Things to Know About In-House Financing in Automotive Industry
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Accounting for 7.1 percent of country’s Gross Domestic Product (GDP), the market share of automotive industry is ready to witness a boom, inviting more franchisors to expand their market nationally and globally, both.
What is In-House Financing?
In-house financing is a type of seller financing in which a firm confirms a loan to the customers, to purchase goods and services. It eliminates the firm’s reliance on the financial sector, providing the customer with funds for completing a transaction.
Being a prominent user of in-house financing, the automotive industry has its business relying on buyers taking loans to purchase a vehicle. Offering in-house financing helps a firm to complete more deals by welcoming maximum customers.
Comprising of an economically diverse population, in-house financing has a sparkling future in India.
Smooth Purchasing Process
Instead of spending extra hours or days with a third party for getting your loan approved, in-house financing ensures a quick process with additional benefits. It includes extended warranties and flexible interest rates, which grabs the attention of customers for further investment.
Creating a shortcut through this financing tool, franchisors are ensuring that customers get their purchase at the earliest.
Easy to Apply
One of the best features of in-house financing is its high flexibility regarding approval. Customers with fair or low credit score consider this procedure to be a life savior, helping them from future troubles.
It, however, does not guarantee lower interest rates, but allow customers to refinance their products on higher interest rates.
Franchisors through in-house financing offer customers with an improved credit score just a month after purchasing a vehicle. Improvement in the credit score comes with long-term benefits that pay off outside the loan.
The article was originally published on Franchise India by Shahram Warsi.