Fixed Ops Journal - May 2016 - (Page 46)
"
FIXED OPS JOURNAL
"It is a great tool for our advisers to be able to
offer this service as an alternative payment plan."
TRAVIS WALKER, Sansone Auto Network
FINANCING SERVICE
■ Targeted credit cards and loans can help capture work
JIM HENRY
B
y offering financing for service
work, dealerships can capture
work that otherwise might go elsewhere. But it's not always easy to
get service departments to offer financing or
to get customers to accept it, dealers and
others agreed.
"It is a great tool for our advisers to be able
to offer this service as an alternative payment plan," said Travis Walker, director of
fixed operations for Sansone Auto Network,
of Avenel, N.J., a fan of service financing.
He said service advisers for the six-dealership group are getting about 14 percent
more work per customer since the group
started offering service financing this year,
using a program offered by Confident Financial Solutions, of Boulder, Colo.
"This is work that we may have lost or never seen," Walker wrote Fixed Ops Journal in
an email. He said most of the customers who
took advantage of service financing had subprime credit, but not all.
According to CFS, the Sansone dealerships
generated more than $20,000 in loans for
service work in just over two months. The
company says its financing produces an average 32 additional repair orders per month
per retailer and a $46,000 average monthly
revenue increase for the service centers it
supports, including both dealerships and aftermarket businesses.
Potential
Analysts expect new-car sales to flatten out
after this year, so demand for service financing
could increase, as customers keep their cars
longer and dealerships compete harder for
service work, said dealership trainer and consultant John Fairchild of Fairchild Automotive
Solutions, of Bishop, Ga.
"I think it's an awesome tool to close a
service deal," he told Fixed Ops Journal.
"Every dealer I come in contact with, I make
sure they've got that going. It makes it easier
to present a high-dollar-value repair for a
customer."
Fairchild believes one reason service financing isn't more popular is that service
writers are inexperienced at selling and re-
PAGE 46
MAY 2016
Weighing worth
Financing for service work has its
fans, but many dealers are lukewarm
about it. Here are some pros and
cons.
▲
PROS
Service retention
"This is work that we may have lost or
never seen." - Travis Walker,
director of fixed operations, Sansone
Auto Network, Avenel, N.J.
Special deals
"We can offer 'six months same as
cash' for $299 or more. When folks
hear 'same as cash' and they're
paying a high rate on their personal
credit cards, it can be very
attractive." - Lawrence Dimmitt IV,
owner, Dimmitt Chevrolet,
Clearwater, Fla.
Loyalty for future work
"With the card in their wallet,
customers are more likely to come
back with that dealership."
- Stephen Roe, general manager,
automotive, Synchrony Bank
▲
foj@autonews.com
CONS
Customer resistance
"We offered it, but it never really
caught on. People needed to apply for
a new card, and most of our clientele
didn't want to do so - instead
choosing to use existing credit cards
they had." - Tony Pordon, executive
vice president for investor relations
and corporate development, Penske
Automotive Group
Dealership inertia
"There's a detailed application they
have to submit from the business
office, there are processing fees, etc.
They just don't want to hassle
with it." - Dealership consultant
John Fairchild, Fairchild Automotive
Solutions, Bishop, Ga.
luctant to pitch anything other than the service work itself.
In several interviews, dealers and fixed-ops
managers also said most customers already
have credit cards, and they are reluctant to
sign up for another credit card.
Still, financing for service already is available
from a variety of lenders, and it is becoming
even more widely available. Relative newcomers include CFS, which was launched in September 2013, and LoanHero, a loan origination platform in La Jolla, Calif., which was
launched in 2014.
LoanHero CEO Steve
Connolly said the company plans to offer service financing at franchised
dealerships, but for now,
its automotive retailers
are exclusively aftermarket ones. He said LoanConnolly:
Hero started as a pilot
AAMCO now,
program in five states, but
dealerships next
a recent deal to provide financing at AAMCO Transmission Inc. locations would give it a nationwide footprint.
Tony Orlando, CFS vice president of partner development, said his company has
signed up about 1,000 retailers in 36 states,
including 410 franchised new-car dealers.
Heavyweight
Dealers said the biggest established player
in the service-financing space is Synchrony
Bank, the former GE Capital Retail Bank,
which offers service financing under the CarCareONE brand at franchised dealerships
and in the aftermarket.
Synchrony said it is signed up with more
than 25,000 retail locations, including both
franchised dealers and aftermarket. The
company wouldn't say how many of each.
"It's amazing more people don't realize
how long financing for automotive work has
been around," said Stephen Roe, Synchrony's general manager, automotive. "It's
a growth segment for our business," which
dates to 1987, he said.
"Dealership is a segment where we see a
great fit," Roe said in a phone interview.
SEE FINANCE, PAGE 47
Table of Contents for the Digital Edition of Fixed Ops Journal - May 2016
Fixed Ops Journal - May 2016
Contents
Editor’s Letter
Service Counter
Legal Lane
Profit Builder
‘Grease monkey’?
Hail
Photo story
Richard Truett
High light
Service satisfaction
Certification
Tsunami
Recalls
90-second oil change
Financing fixes
Supreme Court
Tech trends
Top 50
5 Minutes With
Shop Talk
Fixed in Time
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