28 Jan 2026 · 3 min
Luke and a co-host discuss how tax season drives car dealership sales, with spikes in website traffic and H&R Block rapid refunds bringing in cash. They warn dealers not to mistake big down payments for quality customers and stress the importance of underwriting discipline, especially for buy-here-pay-here operations.
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Hey.
Hey, Luke. Happy Monday, buddy. Hope you are geared up for an awesome week. And I hope everyone is geared up for an awesome week. I think we're starting to see some tax money, Luke. People are getting their tax advance refunds. Some of that cash is showing up at the dealerships. How's it going at your place? Have you seen any tax money yet?
So we, we've had a spike in Internet activity and website activity and I believe that it corresponds with people gearing up for tax time. Have we seen tax money? You know what I find this time of the year is you may not see it, but it's there. Especially with one of the big tax companies giving an advance. Now, I don't know all the particulars of that advance, but I think that there's going to be some money from that. And what you also see this time of the year is someone will come in and use maybe a whole paycheck knowing that their tax money will be here in the next two weeks. So even if you don't see a tax check, that doesn't mean you're getting a tax time bump because people are anticipating the money.
Absolutely. And I think when we have that opportunity to get our hands on some of that tax money a little bit early, if they do an H and R block rapid refund or advance, that gives us the opportunity to sell the car now and not wait until that very last week of February when we think it's gonna be gangbusters and everyone's gonna have to catch in their account.
Sure. And you know, it's nice to have those early deals in January because you just don't know where it's going to play out. You know, the tax season is one of those things. And you know, I just want to caution a couple people, don't be intrigued by these large down payments. Still underwrite your customers, still make sure it's the customer you want and don't, you know, don't bend the rules because they have that down payment. If you've got a system you go by, make sure you stick to that system and make sure the customer is a good long term customer, not just a way to get $2,500 down right now.
Yeah, I think it's probably a proven fact and I say probably a fact in the same sentence, which seems opposite of each other. But more down payment does not equal a better customer for you. Buy here, pay here, guys. Just because you're getting more down doesn't mean it's going to be a better loan. It doesn't mean they're going to pay.
That's right. And Chuck has beat this into our head that loans don't necessarily perform better because of the size of the down payment. I do think down payment size matters a little bit, but you either have a good customer that you're going to take a chance on or a bad customer. Don't confuse the two. If the good customer has a little less down than the bad customer has down, take the good customer every day, because that's where your money's gonna be made in the long run in the buy here, pay here industry.
Yeah. And also to caution those of you that are not buy here, pay here, that are using outside financing sources, make sure you know the rules with each lender. Some of them will cut you off if they find out you're doing a deferred down situation and you're not collecting the down payment in cash that you say you are. I think credit acceptance lets you do a certain amount of actual deferred down, and there's some other banks that allow you. But make sure you're looking into that before you're. You're doing the deferreds.
Yeah. Don't let, don't let tax season and the lure of the fast money hurt your business model. Your business model is there for a reason. And you've been, hopefully you've been successful with that business model. Just stay true to it. Don't get excited. It comes every year. We want to see a gradual climb throughout the year of number of cars sold, not just a ton of cars at one time.
Yep. And stay tuned. This week, Thursday, we are gonna have Bill Nyland on the podcast. He's the CEO of a Tax Max company. If those of you that are familiar with Tax Max, a tax filing service for dealers, he's gonna talk generally about the state of tax season. You know, I don't know we're losing tax season if that's due to global warming or tax warming or whatever it is. But it is. It is becoming diluted. It's just blending right into summer for sure. All right, stay tuned.