Binmaha Almazroui Marketing plan for Automobile Financing without Resorting to banks.
Preface:
The United Arab Emirates, Abu Dhabi included, had followed the open market model in its economic development. Major global trademarks have always found it easy to have representative agents in the UAE market. Major automobile manufacturers have long had their agencies and dealers all over the country . These dealers often belong to wealthy families, and they are invariably solvent companies and individuals who do not need the support of banks to market and sell their cars.
On the other hand, loan policies in local banks are putting so many limitations and restrictions on clients wishing to apply for car loans . The vast majority of citizens and expatriates have already taken different kinds of loans. the vast majority of citizens apply for, and to get, new car loans.
The Plan:
This is a plan where car dealers can adopt a self-financing plan to increase their sales considerably, save a considerable margin of profits usually taken by the banks and promote customer loyalty.
The main elements of this plan are the following :
1- Cars are sold to clients against checks over three years. For more flexibility, the checks could be left undated.
2- The dealer would ask for a guarantor in case the client was unknown or his solvency was questionable. The Guarantor would deposit four checks, covering the car value in case of default.
3- The car shall be pledged either to the case dealer or to the insurance company to ensure it wont leave the country.
4- The car dealer would coordinate with an insurance company to develop a scheme that would cover the value of the sold car, or the remaining sum of money if there was a down payment
5- The Insurance company would set follow-up team of two or three employees to maintain contacts with the customers and to remind them of their due payments.
6- Clients would sign a legally binding instrument by which they pledge to respect and preserve the interests of the company.
7- The payments shall be flexible and will not take the rigid form of previously set monthly payments like those imposed by banks. The follow up work would insure the collection of sufficient and timely payments by clients through phone calls, reminders, soft pressure, etc.
8- The follow up team shall develop a database of information about the clients, their businesses, income, interests, real estate, family members, commitments / liabilities, strengths, weaknesses, etc. This will enable the team to deal effectively with the clients, after knowing a great deal about their backgrounds.
It is expected that insurance companies would welcome such a plan, because it runs in harmony with their line of work, and it will certainly add to their business.
Profitability:
Compared with the bank-financing option, this plan shall be very profitable to all parties concerned. The interest imposed by banks on car loans goes anywhere between 14% and 16%. If this interest, or even a lesser one, Is levied and shared between the car dealer and the insurance company, That will add considerably to the profitability of the dealership, And constitute a good return on investment (ROI). The scheme would also increase sales, Thus doubling profitability. The plan will also be profitable to the insurance companies, By opening a new venue for their business. The clients, On the other hand, Will feel more comfortable with this option which will spare them the rigid banking policies of monthly payments and high interests.
Mohamed G Binmaha Almazroui
Preface:
The United Arab Emirates, Abu Dhabi included, had followed the open market model in its economic development. Major global trademarks have always found it easy to have representative agents in the UAE market. Major automobile manufacturers have long had their agencies and dealers all over the country . These dealers often belong to wealthy families, and they are invariably solvent companies and individuals who do not need the support of banks to market and sell their cars.
On the other hand, loan policies in local banks are putting so many limitations and restrictions on clients wishing to apply for car loans . The vast majority of citizens and expatriates have already taken different kinds of loans. the vast majority of citizens apply for, and to get, new car loans.
The Plan:
This is a plan where car dealers can adopt a self-financing plan to increase their sales considerably, save a considerable margin of profits usually taken by the banks and promote customer loyalty.
The main elements of this plan are the following :
1- Cars are sold to clients against checks over three years. For more flexibility, the checks could be left undated.
2- The dealer would ask for a guarantor in case the client was unknown or his solvency was questionable. The Guarantor would deposit four checks, covering the car value in case of default.
3- The car shall be pledged either to the case dealer or to the insurance company to ensure it wont leave the country.
4- The car dealer would coordinate with an insurance company to develop a scheme that would cover the value of the sold car, or the remaining sum of money if there was a down payment
5- The Insurance company would set follow-up team of two or three employees to maintain contacts with the customers and to remind them of their due payments.
6- Clients would sign a legally binding instrument by which they pledge to respect and preserve the interests of the company.
7- The payments shall be flexible and will not take the rigid form of previously set monthly payments like those imposed by banks. The follow up work would insure the collection of sufficient and timely payments by clients through phone calls, reminders, soft pressure, etc.
8- The follow up team shall develop a database of information about the clients, their businesses, income, interests, real estate, family members, commitments / liabilities, strengths, weaknesses, etc. This will enable the team to deal effectively with the clients, after knowing a great deal about their backgrounds.
It is expected that insurance companies would welcome such a plan, because it runs in harmony with their line of work, and it will certainly add to their business.
Profitability:
Compared with the bank-financing option, this plan shall be very profitable to all parties concerned. The interest imposed by banks on car loans goes anywhere between 14% and 16%. If this interest, or even a lesser one, Is levied and shared between the car dealer and the insurance company, That will add considerably to the profitability of the dealership, And constitute a good return on investment (ROI). The scheme would also increase sales, Thus doubling profitability. The plan will also be profitable to the insurance companies, By opening a new venue for their business. The clients, On the other hand, Will feel more comfortable with this option which will spare them the rigid banking policies of monthly payments and high interests.
Mohamed G Binmaha Almazroui
Preface:
The United Arab Emirates, Abu Dhabi included, had followed the open market model in its economic development. Major global trademarks have always found it easy to have representative agents in the UAE market. Major automobile manufacturers have long had their agencies and dealers all over the country . These dealers often belong to wealthy families, and they are invariably solvent companies and individuals who do not need the support of banks to market and sell their cars.
On the other hand, loan policies in local banks are putting so many limitations and restrictions on clients wishing to apply for car loans . The vast majority of citizens and expatriates have already taken different kinds of loans. the vast majority of citizens apply for, and to get, new car loans.
The Plan:
This is a plan where car dealers can adopt a self-financing plan to increase their sales considerably, save a considerable margin of profits usually taken by the banks and promote customer loyalty.
The main elements of this plan are the following :
1- Cars are sold to clients against checks over three years. For more flexibility, the checks could be left undated.
2- The dealer would ask for a guarantor in case the client was unknown or his solvency was questionable. The Guarantor would deposit four checks, covering the car value in case of default.
3- The car shall be pledged either to the case dealer or to the insurance company to ensure it wont leave the country.
4- The car dealer would coordinate with an insurance company to develop a scheme that would cover the value of the sold car, or the remaining sum of money if there was a down payment
5- The Insurance company would set follow-up team of two or three employees to maintain contacts with the customers and to remind them of their due payments.
6- Clients would sign a legally binding instrument by which they pledge to respect and preserve the interests of the company.
7- The payments shall be flexible and will not take the rigid form of previously set monthly payments like those imposed by banks. The follow up work would insure the collection of sufficient and timely payments by clients through phone calls, reminders, soft pressure, etc.
8- The follow up team shall develop a database of information about the clients, their businesses, income, interests, real estate, family members, commitments / liabilities, strengths, weaknesses, etc. This will enable the team to deal effectively with the clients, after knowing a great deal about their backgrounds.
It is expected that insurance companies would welcome such a plan, because it runs in harmony with their line of work, and it will certainly add to their business.
Profitability:
Compared with the bank-financing option, this plan shall be very profitable to all parties concerned. The interest imposed by banks on car loans goes anywhere between 14% and 16%. If this interest, or even a lesser one, Is levied and shared between the car dealer and the insurance company, That will add considerably to the profitability of the dealership, And constitute a good return on investment (ROI). The scheme would also increase sales, Thus doubling profitability. The plan will also be profitable to the insurance companies, By opening a new venue for their business. The clients, On the other hand, Will feel more comfortable with this option which will spare them the rigid banking policies of monthly payments and high interests.
Mohamed G Binmaha Almazroui
Preface:
The United Arab Emirates, Abu Dhabi included, had followed the open market model in its economic development. Major global trademarks have always found it easy to have representative agents in the UAE market. Major automobile manufacturers have long had their agencies and dealers all over the country . These dealers often belong to wealthy families, and they are invariably solvent companies and individuals who do not need the support of banks to market and sell their cars.
On the other hand, loan policies in local banks are putting so many limitations and restrictions on clients wishing to apply for car loans . The vast majority of citizens and expatriates have already taken different kinds of loans. the vast majority of citizens apply for, and to get, new car loans.
The Plan:
This is a plan where car dealers can adopt a self-financing plan to increase their sales considerably, save a considerable margin of profits usually taken by the banks and promote customer loyalty.
The main elements of this plan are the following :
1- Cars are sold to clients against checks over three years. For more flexibility, the checks could be left undated.
2- The dealer would ask for a guarantor in case the client was unknown or his solvency was questionable. The Guarantor would deposit four checks, covering the car value in case of default.
3- The car shall be pledged either to the case dealer or to the insurance company to ensure it wont leave the country.
4- The car dealer would coordinate with an insurance company to develop a scheme that would cover the value of the sold car, or the remaining sum of money if there was a down payment
5- The Insurance company would set follow-up team of two or three employees to maintain contacts with the customers and to remind them of their due payments.
6- Clients would sign a legally binding instrument by which they pledge to respect and preserve the interests of the company.
7- The payments shall be flexible and will not take the rigid form of previously set monthly payments like those imposed by banks. The follow up work would insure the collection of sufficient and timely payments by clients through phone calls, reminders, soft pressure, etc.
8- The follow up team shall develop a database of information about the clients, their businesses, income, interests, real estate, family members, commitments / liabilities, strengths, weaknesses, etc. This will enable the team to deal effectively with the clients, after knowing a great deal about their backgrounds.
It is expected that insurance companies would welcome such a plan, because it runs in harmony with their line of work, and it will certainly add to their business.
Profitability:
Compared with the bank-financing option, this plan shall be very profitable to all parties concerned. The interest imposed by banks on car loans goes anywhere between 14% and 16%. If this interest, or even a lesser one, Is levied and shared between the car dealer and the insurance company, That will add considerably to the profitability of the dealership, And constitute a good return on investment (ROI). The scheme would also increase sales, Thus doubling profitability. The plan will also be profitable to the insurance companies, By opening a new venue for their business. The clients, On the other hand, Will feel more comfortable with this option which will spare them the rigid banking policies of monthly payments and high interests.
Mohamed G Binmaha Almazroui
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