No-Credit-Needed Options Help Dealers Capture More Sales

June 6, 2019

Consumers expect to see a variety of payment options available wherever they shop, and their local tire store is no exception. One way to open up a tire store to more tire buyers is to offer affordable monthly payment plans that do not rely solely on a credit score for approval.

To enable more customers to buy their tires, more than a third of the independent tire dealers who responded to a Modern Tire Dealer survey offer no-credit-needed payment plans in which consumers lease tires with the option to purchase them in the future.

Nearly two-thirds of the MTD survey respondents who offer lease-purchase programs say the programs have a positive impact on their business levels.

A further breakdown reveals 38% of survey respondents offer no-credit-needed payment programs to their customers. Of those, 47% said “very positive” and “19%” said “extremely positive” described their results with the tire purchase programs.

Purchases such as tires can be challenging for consumers without traditional credit and the cash to pay upfront.

In other cases, consumers may have access to credit but may not wish to increase their credit card balance or add another card to their wallet. Lease-to-own (LTO) agreements give tire dealers the ability to offer a payment option that meets the needs of these consumers.

Instead of looking at traditional credit histories, the companies providing lease-purchase programs consider repayment history for recurring bills such as car insurance, utilities, rent and cell phone service. Modern Tire Dealer asked several companies that offer no-credit-needed LTO programs to tire retailers for details on their programs. They are: Acima LLC, Kornerstone Credit LLC, Prog Leasing LLC (Progressive Leasing), Snap Finance LLC and West Creek Financial Inc.

Thirty-five percent of people in America do not qualify for traditional financing based on their FICO scores, according to Ryan Slobodian, vice president of Snap. “They are looking for somebody who is going to help them. These are people who are driving by, and you have the option to draw them into your tire store.”

The key is to promote the availability of alternative payment plans for tire purchases. “You have to do some messaging on your side,” says Slobodian. “Many of our partners hang one of our banners out on the street. They’re shocked at the number of people who see that no-credit-needed messaging and come in the door. We all know our credit scores. People aren’t going into a shop where they’ve been denied for prime financing previously. But if you invite them in with that no-credit-needed messaging, it’s a way to increase that traffic flow.”

Snap recently added the option to apply for an LTO purchase plan via text message on a mobile device. “It’s all about getting outside the walls of the shop and engaging the consumer in different places where they may be,” says Slobodian.

Providers of loans and credit

American First Finance Inc. (AFF) offers both LTO programs as well as installment loan programs which do not require a traditional credit history for approval. Get to know AFF in this piece: A Look at AFF, a Provider of Leases and Loans for Tires

Another provider of financing to credit-challenged consumers is EasyPay Inc., known in the market as EasyPay Finance. The company says it provides tire dealers with a non-lease credit solution for customers with good credit to no credit. Synchrony LLC, which does business as Synchrony Financial, provides manufacturer branded and privately branded credit cards, which are typically awarded to consumers with good, or prime, credit. Synchrony relies on credit scores for approvals.

MTD begins with a Q&A in which Acima, Kornerstone Credit, Progressive Leasing, Snap Finance and West Creek Financial explain how their offerings benefit a tire store, as well as their process for approving a customer for an LTO agreement.

In addition, areas to consider when evaluating candidates who want to provide lease-purchase payment options to your business are presented in a series of charts here. The charts show answers from the five LTO providers featured in the article: Acima, Kornerstone, Progressive, Snap and West Creek.

MTD: What services and products do you offer tire dealers?

Acima: Acima offers a no-credit-needed financing solution that tire dealers can offer to their potential customers at the point of sale. Acima’s product is 100% web-based and paperless, which equals quick turnaround from application to funding. Acima employs the largest nationwide outside sales force in the industry, which provides in-person enrollment, training, and ongoing support to its dealer partners.

Kornerstone Credit: We provide flexible, no-credit-needed financing for tires and parts.

Progressive: Progressive Leasing offers virtual lease-to-own services to tire and wheel dealers. Virtual lease-to-own is a flexible alternative to traditional credit that allows customers with less-than-perfect credit to obtain the tires and wheels they need to travel the roads safely.

With a Progressive lease, we purchase the merchandise the customer selects from the retailer. Then, the customer signs an agreement to lease that merchandise from Progressive. Progressive owns the merchandise, but the customer can take ownership after making all required lease payments or through an early buyout option.

While there is a cost associated with Progressive’s leasing services, we don’t charge interest.

Our customers may cancel the lease at any time without penalty and, if current on all payments, without any further payment obligation.

Snap: Snap offers financial products for credit-challenged consumers, allowing tire dealers to take credit declines from their primary lenders and turn those into approvals.

West Creek: We offer high-approval financing for consumers who don’t qualify for traditional financing. Our product offers a 100-day payment option, 12- or 24-month finance options, $500 to $5,000 credit lines, and early buyout options after the first 100 days, before the full term.

MTD: How do your offerings benefit a tire dealer?

Acima: Acima saves potentially lost customers, increases average invoices, and helps attract a whole new customer. Because Acima does not rely on a credit score when making an underwriting decision, approval rates are far higher than traditional credit offerings.

In short, Acima helps a dealer compete for the 40% of Americans who cannot qualify for traditional financing. While traditional, or prime credit offerings are still key to any dealer’s success, Acima offers the perfect complement — rounding out the dealer’s financing portfolio and allowing them to offer a financing solution to a far wider range of customers.

Kornerstone Credit: We help increase sales up to 33% by qualifying customers who may not want to use credit or have insufficient credit to qualify for traditional financing.

Progressive: More than one-third of U.S. consumers have subprime credit. This often leads these consumers to delay or even avoid big purchases.

Many would-be tire customers might put off replacing their tires or walk out of tire shops disappointed and empty-handed after being denied credit. Progressive Leasing provides these consumers with an affordable alternative to credit, helping them purchase the tires and wheels they need to travel the roads safely while solving a big problem for tire dealers — the problem of lost sales.

Snap: Tire dealers are always looking for new customers. Snap Finance brings in new customers. These individuals didn’t previously buy in their establishment because there wasn’t a finance product that worked for them.

West Creek: Our leasing options give retailers access to consumers who do not qualify for traditional credit. If a dealer only offers a Tier 1 credit card product, then they are not providing options to 40% of the U.S. consumer market. Most retailers experience anywhere from a 5% to 30% boost to their business with West Creek.

MTD: What sets you apart from other finance companies?

Acima: Price, customer focus and merchant support set Acima apart. Here’s a breakdown.

Price: Acima’s offering has no merchant discount or fees.
Customer focus: Acima reports customer payments back to Experian. This helps our no-credit and low-credit customers build credit history. By reporting to Experian, Acima is working to help customers advance up the credit spectrum to where they can qualify for a dealer’s traditional prime options. No other subprime financing companies offer this benefit. Our customer focus is why Acima is the highest rated, most reviewed subprime financing company on Google.
Merchant support: Acima’s nationwide sales team and in-field support offer the dealer a level of service and ongoing support that is second-to-none.

Kornerstone Credit: Our internet-based mobile application takes 30 seconds or less to complete, with an almost instant response. It’s currently the quickest in the industry.

We make ourselves available anytime our tire dealer partners need us (24/7). We ensure that our partners’ customers are happy, so they’ll come back to the store to do more business. We offer virtual and in-person training, whichever is better for our partners’ sales teams.

Progressive: Many things differentiate Progressive Leasing from other lease-to-own providers. Here are four.

Progressive Leasing is the largest and longest tenured virtual lease-to-own provider in the United States. We’ve helped more customers and more retailers than any other player in this space, and that experience allows us to partner with dealers to help drive material, sustainable growth.
Having done millions of leases in nearly 30,000 retail locations, we have a large, qualified customer base to market to on behalf of our retail partners.
Our in-house, U.S.-based technology and customer and merchant support teams offer highly reliable and scalable turnkey and custom technology solutions and world-class customer and retailer support.
Our data science team employs a broad data set of customer and market data along with the latest machine learning technology to maximize approval rates for each and every retailer we serve.

Snap: Three areas set us apart.

Snap’s superior decisioning and analytics lead to higher approval rates and higher approval amounts, resulting in industry-leading conversion rates.
A consumer-focused brand and experience. We know that a happy customer returns over and over again. Snap’s goal is to treat the customer the right way. As we partner with tire dealers, we know that this is key to a successful relationship.
Snap’s commitment to the customer is apparent in our Google ratings (4.5/5 stars) and internal survey metrics (82% of Snap customers would recommend Snap to a close friend or family member).
Snap Edge — our proprietary revenue generation engine for Snap tire dealer partners. Snap Edge is designed to find consumers and to lead them to our retailer partners. We know that as our partners grow so will our business grow. It is this alignment that is crucial to a true partnership.

West Creek: West Creek was built by subprime credit experts. We use big data and machine learning to give our dealers industry-leading approval rates. More approvals lead to a larger effect on our dealers’ bottom lines. 

MTD: How do you evaluate customers beyond FICO scores?

Acima: Without giving up our secret sauce, there is more to a person than their FICO score. We believe FICO is an outdated solution to a new age problem. Acima doesn’t care much about what happened years ago, we care about where your customers are now. We require three things from a customer: be a real person who we can identify, have a traditional checking account in good standing, and have a source of reliable income. If consumers can meet those three criteria, they should apply and be confident they will be approved.

Kornerstone Credit: We utilize proprietary data that looks beyond credit scores. We believe a customer’s job and banking history are worth more than their FICO score. No matter a customer’s credit history, they can still be approved for up to $5,000.

Progressive: We look at many data points besides credit scores including things like employment and banking history. By doing so we are able to approve many customers with less than perfect credit or with a thin credit file or no credit file.

Snap: There are numerous factors that come into play beyond FICO. Snap uses over 9,000 data points in its machine-learning models versus other credit models that use about 200. It is this significant difference in the amount of data and how it is compiled that leads to the Snap difference in approval rates.

West Creek: West Creek utilizes over 6,000 data points to build its machine learning models. The average competitor uses “off the shelf” models and minimal data points. This enables us to look for reasons to say “yes,” while others are looking for a reason to say “no.”

MTD: How can dealers contact you?

Acima: [email protected], (801) 297-1984,

Kornerstone Credit: Ben Carr at (801) 960-6653, [email protected],

Progressive: [email protected], (855) 222-0801,

Snap: [email protected], (833) 442-8840,

West Creek: 844.WC.TIRES (844) 928-4737,

About the Author

Ann Neal

Ann Neal is a former senior editor at Modern Tire Dealer.