There are many different ways people approach money and spending. Some people love to save and watch their money grow and spend when it's absolutely necessary. Others want to celebrate their hard work with fun or meaningful purchases. But no matter what kind of approach to spending and saving a consumer takes, there will come a time sooner or later when everyone will have to make a major purchase.
When these situations arise, some customers may be faced with a dilemma - especially those who tend to shy away from major purchases to begin with. One thing that can ease the minds of many consumers is having an affordable financing option.
Financing may be appealing to different customers for different reasons. Three of the top reasons people opt for a financing program include:
It's hard to plan for the unexpected. While many consumers know it's a good idea to have an emergency savings account to help during these times, few actually do. According to a GOBankingRates survey, just 29 percent of Americans have more than $1,000 in their savings accounts. This means that, for 71 percent of the population, the need to make a sudden, large purchase could very well put them in a tough situation.
"Just 29 percent of Americans have more than $1,000 in their savings accounts."
Having a financing program readily available can help your customers make the purchase they need without fear of draining their bank account or having to take out an expensive loan.
While many people have little to no money in their savings account, some of your customers might be among the 19 percent of people who have $5,000 or more in their account. But just because they have the money doesn't mean they want to spend it all at once on a home improvement project or another major purchase, Water Quality Products explained. They could be saving the money for something specific, or they might feel more comfortable having a nice nest egg on hand. In these situations, they could be inclined to accept a financing offer to keep their cash liquid but still make the purchase.
Even though the economy has improved greatly since the recession, people still struggle with their finances. Because of this, many consumers find difficulty when trying to obtain a credit card or loan to help with a major purchase. According to the Federal Reserve Bank of New York, as of June 2016, consumers have a:
Refinance loans, credit cards and credit limit increases are all popular ways for consumers to pay for home improvement projects, but at a time when these are unavailable to many people, it's important that there are sound alternatives. A refinance program may very well sound like a breath of fresh air to someone who has tried to obtain financing elsewhere without success.
Every customer is different, and their backgrounds, personal savings strategies and financial histories could vary widely. However, people from all walks of life see the value of using a financing program to help make a major purchase. By offering these and making sure your customers are aware of them, you may be able to make some sales that might have otherwise walked out the door.