Checkout the AutoCPA’s latest newsletter

Here are the highlights of what is included in this edition. Please click here for the full version.

Navigating Today’s Challenges: The Evolving Landscape For New Car Dealerships

New car dealerships are navigating a complex automotive landscape marked by shifting consumer preferences, supply chain disruptions, and rising operational costs. Buyers increasingly seek eco-friendly vehicles, advanced technology, and seamless digital experiences, prompting dealers to diversify inventory and enhance their online presence. Supply chain issues and rising costs pressure profit margins, while competition from pre-owned vehicles and evolving regulatory requirements add further challenges. To remain competitive and profitable, dealerships must adapt by embracing digital retailing, optimizing operations, and staying compliant with regulations.

Estate Tax Exemption – Is Now the Right Time to Gift?

With the estate tax exemption set to revert to pre-2017 levels after January 1, 2026, now may be an opportune time for auto dealers to consider gifting assets to reduce future estate taxes. The Tax Cuts and Jobs Act of 2017 increased the exemption to $13.61 million for individuals and $27.22 million for married couples, but it will decrease significantly if Congress does not act. Gifting appreciating assets, such as a minority interest in an auto dealership, can leverage current higher exemptions and valuation discounts to minimize future estate tax liability. However, these gifts are subject to IRS scrutiny, making it crucial to work with a business appraiser and estate planning advisor to craft a strategy that aligns with your financial needs and goals.

Controlling Special Order Parts in Your Dealership

Managing special order parts effectively is crucial for controlling cash flow in an automobile dealership. Unsold special order parts can lead to significant obsolescence and impact both customer service and profitability. To address this, dealerships should establish clear policies and procedures, fostering collaboration between the parts and service departments. Effective strategies include scheduling customer appointments when parts are ordered, requiring prepayment when possible, having service managers approve orders, and holding departments accountable for parts and charge-back fees. Regular follow-up and organization of special order parts can further prevent cash flow issues. For tailored guidance, dealerships should consult with their AutoCPAGroup member to develop a comprehensive special order parts policy.