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Offer financing to customers?
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joesgarage1946
New User
Jan 10, 2013, 8:56 AM
Post #1 of 11
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Offer financing to customers?
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Hello-
New to the site. I am wondering if anyone knows of a way to offer financing to our customers. I have looked through many other forums and most are a dead end. We are interested in 6 months same as cash so that our struggling customers can get their cars repaired.
Thanks for your help!
Jessie
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Discretesignals
Ultimate Carjunky
/ Moderator
Jan 10, 2013, 9:18 AM
Post #2 of 11
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Re: Offer financing to customers?
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That is why they can use a credit card and take the burden off your shop trying to collect payments. If they don't have a credit card or the money to pay for the repair, push the vehicle behind the building or they can come and get it and have it repaired later when they get the money.
Our shop doesn't go that route because then you get into collections fiasco. You'll also run into the dead beats that skip town. Sometimes we'll allow our frequent good customers make payments with no interest, but even then we have been shafted several times.
Since we volunteer our time and knowledge, we ask for you to please follow up when a problem is resolved.
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Hammer Time
Ultimate Carjunky
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Jan 10, 2013, 9:33 AM
Post #3 of 11
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There are many finance companies that offer programs like that to repair shops however most are only 90 days same as cash although I'm betting you could buy another 3 months from them.
Just Google "auto repair credit card" and you will see a few of them.
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We offer help in answering questions, clarifying things or giving advice but we are not a substitute for an on-site inspection by a professional.
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joesgarage1946
New User
Jan 10, 2013, 10:29 AM
Post #4 of 11
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Thanks!
I looked into GE capital. We would prefer to not have to do the leg work for the bank; meaning that we don't want to have to be the one's to call for customer approval, pay transaction fees etc.. We are looking for a bank that would leave pamphlets for the customer to call and apply themselves. Then we would use that card in our existing credit card machine.
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Hammer Time
Ultimate Carjunky
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Jan 10, 2013, 10:37 AM
Post #5 of 11
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Good luck with that. Without your shop involved, it just becomes a regular MC/VISA credit card.
The benefit of you doing it is that the customer now has a card that can only be used at a few locations, mainly yours.
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We offer help in answering questions, clarifying things or giving advice but we are not a substitute for an on-site inspection by a professional.
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Discretesignals
Ultimate Carjunky
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Jan 10, 2013, 11:02 AM
Post #6 of 11
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How does that work? It seems like all your doing is promoting a credit card to your customers that can be used at your location. If the customer has no money, they would be stupid to finance a repair on their vehicle on a card with a high interest rate. Wait, that is how credit card companies make money...lol.
Since we volunteer our time and knowledge, we ask for you to please follow up when a problem is resolved.
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Hammer Time
Ultimate Carjunky
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Jan 10, 2013, 11:27 AM
Post #7 of 11
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These cards have been around for many years. They are commonly used by the chain outlets. The will carry the chain's name and only accepted at their locations. The smaller independents get a generic version that can be used at other locations that also accept that card. You have to be the one handling it because you are the one that accepts the card because you have an agreement with the finance company.
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We offer help in answering questions, clarifying things or giving advice but we are not a substitute for an on-site inspection by a professional.
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Tom Greenleaf
Ultimate Carjunky
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Jan 10, 2013, 1:29 PM
Post #8 of 11
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Jesse: Interesting topic on that "6 mo. same as cash" deal but this is a lousy biz to do that IMO. Paid for anyway the customer finds the way. Long done with any biz and yes had times I waited upon agreement for a very short time. Knew all my customers personally and their situations too. Yup, while working on one you come across an 'ooops' can't do this job right without more than an initial guesstimate. That means call the person right away to figure out how to proceed.
My fear with the shop financing work is that there's no real telling if the vehicle will need some other real expensive something before some time payment system was done. Leave that to any other concern the customer comes up with.
Learned something now long ago from a used car dealer that constantly had folks wanting to finance a used car - low end used cars. People will say they can afford say $100 a month. The answer then is where is that $100 per month for the last six months you can afford? You get that blank stare.
Disasters happen to good people and being on my own would deal with some if it cost me. Basically I don't believe in financing much of anything. It's a bad habit game but part of reality,
Tom
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re-tired
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Jan 10, 2013, 3:05 PM
Post #9 of 11
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Its impossible to judge people . Kinda the judge a book by its cover type thing.Once had a CPA customer. New lexus, Wallet full of credit cards ,always paid repair .,bills promptly.He had a 70 GS 455 .First car from high school days . Long story short . HE wanted eng rebuilt to factory specs. Hardened valve seats ,a NIB cam from buick. All new accesories, belts , hoses . It was a brand new eng . Tons of labor, every part was painted ,decal kit put on . We fronted everything, machine shop ,special order parts, factory paint . etc ,etc .... No bill till he turned the key . HEY it was a 10 yr customer .............right .. he took pics brought friends /co workers up . PIcked up car on fri . wanna try'er out over the weekend... hey its a 10 year customer.............right 5 yrs later i had a attorney send him a "money or the car letter " he still owed over 5k on a 15k + bill ........ THe kids needed braces . had to join the booster club for kid s football .. work slowed , took in new partner yada yayada ...First and LAST time i was a ATM . CASH ON BARREL HEAD . Dont care where you get it . Loing as it doesnt have red dye on it.
LIFE'S SHORT GO FISH
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nickwarner
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Jan 10, 2013, 3:10 PM
Post #10 of 11
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The man-hours you'd spend dealing with the hassle of this would be much more profitable used on paying customer that have the money right now. Those that don't have credit cards. Those who don't have cash or credit cards wouldn't get approved for the financing anyhow. Even if they did, they wouldn't be able to afford the payments. You're better off dealing with the clients who can pay their bill up front. If you did have this financing, you'd simply attract all the broke people with $20 to their name until the next welfare check and a jalopy rustbucket you need a tetanus booster just to test drive. They want to bring their own parts, bug the crap out of you and are never satisfied at all. The moment the next thing breaks on their car they will expect it to be done nearly free since they're a repeat customer. Or they'll accuse you of sabotaging the car to take advantage of them. Been there with the broke ones. Tried to make it work, finally took some good advice and raised my labor rates along with an immediate charge just to look at it. Low and behold I was still busy working on cars but they were profitable jobs without the hassles. My shop was unfortunately right next to a methadone clinic and a couple miles from a trailer park that definately lives up to the stigma of "that" trailer park. Priced them out of my shop and they went elsewhere.
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Hammer Time
Ultimate Carjunky
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Jan 10, 2013, 3:54 PM
Post #11 of 11
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Don't bet on that Nick, They can be very profitable.
I have had customers come in with brakes falling off the car needing about $600 too repair and they don't have a nickel. Do a one page appl and call it in. Suddenly they get approved for $1500 and end up spending most of it. If they don't spend it all, you know they won't be going anywhere else because their credit is at your shop only. There is no risk if the paperwork is processed correctly and you get all of your money within a couple days.
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We offer help in answering questions, clarifying things or giving advice but we are not a substitute for an on-site inspection by a professional.
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