OTHER VOICES: How point-of-sale financing gave my business a boost

Jack Surface
Surface

I've always been an avid hunter. During my years in Indiana's auto mechanic industry, I've taken many trips out West to hunt deer, elk and other big game.

I can't help but compare my love of hunting and cars. One trait that both of them share, I've noticed, is that things are always changing.

Whether it's the change of seasons, changes in the weather, changes in the car industry, or in the movement of the animals and/or of the cars, I suppose change comes with the territory.

One big change I've noticed after 40 years in the auto shop is this: In the past, 70 percent of my business was exhaust related; now exhaust work makes up just 6 percent.

The bulk of what my team does today at my two Midas stores in Anderson and Muncie, Ind., is brakes, tires and other services, in that order. Tires and brakes are consistently more expensive than the exhaust work that used to make up the bulk of our business.

• This column appeared in the Aug. 14 print edition of Tire Business.

With that change in fixing more tires and brakes comes the increasing need for good financing options. Specifically, my two stores needed a program to make it easy to offer customers a good finance option right at the point of sale.

We've always had some kind of financing program, but either the programs would end up costing too much, or the customers would get denied because they needed too good a credit score. One of the programs we offered was available to customers for over a year, but barely got used because it wasn't worth the effort.

One day while online, I received an offer from a different kind of finance service. Called point-of-sale, or lease-purchase financing, it allows someone who doesn't necessarily have good credit, but does have a good bank account, to get approved for new tires and a brake job, immediately.

I decided to give it a shot.

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The customer looking to get financing can answer the approval questions on their phone with the mobile app or use our in-store computer. Not only does this save time, but it helps the customers feel more comfortable because they don't have to state out loud some of the requirements for qualification.

In almost every case, the customer gets approved within minutes of submitting the application.

At each of our stores, we have three or four people who are trained on it. We offer it to everyone who has an issue with paying, or simply can't afford Not everyone has great credit or wants to sign up for a credit card, but almost everyone has a checking account. That's all they need to get approved for financing.

Recently a lady walked in our store whose car tires were just about ready to blow. The metal was showing and everything. But she didn't have the money to get new ones.

As she was leaving to drive back to Indy, we said, "Wait — try this program. If you get approved, we can set up a payment plan that works for you." She jumped all over it. It worked out great.

One huge result of offering point-of-sale financing is our stores are getting more return business. It definitely brings people back. We use it to build that relationship with them, and then we get referrals.

Just the other day two people came in and asked about the program because they heard about it from a friend. We love the positive word-of-mouth.

And return business, of course, means more revenue. We've done close to $10,000 in extra sales in just the few months since offering the financing. That represents a 5- to 10-percent increase in sales a month — sales that never would have happened otherwise.

Though we've only been using it a short time, and we expect the increase in sales to continue. Hopefully that extra time and money we're saving will free me up to spend more time out West hunting.

Note: Midas Anderson and Midas Muncie use Acima Credit, which provides lease-purchase financing at the point of sale to tire companies.

Mr. Surface operates two Midas stories in Indiana, one in Anderson and the other in Muncie. He can be reached at (765) 643-6983.

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