Well Fargo Commercial Distribution Finance will launch a dealer rewards program early next month in the wake of increasing consumer demand for pre-owned vehicles, Jeremy Jansen, president of the company’s motorsports group, told Powersports Finance.
“We are very excited to deliver inventory financing solutions to the pre-owned space,” he said. “To further promote pre-owned activity, within the next few weeks, Wells Fargo CDF will launch a new pre-owned pricing strategy to all preowned CDF customers. Dealers can expect incentives through lower financing rates based on their pre-owned volume. It’s the first time we have done something like this and we are excited to provide more customized solutions to our dealers.”
The program will operate like a frequent flyer program, he explained. “The more volume you do — or the more miles you fly — the better the financing rates.” Wells Fargo CDF’s goal is to reward and incentivize its dealers to use pre-owned lines versus using cash or local banks.
“From a dealer perspective, pre-owned is an amazing revenue and gross margin opportunity for a dealership,” Jansen said. “The gross margins in the pre-owned business are significantly higher than new [vehicle] business. It’s a wonderful ancillary revenue stream for a dealer, and in addition to the incremental bike sales that come from it, there is parts and accessories, and service opportunities.”
The program will be offered all CDF dealers who have pre-owned lines of credit and entice other CDF dealers who don’t have pre-owned credit lines, to open one with Wells Fargo CDF, Jansen said.
The rewards program comes on the heels of Wells Fargo CDF’s announcement on April 13, that it extended its financing program with Suzuki Motor of America Inc. The floorplan financier will continue to serve the manufacturer’s network of powersports and marine dealers with inventory financing.
Wells Fargo CDF provided $46 billion in financing for more than 33,000 dealers, and 1,400 distributors and manufacturers globally in 2016, according to the release.