Issue link: https://read.dmtmag.com/i/458425
FINANCIAL 8 • January 26, 2015 • Powersports Business www.PowersportsBusiness.com Editor's note: This is the first part of a two- part article discussing why customers should finance their purchase with your dealership. What's in it for us? We all know that it's easier to sell products such as maintenance programs and service contracts if the customer finances with your dealership. There may also be some reserve in it for your dealership. That's a good thing to know, but that will never convince a customer to finance with you. The more important thing to know is what's in it for them. So, what's in it for them? The most persua- sive people I know always look at what's in it for the other person. You want to focus on this as you talk with the customer. By aligning the way you think and talk with the other person's values, you will find it much easier to help them finance with you. Here are some examples. What if the customers are actually pay- ing with cash out of their savings or checking account? What if they own a home? Imagine that they had a mortgage where they financed $200,000 for 30 years at 5 per- cent. Their payment would be close to $1,000 per month. If they put roughly $10,000 toward the mortgage and financed their motorcycle purchase, they would knock roughly 30 pay- ments off the end of their loan. This decision would turn that $10,000 into $30,000. This might be a better financial decision for them. What if the customers are giving you all of their savings? They saved up for the last several years in order to pay cash. Could it be better for them STOCK MARKET WATCH Stock Price Percent Company Ticker 1/2/15 Change Speedway Motorsports, Inc. TRK $22.41 4.2% ArvinMeritor ARM $15.32 4.1% Arctic Cat, Inc. ACAT $34.51 2.3% MarineMax, Inc. HZO $19.73 2.3% ARI Network Services, Inc. ARIS $3.65 1.7% Polaris Industries, Inc. PII $148.83 -3.6% General Electric Co. GE $25.06 -3.7% Dover Corporation DOV $71.98 -4.9% Honda Motor Corp. ADR HMC $29.59 -5.0% Harley-Davidson, Inc. HOG $65.79 -6.2% POWERSPORTS BUSINESS WINNERS AND LOSERS MARKET WATCH Change 1/2/15 from 12/5 % Change Powersports Business Index 319.707 -7.81 -2.39% Dow Jones Index 155.108 -1.10 -0.70% S&P 500 Index 140.085 -1.17 -0.83% Source: Wells Fargo Securities LLC 50 100 150 200 250 300 350 400 5/2/14 5/23/14 6/20/14 7/18/14 8/15/14 9/12/14 10/1 0/14 11/7/14 12/5/14 1/2/15 PSB Index DOW Jones Index S&P 500 Index STOCK MARKET ACTIVITY DEALER FINANCIAL SNAPSHOT DECEMBER 2014 Increases were seen across the country in December, as overall Same Store Sales increased 10.3 percent for 1,451 CDK Global dealers during the month. Service saw the biggest hike, up 15.0 percent over December 2013. The Northeast and South led the service increase, with both seeing more than an 18-percent improvement in that department. Major units saw up 12.3 percent increase nationwide, and parts were up 1.2 percent. PARTS SALES 830 dealers were up in parts, while 621 were down. SERVICE SALES Nationwide, 902 dealers were up in service, and 478 were down. MAJOR UNIT SALES In major units, 770 dealers were up, while 495 were down. NORTHWEST 4.5% Parts Department 12.2% Service Department 2.2% Major Units 3.3% Overall MIDWEST 9.5% Parts Department 16.8% Service Department 5.4% Major Units 1.5% Overall NORTHEAST 0.3% Parts Department 18.3% Service Department 13.9% Major Units 11.4% Overall SOUTH 9.2% Parts Department 18.4% Service Department 16.1% Major Units 15.7% Overall WEST 4.5% Parts Department 8.9% Service Department 14.9% Major Units 12.3% Overall UNITED STATES 1.2% Parts Department 15.0% Service Department 12.3% Major Units 10.3% Overall FOR MORE ON THE SAME STORE SALES DATA For more information on this report and other industry data, contact: cdkrecreation.com/dataservices Why should a customer finance with you? F&I SOLUTIONS *The Powersports Business Index has been adjusted to reflect the removal of Orbital Engine Corp. Ltd. ADR (OE) on 8/15/14 and the addition of CDK Global (CDK) on 12/5/14. contracts if the customer STEVE DODDS to keep some of that money just in case? What would happen if the transmission in their car quit working next month? Would they have the money to fix it? If they gave you even half of their savings and kept the other half, it could give them better financial security than giving it all to you. What if they don't have much credit or pos- sibly a few credit issues? Is it possible that you could find a bank that would finance a purchase for them with 50 percent down? How about 75 percent down? If there is a way to get them financed with a big down payment that could get them back on their feet and help them build their credit? What if the customer are planning to finance with their own bank? Would they like to ride today? You can get them approved and riding, in almost all cases, within a couple hours. Their bank may take a day or two. It isn't uncom- mon for credit unions to only cut loan checks on specific days of the week (or month), caus- ing it to be more than just a few days. What if they are rate-conscious? In most cases, you should be able to See Dodds, Page 9 "So, what's in it for them? The most persuasive people I know always look at what's in it for the other person."