Tax Season 2025

Tax Season 2025

Subprime Finance Retail Industry Poised for Opportunities
Buy Here Pay Here retailers, those considering adopting the business model, and subprime auto finance companies are looking forward to a prosperous tax season 2025. While most are cautiously optimistic, there are numerous challenges ahead.

In recent years, as Tax Season approaches, some dealers have embraced the opportunity for large down payments and increased business as consumers receive tax refunds, while others downplay their significance.

Many dealers are embracing growth opportunities, with some planning to transition from cash-only sales to BHPH financing. Others remain cautiously optimistic, preparing for a tax season 2025 that could mark a turning point for the year ahead.

Reasons for Optimism

Tax season historically drives significant sales activity for BHPH dealers, and 2025 may follow that trend. With improving vehicle affordability, the prospect of reduced regulations as a new administration enters the White House, easing auto loan rates, and expanding credit availability, the Tax Season 2025 presents a prime opportunity to capitalize on increased consumer demand.

Positive trends are creating a favorable environment:

• Dropping Auto Loan Rates: Bankrate forecasts used car loan rates averaging 7.75% by the end of the year, giving more consumers access to financing.
• Expanded Credit Availability: Cox Automotive predicts more buyers will enter the market as loan performance improves.
• Strong Auto Sales Forecast: CNBC projects the highest U.S. auto sales since 2019, providing an excellent opportunity to increase dealership activity.
• Digital Transformation: Use Artificial Intelligence, customer analytics, and online tools to streamline operations, expand reach, and improve service.
• Tech Partnerships: Dealers are working more closely with FinTech’s and technology providers to access advanced tools affordably and enhance services with minimal investment.

Even considering these promising trends, retailers must remain vigilant. Inflation continues to challenge consumers, and credit card, rent, and automotive finance delinquencies have soared and are projected to continue rising throughout 2025, according to Fitch Ratings. Vehicle values remain high. The average used car price is $25,571, according to Cox Auto.

Other challenges include:

• Regulatory Compliance: Navigating strict regulations on lending, consumer protection, and data privacy requires costly legal and compliance systems.
• Staff Turnover: High turnover rates continue in the industry and disrupt operations.
• Technology Integration: Adopting CRMs, online sales, and digital payments demands investment and training.
• Online Competition: The shift to online car buying pressures BHPH to innovate, adding marketing costs and online presence needs.

How Advantage GPS Prepares You for Tax Season 2025

Advantage GPS provides BHPH dealers and subprime vehicle finance companies with advanced tools to thrive during tax season and beyond:

• Real-Time Location Information: Monitor and track financed vehicles in real-time to enhance asset security and streamline recoveries in case of payment defaults.
• Risk Mitigation Tools: Rising delinquencies require proactive strategies. Advantage GPS helps you stay ahead by providing predictive data and insights to manage financial risks.
• Tax Season Readiness: Tax season often marks the busiest and most profitable time of year for BHPH dealers. With Advantage GPS, you’ll have the tools to handle increased activity while protecting your inventory and bottom line.

By partnering with Advantage GPS, you can confidently navigate the opportunities and challenges ahead, protecting your assets and focusing on growth. Contact us today to learn more about our risk mitigation solutions.