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Car Dealers That Accept Bad Credit

The beginning of the changeover dates from January 2015, when Renault launched its Easy Pack offer and changed its communication mode, by highlighting in its ads a monthly rent without contribution, with maintenance at one euro. It worked right away, and that success has not waned. ” This success story - told here by Christophe Michaeli, Director of the "Automotive" France market for BNP Paribas Personal Finance - is that of leasing with option to buy.
Four years later, the LOA has become, by far, the first method of financing new cars in France, and is even starting to make its mark on the second-hand market ( see below ). According to the latest figures published by the French Association of Financial Companies (ASF) (1) , it represented, over the first 11 months of 2018, 75% of the total production of new car financing . And its production increased by 15% over a year, when that of conventional credits fell by 1%.

LOA is an alternative financing method to car dealer that accept bad credit conventional earmarked credit . Rather than buying the car, you rent it from a credit institution, which is the beneficial owner. At the end of the contractual rental period (3 or 4 years in general), you can either return the vehicle and rent a new one, or buy it back definitively, at an agreed price from the start. From a regulatory point of view, LOA is considered to be consumer credit.

But is LOA such a good deal? For manufacturers and their dealers, that's for sure. "The LOA is a real factor in the sale of vehicles, and a real support for the French automobile market," says Christophe Michaeli. DIAC, a specialized subsidiary of the car manufacturer Renault, for example, estimates the share of customers who would not have bought a new car without the Easy Pack offer mentioned above at 20% .
But the LOA is also, and above all, a superb loyalty tool. "By making an effort at the outset to capture a client, we can then keep them for a long time," notes Christophe Michaeli. And for good reason: at DIAC, for example, 6 out of 10 customers equipped with LOA take back a new car from the same dealer at the end of the rental period.

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Geschreven op: 07-04-2020
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