CHICAGO -

Mudd Advertising, Allied Solutions and Auto Financial Group have teamed up to offer a residual-based finance tool that aims to demonstrate what the companies believe to be the benefits of a 24- or 36-month balloon finance alternative.

Among other benefits, officials contend the new iAutopayment RBF can help dealers keep customer loyalty steady and maintaining continual trade cycles, while at the same time pulling in profits.

Explaining more about iAutopayment RBF, it centers on what officials called the “two most important buying needs of today’s consumer,” those being low monthly payments and trade cycle management.

They contend that payments calculated via RBF can be as much as 40 percent lower than those done via conventional methods. When it comes to the trade cycle, the companies said this program allows consumers to trade out of their ride much quicker.

“Statistics show that the average consumer is looking to trade in their current vehicle after 26 months into a 60-month contract,” the companies claimed. “This scenario creates an in-equity position for the consumer and a lost customer for the dealer.

“They do not return to the originating dealer for a couple of basic reasons: 1) They know they owe more for the car than it’s worth. 2) They do not want to return to the same store due to embarrassment or they blame original dealer for their current predicament," they added.

Officials went on to explain how iAutopayment RBF can help change this issue. When dealers utilize the program, they work with participating financial institutions.

The used-car buyer enters a “walk away” balloon payment contract, where officials contend payments are as much as 40 percent lower than traditional contracts.

“The key with this offer is that because depreciation of a vehicle was consumed by the first ownership, the 24-month residual approximates its current wholesale value,” they explained, also sharing the “trifecta of gains" from this, as listed below:

—The dealership maintains customer loyalty and continual trade cycles while still profiting.
—The consumer has affordable payments in a vehicle they desire with a likelihood of decreasing ownership time for continual upgrade.
—The financial institution gains business through dealerships by offering the program that benefits its members.

"As life bounces back as usual and our economy is set to reestablish, iAutopayment was set with one main objective: to satisfy a new opportunity that puts buyers into the cars they want and allow dealerships the possibility of offering more selection and the profitability needed to grow and thrive,” the companies stressed.