Running from January 27 to April 15, the 2019 tax filing season is the perfect time for subprime finance departments to look for new business and, at the same time, comb through old deals that were turned down because of down payment issues.
This Is Tax Refund Season
The 80 days of the 2019 tax filing season represent the most important 11-plus weeks of the year for dealerships with special finance departments.
That’s because those tax refunds, for many subprime borrowers, represent the one time of the year that they may have the opportunity to buy a car. A tax refund is often the largest lump sum of cash that many of these consumers have all year.
How are we so sure these buyers are even thinking of financing a vehicle? Glad you asked.
From January 15 to 26 of this year, Enterprise Car Sales surveyed 1,000 U.S. adults between the ages of 18 and 60 with the following results:
- 58% of respondents said they're planning to spend their refunds as a down payment on a car.
- Of those buyers planning on saving their refunds, 19% said they're saving to buy a vehicle down the road.
Have a Game Plan
In order to take advantage of these buyers entering the market armed with down payments, your store – in particular your special finance department – needs a game plan to take advantage of the busiest time of year for used car shoppers. Here are some suggestions:
- Inventory – Stock the right inventory. Subprime borrowers, in particular, are payment conscious, so your buyers should concentrate on back-of-book vehicles in the $12,000 to $16,000 wholesale range.
- Budget – Reduce spending in other areas in order to increase your subprime department’s marketing budget.
- Leads – Bring in new customers by increasing spending on quality leads. Auto Credit Express can provide your store with new car leads, used vehicle leads, and subprime auto leads.
- Revive old deals – Most importantly, now is the time to sift through every deal that couldn’t get done over the previous 12 months. Odds are, many of them were TD’d because the customer either had no down payment or the down payment they had wasn’t large enough.
Tax Season Isn't Over 'Til it's Over
Keep in mind that April 15 doesn’t mark the end of tax season. According to the IRS, nine out of 10 filers who choose direct deposit have their refund in 21 days, so if they file by April 15, payments are still being transmitted into May.
For paper filers, the refund could take anywhere from six to eight weeks longer. This puts the tail end of the tax season, when filers get their tax refund, near the end of June.
It’s Time to Get in the Game
With new and used vehicle margins shrinking, now is the time to step up your game if you have a subprime department, or get in the game if you lack one. At Auto Credit Express, we’ve been supplying premium subprime leads to dealerships like yours for over two decades.
Don’t have the time to work them? Let the dedicated professionals at our automotive BDC call center carry the load for you. This way, your salespeople can concentrate on what they do best – selling cars!
We also offer direct mail programs and bankruptcy marketing campaigns. Now, more than ever, you need a software product that can make your follow up more efficient and more effective.
To see how our services can increase your bottom line, call us today at 888-535-2277, or simply fill out our quick contact form online, and we'll be in touch.