Sales talking points for this economy

Overcoming customer objections to rising interest rates

Both sales consultants and financial services managers are increasingly facing showroom and e-lead objections to higher interest rates on both new and pre-owned vehicles. Some customers are fully aware and reluctantly accept today’s higher interest rates while others are not as informed. Often, frustrated sales managers simply bark at sales consultants, “Focus on the monthly payments, not the interest rate!”. While, to a certain extent, they are right, many sales consultants and financial services managers will still need to deal with the elephant in the room, and provide reassurance and an explanation to make customers feel confident about buying in this market.

The following are concepts and word tracks that sales consultants, sales managers and financial services managers can share with customers when forced to confront this issue:

Interest rates are going up higher

“Interest rates are going to go up higher. Today you can lock in your rate and be protected from future hikes. 

In the highly unlikely event that interest rates go down in the near future, you could pay out this vehicle loan with a line of credit at a lower rate. With our dealer plan loans you can pay them off at any time without interest or administrative penalties. If rates go up, you are protected and locked-in with the lower, fixed rate. If rates go down, you have the option of refinancing your vehicle at a lower rate. It’s a no-lose situation.”

We don’t set the interest rates

“If you went to the bank and said that you weren’t happy with the higher interest rate on your mortgage, they might be sympathetic, but there isn’t much that they could do for you. The rates are based on the Bank of Canada. The same goes for a new vehicle loan. Interest rates are not set by the manufacturer or the dealership. They are set by the Canadian chartered banks. We all get our money from the same place.”

Don’t forget your trade-in

“Yes, the interest rates are higher, but so is your trade-in value. Much of what you are paying with a slightly higher interest rate is being offset by the highest trade-in values in decades. You might be losing a little on the interest rate, but you are gaining much of it back on the trade-in value.”

It all evens out

“Over the course of your 50+ year car-buying career, you will buy new vehicles at various different interest rates from zero per cent -13.75 per cent (1986), and everything in between. Interest rates are set based on the economy and Bank of Canada policy. 

Sometimes you will buy vehicles at low interest rates and sometimes you will buy vehicles at slightly higher interest rates. It is almost unavoidable, but it tends to even out over a longer period of time. The overall average of your interest rates over many years and many vehicles purchases time is extremely low. Look at it in the same way you would look at investments or the stock market.”

Your investments are happy

“Yes, the interest rate is higher. However, so is the return on your investments.

If you borrowed $60,000 at 5.49 per cent over 96 months that would work out to $14,272 in interest. However, if you also invested $60,000 you could get a guaranteed return of 5 per cent with a G.I.C. (today). That would work out to $29,435 in investment income. You are actually ahead by $15,162. 

When vehicle lending rates are zero to three per cent, your return on investments is the same, if not lower. When vehicle lending rates are higher, your return on investments is also the same—much, much higher.”

Through economic boon, recession and depression, people will continue to buy new and pre-owned vehicles. However, potential customers will always want to feel (and experience) upbeat, positive attitudes of their Sales Consultants and the reassurance that this is a good time to buy their new vehicle. 

About Chris Schulthies

Chris Schulthies is the president of Toronto-based Wye Management. Wye Management provides sales and management training (showroom and digital) for dealerships, dealer groups, OEMs and industry suppliers in Canada and the U.S. You can contact him at or 416.908.6346.

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