In the last couple of weeks, we’ve been doing some maths – and we reckon that the cost of failing to pre-check customers for motor finance is almost £8,000 per sales person per year in an average dealership.
Our figures are, we believe, quite conservative. They assume a rejection rate from your lender of 25% and an average package per employee of £40,000 including bonuses. We also incorporate a range of other normal dealership costs.
James Tew, CEO at iVendi, explained: “The fact is that, for some businesses, failing to pre-check is a significant expense. One dealer group we spoke to calculated it at nearly £200,000 per year.
“If you wait until the end of the sale, then hours will have been wasted. Fully costed, this could run into hundreds of pounds for each potential customer.”
James said that the answer was simple and was already being carried out by some dealers – check the customer for finance early on.
“This sounds as though it might spoil the flow of the sales journey but it is actually quite logical. Talking to the customer about their budget and the kind of price range in which they will be looking is common place.”
James said that iVendi’s recently-introduced Showroom Eligibility tool allowed dealers to do this easily online, sitting with the customer and looking at whether they are likely to be approved by the dealer’s panel of lenders, including possible reasons for rejection.
“In some cases, there will be no motor finance solution available that fits the needs of the customer and the dealer – and it is better for everyone to find out this fact at the start of the process.”