National Alliance of Buy Here, Pay Here Dealers Study
Parents do it to keep track of their children, pet owners do it to keep track of their pets and Navy does it to keep track of their ships, so why not implement a GPS tracking solution to keep tabs on vehicle assets? Buy-Here Pay-Here dealers are implementing innovative collateral management systems (CMS) to protect their vehicle assets while at the same time protecting their bottom line.
In part one of this series we took a look at a recent survey conducted by the National Alliance of Buy Here, Pay Here Dealers (NABD) on GPS tracking and payment device best practices. We first discussed best practices of implementation; now let’s look at dealer experience and perceptions.
Dealer Experience and Perceptions
Besides improving the collection process, collateral management systems (CMS) help improve customer behavior and customer credit ratings. The survey found that 100 percent of respondents indicated that customers improved their credit scores as a direct result of these devices. Today’s devices usually feature payment reminders, which help customers keep track of their payments. Ninety-four respondents claimed that the use of disablers – a feature that remotely disables a vehicle if payments are past-due – boosts the collection process as well.
One of the biggest benefits of payment devices is their ability to lower the overall risks associated with financing credit-challenged customers. Delinquent customers have a higher risk of defaulting on their loans or skipping payments. However, BHPH dealers have a way to mitigate this risk while at the same time improving customers’ experience. According to the survey, 78 percent of respondents claimed expressed that the device provides them with greater credit-granting flexibility, while 81 percent indicated that the use of devices lowers the risks involved with customers. Survey results also showed that nearly 70 percent of respondent believe the devices allow them to sell higher value (ACV) vehicles with less risk.
Stayed tuned to part three in this series in which we’ll continue our discussion on the five best practices of payment devices.