New Car Dealers BHPH Industry

A number of franchise dealers are considering at adding a buy here pay here service to their business to create an income-generating center. With the current economic situation continuing to affect new-vehicle sales, and the declining credit scores of vehicle buyers franchise owners are looking at this possibility. It’s more challenging than opening a new vehicle dealership. The addition of Buy Here, Pay Here can be costly and have negative cash flow for some time. The long term profit potential, however is more consistent and reliable than the current department for vehicles. This is Part 1 of a series of articles to help new car dealers get a better understanding of the BHPH industry. More about the author!

My BHPH company was established in the car shop. I ran both stores for more than 26 years.

For a while buy-here-pay-here been seen as an operation not particularly good for brand new franchisees of cars. First of all because of the differences in the demographics of the customers, new car franchise staff and owners are concerned that they’d have excessive BHPH customers who would be ensconced in their showrooms for new cars. It was also possible that, if shops started selling buy-here-pay here, the average Fico score and approval rates of customers who have “good” credit will decline. It’s possible that these are true. However, the advantages of BHPH are so good that there are still ways to minimize negatives.

This will require you to commit to it financially, mentally, and also with your time. I like to imagine it as a franchise that offers very strong long term possibilities, but it will need some attention.

How to start…

1) You should get an qualifications in the field of Buy Here Pay Here.

Start by going to the NABD website (National Association of BHPH Dealers). There are a list of resources, seminars and free stuff to get you started. Training is available through CarBiz, Leedom Associates, and many more organizations.

Then join a twenty group. This is a special offer for BHPH by NCM, CarBiz and Leedom Associates. While you’ll be able to learn more than you can ever need but it’s also a lot of work and can prove difficult if you do not accept constructive criticism. There is no better way to master BHPH and to run your business successfully.

2.) Before you decide the size and speed at which your company would like to grow, you’ll need to decide how much you are willing to invest. Negative cash flow figures can quickly add up (they can be as high as $100’s thousand per year if you’re not cautious). Slow steady growth is the best way to go.

3) To make it easier for franchisees who are new to establish their business, they will require a separate site with the company’s name in a different way. You will also need dedicated BHPH personnel to oversee the lot. The new people in your car won’t be able to make the adjustment without physical separation.

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