Favorable shifts in supply and demand are driving sales at buy here, pay here dealerships, but capital access remains a concern.
“Some of the strongest times for buy here, pay here profitability [are] coming out of a negative economic cycle and that’s where we are,” Mike Onda, chief executive of dealership network Byrider, told Auto Finance News.
The Carmel, Ind.-based BHPH retailer, which has 35 franchisees across 100 rooftops, doubled its pipeline of qualified franchise candidates in the first half of 2026, Onda said.
Interest in BHPH is growing as vehicle affordability pressures and more irregular income streams — such as those from gig work — limit thin-file consumers’ ability to get traditional auto financing, he said.
Heightened scrutiny
It’s typical for some operators to go out of business during BHPH downturns in credit cycles, Onda said.
Tricolor Auto‘s fall in September 2025 spurred some capital providers to adopt stronger controls such as more frequent collateral audits and tighter borrower-based reporting.
Credit committees and banks have heightened due diligence when evaluating potential relationships, Onda said, noting Byrider’s franchisees maintain individual banking arrangements.
“We haven’t seen anyone pull back in a way that concerns us thus far within the Byrider system,” he said.
A ‘cash-hungry business’
While affordability pressures spur more BHPH demand, liquidity challenges could prompt BHPH consolidation, Stephen Geis, partner at investment bank LEHNS Capital, told AFN.
“The failures that have occurred in this industry have been less asset performance; it’s more liquidity heart attacks.” — Stephen Geis, LEHNS Capital
“As there’s a growing appreciation for the size and scale of the market, there will be continued consolidation,” he said. “The failures that have occurred in this industry have been less asset performance; it’s more liquidity heart attacks.”
Without a strong collections department to recoup losses, BHPH retailers can overextend their business and hit liquidity issues quickly, Ryan Jones, co-owner of BHPH retailer Ace Auto Sales, told AFN.
“Our business is a cash-hungry business,” he said. “You can outsell yourself. You can sell more cars than you can afford to sell.”
The Fyffe, Ala.-based retailer does not have any credit lines with other lenders, but Jones said “buy here, pay here capital is hard to come by and is very expensive.”
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