Why Don’t We Generally Offer Payment Plans?
90% Default Rate
Far too often, I end up chasing people over trivial payments, costing more in human resources than what is owed. The hassle of dealing with false promises and unfulfilled payments is something I’d rather avoid.
Occasionally, I encounter families in genuine need, like those with a small family car rendered undrivable due to a failed AdBlue system. These people generally do pay up, and in emergencies, they sometimes need a little help. Though it's not something I prefer to offer, I do occasionally extend a helping hand. While they have options like asking family, banks, credit cards, or overdrafts, sometimes we step in to assist.
We helped a nice family out before Christmas with their DS3, and I think without our help their Christmas might have turned out another way.
However, the other kind of people present a different challenge.
These are individuals who want a Stage 1 remap and request finance for a £250 to £350 cost. Normally, I would decline, but on rare occasions, I agree, allowing them to split the cost over three equal payments. Unfortunately, we've seen about a 90% default rate on these agreements.
If someone needs credit to modify their car, it often indicates poor decision-making. From my experience, these individuals are more likely to default on payments.
Managing payment plans adds another layer of complexity.
We need systems to monitor and reconcile payments.
Recently, we discovered a missing payment only when reconciling our accounts. This backward approach highlights why I dislike offering credit. Proper management of credit accounts requires dedicated personnel, which isn't feasible for us. Therefore, we generally avoid offering payment plans.
What Happened with the Most Recent Defaulter:
A recent customer requested a Stage 1 map for his VW Golf .
He asked nicely and seemed genuine. Despite my wife advising me to decline and frankly telling me to tell him "sod off," I overruled her. Now, I have to admit she was right! lol
I usually refuse installment payments, but this time, I decided to give it a try. Back in April, I agreed to let him pay in three installments of £83 each, due on the purchase date and then monthly thereafter:
• Payment 1: 19th April
• Payment 2: 30th April (due on 19th May)
• Payment 3: Didn’t arrive (due on 19th June)
The first issue is that I don’t want to run credit control, so I forgot about the third payment until quite recently. When I finally checked the client's records and searched the bank records, I found that no payment had been received. I checked for the amount, his name, and his account number but couldn’t find it.
I’ve removed the messages with personal information etc, but the messages I have shared are direct copies word for word:-
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CUSTOMER – APRIL 6th
Hi im looking to have my Golf GIT 220 remapped it's been decated so needs a stage 1 map how much please??
CUSTOMER – APRIL 14th
I'm up for it tbh mate do you do pay monthly with a deposit??
CUSTOMER – APRIL 16th
I thought we can do a monthly payment plan with a deposit £50 and brake down the monthly payments over 3 months or whatever you do
ME – APRIL 16th
Then you might as well call it 3 payment of £83
And the first being due when we install it with then the following months thus it being three lots of £83
CUSTOMER – APRIL 16th
Ok brilliant I'll see you Friday thank you
ME – MAY 13rd
Can you let me know if you've sent the next months payment please
Thanks
Damien
CUSTOMER
Tuesday it will be mate 🤙🏼 the car is running tip top 👍🏼 just wanted to know if you can put a bit of a crackle on it please??
CUSTOMER
Can you do that m8 ??
ME
Yer we can add pops and crackles
CUSTOMER
More crackling tbh lol how much would that be I don't want silly if you know what I mean 😅
ME - MAY 24th
It'd be £75 to add a crackles map to the existing mapping. I would expect the payments to be up to date before doing any additional work of course.
CUSTOMER - MAY 24th
Ok cool yer of course 👍🏼
ME - JULY 20th
Hi mate
I've been going over our records and I don't seem to be able to find the last payment from you.
Can you let me know what date you sent it please.
I have payments on the 19th and 30th
19th and 30th of April that is. Did you send the last payment from another account?
CUSTOMER – JULY 20th
Thought I set it up to come out my friend I'll have to check my records but it won't be until Monday as I'm away with my kids 👌🏻
ME – KULY 20th
That's fine, let me know Monday what date it was sent so I can verify it and mark it as closed.
CUSTOMER – JULY 20th
Yer cool no worries 👍🏼
JULY 22nd Monday
NO COMMS FROM CUSTOMER
ME – July 23th Tuesday
Any joy on finding the payment date mate?
CUSTOMER – July 23rd
I haven't mate tbh I've been flat out with kids and work soon as I finish work tomorrow I'll take a look im really sorry but I'm sure 3 payments were made
ME – July 23rd
I've rechecked it mate and I cannot find it
I would really appreciate it if you could find the time to do it for me. As you say I am sure its been made, but if I cannot find it from my point of view I've not had it
So to be blunt with you, I simply haven't received it. If you could please check ASAP (like today) then we can avoid needing to fall out
CUSTOMER – July 23rd
How can you say I've messed you about m8 ?? I thought 3 payments have been made I don't check my account so I don't know until I get on a laptop yer I've told you If there's a mistake I'll sort it yer but it won't be until the 15th or 16th next month yer im sorry if the mistake is my end yer
ME – July 23rd
I shouldnt have to chase you for payment I am not a credit card firm
I agreed to the payment plan as you asked nicely and I only discovered you hadn't paid when we did the VAT return and I it didn't add up
I've not received it I asked you to look and you said you'd have it done for Monday and get back to me
Nothing from you (thats messing me about)
I contacted you Tuesday to which you said you haven't had time to look
Thats still called messing me about
I tell you what. I'll write off the £85 and make a post about it. No worries
So just to be clear. I haven't received payment in full. I will class is it as a default as you're in denial about sending it
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Now naturally it would be temping to shame the chap online, but this isn’t what this is about. He cannot pay it, he needs to lie about it and pretend hes sent it, he simply doesn’t have the money.
It was my risk to take out the outset, to be quite frank I was stupid to get involved but for whatever reason I decided to help him out to get stung.
But in future, I’ll be directing people to this post when they ask for credit as an example of why I say no
