Tax season might seem like it’s still months away, but the clock is already ticking for high-performing dealerships. Each year, billions of dollars flood the economy as Americans receive tax refunds. For many, these refunds are their most considerable financial boost of the year; a significant portion of that money is spent on purchasing vehicles.

If you wait until mid-January or February to prepare, you will miss out on a massive wave of buyers who start shopping when they know a refund is coming—even long before they have the refund money in their possession. Let’s dive into why early preparation is critical, how refund dollars impact car sales, and how programs like TaxMax’s File and Drive campaign can help your dealership dominate the season.

The Tax Refund Surge: Billions on the Move

The IRS distributed $312 billion in tax refunds in 2023, with an average refund of $3,028 per filer. For many Americans, this is not just extra cash. It is their financial reset button. Refunds are often earmarked for significant purchases, with vehicles at the top of their list.

The key to understanding tax season buying behavior lies in timing. Most consumers don’t wait for a check-in hand to start shopping. Instead, they rely on refund anticipation programs that allow them to immediately use expected funds as down payments. January becomes the prime buying season, not February or March.

Example:

Imagine two dealerships in the same market:

• Dealership A started promoting tax refund buying in December, educating customers on how they can file and drive early.
  
  
• Dealership B waits until February, thinking customers will only shop after receiving their refunds.

By the time Dealership B launches its campaign, Dealership A has already sold dozens of vehicles to eager buyers, leaving Dealership B with fewer leads and more competition.

Why Waiting Costs You Sales

Delaying your tax season strategy means playing catch-up. Data from tax refund studies shows that up to 30% of buyers use refund anticipation services, meaning they start shopping in January or even December when they have their W2 in hand. These proactive customers want to get ahead, and dealerships ready to serve them early reap all the rewards.

By February, many of these buyers will already be driving their new vehicles, and waiting too long means competing for a smaller share of buyers than every other dealership in your area. Worse, you will face steeper marketing costs as competition intensifies. Early preparation ensures you capture the first wave of refund-driven buyers while your competitors scramble to catch up.

Be the Go-To Dealership for Tax Refund Buyers

To maximize tax season, your dealership needs to position itself as the go-to solution for refund buyers. Here’s how:

1. Educate Customers Early: Use marketing campaigns to inform buyers that they do not need to wait for their refund check; they can file now and use their anticipated refund to purchase a vehicle.
   
   
2. Streamline the Process: Partner with programs like Tax Max’s File and Drive to handle tax filing and vehicle purchases in one seamless transaction.  The Tax Max File and Drive services can have your customer approved for the money within minutes while sitting on the showroom floor. 
   
   
3. Launch Awareness Campaigns: Build anticipation with higher funnel mediums like social media, OTT, YouTube, and email, as well as lower funnel places like PPC and in-store promotions, starting early in December.  In other words, right now!

Incentivizing Your Team for Success

Tax season is a critical time for your sales team, and the right incentives can significantly boost performance. A strong incentive plan motivates your staff to focus on larger down payments and helps them prioritize buyers who use tax refunds.

How to Build an Effective Incentive Plan

1. Tiered Bonus Structure: Offer an extra percentage to secure higher down payments. Incentivize down payments received after closing a deal to widen profit margins and give more foom to the business office.  Only incentivize down payment using the customer's Tax Refund. For example, only play with percentages to make it work for your dealership:

   • Down payments under $1,000: No bonus.
   • Down payments of $1,000–$2,000: 5% bonus.
   • Down payments over $2,000: 10% bonus.
     
     

2. Reward Top Performers: Create weekly or monthly recognition programs for sales reps who secure the most refund-based deals. Offer cash prizes, gift cards, or other perks to keep energy and morale high.

3. Tie Incentives to Collections: For Buy Here Pay Here dealerships offer bonuses to collections teams for securing timely payments from delinquent customers using their refunds. For example, a 10% bonus for every account brought current during tax season.

Example:
A salesperson closes ten deals in January, with 5 involving down payments of over $2,000 from Tax Max refund buyers. With a 10% bonus, they earn an extra $3,000 monthly, motivating them to prioritize refund-driven sales.

Why Tax Max Is the Industry Leader

Tax Max’s File and Drive campaign is the gold standard for tax refund solutions in the auto industry. Here’s how it benefits your dealership:

• File Taxes On-Site: Customers can file their taxes at your dealership, removing the need to wait for refunds.
  
  
• Turn Refunds into Down Payments: Buyers can use their anticipated refund to drive away in a car the same day.
  
  
• Simplify the Process: Tax Max provides training, marketing materials, and ongoing support to ensure your team can execute the program smoothly.

At Big Time Advertising, we’re proud partners with Tax Max, providing creative materials and campaigns to help dealerships capitalize on tax season. From digital ads to in-store promotions, we’ll ensure your dealership stands out.

Building an Early Strategy: The Action Plan

To make the most of tax season, start preparing now:

1. Partner with Tax Max: Set up the File and Drive program to prepare you for buyers from January through March EARLY.
   
   
2. Train Your Team: Use Tax Max’s resources to ensure every staff member understands the program.
   
   
3. Create Incentives: Implement bonuses tied to refund-driven down payments to motivate your team.
   
   
4. Market Early and Often: Begin your campaigns in December to build awareness and excitement.
   
   
5. Stock the Right Inventory: Focus on affordable, high-demand vehicles that align with refund budgets.

Tax season is a rare opportunity to drive significant revenue, but only if your entire sales team is prepared. Waiting until February means leaving money on the table and competing in a crowded market. By partnering with Tax Max and implementing a strategic plan now, you can ensure your dealership is the first choice for refund buyers.

🎯 Ready to make this tax season your most profitable yet? Click here to learn more about TaxMax’s File and Drive campaign and how Big Time Advertising can help you dominate the season.

Let’s work together to make this tax season a game-changer for your dealership and team.

-by Terry MacCauley, Founder & CEO

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