issue dealerships must face is an increasingly large percentage of consumers are currently in an economic position to finance a vehicle, but may have suffered credit setbacks for one reason or another. These customers are often excellent car-buying candidates, but remain haunted by their financial past.
It would be in the dealers’ best interests to capture this growing market, for a variety of reasons. Dealers who find a better way to capitalize on this opportunity – changing their procedures to address their customers’ needs – will not only remain ahead of their competition, they will pave the way for improved customer rights.
A successful approach to the credit-challenged customer can pay off in many ways:
- Converting a massive consumer market into profitability.
- Increasing responsiveness to a disparate customer base.
- Protecting consumer investments through additional product sales.
- Building dealership loyalty through repeat and referral business.
Dealers know that excellent credit gives the consumer a negotiating advantage. The balance of power shifts when dealing with a credit-challenged customer. But should still be kept in mind that customers credit options may be limited, but their choice of dealerships is not.
Any dealership which can address the customers’ needs respectfully and accommodate their wants will breed intense customer loyalty. These customers will tell their inner circles how the dealership was able to help them when no other store would. And, they’ll want to come back themselves when they are in a better position to upgrade their vehicles.
Best of all, As long as deals are structured properly, stipulations are collected and the paperwork process is in order, dealerships can prosper beyond prime.