Are you interested in opening up a buy here pay here car lot? Want to know the bhph training manual? BHPH can be a very lucrative venture. There are several different ways you can make money doing it. The three main sources of revenue are:
- Front End Profit
- Back End Profit
Interest: You are the boss so you set the interest rate. You get to keep the profit on the car and collect interest on top as it’s coming in.
Back-end: You can make back-end profits on top of your front end profits. Sell Gap Insurance and Service Contracts. Imagine selling a $795 Gap on top of the profit you made off the car. That’s an additional $650 made on the back-end of the deal.
Front-end: The profit you made off of the car. Let’s say your cost in the car was $2,500 and you sold it for $4,000. You would have made $1,500 on the front-end in profit.
No Discount: There is absolutely no discount when doing buy here pay here. Discount is one of the main turnoffs to working with sub prime lenders for bhph dealers.
Subprime lenders will only do the deal if it’s really in their favor and not only that, they’ll only do it if they can collect most of any profit you make off the car. This is what a discount is. It is the third party bank taking a portion of your profit in order to do the deal.
Buy here pay here financing is also known as In House Financing. The car lot is the bank, not some third party lender. They carrying the loans. Borrowers pay directly to the dealer. The lender puts a lien on the title and once the borrower pays off the vehicle the lender releases interest in it and hands the title over to the registered owner making them the legal as well as the registered owner.
Interested in bhph consulting? Just click on the link and go to the strategy session form.