3 Ways to Improve Your Car Dealership’s Cash Flow
“How can I make my car dealership more profitable?”
This is the question many — if not all — dealers ponder when strategizing ways to reel in more money for their car business. While there are various methods and strategies your dealership can implement to become more profitable, one of the fundamental keys to doing this is increasing your cash flow.
Cash flow is an important factor when measuring your dealership’s financial performance. While positive cash flow indicates a company has effective accounts receivable (income) and accounts payable operations (expenses), negative cash flow in your car dealership can result from:
- Slower car sales seasons when overhead costs are higher than income
- Having trouble collecting on car payments
- Being short on staff to fulfill daily operations
Thankfully, there are multiple ways your car dealership can increase its cash flow.
Credit Acceptance offers auto finance programs that allow enrolled dealers to sell more cars and make more money by offering credit approval to non-prime and subprime car buyers who are unqualified to receive traditional auto financing.
Through our Portfolio Program, enrolled dealers can get paid three ways:
- Advance
Your car dealership will receive an upfront cash advance for every deal that gets funded through our program. - Portfolio Profit Express (PPE)
When you close a pool (portfolio) of 50 or 100 contracts, you’re eligible to receive 20% (for a 50-contract pool) or 30% (for a 100-contract pool) of future expected portfolio profit. - Portfolio Profit
Once the total advance balance is repaid in the pool, you’ll be eligible to receive 80% of the net collections on all contracts in the capped pool through monthly Portfolio Profit payments.
Credit Acceptance works with more than 12,000 franchise, independent and BHPH car dealers across the nation to help them sell more cars by giving them the ability to approve credit-challenged car buyers for car financing. Last year, enrolled dealers were paid nearly $4 billion in total funding and more than $180 million in Portfolio Profit.
If your car dealership wants to increase its sales and cash flow by offering non-prime and subprime car financing for buyers with bad credit or no credit, simply fill out the form on our website to learn the benefits of becoming an enrolled dealer!
