Modern Tire Dealer

MAR 2019

Magazine for the professional tire industry

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M T D M a r c h 2 0 1 9 28 N o - C r e d i t - N e e d e d O p t i o n s C onsumers expect to see a variety of payment options available wherever they shop, and their local tire store is no exception. One way to open up a tire store to more tire buyers is to offer affordable monthly payment plans that do not rely solely on a credit score for approval. To enable more customers to buy their tires, more than a third of the independent tire dealers who responded to a Modern Tire Dealer survey offer no-credit-needed payment plans in which consumers lease tires with the option to purchase them in the future. Nearly two-thirds of the MTD survey respondents who offer lease-purchase programs say the programs have a positive impact on their business levels. A further breakdown reveals 38% of survey respondents offer no-credit-needed payment programs to their customers. Of those, 47% said "very positive" and "19%" said "extremely positive" described their results with the tire purchase programs. Purchases such as tires can be chal- lenging for consumers without traditional credit and the cash to pay upfront. In other cases, consumers may have access to credit but may not wish to increase their credit card balance or add another card to their wallet. Lease-to-own (LTO) agreements give tire dealers the ability to offer a payment option that meets the needs of these consumers. Instead of looking at traditional credit histories, the companies providing lease- purchase programs consider repayment history for recurring bills such as car insurance, utilities, rent and cell phone service. Modern Tire Dealer asked several companies that offer no-credit-needed LTO programs to tire retailers for details on their programs. ey are: Acima LLC, Kornerstone Credit LLC, Prog Leasing LLC (Progressive Leasing), Snap Finance LLC and West Creek Financial Inc. irty-five percent of people in America do not qualify for traditional financing based on their FICO scores, according to Ryan Slobodian, vice president of Snap. "ey are looking for somebody who is going to help them. ese are people who are driving by, and you have the option to draw them into your tire store." e key is to promote the availability of alternative payment plans for tire pur- chases. "You have to do some messaging on your side," says Slobodian. "Many of our partners hang one of our banners out on the street. They're shocked at the number of people who see that no- credit-needed messaging and come in the door. We all know our credit scores. People aren't going into a shop where they've been denied for prime financing previously. But if you invite them in with that no-credit-needed messaging, it's a way to increase that traffic flow." Snap recently added the option to apply for an LTO purchase plan via text message on a mobile device. "It's all about getting outside the walls of the shop and engaging the consumer in different places where they may be," says Slobodian. PROVIDERS OF LOANS AND CREDIT American First Finance Inc. (AFF) offers both LTO programs as well as installment loan programs which do not require a tra- ditional credit history for approval. Another provider of financing to credit-challenged consumers is EasyPay Inc., known in the market as EasyPay Finance. e company says it provides tire dealers with a non-lease credit solution for customers with good credit to no credit. e following overview also includes responses from a company that relies on credit scores for approvals, Synchrony LLC, which does business as Synchrony Financial. Synchrony provides manufacturer branded and privately branded credit cards, which are typically awarded to consumers with good, or prime, credit. MTD begins with a Q&A in which Acima, Kornerstone Credit, Progressive A REVIEW OF NO-CREDIT-NEEDED PAYMENT PROGRAMS ALTERNATIVES TO TRADITIONAL FINANCING CAN HELP DEALERS CAPTURE MORE SALES Ann Neal By ©GETTYIMAGES.COM/COURTNEYK

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