People need cars. Whether it’s a 16-year-old buying a starter vehicle, a young professional looking for an upgrade, or an older customer who wants to trade in for a new model, just about everyone has uses for a good automobile. Unfortunately, needing a car and being able to afford a down payment are two entirely separate principles.
That doesn’t stop people from buying cars, though, and this can be a mixed blessing for car dealers. On the plus side, it means that there are more people in the market for a vehicle, which boosts sales. But it also means that these customers will try to pay for said vehicle with a credit card. And credit cards can be bad news for car dealerships.
So how do dealers accommodate these payment methods in a way that won’t drive them out of business? The answer is simple: They find the right card processing plan. This article will outline just a few aspects of an ideal plan for car dealers. From reduced fees to extra perks, these agreements will help them serve their customers and their bottom line at the same time.
A Plan That Features No Extra Fees …
Processing rates are nightmarish for dealer owners. Usually, a merchant services provider will charge a fee that applies to a merchant’s credit card sales volume. For example, if a company makes $10,000 a month in credit card-based sales and it has a rate of 1.75 percent rate, its processor will take $175 as its fee. Sounds simple, right?
Two things complicate this issue for car dealerships. First, dealers sell expensive merchandise and make very little money off each vehicle sold. Even a one- to two-percent fee can potentially wipe out their profit margins, which is why many dealers won’t let customers pay for an entire order with a credit card.
The other problem stems from hidden fees. Processing charges are bad enough for dealers, but charges for premium cards, terminals, and interchange can completely eat through their profits. An ideal plan for car dealerships includes a low rate and reduced fees, which should allow them to hold onto their earnings.
A Plan That Makes Your Monthly Statements Simple …
Excessive charges aren’t just a threat to a dealer’s bottom line. They’re also frustrating from an accountability standpoint. When a card processing company loads a monthly statement with incomprehensible fees, dealers may think they’re being billed for services they never received.
If dealers don’t want to receive a messy, convoluted statement each month, they should find a plan that reduces fees and streamlines monthly bills. This helps companies adhere to their budgets and reduces unnecessary reviews.
A Plan That Minimizes Chargebacks …
No company wants to incur chargebacks. These penalties don’t just eat up companies’ revenue. They also hurt these businesses’ relationships with processors. Since car dealers sell expensive stock and need larger sales allowances, they’re more likely to suffer the negative aspects of a bad card processing reputation. This means that a plan with chargeback protection is ideal for these merchants.
A Plan That Pays You on Time …
You can’t operate a business without money. Unfortunately, some processors don’t deposit their clients’ earnings quickly enough. Car dealers should seek agreements that ensure they’ll receive payment within 24 hours.
… An All-Inclusive Pricing Plan
Only one plan can guarantee all of these features, and that’s an all-inclusive pricing plan. Dealers can anticipate a flat fee with no additional charges, no complicated bills, no late payments and no excessive chargeback penalties. Few other plans offer that much value for such a low rate.