Just so we’re clear, this isn’t going to be an article about how to collect insurance money by wrecking your cars. By “rolling” the cars, I’m talking about a strategy of moving cars from one RTO® customer to another and increasing your profit.
Follow me through this scenario.
Joe leases a 2003 Toyota Camry. When Joe comes in to make his payment, I ask if there’s any other vehicle on the lot that he likes better. Of course, after driving around in the same car for 12 months, the thought of something different intrigues him! Joe finds another Ren’T’Own ® vehicle on the lot, they terminate the current lease and initiate a new lease for the different vehicle.
I put the ‘03 Toyota Camry out for lease to the next Ren’T’Own® customer.
Since Joe only had the car for 12 months, I put the Camry back out on Ren’T’Own® for the same monthly payment to my new customer, Alice. Around 12 months I ask Alice the same question about whether there’s a car on the lot she likes better. Of course there is! I terminate Alice’s current lease and initiate a
new one for the different vehicle.
I put the ‘03 Toyota Camry out for lease to the next Ren’T’Own® customer.
Mark leases the 03 Toyota Camry and since it’s about a year older now, I drop the wholesale value, markup, upfront money and lease term accordingly. I let Mark finish out the lease term and purchase the vehicle for a residual value of $500.00.
By rolling the car from one customer to another, you keep your customers happy, your payment stream flowing, you have additional opportunities to collect upfront money, and you can increase your profit by 400%!
Sounds too good to be true? Contact us at 800-879-3433 and request a copy of our “Rolling” example – we’ll show you how easy it is!
Not all “perfect storms” are weather related and not all are negative. Let’s look at a perfect storm strategy of smart business that’s sure to bring success, sustainability, and profit to your dealership.
“A Perfect Storm” is defined as the joining together of events that drastically intensifies a situation. On their own, each event is not terribly remarkable but when combined together, the results are formidable! Not all “perfect storms” are weather related and not all are negative. Let’s look at a perfect storm strategy of smart business that’s sure to bring success, sustainability, and profit to your dealership.
In tough economic times, what can you do to add revenue to your dealership? Sure you can make the one time sale of a service contract to someone who’s already buying a car but is that enough to sustain your business? Probably not! You need something that will support your existing customer flow, bring in new customers, and offer something that will keep them all coming back.
Our most successful dealerships will offer both Ren’T’Own® and Daily Rentals in addition to regular Retail sales. The rental program can bring in customers who normally wouldn’t have been on your lot in the first place and Ren’T’Own® will service those customers you normally would have to turn away due to lack of financing options. Ren’T’Own® will provide a steady stream of receivables to sustain you through the ups and downs of the unpredictable Retail business. It’s a bonus when you also have a repair shop on site! Your rental business can provide loaners to customers having repair work done. No repair shop? Partner up with a local repair shop and refer customers to each other!
It all works together. All aspects of the business feeds into each other creating the Perfect Storm of Success!
Check out this dealer testimonial and see how well Ren’T'Own® and Daily Rentals work together!
Learn more about Ren’T’Own® and Northland’s Daily Rental program by visiting www.northlanddealers.com. ENROLLMENT DISCOUNTS AVAILABLE!
We’re not asking you to make a big change in how you do business, we’re just suggesting a small twist that will make a big difference in your protection and your profit.
You’ve been doing BHPH for years. You understand the customer, you’ve learned how to identify risky applicants, you get how to structure the deal, and unfortunately, you have learned to accept the 30.39% loss rate as just part of doing business. What if you could twist the BHPH business model just a little bit and protect yourself from that 30.39% loss?
21 years ago, in direct response to the feedback and concerns of BHPH dealers, Mr. Al Lentsch developed the original Used Car Leasing program called Ren’T’Own®. Although very similar to the BHPH model, Ren’T’Own® has a little twist that provides a win/win for the customer and the dealer.
What’s the twist? With Ren’T’Own®, the vehicle remains titled to the dealership throughout the term of the lease. As titled owner of the vehicle, and with the unique Ren’T’Own® lease contract:
- You are able to service customers of all credit backgrounds
- You have leverage over delinquent payers
- You have protection from your customer’s bankruptcies
- You eliminate the expense and time consuming process of repossessions
- You reduce tax burdens
- You can claim depreciation on the Ren’T’Own® vehicles
- YOU are the only dealer the customer can go to if they want to trade
We’re not asking you to make a big change in how you do business, we’re just suggesting a small twist that will make a big difference in your protection and your profit.
Learn more about the benefits of Ren’T’Own® by listening in on one of our free webinars, checking out our websites www.northlanddealers.com and www.rtolto.com, or by calling us at 800-879-3433.
Don't accept the 30.39% loss rate of Buy-Here-Pay-Here any longer!
The national average shows that 30.39% of BHPH deals go bad and the average loss per charge off is $4,273.00. When I see these statistics, I’m amazed that this loss is accepted as the norm for the BHPH industry especially when other profitable options for servicing the sub-prime customer base are available.
By using Northland’s Ren’T’Own® used car leasing program as your business model, you keep the car titled in your dealership’s name. YOU own the car – it’s YOUR asset. Think about the protection and leverage that arrangement gives you!
The customer is paying you for the periodic use of YOUR car with the option to purchase it at any time. This arrangement sets the premise for a long term, positive relationship with the customer. Ownership of the car gives you leverage over delinquent payers. Laying out expectations and encouraging communication from the customer is key.
The unique Ren’T’Own® lease contract has a return option as well. If your customer gets in a financial bind and can’t make the payment, they can return the car with no penalty and no obligation to fulfill the remaining term of the lease contract. This can be a huge relief to some customers as they won’t have to worry about a repossession damaging their credit even more. Because of the positive relationship you’ve set with customer, they know when they get back on their feet financially, they will be welcomed back to your dealership to lease another car. Our dealers report that over 55% of the customers who return vehicles (voluntarily or involuntarily) before the lease ends, come back to re-lease.
The title arrangement and the return clause both contribute to why there is a less than 5% chase rate with Ren’T’Own®.
Here are a few other ways that Ren’T’Own® can protect your assets:
- Because your dealership is titled owner of the car, your customer can not include the car in their bankruptcy.
- Install a GPS tracking device to locate your car in the event a customer stops paying.
- Include an Engine & Transmission warranty so those costly repairs do not end up being a burden on the customer and a cause for non-payment.
With a business model like Ren’T’Own® available, there’s no sense in accepting the 30.39% loss rate of BHPH as the norm!
Do you ever feel like picking the right customer who will pay on time is like playing the shell and pea guessing game?
Credit Scores are becoming less reliable in determining good and bad paying customers. In fact, credit scores are not used at all when evaluating customers for Ren’T’Own®. Our strategy is simple, and virtually every customer can be approved.
A typical customer has three basic needs.
- They need a job
- They need a car to get them to work
- They need a place to live
You can look at even just two of those basic needs and decide if they are stable enough to pay for a car. If they have worked for the same employer for several years, it is likely that the employment will continue. If they have lived at the same address for some time, it shows that they can be trusted to pay the necessities.
We recommend that our dealers concentrate on the customer’s length of employment, length of residency, and years with the same bank. Additionally, it’s important to verify references, income, and current debt. Most of this information can be gathered while making small talk with the customer. For more detailed information and for record keeping, you would want to use an application or a similar tool.
Approving customers doesn’t have to be a guessing game! In the end, what matters most is matching the customer up with the right car and payment that they can realistically afford.
Be the HERO in your community!
Check out this article from the September 19th issue of “Used Car News” about a Wisconsin car dealership who sold a mini-van to a woman for $1.00. This mother of 4 had recently lost her vehicle due to some teenage vandalism and was unable to afford a replacement. News of this good deed spread like wildfire through social media sites and news outlets. Feedback has been flowing in from current and potential customers with promises of choosing Sheboygan County Budget Auto for their next car purchase. One act of kindness went a long way for this dealership with the positive word of mouth advertising they received.
A similar wildfire of positive advertising occurs when you approve someone for a Ren’T’Own® car!
In many cases, your Ren’T’Own® customer has gone through some rough times in their life. Most likely they’ve been turned down for financing at other dealerships. They have hit a dead-end everywhere they’ve looked for a car. Until they came to your dealership……..
YOU have a solution for them – Ren’T’Own®! Your genuine interest is finding a car that’s right for them and one that they can realistically afford. You instantly become their HERO! They tell their friends, family, and co-workers all about your dealership and the kindness you showed them – that’s all it takes to start the wildfire! You are now the HERO for the whole community!
We’d love to hear your stories of heroism! Please feel free to comment below or contact us at sales@northlanddealers.com with examples of how your dealership and Ren’T’Own® have given your customers the opportunity they needed to get back on the road!
Are you using video on your dealership website?
Video is a POWERFUL marketing tool! Use it to convince viewers to buy their future car from YOU!
Video is a powerful merchandising tool. Video can not only help influence a shopper to buy a particular make and model of car but can also convince them to buy that car from YOUR dealership. Video gives the consumers a feeling of getting to know you, the dealership, and the car without even leaving the comfort of their own home. This feeling of familiarity makes the customer’s first visit into the dealership a comfortable one. They are more at ease which can make the selling process much easier for your staff.
Photos can be deceiving. Given the right angle or the right amount of shading, you can hide many of the blemishes on a used car. Although this technique may lure the customer into your dealership, it may leave the customer feeling tricked and as a result have bad feelings against the dealership.
With Video, the customer gets a real life representation of their future car. You can get the customer right in the drivers seat and make them feel what it’s like to drive the car. You can add narration that you can’t include in a photo such as the car’s history, gas mileage, warranty information, etc….
Don’t forget to include video about your dealership. Let the customers get to know your staff. Show off showroom floor, the service department waiting room area, the kids play area, etc… Highlight the features that will help convince customers why they should do business with you.
Another valuable technique is Customer Testimonials! Personal endorsements of what it was like doing business with your dealership will go a long way.
And finally, don’t just limit your videos to your dealership website. Utilize YouTube, Facebook, Twitter, and other industry social networking sites. In fact, if you have videos talking about Ren’T’Own® or testimonials from your Ren’T’Own® customers, please send them our way! We’d love to link your videos to our Facebook page and website!
Did you know that Northland stands behind the Ren'T'Own® and Lease'T'Own® Contracts?
Everyone knows how important contracts are. They must be worded precisely the right way in order to protect you. To make things even more complicated, each state has different requirements when it comes to contracts.
Northland currently has 14 unique consumer lease agreements to accommodate the requirements of different states.
We routinely audit our Ren’T’Own® and Lease’T’Own® contracts to ensure we are compliant with the most up to date requirements in each state. We work closely with several attorneys and with each state’s Attorney Generals. Consider the cost savings to you not to have to worry about that!
Did you know that Northland stands behind the Ren’T’Own® and Lease’T’Own® contracts? We will defend the contracts, at our own expense, should the wording ever be challenged. Yes, we have the utmost confidence that our contracts are compliant and up to date!
If you are still trying to decide which business to partner with for your used car leasing program, consider the protection Northland provides with this guarantee.
For more information on what Ren’T’Own® and Lease’T’Own® is all about, check out our website at www.northlanddealers.com and register for one of our free webinars!
We also invite you to check out our new consumer website – www.rtolto.com. This site was designed to educate the car buying public on what Ren’T'Own® and Lease’T'Own® can offer and also to provide our dealers with FREE leads!
I read an excellent article in the Sept 5, 2011 issue (page 3) of Used Car News called Consumers Cautious on Bad Economic News.
Nervous customers are keeping their cars longer due to concerns about their financial future. YOU CAN CHANGE THIS!
The article is talking about how the weakening economy is rattling consumer’s confidence about taking on another payment. These nervous customers are keeping their cars longer due to concerns about their financial future. YOU CAN CHANGE THIS!
Did you know that you can eliminate fears and objections from would-be-car buyers and boost your bottom line by offering Ren’T’Own®?
There’s nothing to fear with Ren’T’Own®!
- Consumers won’t be turned down – approval isn’t based on credit score
- The consumer puts out minimal up-front money
- They pay for the periodic use of the car at an affordable rate
- The “affordable rate” was mutually agreed upon between the consumer and dealer based on the consumer’s realistic budget
- The car is typically covered with a warranty so there’s no need to worry about costly repairs
- The consumer can purchase the car whenever they feel comfortable with their situation
- The consumer can return the car at any time, for any reason, without penalty
Don’t let the stock market swings determine the activity level in your dealership!
Check out our new consumer website – www.rtolto.com for more reasons why Ren’T’Own® is a good option for your customers. Not only is this an educational site for consumers, it’s also a lead generation tool for your dealership! Contact us to find out how you can be part of our dealer locator and be sure to add a link to www.rtolto.com from your website!
~ “I’ve always thought that people need to feel good about themselves and I see my role as offering support to them, to provide some light along the way.”
Leo Buscaglia (author and motivational speaker)
In case you haven’t noticed the message intertwined in almost every blog posting we do, Northland shares a similar feeling as Mr. Buscaglia. We see our role in the auto industry as offering support and guidance to our nationwide network of dealers which, in turn, helps those dealers become more successful. Our motto for over 20 years has been “Helping Dealers Succeed”.
HELP US CONTINUE HELPING YOU! Please take a moment to comment below or e-mail us (sales@northlanddealers.com) on what you’re struggling with the most in your business. Is it the lack of affordable used car inventory? Lack of customers? What is it?
21 years ago, your feedback about the problems you were facing in the BHPH business with repossession costs, delinquent payers, customer bankruptcies, tax burdens, etc… is what sparked the invention of Ren’T’Own®!
We want to use your feedback to help spark some new ideas and to help improve our current programs that will ultimately HELP DEALERS (that means you!) SUCCEED!
