To soften the sticker shock of expensive vehicle fixes, and to deter customers from declining service, a growing number of dealerships are providing loans for repairs through a consumer finance company.
The biggest player in this space is Colorado-based Confident Financial Solutions, which works with about 800 new-vehicle dealerships to offer repair loans. According to a recent survey by the American Automobile Association, 1 in three U.S. motorists — some 64 million — say they could not pay for an unexpected vehicle repair without going into debt.
The benefits of the loans to a dealership service department include increases in gross revenue and reductions in service denials, says Tim Brooks, lead service adviser at Freedom Chrysler-Dodge-Jeep-Ram in Duncanville, Texas.
"We saw a 50 to 80 percent increase in revenue [in customer-pay work] during the first year  we started pushing loans from CFS, as well as a 30 to 40 percent decline in service denials," Brooks told Fixed Ops Journal. He would not provide revenue totals.
About 30 Freedom customers each month take out loans that average between $1,000 and $3,000, Brooks says. Freedom is part of Dallas-based Roundtree Automotive Group, which operates about 10 new-vehicle dealerships.