Every economic report says to brace for a coming recession. Interest rates are increasing.
When customers struggle to afford the basics, choices are made. One of the first things they do is to stop paying car insurance. Cancellations go through the roof. Buy Here Pay Here dealership teams spend significant time tracking insurance. The process is tedious, fraught with delays, human error – and costly in terms of real dollars and operational efficiency.
My recent travels allowed me to meet numerous Buy Here-Pay Here dealers in various states. A few consistent themes became apparent. “My insurance cancellations are higher than I have ever seen.” “Down payments are a third of what they were last year.”
“Sales have slowed dramatically.” “The cost of everything is through the roof!” While many of us have been through these cycles numerous times, this one contains some notable differences.
2022 looks to be a continuation of rapid evolution, inventory shortages, wholesale prices remain near-record levels, inflation, cost of capital is likely to rise and let us not forget the need to electrify the dealership.
What I can tell you is this… behind all the glitz and glamour of the fancy gadgets remains the most underrated profit engine and tax strategy dealerships do not take advantage of . . .