Following the 2026 NADA Show in Las Vegas, Tom Harnetiaux, Growth Director at PayJunction, shared with CBT News how dealerships can protect profits amid slower new vehicle sales, longer vehicle ownership, and shifting service opportunities.
Q: From your perspective, what are the biggest financial pressures auto dealerships are facing right now?
A: Dealerships are navigating a complex financial landscape right now. Margins on new car sales have tightened as supply chains stabilize and incentives return. Meanwhile, operating costs like labor, technology and regulatory compliance are continuing to climb. Many dealerships are also seeing rising costs tied to payment processing and customer financing, which are often less visible but just as impactful on profitability.
Q: How have shifting consumer buying habits, particularly longer vehicle ownership, changed where dealers need to focus to protect profitability?
A: Longer vehicle ownership shifts the revenue focus from front-end sales to back-end service. As consumers hold on to vehicles longer, the fixed operations side becomes even more critical. Dealers that invest in efficient service workflows, customer-friendly scheduling and digital payment experiences are better positioned to capture this extended lifecycle value.
Q: Why are more dealerships implementing surcharging today, and what specific revenue challenges is it helping them address?
A: Surcharging has emerged as a way for dealerships to offset rising operational costs. With shrinking margins in sales and increasing cost pressures across inventory, labor, compliance and technology, dealerships are looking for responsible ways to protect profitability. Passing along credit card fees in a compliant manner helps offset these broader financial pressures and preserve revenue without cutting corners on service or staffing.
Q: What does compliant surcharging look like in practice, and how can dealers ensure it’s implemented correctly without hurting the customer experience?
A: True compliance includes transparency, signage, receipt disclosures and adhering to state-specific regulations. While these are foundational elements, they’re not an exhaustive list of requirements. It’s not just about legality; it’s also about how it feels to the customer. When implemented correctly, customers are informed upfront and clearly presented with the freedom to choose a no-fee payment option like debit, cash or ACH. The key is clarity and consistency. Tools that automate compliance and disclosures help ensure the payment experience stays smooth and professional.
Q: What risks do dealers face when surcharging or payments are handled improperly?
A: Noncompliant surcharging can result in chargebacks, fines, legal consequences and even the loss of a dealership’s ability to process cards altogether. But beyond regulatory risk, poor payment experiences can erode trust, especially if customers feel blindsided by unexpected fees. Dealers should ensure their payments partner provides built-in compliance support and seamless integrations that prevent manual errors.
Q: With fewer new vehicle sales, where are dealers finding the best opportunities to maximize profits within fixed operations?
A: Dealers are increasingly viewing fixed operations as a cornerstone of profitability, and that requires more than just volume. The most forward-thinking teams are using automation and modern payment tools to streamline invoicing and create a smoother experience for both staff and customers. Flexible payment options like contactless and cards on file are also helping improve cash flow and customer satisfaction. As service volumes grow, the ability to operate efficiently while maintaining trust becomes a clear competitive advantage.
Q: What should dealers be looking for in a payments partner to ensure long-term scalability and compliance?
A: Look for a payments partner that not only understands the automotive space but also prioritizes compliance, transparency, and innovation. Scalability means being able to handle both in-store and online payments, integrate with your DMS, and adapt to changing regulations. Bonus points if they can reduce manual work for your staff while providing a secure infrastructure compliant with SOC 2 and NIST.
Q: As dealers plan for the year ahead, what steps can they take now to better insulate their business from ongoing economic and market volatility?
A: Diversifying revenue streams, especially by strengthening fixed ops, is key. But so is tightening operational efficiency. That means evaluating costs hidden in day-to-day transactions, modernizing systems that are prone to error or delay and choosing partners that offer flexibility. In uncertain times, control over the customer experience and financial operations becomes a dealership’s best defense.
Ultimately, dealerships facing tighter margins and shifting consumer habits are finding that a strategic combination of compliant surcharging, streamlined service operations, and modern payment solutions is essential. By prioritizing efficiency, transparency, and customer experience, dealers can protect profits, strengthen fixed operations, and position themselves for sustainable growth amid ongoing market challenges.
