Ben Smith

Running a car dealership is more high stakes than industry outsiders would assume. While dealerships are selling high-priced merchandise with cars costing $25,000 to $30,000, the gross profit on a single vehicle sale is around $1000 to $2,500. Sales vary from model to model of course, but the reality of car dealerships is that the profit margin is a lot lower than you think.

Download our free payment processing guide for high-risk merchants.


To make matters of running a car dealership more complicated, there’s the matter of securing a merchant account with reliable payment processing. Car dealerships have a tough time finding payment processing providers that will work with them, as they’re considered high-risk merchants.


All car dealerships should prepare for potential chargebacks on credit cards. And even if a dealership does land a payment processing provider, they could be subject to foul play concerning payment processing fees.

To avoid being overcharged monthly by your provider, check out our tips for understanding car dealership payment processing fees below.

Beware the Soaring Additional Fees

Car dealerships that accept credit cards for partial payments know that they can be subject to heavy interchange and assessment fees. Known as the most common transactional fees per sale and sale volume per month for businesses, interchange and assessment fees are obligatory.


There are a whole host of other fees, including surcharges for car dealership payment processing, that can make your monthly statement a mile long if you’re not careful. Make a golden rule for your dealership that when you’re shopping for payment processors that you ask upfront about any additional fees. Since dealership’s deal with a high volume of sales per month, you don’t want to find out after the contract’s been signed that your monthly costs are gouging into any profit you made.

Watch Out for Cluttered Bills and Penalty Clauses

One way you can tell straightaway if a contract is pushing additional car dealership payment processing fees on you is if your monthly statement does in fact appear a mile long. Some payment processors use the tactic of making your statement so busy with information that only a concerted effort will reveal extra fees. Take the time; it will save your dealership its hard-earned revenue!


Another way payment processors might try to make a quick buck off your business is to include a penalty clause for pulling out of the deal. Termination penalty clauses in a contract signal that if you decide to terminate the contract before its expiry date, you will have to pay an expensive kill fee. The easiest way to avoid such a situation is to research a company in-depth beforehand.


Ideally you want a payment processor who can offer a plan that’s customized to protect a high-risk merchant, accounts for credit card rates, and doesn’t involve dozens of extra fees.

All-Inclusive Is the Way to Go

A solution that is mindful of all the difficulties of setting up fair car dealership processing fees is an all-inclusive plan. With all-inclusive plans, you pay a streamlined fee that accounts for sales volume with a 2.1 percent rate. Your monthly statement is also much cleaner, with all expenses detailed in plain English upfront, which means no hidden fees whatsoever. And lastly and perhaps most importantly, your dealership will have up to $1000 protection against chargebacks.


Car dealership payment processing is all about being aware of the stakes of running a high-risk business. So, take every precaution!


High-Risk Merchants: How to Get Reliable Payment Processing to Grow Your Business

Ben Smith

Ben brings 20 years of experience to his role as IT Director for BNA Smart Payment Systems. Among his many directorial duties, he is responsible for the selection, acquisition, development, installation, maintenance, and support of IT infrastructure. Ben also establishes and leads a cross-functional architectural committee, acts as a technical expert and a critical technical resource across multiple disciplines, and consults on all system implementation, modification and integration activities. He graduated with Honours from Durham Collage in Computer Programming, and takes yearly training courses for security and development technologies to remain up-to-date. Outside of work, he loves playing hockey and skating with his family, and also enjoys gardening and cooking.
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