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Entering the Special Finance Market for BHPH

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Entering the Special Finance Market for BHPH

By Mark Behnke, RVP Automotive Solutions

A few bumps in the road may have slowed the economic recovery, but that hasn’t been the case for Auto Finance! In 2012 dealers were able to find more sources for their credit-challenged customers, with Experian Automotive’s quarterly auto finance data showing a significant increase in loans made to below-prime car buyers. It’s an exciting prospect, isn’t it? Special Financing opens the door to so much potential business in the auto lending industry and dealers can reap the benefits right along with the commercial lenders.

Keep in mind; you don’t want to jump into the BHPH Special Finance market blind!  As big a potential profit source as it is, dealers still need to do their homework in advance to ensure success.  Many dealers are becoming more comfortable with the idea, and the truth is, it’s a whole new business. If you’re going into it with no experience, go to NABD or other online/face to face Special Market financing seminars first. Put yourself through some training sessions and get comfortable. It is important to fully understand BHPH and this type of financial market, the risks involved, and the tips to success well enough to manage it and supervise it properly.”

Start by visiting NABD at The association is a tremendous resource and a great place to start gathering information and look for educational opportunities. In any case, your first step must be to create a comprehensive business plan and stick to it.

The most fundamental part of any BHPH Special Finance business plan is the underwriting guidelines and, in particular, the cash-in-deal commitment. Once you decide how much of your cash you’re willing to invest in each customer, you can start to figure out how much cash you’ll need in reserve to keep it going.

For independent dealers whose entire business model revolves around indirect special financing keeping up with the changing market has been a challenge, to say the least, but there are resources and help available. The profit margin is tremendous for BHPH dealers who are looking to expand their client base. Special market financing is also ever present no matter the economic condition, so though it may seem like a whole lot of risk, entering the Special Finance market is a trend that is here to stay!

For more information on how to protect the deals you close via Special Financing please visit or email me.

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