Customer Financing
How to help your customers pay for Auto Repairs
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A look at repair financing options
By Ann Neal
Auto repair shops, like all businesses, always need new customers. One way for shops to gain loyal customers is to offer an option to finance auto repairs. About a third of American consumers do not qualify for traditional financing based on their FICO scores, according to Ryan Slobodian, vice president of Snap Finance LLC. “In order for repair shops to effectively serve 35% of people in their stores, shops need a tertiary or additional finance option that serves people with credit challenges,” says Slobodian. An installment loan option engages a whole new consumer market, bringing them into a shop where they have a good experience. “Their loyalty is going to stay with that shop because it offers a finance product that works for them. We focus on treating them with trust, respect and dignity whereas a lot of times the credit-challenged consumer may not have that experience,” says Slobodian. In addition, a payment option that breaks the cost of a repair into smaller amounts may lead to higher tickets as the consumer has more cash to move from crisis management to proactively servicing their vehicle. Window or street signage with no-creditneeded messaging draws credit-challenged consumers into a shop. “These are payment buyers. They are focused on the payment and how much it will cost them per paycheck,” says Slobodian. Snap offers a 12-month term installment loan with an early buyout option. The goal is to set up the consumer for success, according to Slobodian. “We approve an amount that is enough to complete the transaction but gets them into a payment that will allow them to succeed.” Snap’s installment loan products are no recourse, meaning Snap takes all the risk, not the shop. “It works a lot like a credit card transaction in that we settle in two business days, and a shop has the money in its account. The risk to a repair shop is not offering a product like this and
allowing a consumer to go to a competitor who may have it.”
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Auto fnancing options Q&A Car repair financing enables shops to close more sales with customers who may not have upfront cash or access to traditional forms of credit. Auto Service Professional asked companies for details on products designed to help consumers pay for auto repairs. Six responded: American First Finance Inc. (AFF); Confident Financial Solutions Inc., which goes to market as DigniFi; FlexShopper LLC; EasyPay Inc.; Snap Finance LLC; and West Creek Financial Inc. ASP: What services and products do you offer to providers of auto repair services? AFF: We help auto repair shops meet the needs of more customers with payment plans they can afford through loans or financing plans that approve more customers, including those without a FICO score. By including a nonprime financing solution, your shop can provide an alternative payment option to a credit-challenged customer who would otherwise go to a competitor or simply never walk in your door. It’s like providing instant buying power for your customers to pay for parts, service, warranties, tax and labor. DigniFi: We offer closed-end installment loans to consumers for the primary purpose of financing auto-repair related expenses. Loans range from 12 to 36 months with APRs from 9.99% to 36%. Customers will have their interest waived if they make all their scheduled payments on time and pay off their loan in full within 60 days. There are no prepayment fees. DigniFi also offers cash advance loans deposited directly into the consumer’s bank account, vehicle protection plans, and roadside assistance programs. EasyPay: We provide a non-lease credit solution at the point of sale, with a unique approach that offers customized approvals for customers with good credit to no credit. Unlike leas-
