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What Every Dealership Needs to Know

If you’re in the business of selling cars, then chances are you’ve had to deal with automotive collections at some point. Customers fall behind on their payments, and they’re not always the easiest to track down. 

To prevent this from becoming a stumbling block for your business, it’s important to have a few things in place:

  • Clear policies
  • Organizational skills and good record-keeping
  • Ongoing communication strategies
  • Knowledge of legal debt collection practices
  • Data management and consistency in how you use it

In this blog post, we’ll be discussing the simple yet effective ways that you can get your automotive customers to pay. And if they don’t, we will show you what your next steps need to be. Let’s begin!

Contacting the Customer

It’s important to develop a workflow to manage late payments from automotive customers. The first step is contacting the customer as soon as you know their payment is late.

It’s important to develop a direct line of communication with them immediately so that you can remind them of upcoming payments and keep track of any that are already late. You’ll want to be friendly but firm in your communication.

This ensures that you let them know when their payment is due without being overly aggressive or hostile – it should never be about creating friction but rather maintaining a strong working relationship with the customer. You could even offer reminder emails prior to due dates.

That way, they have an early warning before the date rolls around and they may be more likely to make their payment on time. You can ensure timely payments from all your automotive customers by staying organized and coming up with ways to develop reminders and keep track of payments easily.

Following Up

If payment is still not received, it’s time to follow up again. Depending on how much money is owed, you may need to take a few steps before sending a certified letter with the return receipt requested. Start by calling the customer and having a friendly but firm conversation about the past-due balance.

It’s important to make it clear how late payments can negatively affect your business and how eager you are to receive compensation. Also, explain how payment should be made and how quickly you need it.

If this doesn’t bring in the funds, make another written attempt, being sure to detail how long they have been overdue and how late fees are adding up. In some cases, local legislation will require how many times you must follow up before taking more aggressive action.

Once all formal communication methods have been exhausted with no luck, however, it’s time to send a certified letter with the return receipt requested. Include in it a clear roadmap as to what comes next.

This will ensure that your record shows information about when and where the card was delivered as evidence if legal proceedings are necessary down the road. It will also create a record of clarity should it come before a judge.

Give Them Time to Respond

After you have sent out a certified letter, it is important to give the customer 10 days to respond. This allows ample time for the letter to be delivered and read, giving them a reasonable chance to provide a response. It’s also important for the sake of not appearing as if you are harassing the customer for non-payment.

Fair or not, the Fair Debt Collection Practices Act (FDCPA) takes a strict stance against what it deems to be consumer harassment. Be knowledgeable of this going in. At this point, you have to be focused on what comes next.

Call the Professionals

Suppose you have done your due diligence in trying to secure payment from a customer and they are still unresponsive or unable to pay. In that case, it is time to consider the possibility of engaging in a debt recovery service. You will want an experienced and knowledgeable team who can successfully resolve the outstanding debt without violating FDCPA protocols.
At Southwest Recovery Services, we use collection strategies that have been strategically designed to best suit the needs of our clients while complying with all rules and regulations regarding debt collection. Further, we have access to sophisticated communication technologies so we can create the breadcrumbs that strengthen your legal ability to collect.

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