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6 Ways to Run First-Time Car Buyer Programs for those with No Credit History
Buying a car for the first time can be overwhelming, as many first-timers don’t understand the process. They also struggle to secure approval from traditional lenders because they have no credit history.
By offering educational resources and alternative lending solutions, your dealership can gain a reputation for helping these new buyers secure a vehicle that meets their needs. Here are the steps to build a first-time car buyer program for those with no credit history:
1. Train sales staff how to work with first-time buyers
Start by educating your sales team on the importance of approaching first-time buyers with patience and transparency. You’ll additionally want to promote a customer-first culture that emphasizes long-term relationships over just closing sales.
2. Explain the concepts of prequalification and preapproval
First-time buyers may be unfamiliar with these terms, so your reps will want to go over how these customers can reduce their stress by learning what they’ll be able to spend on their auto purchase early on.
3. Cover the basics of auto financing
Because these first-timers are inexperienced with the ins and outs of buying a car, your reps should also review the rates, terms, and repayment schedules in detail. This effort will help new buyers understand the financial commitment they’re about to make.
4. Introduce buyers to alternative financing sources
Talk with those lacking a credit history about the likelihood of subprime auto financing and what it entails, including higher interest rates and stricter repayment terms. Then connect them with lenders specializing in no-credit financing to improve their chance of approval.
5. Offer a clear breakdown of costs
Transparency can go a long way towards repeat business, so be sure to discuss all financing fees, dealership fees, and anything else they might encounter. Make sure they’re also aware of needing to pay for insurance, vehicle registration, and ongoing maintenance.
6. Prepare buyers for a sounder financial future
Emphasize the importance of making on-time payments to build credit and qualify for better financing in the future. You can further mention the possibility of refinancing once their credit improves, helping them secure better terms later on.
Why your dealership needs a first-time buyer program
Rolling out a first-time buyer program can benefit these customers and your dealership. By providing education and expanded financing options, your dealership can:
- Increase car sales by approving more buyers with little-to-no credit history
- Build long-term customer relationships that lead to future sales and referrals
- Position itself as a trusted advisor as first-timers achieve a financial milestone
If your dealership wants to serve more first-timers to grow its business, join our dealer network today! Beyond providing subprime financing that can lead to a greater number of approvals, our support staff can provide valuable insights into this buyer pool.