The Lot Blog

What BHPH Dealers Should Know About Subprime Financing

BHPH dealer speaking with subprime customers

If you’re a Buy Here Pay Here car dealer, chances are you already offer your own, in-house vehicle financing to car buyers with bad credit or no credit. If this is the case, you may not see the benefit in working with subprime lenders or finance companies. However, there are a number of advantages to offering subprime vehicle financing through your BHPH dealership.

Understanding Subprime Auto Financing

Similar to financing through a BHPH dealership, subprime auto financing is offered to car buyers with poor credit scores or limited credit histories. A key difference between offering subprime and BHPH financing is that with subprime financing, your dealership works with one or more third-party lenders or finance companies who are willing to approve car buyers with non-prime, subprime or deep subprime credit scores. Subprime lenders also usually report to the three major credit reporting bureaus, giving credit-challenged car buyers the opportunity to improve their credit history by making on-time car payments.

Advantages of Offering Subprime Auto Financing

While using your BHPH dealership to provide your own, in-house financing may seem like a win-win, collecting car payments from your customers every month may steal valuable time away from selling cars. Working with a subprime auto finance program like Credit Acceptance allows BHPH car dealers to continue providing approval to credit-challenged car buyers for vehicle financing without the hassle of managing monthly collections.

Credit Acceptance is an indirect subprime auto finance company that helps streamline the car sales process for car dealers enrolled in our program. Advantages of offering subprime auto financing through Credit Acceptance include:

  • Competitive advances: Our auto finance programs enable BHPH dealers to receive upfront advances, which can be used to cover business expenses and/or invest in more inventory.

  • Ability to sell nearly any vehicle: Credit Acceptance’s auto finance programs work well with nearly any vehicle, which gives BHPH dealers the opportunity to offer subprime car buyers more vehicle options from their inventory. Contract terms up to 72 months can help keep payments down and enable customers to finance newer, lower-mileage vehicles.

  • Same-day funding with eContracting: With Credit Acceptance’s eContracting, BHPH dealers can receive same-day funding. Processing begins as soon as the contract package and funding proofs are electronically submitted and approved by Credit Acceptance.

  • Collections: Credit Acceptance has a team of trained professionals that focus solely on collections, freeing up your time to buy and sell more cars.

If you are a BHPH car dealer who is looking to increase your inventory and profitability, Credit Acceptance can help. Sign up on our Become a Dealer page to learn more about our subprime auto finance programs.