The BHPH market, and the auto dealer industry as a whole, has its ups and downs. Slow months and gold rushes like tax return season. To survive and even thrive in this climate takes a truly savvy dealer with rock solid financing relationships – both funding for their lot and financing for their customers.
3 Things you Need to Do to be a Successful BHPH Dealer
1) You Need BHPH Capital
As you know, stocking inventory for your BHPH dealership isn’t cheap. Whether you buy at auction or through other channels, you have the base cost of the vehicle plus reconditioning. Now add operational overhead, from staffing to marketing, and multiply it by all the vehicles on your lot. It certainly adds up.
Even if you’re selling at a healthy clip, you know the dollars coming in won’t replenish your bank account right away. It takes time to see that return on investment. In the meanwhile, you need to maintain your inventory levels, which takes financial backing from a bank or other financing company.
2) And You Need to Sell
Now, let’s talk about your customers. As a BHPH dealer, you see you fair share of buyers with less than perfect credit, especially during tax season. This is the one time of year that they’ll have the cash on hand to make a down payment. No matter the time of year, working with an indirect source to finance the loan means walking a very thin line.
On one hand, you have a customer ready to buy. On the other, you have a risky customer that could mean disaster for you and the relationship with your financing company.
What it boils down to is a lot of leg work on your end, trying to determine if the risk is worth taking. You have to verify loan stipulations by making calls to landlords and employers, along with checking other criteria required by the financing company. And if you simply take a “shotgun” approach to see what sticks, your look-to-book ratio goes out the window along with your financing partner.
3) Protect Your Business and Partners
So, here you are. Trying to succeed in the ups and downs of being a BHPH dealer. You need cars to sell and customers to buy them. And that means creating solid relationships with your financing partners and protecting every car, every dollar.
This is where a vehicle tracking solution like Spireon GoldStar GPS can give everyone peace of mind. With it, you can verify STIPs faster. Ensure more on-time payments. Locate vehicles in real-time, then recover them quickly if it comes down to it. And of course, maintain a healthy relationship with your financing company by securing every vehicle that drives off your lot.
Here are a just a few nifty features that come built-in with GoldStar GPS:
To learn more, check out our BHPH solutions and feel free to get in touch with us for a free demo. Find out why over 8,000 dealers (and numerous financing partners) trust Spireon.