Why Purchase PIPPs?

By James Vien - December 22, 2021

Payment Interval Purchase Plans otherwise known as “PIPPs” have been around for years. However, during these unprecedented times, this financial tool may now see increased usage on the horizon. With unemployment surging up and down daily, how can a finance company play it safe when dealing with a buy-here-pay-here dealership?

Traditional credit scoring and models can only do so much to predict the risk of a loan or even how it will behave over the term. PIPPs can help shed a realistic light on the customer beyond the historical numbers. If approached with a fundamental plan, buying small portions of the loans on your terms can save the finance company thousands if not millions of dollars in potential losses from deals gone bad.

What happens are the end of the PIPP term? The finance company can buy more payments at a discount or even just service the loan on behalf of the dealer for a predetermined fee if they do not want to assume the full risk of the loan. These benefits allow the dealership and the finance company to conduct business and foster trust of partnership while containing the financial risk.

Finally, PIPPs provide a way to further strengthen that partnership by including discounts with the purchases of those payments to perpetuate growth and revenue for all involved. PIPPs are clearly a win/win for all parties involved from the end customer who drives that vehicle off the lot to the finance company that can try that “iffy” loan without committing to a full term of uncertainty.

Why choose Deal Pack to handle your PIPP plans? Deal Pack features fully-integrated accounting so all of the entries for the PIPP are properly taken care of accurately and efficiently. Secondly, Deal Pack allows for simple entry of discounts and easy addition of buying additional payments of the customer’s loan (or even just loan servicing) should the finance company wish to wait just a little longer to decide to carry it over the long term.

Finally, Deal Packs “one stop shop” allows the user to take a payment from the customer and pay the dealership for the loan payment within a matter of minutes saving everyone time from start to finish.

Deal Pack is clearly the risk-free win/win for everyone! Give us a call today at 1-800-526-5832 or email us at support@abcoa.com to discuss how Deal Pack can empower your company to take better care of you customers!

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