In the Buy Here Pay Here (BHPH) industry, one popular saying is, “If it doesn’t drive, the customer won’t pay.” This highlights a key challenge for dealerships—ensuring that the cars they sell remain reliable for customers. Unfortunately, as with all used cars, breakdowns are inevitable, and repairs are sometimes necessary. When a repair is needed, it’s not just a matter of getting the car fixed; it's also about whether the customer has the financial means to cover the repair costs.

For a BHPH dealership, this can be a tricky situation. Customers may not have the funds on hand to cover a major repair, which can lead to financial hardship, or worse, the customer defaulting on their car payments. So, how can a dealership assist the customer in getting the repair done without putting them in a difficult position financially? The solution could be a special Tax Payment Repair Note.

What is a special Tax Payment Repair Note?

A Tax Payment Repair Note is a financing solution that uses a customer’s future tax refund to help cover the cost of a necessary repair. This can be a win-win for both the dealer and the customer. Here’s how it works:

Free Tax Refund Estimate: Using a tool like the Tax Max Refund Estimator, dealers can quickly provide a free estimate of a customer’s future tax refund based on their most recent paystub.

Offering a 0% Repair Loan: If a customer needs a repair—say, a $600 bill—but has a tax refund estimate of $3,000, the dealership can offer a repair loan with 0% interest, using the future tax refund as collateral.

Flexible Payment Terms: The loan can be structured with small weekly payments for the repair cost, followed by a larger balloon payment due once the tax refund arrives—typically in March of the following year.

Customer Goodwill: This arrangement offers the customer a manageable way to fix their car without the immediate burden of the full repair cost. It’s a flexible and low-pressure solution that fosters goodwill between the dealer and customer.

Why It Works for Dealers and Customers

This approach can be a real asset for both parties involved. For the dealer, it ensures that the customer can get the repair done and remain in good standing with their vehicle, ultimately helping the dealership continue to receive payments. For the customer, it removes the immediate financial burden of paying for expensive car repairs, which can help prevent further financial strain.

Additionally, as tax season arrives, the dealership, the customer, and Tax Max work together to ensure the customer receives their maximum refund as quickly as possible. This way, the customer can use their tax refund to make the deferred repair note payment without added stress.

Have questions or want to learn more, please contact:

Chris Neylan
Chief Operating Officer
Tax Max
813-987-2199