After much spending on the Holidays, paying for car repairs is something most consumers would rather avoid in January. Not to mention the economy makes it so most consumers would rather pay in installments on big ticket items if given the opportunity. In this article we will explain why it is crucial to offer your customers payment options for automotive services and repairs.
The BNPL Advantage
Offering Buy Now Pay Later (BNPL) options to customers comes with a major advantage to businesses, and the numbers are compelling. Below are some key statics to consider:
- BNPL’s user base grew by 85% in 15 months
- $689 average amount customers spent on latest BNPL purchase
- 85% boost in average transaction size
- 50% of consumers have used BNPL
- More than 1 in 5 shoppers are expected to make a buy now, pay later (BNPL) purchase this year, and that ratio is projected to increase to more than 1 in 4 shoppers by 2025.
The Economy and Customer Expectations
Paying in installments is a rapidly growing trend in all e-commerce businesses and the automotive industry is not any different. In 2023 customers are expected to be much more cautious about their spending. They will prefer to take their vehicles for services or repairs at dealerships and shops that offer their customers the option to service now and pay in installments. Let’s face it, it’s much easier on their wallets and customer loyalty is significantly impacted by their satisfaction with their experience, including their payment experience.
Everyone Wins with Service Now Pay Later
Paying in installments for vehicle repairs liberates your customers from having to make tough decisions like choosing between making a large lump sum payment or driving an unsafe vehicle. When customers can service their vehicles right away and pay in installments, they are more likely to approve the additional services recommended in your estimates. This will minimize your denied services and increase your bottom line and customer satisfaction scores significantly.
First, it can help you attract new customers. The reality is some customers remain hesitant to take their car to a dealership for service or repairs because they fear “higher costs.” Giving your customers the option to pay in instalments for services performed on their vehicles means empowering those customers to afford the services they need while watching your Average Repair Order values soar.
Second, it can help to increase customer satisfaction and loyalty. When customers are aware that they can pay for their car repairs over time by servicing at your shop, they are more likely to return to the dealership for future services. This can help create a loyal customer base that will continue to frequent your dealership for all their automotive needs.
Third, it can increase the average Repair Order Values. When customers can pay for their car repairs over time, they are more likely to approve additional repairs and services that they might have skipped, boosting profits.
Choosing the Right Technology
When choosing a BNPL provider, it’s important to look for a technology provider that caters to and understands the automotive industry. Here are the key characteristics to look for when choosing your provider:
- Tailored for Service. Embedded in the customer journey from booking through follow up
- Time. Applications approved within seconds, giving customers plenty of time to consider adding to their Repair Order before arriving at your shop
- Estimate Approvals. Flexible payment options drive higher customer approvals
- Customer Privacy. Applications and approvals from the comfort and privacy of the customer’s own device Increase Revenue & Retention Higher average repair values & a major reason to return Kind to Customers Considerate of Customers circumstances and needs
By partnering with the world’s largest third-party financing company, VenueVision has created the first Service Now Pay Later technology stack made to meet the specific needs of automotive dealers and their customers. VenueVision’s technology revolutionizes the traditional automotive service experience by immediately providing customers with greater purchasing power early in their service process. Providing customers with the option to pay in installments for their vehicle service is a game changer for dealerships, and its risk free.
In conclusion, offering Service Now Pay Later options to dealerships can provide a much-needed lifeline for many motorists, especially those who are struggling to make ends meet. It will attract new customers, build customer loyalty, and increase repair order values and revenue for service departments.