The past year has been a rollercoaster for businesses in the automotive industry. On the one hand, car prices have been higher than ever. That makes it sound like dealers of all sizes are raking in the profits. But the truth is, it’s been harder to source cars. When production shut down for COVID, people began snapping up used cars. But before long, sourcing used vehicles in good condition became a problem.
And repairs have been an issue, too. There’s a well-established chip shortage that’s expected to persist for at least several more months. Parts have also been affected by supply chain disruptions. All of this upheaval has forced industry players to seriously rethink the way they approach the automobile. Insiders say that even the types of chips in cars may need to change.
Small businesses like auto body shops have devised several ways to manage the parts shortage and consumer demand. Some have asked their customers to refrain from coming in unless they have a serious issue. Almost all have counselled patience and emphasized that they’re moving as quickly as possible. Studies show that people look for shops close to home, that have good word of mouth. Many auto repair shops are lucky in that they have loyal clientele that have been understanding about recent changes to the industry.
Still, there are some pivots that small automotive businesses can make in order to stay ahead of the curve. One is to upgrade their equipment. If it’s possible to make a process simpler or more efficient, now is the time to do that. Hiring shortages have also become a chronic issue. Investing in more efficient CRM software, call-forwarding may be a way to cope with a lack of reception type workers.
And the biggest reason to invest during a challenging time is that it’s a great way to benefit during tax season. Section 179 of the IRS tax code makes it possible to expense just over $1 million in business equipment acquired during the tax year. One of the only restrictions is that it needs to be put into service during that time. At Alliance Leasing, we’ve been able to help auto body shops acquire a variety of equipment that can be expensed this way. That includes everything from tools to vehicles, signage and even software. We’re also able to provide some clients with working capital.
If you’re a business owner in the automotive space and you need to make a move, call us today. We’ve been helping people just like you for over 30 years. We’d love to assist you, too.