The debate on whether to post prices on vehicles has raged almost since Buy Here – Pay Here was invented. The number of dealers who actually post prices seems to ebb and flow like the tide based on the current status of that debate. In today’s business climate of increased transparency and ever-increasing regulatory scrutiny, the debate is again in full swing. Most dealers who argue against posting prices on
Many BHPH dealerships never pulled credit reports in the past. Their philosophy was, “My customers all have bad credit. I don’t need to pay for a report to tell me that.” That philosophy has been changing over the past few years and obtaining a report on all prospective customers is a “best practice” that should be adopted by all BHPH dealers. You need to obtain credit reports on your prospective
Tax time will soon be upon us. Buy Here – Pay Here dealers look forward to this time of the year because many dealers make a high percentage of their annual sales during this period. One dealer I read about claimed to make 80% of his sales during this quarter. That seems a too high to me and I would argue his marketing and sales efforts during the rest of
Determining who to make loans to is one of the critical factors in the success of a dealer controlled financing business. Making the wrong decisions can cause you considerable collection work and expense than making good lending decisions. Poor BHPH underwriting can increase your delinquency, stunt your cash flow and trigger excessive charge-offs. Good BHPH underwriting can help you avoid these mistakes, build your cash flow and minimize charge-offs. Effective
A great article that Ken Shilson, founder and President of the National Alliance of Buy Here Pay Here Dealers, wrote and has graciously allowed us to share with you here. New developments in the Buy Here, Pay Here (BHPH) industry are happening at an unprecedented pace, and new operators are entering the business in record numbers! Both new entrants and experienced operators are seeking exceptional profit opportunities in the low
I often begin our Collections training class by asking the students what the most important collection tool is at their dealerships. I get answers ranging from the telephone to the tow truck but I have never had a student give me the right answer. The correct answer is the application. That’s right, if you want to successfully collect the loans or leases you make to your dealer controlled financing customers,
I have just returned from the 1st Annual Mid-Atlantic Independent Auto Dealers Association Conference in Atlantic City. It was an excellent conference with 25 educational sessions to assist independent auto dealers. The conference was very well run and, based on everything I heard from dealers in attendance, will continue to grow every year. If you weren’t there, I’d put this one on your calendar as a must attend for next year.
The Buy Here Pay Here market continues to grow. According to studies done by Experian, 9.18% of all vehicles financing in 2010 and 14.38% of used vehicle financing were done by BHPH dealers. Last year those numbers grew to 9.8% of all vehicles and 16.62% of used vehicles financed. As the economy continues to struggle, it appears this growth trend will continue for 2012 and beyond. Growth in this market
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 the Dealer Controlled Financing business, it is critical that we take responsibility for our customer and make sure we put them in the right vehicle with the right terms to help them succeed. The first step is to explore the customer’s needs and help them to select the correct vehicle for them. I’ll never forget the customer with a wife and 3 children, 2 still in car seats, who
