Inform Consumers Through Targeted Direct Mail
Independent and franchise dealers, buy here, pay here dealers, and auto financiers can benefit from sending targeted direct mail to consumers with imperfect credit. A targeted direct mail campaign involves distributing focused messages to consumers who are likely to purchase a vehicle through the subprime market.
What a Prospective Consumer Needs A prospective consumer could have a variety of credit problems, such as improving their credit after bankruptcy, a car repossession, little credit history, or no credit history. A subprime loan helps a consumer begin building credit even if the interest rate is not as low as one would get with a higher FICO score.
What Information Works To market effectively through targeted direct mail, dealers and lenders should offer consumers valuable tips. They should be able to use them even if they do not do business with you. Each communication helps consumers become more aware of your brand, possibly turning them into future leads.
What to Say in Targeted Direct Mail Here are sample tips to offer your prospective subprime borrowers through the mail:
Make a pre-credit application. A consumer with poor credit or no credit can get a copy of a free credit report online and work with a lender or car dealership representative to determine what kinds of auto loan terms he might obtain.
Ask about a possible loan amount. Regardless of their credit situation, the issue will be how high the monthly payment is for many consumers. The total amount of a vehicle purchase financed over 3 to 6 years will significantly influence the size of the monthly payment.
Explore interest rates. A loan amount helps estimate a car payment, but the deciding factor is the interest rate. A higher interest rate can make a $300 payment soar to more than $400 per month.
Encourage borrowers not to commit to a payment that’s beyond their budget. This would exacerbate their existing credit problems.
Targeted direct mail marketing is a proven way to communicate passively with subprime consumers. If you use targeted direct mail to reach the auto market, strive for a clear and consistent message. Consumers want helpful information without a particular slant they can use when making financial decisions, or they will throw your message in the trash.