8 Things to Know When Choosing a Secondary Finance Provider

June 6, 2019

Lease-to-own (LTO) agreements give tire dealers the ability to offer a payment option for consumers who may not qualify for or do not want traditional financing. Here are 8 questions to ask when choosing an LTO payment program.

The companies providing details on their no-credit-needed LTO programs are: Acima LLC, Kornerstone Credit LLC, Prog Leasing LLC (Progressive Leasing), Snap Finance LLC and West Creek Financial Inc.

1. Length of time to qualify for your program?

Acima Less than 48 hours from the time you have submitted the required enrollment documents to us.
Kornerstone A tire dealer partner can be signed up in less than 24 hours.
Progressive In most cases we can qualify a tire dealer within one business day after we receive the necessary documentation.
Snap Dealers can sign up within minutes and immediately begin doing business. In addition, Snap will assign a Client Success Manager to assist in on-site training and with ongoing support.
West Creek Our process takes 10 mintus for a dealer to apply, and account setup is 24 hours or less.

2. Dealer transaction fees?

Acima The standard merchant discount is 0%.
Kornerstone We our let partners choose what works best for their business model. Ask your account manager about our options.
Progressive Progressive Leasing does not charge any dealer transaction fees. We offer our virtual lease-to-own services at no cost to the dealers.
Snap Fees are negotiated individually based on a number of factors but are similar to credit charge interchange rates.
West Creek We can customize our program to the dealer’s needs.

3. Technology required by the dealer?

Acima Any internet-connected device from smartphones to desktops.
Kornerstone An internet or mobile connection. Our technology works seamlessly through an internet-based mobile application. A customer can text to apply using a tire dealer partner’s unique mobile application link.
Progressive No technology is required of our dealer partners. Progressive Leasing offers fully hosted solutions for retailers with limited technical infrastructure, while investing in custom technical point-of-sale (POS) integrations for more technically advanced retailers.
Snap An interconnected device is all that is needed.
West Creek A computer or tablet with internet access. Our entire process is online, and no additional software is needs.

4. Your approval rate?

Acima Industry wide, tire merchants will see approval rates in the low-to-mid 80% ranges.
Kornerstone Our approval rate is as high as 80% with our top performing partners.
Progressive Customer approval rates vary between 50% and 80%, dependent on the retailer. We believe in transparency and will not promise approval rates that we believe we cannot sustain.
Snap There are a number of variables that impact approval rate, so each dealer’s experience will vary.  We are told by many dealers who have switched from similar products that Snap’s rates are very competitive if not better.
West Creek Our average dealer sees approval rates of 80%+.

5. Your approval amounts?

Acima Typically tire merchants will see approvals up to $3,000.
Kornerstone We approve up to $5,000.
Progressive Our average approval amount is $1,750.
Snap Snap has approval amounts of up to $3,500.
West Creek They vary from $500 to $5,000.

6. Your close rate?

Acima Our in-house account reps and nationwide sales team pull out all the stops to ensure you get applications funded. That said, around three out of four approvals will book.
Kornerstone We have partners who convert up to 90% of their applications into sales which can also increase their business close rate by up to 40%.
Progressive Customer close rates vary between 60% and 90%, dependent on the retailer.
Snap Snap’s close rate will vary depending upon multiple factors but is typically 80% – 85%.
West Creek We see an 80% conversion rate for our average dealer partner.

7. How long for a tire dealer to be paid the full amount of the sale?

Acima 24-48 hours.
Kornerstone Funding occurs within 24 hours via ACH (automated clearing house).
Progressive ACH payments are typically initiated the same day as the customer transaction, or the next day depending on when the lease agreement is signed.
Snap We fund within 2 business days.
West Creek West Creek provides funding to dealers via ACH transfer 24-48 hours after the customer's items are delivered.

8. How long for an LTO application to be processed?

Acima The application is quick and easy to fill out. Acima issues decisions within seconds of clicking “submit."
Kornerstone Our mobile application takes 30 seconds or less to complete and the approval happens in a matter of seconds.
Progressive Many customers complete our application in 5 minutes or less and nearly all of our customer lease applications are processed within 10 seconds of submission.
Snap The Snap application takes about 5 minutes to complete, and a decision is rendered in 5 seconds.
West Creek Less than one minute.
About the Author

Ann Neal

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