by BHPH United - Posted 1 month ago
In the Buy Here Pay Here (BHPH) industry, one popular saying
is, “If it doesn’t drive, the customer won’t pay.” This highlights a key
challenge for dealerships—ensuring that the cars they sell remain reliable for
customers. Unfortunately, as with all used cars, breakdowns are inevitable, and
repairs are sometimes necessary. When a repair is needed, it’s not just a
matter of getting the car fixed; it's also about whether the customer has the
financial means to cover the repair costs.
For a BHPH dealership, this can be a tricky situation.
Customers may not have the funds on hand to cover a major repair, which can
lead to financial hardship, or worse, the customer defaulting on their car
payments. So, how can a dealership assist the customer in getting the repair
done without putting them in a difficult position financially? The solution
could be a special Tax Payment Repair Note.
What is a special Tax Payment Repair Note?
A Tax Payment Repair Note is a financing solution that uses
a customer’s future tax refund to help cover the cost of a necessary repair.
This can be a win-win for both the dealer and the customer. Here’s how it
works:
Free Tax Refund Estimate: Using a tool like the Tax
Max Refund Estimator, dealers can quickly provide a free estimate of a
customer’s future tax refund based on their most recent paystub.
Offering a 0% Repair Loan: If a customer needs a
repair—say, a $600 bill—but has a tax refund estimate of $3,000, the dealership
can offer a repair loan with 0% interest, using the future tax refund as
collateral.
Flexible Payment Terms: The loan can be structured
with small weekly payments for the repair cost, followed by a larger balloon
payment due once the tax refund arrives—typically in March of the following
year.
Customer Goodwill: This arrangement offers the
customer a manageable way to fix their car without the immediate burden of the
full repair cost. It’s a flexible and low-pressure solution that fosters
goodwill between the dealer and customer.
Why It Works for Dealers and Customers
This approach can be a real asset for both parties involved.
For the dealer, it ensures that the customer can get the repair done and remain
in good standing with their vehicle, ultimately helping the dealership continue
to receive payments. For the customer, it removes the immediate financial
burden of paying for expensive car repairs, which can help prevent further
financial strain.
Additionally, as tax season arrives, the dealership, the
customer, and Tax Max work together to ensure the customer receives their
maximum refund as quickly as possible. This way, the customer can use their tax
refund to make the deferred repair note payment without added stress.
Have questions or want to learn more, please contact:
Chris Neylan
Chief Operating Officer
Tax Max
813-987-2199