Should I offer financing on big installs?
Short answer
Yes. A financing option turns a customer who can't approve $9,000 today into one who can approve $140 a month today, and it costs you a small dealer fee, not your margin.
Most customers aren't rejecting the job, they're rejecting the lump sum
A $9,000 furnace and AC replacement feels like an emergency expense even to a customer with the money, because it wasn't budgeted. Financing reframes the decision from 'can I come up with $9,000 right now' to 'can I afford $140 a month,' which is a much easier yes for most homeowners.
Financing partners charge you a dealer fee, typically in the mid single digits to low teens as a percentage, depending on the promotional terms offered to the customer. That fee is a cost of doing the deal, similar to a credit card processing fee, and should be built into your standard install pricing, not treated as a surprise hit to margin on the deals that use it.
Present it without pressure
Offer financing as one option among several, not as the only way to afford the job. Customers who feel pushed into financing they don't understand become chargeback and complaint risks. Present the monthly number clearly, alongside the cash price, and let them choose.
Presenting the financing option
You
“The full system replacement is $9,000 if you're paying cash or check. We also offer financing through our lending partner, which for most approved customers runs around $140 a month depending on the term you pick. Some people prefer to pay it off over time instead of writing one check. Want me to run the numbers for both so you can compare?”
Cost of offering financing on a $9,000 install
| Job price | $9,000 |
|---|---|
| Financing dealer fee (typical range)varies by promo terms, run your actual lender's rate | 6-12% |
| Fee at 9% | $810 |
| Net to you | $8,190 |
| Compare to: job lost entirely without financing option | $0 |
The math: Job price minus the financing dealer fee is your net. Compare that net against the realistic chance you close the job at all without a payment option, for most big-ticket residential work, financed net beats a lost sale.
Where owners get this wrong
- Building the dealer fee cost into only the financed price, which makes cash customers effectively subsidize it or makes financed pricing look inflated.
- Pushing financing as the only option instead of presenting it alongside cash pricing.
- Not training the office on how the approval process actually works, leading to confused customers mid-application.
Ask your version of this question
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Now run it against your numbers.
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