In this installment of the series on the Value of Captive Finance, we illustrate the ways in which captive financing can be used to increase customer retention and loyalty

1. Impact of Captive Finance
TFS Concept Template
This model has been conceptualized from Transcendent Research © Transcendent www.transcendent.com.sg
Increase Customer Retention
Properly leveraged captive financing
can significantly increase customer
touch-points well beyond the point of
sale. As such, they can be used as
opportunities to notify customers about
trade-in options, thereby incentivizing a
shorter turnover cycle as well as up-
sells. Furthermore, it’ is a prime
opportunity to increase brand reliance
by offering restructuring options when
customers find themselves in difficult
situations. In this way, captive
financing can be a tool for building and
retaining loyalty with customers by
maintaining communication with them
throughout their experience of their
asset’s lifecycle and encouraging them
to return to the brand for their next
purchase.
Allegiance:
Work with customers on restructuring rather than
repossession
Renewal:
Target customers at end of product lifecycle with pre-
approved new offers
Loyalty:
Retain customer by offering access to different models
Banks
Captive 46%
31%
37%
Cash
Buyer
Customer Retention Rates
by Purchase Method