How are you receiving payment for vehicle sales?
 

Background: I am opening a small used motorcycle dealership.

Question: How do you currently accept payments from customers, financing institutions, and any other entity that may be purchasing your vehicles?

Any input is greatly appreciated.

Thanks,

Tom

cash, personal check for over $250 only [ that's the county threshold for felony bad check pursuit ] , major credit card. NO OPEN ACCOUNTS, EVER , even for family, especially for your customer demographic.
this from 23 years as a Kawasaki / Yamaha dealer.

New car store here, with small used car operation. Cash, check, credit card, wire/ACH (we have an account for incoming wires only so don't need to worry about any issues there).

If any of you are taking credit cards check your state laws on title delivery. In my state we have 45 days to deliver title. Put yourself on as 1st lienholder until 90 days are up because they can dispute the purchase. You have to prove why it should not be disputed! The whole time you are without the funds. Just a word to the wise. Don't forget the fee you are charged for letting them use their card.
Completely agree with No Open Accounts! If you are foolish enough to allow it don't forget to be the lienholder on the title.

Very valid point about accepting credit cards with the risk of the transaction being disputed in the future. I have always put a self-imposed limit of $2,000 on a credit card toward vehicle purchase for exactly this reason. It limits my liability if someone does want to dispute the charge and it prevents paying needless processing fees.

I have never run into an incident where a credit card is charged back on a vehicle purchase, but a friend at another store had an incident where credit card was processed over the phone, original receipt never signed by customer at delivery, and the transaction was later charged back. I think it $4,000 or so -- so just part of the deal, but still a major headache.

I don't accept credit cards at my car dealership. Mainly for the chargeback potential as others have mentioned, plus the fees dig into your profit. You also have to remember the fees also go against all the state fees you collect like sales tax. The state won't give you a discount for their fees so for you it is a losing proposition.

Personally, I like getting paid by check. I have no preference if it is certified or personal. Some dealers only like certified bank checks but these get counterfeited all the time and good luck calling a bank to verify it's legitimacy. They won't do it. I don't mind cash as long as it's under $10,000 so you don't have to worry about IRS forms or having to count a large amount. I used to have a separate bank account for wire transfers. I've only ever had one person who was from out of state that wanted to pay by wire so I closed the account. Bank kept charging me an inactivity fee.

By "open accounts" do you mean delivering the vehicle without receiving payment yet? Just want to make sure I am understanding correctly.

Some of us certainly deliver cars without payment, but I would say having open accounts probably is more of a drag on those of us with parts and service operations. Every small shop is going to want to have a parts account with you and they just have to be watched close to make sure you aren't holding the bag if they go belly up. Our biggest offenders are usually body shops that run up huge balances from their parts orders.

Only time a car goes without payment is if it's a government sale backed by a PO. In my area some won't issue a check until vehicle is titled or MSO arrives. So a PO must suffice.