RV dealership financing solutions come in a few basic forms. Many RV and boat dealerships choose to run their own financing department. These dealerships usually fall into two categories, the small guys who think they can’t afford an outsourced solution and the super-large dealerships with the resources to manage all of the many moving parts of RV financing. Well, I’m here to tell you that many of these assumptions are incorrect.
The Job of an RV Finance Manager
On the most basic level, the finance manager is tasked with processing or facilitating loans for your customers Typically, this responsibility takes on two forms.
First, you are directly financing RV purchases through the dealership. Or, the finance manager may be responsible for maintaining relationships with lenders such that they can secure favorable rates for your customers and help you turn a profit.
Whether your current strategy is one or the other or some hybrid model, one thing remains the same: you are paying for payroll, benefits, and all of the soft infrastructure required to make an internal F&I department work.
Small Dealership Financing Issues
Aside from the extra financial costs associated with hiring and maintaining an internal F&I department (I’ll get to that in a moment), it’s worth dispelling the idea that keeping things in-house leads to a better customer experience.
To address the idea itself: no one is disputing that there are many businesses where a local, in-house solution is key to a positive customer experience. I’m talking about that, “step right over here and we’ll get you taken care of” experience. However, it is unlikely that a small dealership, either financing directly or through partner lenders, will be able to secure the best rates for customers.
When someone is making a large investment in an RV, the financing rate is one of, if not the most important factor. When that customer walks away, they’re going to remember that they were approved with a favorable rate every time the bill comes around. Everything else is an afterthought.
Speaking of approvals, it’s also important that each and every potential buyer has a realistic chance of getting approved for credit. Otherwise, you’re not moving units. Particularly for small dealerships, this factor alone can mean the difference between success and failure. Finance Solution actually has a track record of looking at dealership’s recent loan applications and demonstrating how our team could have secured 20% more approvals.
Plus, when it comes to cost, an outsourced provider like Finance Solution is actually more affordable than an in-house team. We only make money when you do, meaning we are just as invested in your success as our own. No payroll costs, no healthcare, no sick days. Just approved loans.
Meeting RV Financing Requirements
When you’re going the in-house route for your financing department, consider a few costs outside of something as concrete as salary. You need to recruit experienced professionals, keep them happy at your dealership, stay up to date on training and the latest developments in the field, and repeat when the time comes.
It is important to consider all of the pitfalls and complications that can arise during the lending process. At Finance Solution, that is the process we specialize in. You should be focused on giving your sales team everything they need to move units. Let us handle the rest.
An in-house financing department might sound good on paper, but securing the best rates for your customers, facilitating a smooth process until they drive off the lot, and buying the right insurance and warranties are best accomplished by an experienced team of outsourced F&I professionals.
Dealerships With High Volume
The largest dealerships can afford the experienced internal F&I department that can avoid pitfalls and maintain outside lender relationships. However, consider this: just because you technically have the money in your bank account to buy the more expensive car, can you really “afford” it?
The large staff that could act as a functional and effective F&I department necessarily involves spending a large portion of your resources on staffing finance managers, a support team, ongoing training, and other costs. The fundamental difference is that you are paying these people regardless of whether or not customers are walking through the door.
Let’s talk about another solution, one that is helping dealerships find success even today when times are so uncertain. Reach out today to get started.