While we all know that the coronavirus (COVID-19) is causing chaos in many ways with some thinking it is fake news cause by the media and others worried. Our concern is that any intervention by the Federal government is a slippery slope that can only mean the beginning of increased Federal involvement.
Many car dealers rely upon an uptick in sales around tax-time and even factor that into projected sales. While we're in this state of "it's overblown," think of the following (and we're not going to even include the many school closures and, in some states, the closures of pretty much all public venues - restaurants, etc - or mass gatherings.
Will those hurt car sales? Perhaps. There are ways around that though simply because of the first of the following:
1. The Feds have cut the Prime interest rate to almost 0% - That should be GREAT for car sales. Especially A paper buyers.
but what about those that depend on their tax refunds/returns to provide a much needed down payment - especially those that are sub-prime buyers?
Let's look at #2 - the most important in that sub-prime market...
The IRS and Treasury Department are expected to announce this week that the April 15 tax deadline will be extended by as much as 90 days.
How is that going to affect car sales?
This was emailed to all CPAs by their respective associations last night (3/15/2020)
You tell us. How would this affect your business (if at all)?