There are many benefits to serving the subprime customer, and more profit just happens to be one of them.
Subprime Buyers = More Profit
Subprime customers could have a poor credit score for a many number of reasons including divorce, illness or unexpected loss of income. They should be treated like every other customer because that's all they are: A person who wants to buy a car.
Typically, steering them towards used vehicles is mutually beneficial. They want to keep the loan within their budget and improve their credit standing, while you want to complete the sale. Having an inventory with a wide range of affordable vehicles will better accommodate their needs.
The Numbers Don't Lie
Here is some data from Experian's Q2 2015 State of the Automotive Finance Market report that shows why you want to start tapping the subprime segment:
- Used-vehicle financing is at an all-time high of 55.5%
- 30-day delinquency rate fell to 2.32% (lowest in 5 years)
- 60-day delinquency rate was 0.607%
- Average interest rate for a new vehicle loan was 4.8%
- Average interest rate for a used vehicle loan was 9.1%
The #1 Key for More Profits: Serious Buyers
If your dealership is seriously considering tapping into the subprime market, you need to have customers. And not just any customers. The true key to maximizing your dealership's subprime financing profits is finding serious car buyers.
At Auto Credit Express, we generate the most serious subprime auto leads in the country. 32% of our leads buy a car within 60 days. Stop wasting your time searching for leads when we would be happy to provide them for you. Get in touch with one of our Special Finance Experts by calling 888-535-2277 or by filling out our contact form online.