In the month of March, new light-vehicle sales were down 34.1% due to the COVID-19 pandemic. For dealers across the country, this trend has not only impacted their revenue but also their cash flow – the lifeblood any dealership.
On Friday, April 3, NADA experts from the Academy and 20 Group hosted a webinar offering dealers practical solutions for securing immediate cash and maintaining cash flow. Presented by NADA Academy Instructor Steve Brazill and 20 Group Manager and Dealership Management Consultants Mark Rogers, Don South and Tim Gavin, Managing Cash Flow: Making it Through the COVID-19 Pandemic, offered insights into loss of cash flow, as well as real-world examples that can help dealers maintain a healthy cash flow during this unprecedented economic slowdown.
“We are definitely in a situation where we are all in a pause,” said Mark Rogers. “This pause is going to end and what we want to talk about is when this pause ends, am I set up to go forward? Do I have the processes in place to go forward and keep my business growing and recovering from this down time?”
To improve the current cash flow situation at dealerships today, the panel recommended adding any vehicle not currently on a dealership’s floor plan to floor plan financing and drawing down any lines of credit to put cash back into a dealership’s bank or cash management account. Additional advice also included: immediately funding any contract in transit; wholesaling any used vehicle that a dealership doesn’t plan to retail; and cleaning up any incentives or warranty claims that are sitting idle.
From a best-practice standpoint, presenters urged dealers to drill down on the impact that vehicle sales and other sources have on their cash flow. Additionally, NADA’s panel shared that reducing contracts in transit, freeing up frozen capital and using e-signatures, when possible, can further enhance the liquidity of a dealership.
Tim Gavin reminded dealers: “NADA has your back with our 20 Group Consultants, and our legislative, regulatory and operations advocates. We will all get through this together.”
A recording of the webinar is now available to NADA members here.
Note: NADA’s webinar is offered for general informational purposes only.