Despite the increase in the average car price, more and more franchise and large independent dealers are buying into the 500-plus beacon score range to help generate more sales on the new and used car side.
In order to get these lower tiered buyers financed, the lender typically requires a larger down payment while not providing the option of extending the credit limit, making the down payment more important than ever. For the consumer, finding that extra disposable income for the necessary down payment this time of year is becoming more and more challenging and often results in the dealership turning down more customers than they would like.
There is a solution. Most consumers and dealers are aware of what the next few months, quickly approaching, can help provide to bring some down payment relief. Tax season is the only time of the year where many Americans receive a large windfall of disposable income. Every year, the Internal Revenue Service will stimulate the economy by refunding billions of dollars back into the hands of the American taxpayers in the form of a tax refund.
Many Americans will take these available dollars and make a major purchase, including a car. With a large tax refund down payment, customers are able to receive better financing, lower monthly payments and gain access to the car, truck or SUV that fits their family’s needs. With customers having access to their tax refund, dealers typically see larger down payments with a higher approval percentage. Plus, many dealers experience double, even triple gross on many deals, as they are able to provide more F&I products to the customer as an added benefit.
As you’ve probably noticed, tax season has experienced several significant changes over the last few years. The most significant change has been the implementation of the PATH Act by Congress and the IRS. The PATH Act requires the IRS to delay the processing and funding of any tax return that claims certain refundable credits until the end of February. Unfortunately, those taxpayers who are impacted and experiencing tax refund delays by the PATH Act are most likely the consumers who will need to access their tax refund to help provide a larger down payment to get approved. These customers can’t wait until the end of February!
So, what if your dealership could help your customers get access to their tax refund check up to six weeks before the IRS releases? What if there was a program that would send the tax refund check to your dealership first to assist in the down payment? Don’t you think most customers would like to access their refund earlier, giving them a better chance of being approved and allowing them to get the car they need now?
Well, we all know the early bird gets the worm. This simple proverb means that if you do something early or before anyone else, you will have an advantage and therefore be successful. There is where a tax consultant can help your dealership increase sales and generate larger down payments this tax season.
Your tax consultant can access your customer’s tax refund at your dealership weeks before the IRS releases. The consultant can prepare your customer’s tax return and have the refund sent back to the dealership within hours to assist in the down payment. Now your dealership can access down payment dollars (upon bank approval) within hours to help the customer get approved for the car of their choice that day.
The down payment is more important than ever, and the tax refund is a tremendous funding source to help customers get the down payment needed to get them approved. Remember, the early bird gets the worm. Set yourself apart from the competition this tax season by offering a tax refund program, which will help your customers access a portion of their tax refund weeks before the IRS releases it and allow your dealership to steal market share this tax season.
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