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It’s the Most Wonderful Time of the Year… To Buy Software (Part 1)

For dealerships, the holidays can be the busiest time of year. Customers are in a shopping mood, on the hunt for the perfect gifts for family, friends, and maybe even themselves. It’s crunch time to reach monthly and annual sales goals, and to finish clearing out the previous year’s inventory to make more room for next year's.

Don’t miss your opportunity to save amidst all the holiday spending. Now is the best time to buy software for your dealership. In this two-part series, learn how you can save money on software during the holidays, and why it’s more strategic to start now, before the new year begins.

Imagine a dealership brings in $52.7 million in revenue annually and spends 5% of it on IT. Saving just 10% on existing IT expenses would save $263,500 per year. Why save your gifts for Christmas? Put money in your stocking now. Here’s how buying software during the holidays can help you save green.

Season’s Greetings? More Like Season’s Sales.

Just like with holiday gift shopping, everything from software to hardware is on sale this time of year. As companies strive to meet year-end sales goals, they are more willing to offer deals for all types of products and services.

The best deals are more likely to be on software. Why? Because profit margins are higher on software than on hardware, there is more room to cut a deal, particularly on longer-term contracts or subscriptions.

Last Chance to Maximize Tax Deductions

After the new year celebrations die down, Uncle Sam will want his cut. Make large business purchases before the end of the year in order to increase your business expense deductions and reduce your tax obligation.

How do you ensure your year-end software purchase benefits your bottom line? Here are some facts you may want to consider.

1. Software that is leased or licensed, like subscription software, incurs regular expenses and can be deducted as expenses occur. For example, you could deduct $12,000 at the end of the year on a $1,000 per month software subscription.

2. However, most software purchases must be depreciated over a 36-month period. On a one-time software purchase of $12,000, you could deduct $333.33 per month.

3. You can also save on more than just the software itself. If you hire consultants to set up the software, their services may be deducted as a business expense.

Admittedly, we’re not tax experts, and with upcoming changes to the tax code, we strongly recommend checking with the IRS for the latest policies on business expenses.

Bundles of Joy

Keep your eyes open for companies offering bundles of multiple products at a reduced priced. Why bundles? Bundling usually saves 7-15% over the cost of purchasing the items separately. If you don’t see any bundles available online, ask the software provider directly to see if they have any flexibility.

This is a great opportunity to save on software you need to buy, and software you’d like to try out. You’ll lower your investment and risk while getting more value out of your purchase. Providers will often bundle products that complement each other, like selling tools for your website and your showroom.

Save Green This Holiday Season

Take advantage of holiday sales, year-end tax strategies, and bundling offers, and you’ll make a smart investment in your dealership’s future success. And that will make even the biggest Grinch jolly. Stay tuned next week for part two, to learn why purchasing software is more strategic than waiting for the new year.

Navigating the Software Jungle Ebook

Not sure how to decide which software to buy? Learn the 4 most important steps to choosing the right software for your dealership. Download your free guide, “Navigating the Software Jungle.”

Do you want to use ecommerce software to sell more cars online during the holidays? Learn more about Drive Motors’ online checkout for car dealerships.

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Webinar Recording: Put Customers in the Driver's Seat by Letting Them "Couch" Their Own Deals
It’s the Most Wonderful Time of the Year… To Buy Software (Part 2)

About Author

Rune Hauge
Rune Hauge

Rune Hauge is the Head of Growth at Drive Motors. He is experienced in ecommerce and digital media and is excited to share his expertise with dealerships to improve the car buying experience.