Managing auto dealer cash flow is a huge challenge. Without steady access to capital, dealerships struggle to maintain inventory, cover operational costs, and scale their businesses.

However, dealers can achieve greater stability by leveraging cash advances and profit-sharing programs from financing companies.

Here’s how you can secure upfront funding, generate long-term revenue, and mitigate financial risks:

1. Cash advances for immediate liquidity

One of the most effective ways for your dealership to increase cash flow is by securing an upfront cash advance for every funded deal. You can access immediate capital once financing is approved instead of waiting for customer payments to come in over time.

How cash advances improve cash flow:

• Faster inventory turnover – Allows dealers to purchase and restock vehicles without waiting for installment payments
• Liquidity for operational expenses – Covers overhead costs such as payroll, marketing, and dealership maintenance
• Protection during slow sales periods – Ensures dealers have available funds to manage fluctuations in demand

Some financing providers offer same-day funding through digital contracting and electronic processing, accelerating the cash-flow cycle.

2. Profit sharing for long-term revenue

Beyond cash advances, your dealership can participate in profit-sharing programs. These programs let dealers earn continuous revenue on financed deals long after the initial sale.

Key benefits of profit-sharing models:

• Consistent monthly revenue – Dealers receive payments based on a percentage of net collections for a steady income stream
• Higher total earnings per vehicle – Dealerships generate long-term financial returns from customer payments vs. only relying on the initial sale
• Protection from market fluctuations – A diversified revenue model helps balance income streams even during slower sales periods

Some finance companies also offer bonus payments when dealerships reach portfolio milestones, such as financing a set number of contracts, which can provide a further infusion of capital.

3. Expanded customer approvals for increased sales

One of the best ways to increase sales volume is by expanding your financing options to serve credit-challenged buyers. Many dealerships limit their customer base by working only with prime lenders, leaving them unable to serve buyers with low or no credit history.

How expanded approvals improve cash flow:

• Larger customer base – Working with both prime and subprime buyers can create additional sales opportunities
• More deal closures – Structuring financing for a broader range of buyers allows dealerships to convert more leads into sales
• Credit-building options for customers – Reporting payments to credit bureaus encourages on-time payments and reduces delinquency rates

Your dealership can enjoy better cash flow by working with a financing provider that approves a broader spectrum of buyers.

4. Structured payment models for risk management

One of dealerships' biggest cash flow risks is when customers who financed in-house don’t pay or default, as you’re stuck with repossessions and charge-offs.

How structured financing helps mitigate risk:

• Dealers receive an upfront payment no matter the customer’s payment behavior
• Lenders handle collections, reducing administrative burden and operational costs
• Revenue is spread across multiple deals, ensuring financial stability even if some customers default

Choosing a financing model that shares revenue and risk can protect your cash flow and deliver long-term sustainability.

Select the right financing company to maximize cash flow

Your dealership should seek out a financing provider that offers upfront cash advances, profit-sharing programs, expanded credit approvals, and risk-sharing models. To strategically utilize these options, consider joining Credit Acceptance’s dealer network.

Our Portfolio Program, for instance, allows dealers to receive up to 80% of future collections. In a single year, we’ve paid out nearly $4B in total funding and more than $185M in profit.