One reason dealers balk at offering financing options is because they are selling in affluent areas and have the belief that these customers will not want financing. However, people who appear affluent may be up to their eyeballs in debt. Perhaps they realize the time value of money and want to take advantage of a “no- interest” promotion while their money earns interest for them. Or maybe they just don’t want to fork over several thousand dollars and would prefer to make monthly payments.

The point is if you don’t ask, you won’t know. Many times customers will give the excuse that they “need to think about it” because they’re reluctant to say they don’t know how they’ll pay for it. There is a reason that nearly all major electronics stores, furniture stores and home improvement stores offer financing. It is because customers of all types sign up for it every day.

Other dealers believe customers who do not request financing are not in need of it. People are not generally inclined to ask questions that will embarrass them. Maybe a potential customer is looking for a water treatment system and checks the Yellow Pages. One ad says “Financing Available.” The ad on the opposite page does not. Which business is the customer more likely to call?

The way to be successful with financing is to actively advertise and promote it (including strategic use of “no interest” promotions). Offer it to every customer and let the customer make the choice about what works best. Taking away the financial worry of customers at the beginning of the presentation lets them focus on the features and benefits of the product, not the price tag.

Then there are the dealers who do not offer financing because they think the interest rate is too high and assume the customer would not want it. Most financing programs offer interest rates between 15% and 23% APR. This holds for programs at furniture, electronics and home improvement stores. If customers truly thought the interest rate was too high, none of those programs would exist. Many customers need the convenience of making monthly payments. Some are waiting for a bonus or tax refund and are willing to pay those rates for a brief time.

A big reason finance programs succeed is because of the “no-interest” promotions they offer. Customers with good credit, bad credit and every variation in between will sign up for financing, regardless of interest rates, if they can get these promotions. If you choose a program with no pre-payment penalty, then you can use a promotion to close the sale immediately. It then becomes the customer’s responsibility to decide to refinance the balance or pay the stated interest rate. Offering every customer a 90-day, same-as-cash promotion may be cheaper for you than taking a credit card, and it gives the customer 90 interest-free days to shop their bank for a lower APR, if necessary. It comes down to offering customers the choice and letting them decide what fits their needs.

Consumer financing programs are offered every day in many different industries. Dealers may close more sales, generate more profits and reach growth targets they would not have reached without financing.