Auto part stores have long been vital in empowering consumers to fix their own vehicles. This is because accessibility to affordable, quality parts is what allows those consumers to handle the tasks they would usually hire a mechanic to fix. Even mechanics enjoy the convenience that parts stores offer, but there is one thing that can make things a little less accessible—the price.

Fortunately for consumers and businesses that patronize these stores, convenient auto parts financing options are becoming more and more popular throughout the industry. By offering financing, parts stores ensure every customer has the funds available to get what they need, with the ability to spread out the bill as much as they need to.

Today we are going to cover a few things about auto parts financing, including:

• The benefits of auto parts financing.
• The most important types of financing to offer.
• How to offer auto parts financing.

After reading this article, business owners should know exactly how they can offer flexible payment options to customers and why they should.

The Benefits of Auto Parts Financing

Financing does more than just help consumers. In fact, there are many aspects of financing that bring even more to the table for businesses. The following are the most significant benefits of offering flexible payments.

• Higher conversion
• Larger average cart size
• More streamlined purchase process
• More consistent customer satisfaction

Each of these benefits would be sufficient on its own to justify incorporating some sort of consumer financing. But, in combination, they make it a no-brainer for business owners around the country, as financing improves almost every KPI for any sales-driven industry.

The Most Important Types of Financing to Offer

“Consumer financing” is an umbrella term that refers to a list of many different financial products. Businesses that offer certain choices may see a more significant improvement in the aforementioned KPIs than others, and this comes down to knowing the right financing options to offer for their industry.

For auto parts financing, the most important products are:

• Buy now, pay later (BNPL) payment plans
• Store credit cards
• Consumer Loans

BNPL Payment Plans

BNPL payment plans are the most popular in retail spaces like auto parts stores because of their low impact on credit, low-to-no interest, and simple payment structures. Essentially, a BNPL payment plan is a type of short-term loan that doesn’t report to credit bureaus the same way as a traditional loan and often comes with no interest charges if paid in four equal payments.

Since they don’t report the way a normal loan does, they don’t impact credit at all unless payments are missed or paid late. Additionally, zero interest is a standard for the “pay-in-four” model in which BNPL typically comes, and the interest on longer payment plans is usually still lower than that of a personal loan of similar size and length.

Store Credit Cards

A longtime favorite of retailers, store credit cards serve as both a financing option and a customer loyalty tool. This is because store credit cards often offer advantageous rewards and interest rates when consumers shop at the store from which they received it. A permanent line of credit is an attractive option for repeat customers and mechanics with a frequent need for parts, but not as much more one-time buyers. That is why it comes second on this list.

Consumer Loans

Consumer loans are more of an “emergency option” for customers with an expensive need for a one-time purchase. They also work well for consumers who are skeptical about financing products they aren’t familiar with, like BNPL. Traditional loans are loved for their predictability and simplicity, with a pre-determined payment schedule and low-interest rate, making them a set-it-and-forget-it option for those who have to make a large purchase.

How to Offer Auto Parts Financing

Offering consumer financing is a simple three-step process:

1. Find a partner that fits your needs
2. Contact them and request a demo
3. Agree to terms

These three steps can be done in less than a week, with deployment only taking another week or so with a quality lending partner. In regard to what a “quality” partner looks like, the idea is simple: Find a partner that offers all of the financing products that your business needs and does so in a way that is easy and quick for both you and your customers to understand and navigate. 

Skeps is a great example of a quality auto parts financing partner.

Offer Auto Parts Financing With Skeps

Skeps offers a comprehensive, end-to-end consumer financing program that helps businesses modernize their entire payment process. We go above and beyond one-click payment, also offering a one-click application process for several different types of consumer financing, including:

• BNPL
• Store credit cards
• Consumer loans and leases

If you’re looking to partner with a forward-thinking fintech company that will keep consumers' eyes on the purchase while offering best-in-class financing, Skeps is the perfect fit.