HOUSTON — Rates are low, but capital is scarce.
To secure the limited funds, buy-here, pay-here dealers will have to improve operational efficiency, develop more detailed loan-performance reports, and forge stronger bonds with their lenders in order to survive in 2010.
“We all know that capital is the gasoline that goes in the tank in BHPH,” said Ken Shilson, president of Shilson, Goldberg, Cheung & Associates LLP, a Houston-based CPA firm specializing in the BHPH industry. “We have to utilize it more effectively than we have in the past.”
Shilson and Rick Potter, president of dealer funding provider CAR Financial Services Inc., outlined the steps BHPH dealers should take to secure the hard-to-come-by capital. Their advice came during a session at the 2009 Underwriting & Collections Conference for the National Alliance of Buy-Here, Pay-Here Dealers, an organization Shilson founded in 1999.
To read this article in its entirety, join Auto Finance News VIP. To be become a member, click here: http://autofinews1.wpengine.com/page/get-vip-access
Agreed
A tool often overlooked is collateral protection insurance. As the vast number of BHPH cars are re-sold, the delear/leander has a keen interest in the condition of the car. A hybrid CPI program available from the IL Group structures the coverage level to minimize the cost to the otherwise uninsured borrower while providing protect against physical damage loss to those car coming back. Fewer losses at the back-end do wonders to enhance the capital available for the front-end lending.
Ken — Do BHPH dealers typically use CPI? How much is a policy, if the typical car is only about $10k?
I have a new software program I am promoting to auto lenders, BHPH auto dealers, repossessors and much more! One thing:
I NEVER push something I don’t believe in.
Give me a shout if interested and I will explain the program, although this one is a no-brainer! This software is a tool every lender & BHPH Auto dealer should & must have!
Waiting for your replies!
elise