Car dealers can take certain steps to make timely payment from their customers more likely:

• Agreeing on clear payment terms and conditions before the sale
• Understanding how credit agencies report to potential buyers' credit reports.
• Generating legally compliant invoices.
• Developing procedures and protocols for handling late payments.
• Effectively and consistently making collections calls.
• Creating strategies for dealing with customers who are delinquent on their payments.
• Ensuring all customers are aware of potential fees, penalties, or other consequences associated with non-payment.

In addition to previous points, small business owners may also face higher delinquency rates due to a number of factors, including:

• Inadequate credit checks - Failing to conduct adequate due diligence when extending credit can result in customers defaulting on their payments.
• Lack of follow up - Failing to follow up with customers who are late on their payments can set the precedent that such behavior is accepted.
• Poor collection methods - Not employing efficient collection strategies or not offering flexible payment options can make it difficult for customers to pay off their debts.
• Arrears incurred by customers - Customers may fall behind on payments due to financial hardship, job loss, illness, or other various personal matters.

Here are some collection strategies to help reduce delinquencies in your dealership:

• Send timely payment reminders - Sending payment reminders in advance of the due date can prompt customers to make their payments on time. This can be done through email or text messages.
• Make payment easy - send a payment link that allows the customer to make payments easily.
• Offer incentives for early payment - Offering discounts or other perks can encourage customers to pay off their balances quickly.
• Follow up with late customers - Calling, texting, or emailing late customers (with their prior written approval) can remind them of their obligation and motivate them to stay current with payments. Be aware of strict federal and state laws regulating calling, texting, or emailing your customers.
• Set up payment plans - Setting up automatic recurring payments or allowing customers to split payments into smaller installments over a period of time may help customers manage their obligations more easily.