.png?width=145&height=40&name=newlogo-black%20(2).png "newlogo-black (2)"){kind=small}
What do the decisions over the Fiscal Cliff Mean for Automotive Dealerships?
Car sales for 2012 ended at a high point. Car makers are whistling in the wind a total of 14.5 million in sales. That’s 13 percent better than 2011, the best in five years. Perhaps better employment conditions and the average car on the road being more than 11 years old created the perfect storm for auto dealers’ sales to ride on the cloud nine of sales.
|
So, why are some car dealers still looking down? It’s the fiscal cliff deal and the possibility that it could have a negative impact on dealership revenue. Dealership owners typically exceed the $450,000/ year tax bracket. This raises their taxes from 35% to 39.6%. Although Edmond feels like the Fiscal Cliff Deal shouldn’t affect new car buyers. Some dealers are still concerned about their revenue. |
To ease concern, we’ve come up with 3 ideas to help automotive dealerships increase profits in an effort to offset recent tax increases.
- Take Advantage of Low-Interest Rates: Interest rates are at a historic low. And, it should remain that way at least until 2014. Make sure your customers know that when they come in to purchase a vehicle by having interest rate promotions.
- Take Advantage of Expense Deductions: The deal allows some small business owners to take retroactive deductions and tax credits through an increased allowable expense credit and extension of the bonus depreciation credit. For more details on how this work talk to your CPA or tax specialist. But, this could be an opportunity to invest in equipment and tools that increase profits and customer service. For example, iPads that shows vehicle accessories.
- Appeal to Buyers who are Parents: Several credits for families have been extended for the next 5 years. So, if you sell any of the cars that are among the safest in America be sure to have family-friendly promotions to draw those parents into your dealership. For example, 10% off all entertainment and safety accessories that are installed by delivery. You can promote that on Facebook.
Insignia Group is not a professional tax preparation service. Information from the following articles was used to write this blog post. If you are in need of more in-depth analysis and information please contact a professional.
