While consumers are eagerly awaiting tax refunds, dealers are watching wholesale prices and preparing for one of their busiest seasons. In a recent conversation with Joe Lescota, NIADA director of dealer development, actions dealers should consider taking during tax season were highlighted. Additionally, Lescota identified the three biggest challenges independent dealers face, the importance of analyzing what dealer inventory sells and leveraging available training and resources. Access the full conversation and a summary of the topics covered below.
The three big challenges all independent dealers face
When asked about the biggest challenges independent dealers face, Lescota was quick to cite three issues he frequently sees with dealers: dealers not putting enough strategy behind their marketing and promotional efforts; inconsistent processes and procedures that make for unproductive employees and cause significant capital and legal issues; and dealer inventory management issues such as knowing how much inventory to have, when to buy inventory and how to price dealer inventory – all common, but expensive, problems to have.
Tax season has shifted
In the last three years the days to release tax returns or refunds has been extended. This delay in tax return refunds has caused disappointment for a number of dealers who do not see the profits they anticipated during what they perceived as tax time. Lescota recommends dealers take initiative to adjust to the new tax season and shift inventory purchasing strategies accordingly.
Buy early, do the math and buy smart
Wholesale prices go up as tax season approaches. Buying early will give dealers a competitive edge; however, it’s important to know individual markets, research pricing and take the whole vehicle into consideration. Dealers also need to keep their holding costs per day in mind when purchasing inventory.
Training and Resources are Available
Lescota also highlighted the importance of using the resources and training materials available from state independent dealer associations and the National Independent Automobile Dealers Association. Programs like the Certified Master Dealer Class can help a dealership become more profitable if the time is taken to learn and understand best practices.