{"id":1096,"date":"2016-04-13T08:00:50","date_gmt":"2016-04-13T13:00:50","guid":{"rendered":"http:\/\/efgintelligence.com\/dealershipcorridor\/?p=1096"},"modified":"2016-08-12T15:20:34","modified_gmt":"2016-08-12T20:20:34","slug":"selling-cash-down","status":"publish","type":"post","link":"https:\/\/efgintelligence.com\/dealershipcorridor\/selling-cash-down\/","title":{"rendered":"Selling Cash Down"},"content":{"rendered":"
\"Hollis
Contributing Author:
Hollis Goode
Regional Vice President
EFG Companies<\/figcaption><\/figure>\n

How comfortable is your sales team with asking for cash down payments on every transaction?<\/strong><\/p>\n

With the plethora of $0 down advertising, it\u2019s become more commonplace for customers to expect to put $0 down on their vehicles. However, as any F&I manager will tell you, this makes it more difficult to secure a loan that is beneficial to both the dealership and the customer.<\/p>\n

Take a look at the deals coming to the F&I office. If more than 20% of those deals are for $0 down, then there is a breakdown<\/strong> between your sales staff and the F&I desk.<\/p>\n

Granted, the sales team might find it difficult to broach the subject. After getting a \u201cno\u201d once, they might give up, assuming they can\u2019t negotiate. This mindset needs to be overcome in the same way you train your sales people to ask for the sale and negotiate the sale price.<\/strong> The more training and information you give your sales people, the less anxiety they have when asking for the sale, for a down payment, for a trade-in value, etc.<\/p>\n

Remember, it is always better to ask than to assume the answer is no. After all, we all know what assuming makes out of you and me. <\/p>\n

After looking at the number of deals coming to the F&I office, the next question to ask is whether your sales team knows the dealer and consumer benefits of cash down payments.<\/strong> Simply knowing these benefits can alleviate that anxiety in asking for the down payment, and enable your team to better negotiate with the customer.<\/p>\n

On the dealership side of things, asking for more cash down gives your F&I managers more wiggle room to secure financing that will allow for the sale of F&I products.<\/strong> This is important for your sales team to keep in mind, as this could affect overall dealership profitability.<\/p>\n

Think about it this way, if a customer wants to put $0 cash down on a $20,000 vehicle, then the F&I manager has to find a lender that will finance more than $20,000 to account for F&I products. If the customer is credit-challenged, this could be more difficult, if not impossible.<\/p>\n

On the other hand, if a customer is willing to put $5,000 cash down on a $20,000 vehicle, then the F&I manager doesn\u2019t have to increase the amount financed much more to account for the F&I products. In addition, if the customer is credit-challenged, that down payment could boost their tier rating, making it easier to secure financing that is beneficial to both the dealer and the customer.<\/p>\n

On the customer side of things, providing cash down payments enables customers to:<\/strong><\/p>\n