When the credit report comes back, you discover that you are in for bad news. The car buyer actually has very bad credit. In this situation, you may still find yourself wondering if you should extend credit to your customer or if you can persuade one of your creditors to offer a loan to your customer. There are some ethical ways that you can still sell a car to a customer with bad credit who needs a loan, without exposing yourself or your creditors to excessive risk if your customer defaults on the loan.
The Customer Will Finally Take That Car Off Your Lot
The customer may be looking at a car that you are struggling to sell. There may be a car that you simply cannot get off your lot regardless of how low you set the price.
You Can Sell Other Services
You may be able to convince the customer to purchase services. For example, you may require credit life insurance or an extended warranty. These extra fees can help you generate enough of a profit that you will not lose as much money if the car later has to be repossessed.
The Customer Has a Cosigner
If you are unable to convince creditors to provide a loan for the car, remember to ask the buyer if he or she has a cosigner to contact. If your customer has a cell phone, encourage him or her to make a few phone calls to family members who can agree to cosign.
You're Selling a New Car
If you are a new car dealer, it may be even better to offer a loan to a customer with bad credit. The customer will not have to spend money on maintenance and can instead spend more money on paying off his or her loan.
The Loan is Great for You or Your Creditors
Depending on how expensive a loan the customer is willing to choose, it may be worthwhile to sell the car to him or her, especially if you get kickbacks from your creditors.
You may have to offer a loan that is not ideal for the customer, so be upfront with the terms of the loan and allow the customer to decide. Besides interest rates, explain to your customer about how precalculated loans and prepayment penalties work. If your customer does not fully understand the downsides of the loan, he or she is more likely to be angry at these downsides and less likely to refer you to friends and family members.
Share25 September 2015
When you send your kid off to college, you know that there will be a time that he or she needs a little extra cash. The extra cash could be to pay for car repairs, books that are needed or maybe even medical treatment. Are you prepared to send your college student money when he or she needs it? How do you prepare for such an instance? Do you use credit cards that you can reload money to when it is gone? Do you use cash wiring services? This blog will show you what you can do to ensure your college student can receive funds quickly and easily.