Rebates 08

The Tax 2008 Rebate Debate

Providing technical and development support for an auto dealer software company gives me the opportunity to get a little bit of input from a lot of dealers. During this time of year (January – April) separating customers from their tax return is all the hype. But 2008 has the economic stimulus package twist. As we all know, estimated returns starting in May will range from $300 to $1500. The following summarizes some of the most common predictions I have heard regarding how the typical, potential Buy Here Pay Here prospect will behave.

So first, a summary of the pessimistic viewpoints I have heard:

It may be safe to assume that our typical “Up” is caught in and adjustable rate mortgage, that has probably adjusted “Up” recently. They were also caught in the typical excitement of the tax return season. If they haven’t bought a car already they have likely blown the return with nothing to show for it. And as far as the mortgage is concerned, they are likely biting their nails awaiting the tax rebate to stay out of foreclosure on their home.

Now we can close with the optimistic view:

No need to worry about an adjustable rate mortgage, most “Ups” are renters. Although the 2008 tax season was soft, we can hope that consumers settled debts with their tax return and are holding off on a vehicle purchase for the rebate. The least we can expect is that during the summer we will see customers putting more cash down.

So what does this all mean?

Before the checks start rolling out we have to start preparing potential “Ups” with our advertising. Lets get folks thinking about buying a used vehicle subconsciously now, so it may not be wise to back off on marketing just yet. If it is not too late already, start adjusting your auction purchases to get your inventory to look appealing to the typical “rebate” customer. By appealing we mean the down payment to payment ratio. Remember, this time we will know approximately how much cash a customer may have to work with. If an “Up” is walking the lot with a wife and 2 kids in tow, then we can safely figure that they have about $1500 to work with.

Go sell ‘em!

Jose Roman

Radiant Concepts, Inc.

by Jose Roman

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