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By David Meyer, Executive VP
There are some things about the BHPH market that will never change. Customers with credit challenges will always need vehicles and special financing to help them pay for them. But that doesn’t mean BHPH dealerships should continue to do business as usual. As new technologies emerge and evolve, so too must BHPH dealers in order to take advantage of them.
One area that BHPH should continually reassess and reevaluate is the collections department. Too many BHPH dealers are content with the status quo when it comes to collections — tolerating more skipped payments than they probably should. To remain profitable in this predominantly cash-based business, it’s critical to keep your collections current. This will make the difference between running a profitable business and running your dealership into the ground.
There are a number of ways to stymie the hemorrhage of cash in your BHPH operations. For starters, you can make sure you’re not overpaying for your inventory, that you’re keeping transportation costs in check, and that you’re taking advantage of online tools and strategies to reduce your marketing costs. Another way to control cash outlays is to optimize your staff requirements. That includes your collections staff. Along with that, make sure the collections staff you do have has all the tools in place for keeping collections current.
Another key way to control cash outlays is by performing credit checks, payment and employment history checks, and STIPS verifications on your customers before you finance their vehicle purchases. This will help you weed out the wrong customers who could end up costing you in defaults, repossessions and even vehicle damage or loss. Improving your collections processes and your repossession times will also go a long way to keeping more money in your pocket.
So how do you improve the efficiencies and effectiveness of your collections? One solution worth looking at is GPS tracking device such as GoldStar GPS. Look for a system that comes with automated payment reminders that help keep customers stay on track with their payments without requiring your collections staff to continually hound them, as well as remote starter interrupters that let you disable delinquent vehicles to encourage on-time payments. GoldStar GPS even includes stop history reports that help you verify places of residences and places of work. And of course, GoldStar GPS allows your collections staff to quickly locate delinquent vehicles for faster, more cost-effective repossessions.
Forward-thinking BHPH dealerships that have adopted technologies like GoldStar GPS have been able to optimize their collections while enabling their staff to process and handle more accounts more quickly. They’ve also seen a dramatic reduction in delinquencies as well as repossession costs. All of which means more money coming in, and less money going out.
If you’re ready to reevaluate the way you manage your collections, visit www.GoldStarGPS.com.