Some kinds of repairs always come as a shock to car owners, no matter how long they’ve been driving, owning, or maintaining cars. While not all repairs are expensive, some are pricey enough that even people with good incomes and savings will blink. What does your auto shop do for customers who cannot afford the repairs they need at the time their car breaks down or is damaged? Do you offer repair financing to your customers?
The Average Car Repair
The American economy is doing much better than it has been in recent years, but as individuals plenty of people are still strapped. Many families have not recovered from the recession of 10 years ago. They were forced to downsize and have not built up large savings if they had them in the first place. Millennials are burdened with student loan debt. In 2017 AAA did a survey of American car owners. It revealed that the average car repair bill is between $500 and $600 – not huge. However, according to that same survey, 64 million drivers revealed that they would not be able to pay for an unexpected car repair without going into debt.
Since 64 million is a very sizable percentage of American drivers and $600 is not a whopping sum of money, that means that many people who walk through the doors of an auto shop will need other options besides writing a check to pay for their car repairs. While some of them will appeal to family or friends or make some sort of other arrangement, most of them will choose financing if it’s available.
Does Your Shop Offer Repair Financing?
If your shop does not offer financing, you are probably turning plenty of customers away when they don’t have other avenues of credit or have poor credit histories. The resulting loss of revenue from these lost opportunities is not small. Financing programs can offer a convenient way for both the shop and the customer to get their needs met without putting the shop at risk for uncollected loans.
Some financing options come with low or no-interest introductory rates. Financing cards will frequently offer other promotions or discounts as well for services related to car maintenance like oil changes or tire rotations. For a customer who is temporarily strapped, they are a much better option than putting an expensive repair on one of their regular credit cards and paying immediate monthly interest.
The Automotive Management Network has a list of companies that specialize in offering customers financing for auto repairs here. Many of these companies offer monthly payment plans, and customers can apply for this financing at the auto shop counter and get approved (or denied) quickly.
Letting Your Customer Base Know Their Financing Options
Not all auto repair shops offer financing. Some shops have offered it in the past and no longer do. If your shop does offer customers financing options, how thorough a job does your sales staff do getting the word out? It’s one thing to present financing as an option when announcing the bad news about the cost of the repair. That’s a short-term information drop necessary to make the repair happen. Does your sales and marketing team let your customers know ahead of time that your shop offers and will help them get that financing? Do they include this in their direct mail marketing? Is it highlighted on the company’s social media? Is it visible when a customer walks through the door? If not, why not?
We would like to hear your experiences with car repair financing and how it’s worked or not worked for your auto shop. Please leave your comments here or in our forums.