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Tax Time: That Decisive Moment--Don't Miss it!
Bill Elizondo is the COO of AFS Dealers and has nearly three decades of experience in various roles working with three of the largest used car dealers and finance companies in the industry.



It's here…and then it's gone. Tax time for car dealers is exciting. The salespeople are a-buzz knowing that the customers walking up might have $6,000 to $8,000 in cash ready to put down on a new or used vehicle.  To the in-house LHPH/BHPH dealer, this can really make the entire year, or conversely, can hurt them through the slow months. The large down payments can give opportunity to buy more vehicles or replenish the cash used to buy additional vehicles. With LHPH, you have early buyouts or returns that will increase your profits, and you still have the residual to sell if the customer finishes paying off the lease. On the other hand, not selling enough vehicles and getting ample upfront cash can cause a lack of cash flow later that can cripple a business.

So, how do you get your fair share? Marketing and collections.

Get the word out as much and as often as possible. Use companies like Tax Max in your dealership that can file your customers' tax returns and print the refund check on site. Contact local tax return companies, drop off flyers, and offer a gift card or some incentive to have them send you customers.

Tell everyone! The more you inform your customers of your plan, the more you create that excitement that will ensure your success. Depending on the size of your budget, you can send out mailers, have banners made, and send out email blasts to your current customers.  If your budget doesn’t allow for a big marketing plan, you need to get creative. Make up some flyers on your own copy machine. Take the fliers to your local pizza or sandwich delivery shop and ask them to attach the flyers to their pizza boxes or sandwich bags. To incentivize the businesses, buy some food from them! Have it delivered on Fridays when you have the most customers. People are fed and you get some sales. It’s a win-win!

Stand out to increase your marketing opportunities. Create a plan that offers a special incentive that immediately makes your customer do a double take to see if they saw your offer correctly. Double the tax refund for customers. Add on a special deal for the first 25-50-100 customers. You can also incentivize the vehicles that are your toughest sellers. Whatever it is, make it stand out from your competitors. The in-house advantage is that you are making the decision. No need to get approval from a bank or finance company.

Prepare your team. Everyone in your organization must understand and be prepared to promote and sell the promotion. Doing some upfront training, role playing, and discussing the offers that you have for tax season can only increase your chances for success.

Catch up your delinquent accounts. Save a loss by getting customers to use their refunds to get back in their cars or make payments ahead of time. This strategy is a main driver of a successful tax season for your in-house business. The one phrase that every LHPH/BHPH dealer knows: "Cash is KING!" Collections in the in-house industry is the backbone and the true success of the business.

Marketing to your collections accounts can be a similar process to marketing to lessees and buyers. Send a mass text, email, or letter to your customers letting them know that they can file their taxes at your dealership, if you have that option, or let them know that they can pay their accounts current with their refund. Now is the time to get your delinquencies as low as they can go and collect, collect, collect!

Discuss the collections plan with your employees and let everyone know the expectations for all of your active customers. Role playing on how to collect more money and ask for additional payments, as well as continuing to build that relationship are extremely important and should lessen the number of repossessions, at least for a period of time. Any way you look at it, tax season can be an opportunity to amplify your success in the in-house financing industry. How will you use it to your advantage?

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