I run a small, traditional BHPH operation with vehicles purchased outright. Often, clients offer less than the required down payment. Could collaborating with finance companies increase my sales?
Partnering with finance companies can indeed be a viable strategy if you’re running into issues with customers falling short on down payments. In my experience, these companies often have more flexible credit criteria that can work in your favor when structured properly. However, it’s crucial to ensure that the deals you strike still maintain your margins; sometimes the added cost of financing can erode profitability if not managed thoroughly. Create agreements that clearly delineate roles, responsibilities, and fee structures right up front to avoid disputes and keep your operation sustainable. It takes a bit of legwork to align incentives, but if done right, it can open up a wider customer base.
I’ve been following these kinds of strategies on forums for a while now, and it sounds like teaming up with finance companies might give you a leg up if you’re running into cash flow issues with customers’ down payments. I mean, if you can get a financing partner that works well with your business model, it might permit you to sell to a broader range of folks who just don’t have the cash upfront. On the flip side, you really have to make sure the added fees and obligations line up with your overall profit goals—you don’t want to end up slicing your margins too thin. It’s definitely not a one-size-fits-all fix, but if done right, it could be a good way to expand your clientele without straining your current resources. It depends on finding the right partner whose conditions actually make sense for what you’re trying to do.