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Financing New Tires-In House


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Hello all shop owners. An idea hit me last night that may help me get above my competition in town for tire. In house financing new ones. I was wondering if anyone else was doing this? Looking for information on handling payment dates, Interest, etc.

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To my way of thinking there would actually be less risk in financing higher margin business (i.e. repairs) than tires. On a $500 set of tires you will probably make less than $150 and the out of pocket costs may be $350. It will be an easy way to get a lot of money at risk.

There is a shop 40 miles from here. They Take a 350 set of tires and charge 900 for them stretched out over 6 months. I think its a check hold program?

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There is a shop 40 miles from here. They Take a 350 set of tires and charge 900 for them stretched out over 6 months. I think its a check hold program?

That's not a bad plan.... with 350 down and the rest on payments. I'm not a bank, and don't want to be. I can turn that same 350 into 900 in weeks vs. Months. On the other hand, if you are in the position of having sufficient cash on hand laying around doing nothing for you, then being a bank might make sense for you.

 

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There is a software program I used in the past to do this type of business. Here is the link: http://www.notesmith.com/

 

Now, consider the type of customer that you will be dealing with, (there is no easy money, you have to work for it no matter what), if you have no experience chasing money, I would suggest you reconsider, such low margins on tires, and the regulatory hassles may not be worth it, but only you know your numbers and risk tolerance.

Edited by HarrytheCarGeek
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  • 2 weeks later...

There is a software program I used in the past to do this type of business. Here is the link: http://www.notesmith.com/

 

Now, consider the type of customer that you will be dealing with, (there is no easy money, you have to work for it no matter what), if you have no experience chasing money, I would suggest you reconsider, such low margins on tires, and the regulatory hassles may not be worth it, but only you know your numbers and risk tolerance.

With a check hold system, You pretty much get all your money right there, you just stretch it out over a few months instead of one lump sum.

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We take post dated checks all the time. Loaning money may mean never getting paid and again never getting paid after winning a judgement, but a post dated check is backed by the sheriffs dept if it bounces.

 

A better way is to get hooked up with a credit card company that allows you to give instant credit. There's some hoops to jump through but it gets you paid instantly and tires rolling out the door easier

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We take post dated checks all the time. Loaning money may mean never getting paid and again never getting paid after winning a judgement, but a post dated check is backed by the sheriffs dept if it bounces.

 

A better way is to get hooked up with a credit card company that allows you to give instant credit. There's some hoops to jump through but it gets you paid instantly and tires rolling out the door easier

I get flyers in the mail about synchrony. nobody ever contacts me.

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  • 2 weeks later...

Tires are so competitive around here - especially with Sams and WalMart selling them that I can imagine being able to make a sale with that kind of markup. It seems they could go anywhere in town and beat that price by a long shot, and if the only reason they are willing to pay an exorbitant price for them is to drag out payments for 6 months.....it seems likely that you probably wont get paid. Seems like a shaky system to me. As someone said, Syncrony bank has a system, and our NAPA offers an in house credit card with 3/6/12 month options (to its Car Care Centers) depending on how much they spend. Much better option. You get paid. They collect just like a credit card. But they have to qualify...which may be a problem if they're financing tires for 6 months. Just my .02

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
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