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Four Things to Know Before Implementing a Customer Referral Program

Avid readers of the TIADA blog know that last month the TxDMV Board adopted new rules that allow an independent dealer to offer a customer referral program. So now that your creative juices are flowing, you might ask the question; what do I need to know before I implement my new customer referral program?

First, this is only for independent dealers. Your referral program cannot be associated with your franchise, wholesale, motorcycle, house trailer or mobility license – if you have one.

Second, the referral program is only for current customers and customers who have purchased a vehicle in the last four years. The newly referred customer doesn't have to purchase a vehicle from you.

Third, there is no cap on the amount of the referral fee and it doesn't have to be cash. Yes, you can offer gift cards, TV's, game tickets and other items that work for your dealership.

Last, you cannot make your referral program a part of any financing agreement or retail installment contract. The association would not recommend reducing a payment, waving a payment or requiring a current customer to use their referral fee to make a payment as a part of the referral program. 

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