MSP BHPH Software: Lease Here Pay Here

MSP allows you to offer Lease Here Pay Here to your customers. MSP is:

  • Fully compliant with government lease regulations.
  • Fully compliant with all county, state and federal tax regulations.
Why do Lease Here Pay Here?

The primary difference with leasing compared to traditional financing is that the title remains in the dealership's name instead of the customer's. This provides a number of benefits:

  • Dealerships can defer taxes because they can depreciate their inventory.
  • Repossessions are made much easier in most states.
  • In the event of a customer declaring bankruptcy, it is far easier for the dealership to retrieve their car since they still own it.
  • Sales tax expense for the car dealership is reduced in most states. When a car is financed all the sales tax is remitted upfront and paid in full even if the customer ultimately defaults. In most states, when a car is leased the sales tax is remitted gradually over the course of the lease with each payment. If the customer defaults, the dealer stops paying sales tax.
The other key difference between financing and leasing is that with leasing there is a residual value on the car and the end of the lease term. This also offers a number of benefits:
  • It can make it easier to sell the car because the customer can get more car for a lower monthly payment.
  • This will make renewing customers at the end of their term much easier. When a car is financed, the customer owns the car outright at the end of the term. When a car is leased, the customer has a residual to pay at the end of term. Most often they will opt to either extend the lease or to return the car and lease a new vehicle.
  • Customers opting to return cars at the end of their lease helps keep a dealership stocked with inventory. This is very helpful in a time where inventory is difficult to find.
There are two main disadvantages to Leasing:
  • In some states, because the title remains in the dealership's name, the dealership is vicariously liable should the customer allow their insurance to lapse and then get in an accident. In states with such vicarious liability, a prudent dealer would need to carry "contingent" or "excess" liability insurance.
  • Because there is a residual value remaining at the end of a lease term, monthly payments are smaller compared to financing. As a result, it takes longer for dealers to get their money back on a car.

Call us today if you have any questions, or need help getting set up.

Lease Here Pay Here Reports

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What BHPH dealers are saying

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I would highly recommend Constellation software to anyone (who of course isn't within 20 miles of us as I would hate to give another dealer the same edge we have!). Seriously, this is a top-notch program and I am amazed we went so long without it. Definitely the best package on the market. Thanks for everything and I hope to continue doing business with you for a long time.

Jason Giacopelli,
MPH Auto Sale/RPM Lenders, Inglewood, CA

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