Program unveiled to capitalize on pre-owned
National Powersport Auctions provided dealers with a head-turning benefit last month when it announced its NPA Dealer Financing Program. Justyn Amstutz, NPA partner, executive vice president, provided Powersports Business readers with some insight on how the program evolved, and why dealers should take advantage of it.
PSB: What type of dealer did you have in mind when you formulated the idea for NPA Dealer Financing?
JA: The biggest void or the biggest gap that we saw was for the independent or non-franchised dealer — how are they getting credit availability? Credit not only to purchase at the auction, but, more importantly, to be able to buy off the street? The cool thing about NPA’s Dealer Financing Program is that 25 percent of the available credit line can be used to take trades and buy off the street. It’s a competitive interest term at 60 days, and they can do an additional 60 days. The interest rates are competitive.
PSB: What are the key points that get dealers excited about NPA Dealer Financing?
JA: The two biggest selling points are that a dealer who has a credit line with NPA Dealer Financing can purchase from an NPA auction 100 percent of the auction purchase price, and their buy fee can be put on their NPA Dealer Financing line. Additionally, 25 percent of the total available credit line can be used to take trades and buy off the street for wholesale profit opportunities.
PSB: This seems to be coming at an ideal time for dealers who want to take advantage of pre-owned. How long has it been in the works?
JA: We’re a very aggressive company, however, we are cautious when we roll out any type of new initiatives or plans. This is something that we’ve been working on for about a year. We wanted to make sure that we found the right strategic partner. Although auctions are competitive in nature, each one of the car auctions has a financing arm. Manheim’s got MAFS, ADESA’s got [Automotive Finance Corp.]. We have a longstanding relationship with AFC. They were the right strategic business partner. We looked at a variety of different perspective opportunities. We are happy to be partnered with AFC.
PSB: More and more dealers have turned to pre-owned to grow their profit. How will this program enhance their pre-owned experience?
JA: It’s going to continue to grow. This plan was brought out in response to NPA’s hard pushing drive toward consignment and wholesale education. We work closely with each one of the OEMs to educate their dealers on pre-owned and the direct benefits of the used business. The processes of taking in a trade by utilizing National Powersport Auctions’ Value Guide to give a realistic, actual cash value on a trade (to have realistic expectations up front whether they come to the auction or not) is imperative. We also provide education to dealers on cash and inventory management. The biggest issue that we heard was there’s not enough wholesale floor planning available, especially if you’re an independent, if you’re not a franchise dealer.
PSB: What’s the final point worth mentioning about the program?
JA: It costs you nothing to open the line. There’s no fee, no application fee. And if you don’t use the line, it doesn’t cost you anything. So it’s nice to keep in the back pocket for a rainy day or a business opportunity. Although we’re in the business to make money, the true benefit is for a dealer to become healthy by utilizing the line at their discretion and being able to manage his inventory and manage his cash when needed.Click here for reuse options!
Copyright 2011 Powersports Business