In my last article, we discussed the importance of having the right collectors for your DCF dealership. Once the sale or lease is completed, no one will have more contact with your customers than your collectors. If you fail to hire, manage and train the right collectors, it will be very difficult for you to actually realize the profits you generated during the sale or lease of the vehicle. Without
Effective collections is the lifeblood for any dealer engaged in dealer controlled financing. You’ve sold or leased the vehicles but you won’t realize the profits you made or produce the cash necessary to replenish the inventory or pay the bills until you collect on what is owed you. Your sales people will talk with the customer regularly for a couple of days or maybe even weeks until the sale is
I got a call from one of our clients who we provide consulting for. “Al”, she said, “I’ve got a problem”. She continued, “I just had a payment rejected for a customer we have set up on an automatic payment plan. I tried to call his cell phone and now the number is no good. We did a field call to the residence address we have on file and the
We’ve often heard the phrases “Don’t expect what you can’t inspect”, and “Knowledge is power.” These could not be more true than they are today in the Dealer Controlled Financing industry (Buy Here-Pay Here, Lease Here-Pay Here and Rent-to-Own). Knowing how well your dealership and portfolio are performing compared to industry standards and compared to your own historical performance is invaluable. If you don’t inspect it, you can’t track it.
Managing a Buy Here – Pay Here dealership can be like walking a tightrope. A manager needs to balance creating a friendly atmosphere against the need to maintain a business relationship. Potential customers should feel welcome when they come in to purchase a new vehicle and current customers should feel like the dealership cares out about them and what is going on in their lives as they make their payments.
It is a standard practice in the Dealer Controlled Financing business to charge the same interest rate to all customers at a particular dealership but the methods for determining that rate vary widely. There are 3 basic methods for deciding on a rate: 1. Charging the maximum allowed by state law Every state has a law limiting the amount of interest a dealership is allowed to charge. This maximum rate
“In a dark place we find ourselves, and a little more knowledge lights our way.” Many BHPH dealers find themselves in a dark place. Any tax season rush is over, sales are down and delinquency is up. Now is the time to take a good, hard look at your dealership and determine where it can be improved. There are numerous industry magazines, websites and other sources where you can find
In previous articles I have discussed the dilemma dealers face regarding Cash In Deal with the current high state of wholesale vehicle prices and additional potential sources for BHPH inventory. This month I’d like to take a look at inventory pricing. After all reconditioning has been completed; the person responsible for establishing the selling prices of your inventory should drive the vehicle. Only after driving the vehicle should he then
Would you like to make more money? If you answered no to that question, you can stop reading. If your answer was yes, you should consider entering the Buy Here – Pay Here business. Retail Cars You Currently Wholesale Buy Here – Pay Here offers you the ability to retail vehicles that you currently wholesale and make more profit. Taking trade-ins that don’t meet the standards for your retail sales
As I analyze data and visit Buy Here – Pay Here dealerships, I am constantly amazed by the amount of overage inventory some dealerships insist on maintaining on their lots. They seem to be unaware or unconcerned about the costs that are associated with this overage inventory and how it can be dragging the performance of their dealership down. Let’s look at a few of the ways stale inventory can
