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Are You a Franchise Dealer Considering the Buy- Here Pay-Here Market? Listen Up! – Part One
The tides of business are constantly changing and if companies fail to ride the wave, they will miss out on great business opportunities that could prove very beneficial. Businesses must reinvent themselves to keep up with today’s fast paced competitive world. Think about it. If you remain stagnant or stuck in your ways, you can never expect different results. The same could be said about the automotive dealer sector.
In 2008, subprime lenders began to tighten their checkbooks, leaving credit-crunched customers out in the cold and dealers left to find new ways to finance customers.
To avoid closing their doors and remain competitive in the market, dealers began to look to the Buy-Here Pay-Here (BHPH) sector as a way to keep afloat. The BHPH method of financing has been seen as a great way to sell used cars, but large franchise dealers have steered away from the approach…until now. With more customers delaying the purchase of a new or used car, dealers are forced to think outside the box. Now is the perfect opportunity for dealers to implement a BHPH operation.
But before dealers jump in feet first, they need to prepare for what’s ahead. Venturing out of your comfort zone can be scary, so getting comfortable and familiar with the BHPH sector is a must. Approach it like you would a new investment; you wouldn’t buy a pricey item before doing your due diligence would you? Learn everything you can about the sector and participate in some training sessions. You want to become an expert in BHPH so when it comes time to manage and supervise, it’s a piece of cake.
Stayed tuned for part two in this series in which we’ll discuss more steps franchise dealers should take before taking the BHPH route and how a collateral management system might just help.