Did you know that in 2017, the number of Americans with auto loans reached 108.66 million? This figure is not really unexpected because having a car has become a necessity in the country. Additionally, almost half of the American population relies on loans to purchase a car through banks as their top choice. According to Statista, in 2018, the total open car loans reached 368 billion USD. The most interesting part is that the number of people availing car loans is increasing. With this statistic in mind, do you think the inclusion of offering installment payment plans to your customers in your sales plan will increase the revenue of your business? To know that, let’s tackle this type of plan.
What Is an Installment Payment Plan?
An installment payment plan is a payment plan where the customers pay a single purchase of items or services in multiple segments, as agreed by the seller and the buyer. This payment agreement is somehow similar to a recurring payment plan because it also allows the buyer to pay in multiple segments. However, it differs from the way the buyer receives the product or service. Through a recurring payment plan, the seller receives the payment regularly.
A monthly Netflix subscription and college student tuition payments are a few examples of this payment option. Installment payment plans, however, lets the buyer receive the item right away after the payment contract signing. Car loans are an excellent example of an installment payment plan. This affordable payment method promotes more sales for the company since it allows the buyers to purchase a product, such as home appliances, without hurting their budget.
Advancement in the Installment Payment Plan
One of the benefits that people get from technology advancement is the convenience it offers. For example, traditionally, a company loan collector visits the customer through the provided address to collect the monthly payment for the installment payment plan. This payment method costs businesses a significant amount of money for the collector’s fee. Luckily, you can opt-out of this service and replace it with a more advanced one, which is the bank auto-debit. Through this method, you can collect the buyer’s payment through their debit account. Aside from that, you can also collect their payments through credit cards. However, not everyone has these luxuries. Still, you can allow them to pay through third-party outlets, which, most likely, is available in their areas, such as convenience stores’ payment kiosks.
10+ Installment Payment Plans Samples
Part of the process of the installment payment method is providing an installment agreement. Create one for your company and use the following examples and templates as your reference. You can download these zipped documents in PDF format for free.
1. Student Accounts and Installment Payment Plans Sample
2. Installment Payment Plan Fact Sheet Template
3. Installment Payment Plan Agreement Sample
4. Student Installment Payment Plan Application Sample
5. Tuition and Fee Installment Payment Plans Template
6. Payment Plan Installment Schedule Sample
7. Installment Payment Plan of Redemption Contract
8. Installment Payment Plan Request Sample
9. Installment Payment Plan in PDF
10. Installment Payment Plan Policy Sample
11. Motor Vehicle Insurance Installment Payment Plan Sample
Best Practices in Managing Installment Payment Plans
Managing the installment payment plan for your company can be difficult, especially as the number of customers availing this service increases. However, we included the following tips, which you can apply for easier management.
1. Let the Customer Decide the Billing Date
Most of your customers will rely on their paychecks to pay their bills. Some of the employers pay their people every month, but most of them credit it every 15 days. With this reason in mind, it should be beneficial for both parties if you will allow the customer to choose the payment schedule. It will lessen the possibility of payment delays.
2. Brief the Customers of the Expected Details that Will Appear in Their Statement
Though not all, many of your customers will regularly check the transactions of their credit cards or debit cards. Imagine that one time they’ll check their account details to see an unknown purchase. They’ll get mad. To avoid this event, ensure that the billing description that will appear in your customers’ account is accurate. Using a different name aside from your company may lead to legal issues. You don’t want that to happen. If you are using another business name, make sure that you inform the buyer.
3. Provide an Easily Accessible Cancelation Policy Document
For some reason, customers may want to cancel a purchase. If it is the case, a proper protocol must apply to maintain order. Make sure that he/she has a copy of the cancelation policy during the contract signing. You should also provide a website where they can easily access this type of procedure. If they cancel the purchase, make sure to discontinue the billing to avoid any customer disputes.
4. Obtain a Customer Service Contact Information
Needless to say, customer service plays a crucial role in a business. Thus, as a business leader, you should provide one. Many companies offer a toll-free number for this service. We recommend that you include this contact information on your company website for customers to access it anytime.
5. Provide Clear Information About the Billing Information
During the contract signing, you should clearly explain the billing information. However, if your customer signed a 12-month contract, most likely, they are going to forget the details of the billing arrangement. Thus, we recommend that you send a payment notice that includes the billing information days before the transaction.
Including an installment payment plan in your business sales strategy will definitely increase your business sales, especially if your target market is the middle class, where the source of income mostly comes from their regular paycheck. With the information that we have discussed in this article, you now know where to set off from here.
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