If your dealership has a large inventory of used cars that seem to be staying on the lot rather than selling, perhaps it is time to consider offering bad credit loans. Not every customer is going to have perfect credit and to boost sales, instead of turning away customers with questionable or bad credit; you can create financing options for these customers.
Bad Credit isn't Fatal
Just because you have a customer come in with bad credit, don't automatically assume they are going to default on their car loan with you. Their bad credit rating may have been caused because they lost their job and ended up defaulting on another loan. If they are employed again, they could be using the car loan to rebuild their credit and get back on their feet financially. By approving their loan, you could be building their loyalty, which could lead to more sales for your dealership.
Increase Sales on Your Lot
Offering bad credit loans is another way of increasing sales for your dealership. During lackluster economic times, this could save your dealership from going into the red. While you may prefer customers with excellent credit, during an economic downturn, you may struggle to find customers with that kind of credit shopping for new vehicles.
You can increase sales on your lot, especially for used cars, by offering bad credit loans to customers with less than perfect credit. While there is some risk involved, you may be pleasantly surprised by the outcome of offering these types of loans. People with bad credit still need a car to get back and forth from work or school and they know defaulting on their loan will end up costing them their car. Most people don't want that and will strive to make their payments on time.
Work with Lenders
Speak with the lenders that you are currently working with to see if you can put together bad credit auto loans with them. If they pass, you can find other lenders than specialize in these loans and work with them to offer bad credit loans to your customers that need them.
There are many lenders, including local banks, which will help you offer these types of loans at your dealership. Finding and opening these avenues will allow you to increase your sales throughout the year and move cars off your lot that you may otherwise be stuck with for several months.
Advertise Your Bad Credit Loans
In order to find customers that need bad credit loans, start advertising for them in local publications and on the Internet. If you dealership has a reputation for not offering these loans, than you will not get these customers without advertising and letting them know you now offer bad credit auto loans.
Use the social media sites your dealership has to tweet or post about offering bad credit auto loans so you can find the customers you need to increase your dealership's car sales and move used cars off your lot.