Despite what many people think, the car dealership business is not as profitable as it is sometimes depicted. Dealership profits are often hard-won, and margins are often squeezed ever-tighter by manufacturer pricing incentives and the like. The bottom line is that it can be difficult to make a good bottom line in the car dealership business.
That means that your dealership wants to be especially cautious when choosing car dealership merchant services. With so many different providers and so many different plans, all with their benefits and disadvantages, it can be difficult to know what you really need to be considering when you try to choose a provider.
First things first: Consider your budget. Since the car dealership business can have incredibly slim profit margins, you know you need an economical solution. And there are plenty of providers that will label your business high risk, then try to charge you ever-higher fees. Some providers will tack on extra fees, or make your bill so confusing that you can scarcely sort out which charge is for what.
A great first step is to know your budget. Have it in hand when you go shopping for car dealership merchant services, and always compare a provider’s offer against your budget. Be sure that all fees are spelled out in the contract to avoid any surprises when the bill arrives.
Your budget has already touched on the financial aspects of shopping for car dealership merchant services, but you should also be thinking about any potential provider’s fee structure. Most fee structures include variable rates, often a percentage of the transaction value. Smaller transactions will cost you less, while larger transactions will cost you more.
Since car dealerships tend to deal with high-priced merchandise, those percentage fees can add up quickly—which can throw out your budget. Always look at what your provider offers, and compare structures between providers and plans. Chances are someone will give you a better deal than another.
Car dealership merchant services should have a number of security measures built into them. This protects not only the provider, but your business and your customers as well. Look for solutions that offer secure processing, and always ask your provider about the security features they use to keep your information safe. Are they storing your transaction data on a server? If so, how do they protect that server from hackers?
Moreover, you should inquire about their protections for credit card fraud. Since car dealerships work with high-priced merchandise, they are preferred targets for people using stolen credit cards. That can lead to chargebacks, which can be a huge problem for dealerships: You are suddenly out both the merchandise and the money! That can make it impossible to break even, and you may even default on your merchant account. Be sure ask about the protections your provider offers you in these situations.
Many providers will try to sneak in additional fees at bill time, nickel and dime-ing you for everything from the paper the bill was printed on to the ink that was used to print it. These sneaky fees often are not discussed, and they are often presented in a vague or even confusing way on your bill.
One of the reasons providers get away with this is because most car dealership merchant services are not all inclusive. That means there are additional fees charged if you use certain features or if certain scenarios occur. Instead, look for options that offer you all-inclusive billing. You will not be charged extra for “additional” features or “administrative charges.” All-inclusive options are really a case of what you see is what you get.