Buy Here, Pay Here (BHPH) dealerships help credit-challenged buyers secure reliable transportation. However, running a BHPH dealership comes with unique financing challenges.

Managing cash flow, mitigating risk, ensuring compliance, and maintaining a steady inventory can be challenging without the right approach.

By implementing structured financing solutions, streamlining collections, and optimizing cash flow, BHPH dealers can focus on selling more while maintaining financial stability.

Managing cash flow for long-term success

The challenge

Because BHPH dealers finance vehicle sales upfront, it ties up capital and limits your ability to purchase new inventory. Since your dealership collects payments over time, inconsistent cash flow can make it difficult to grow operations.

The solution

A structured financing model allows BHPH dealers to:

• Secure upfront funding when selling a vehicle
• Generate multiple revenue streams through structured payment models
• Ensure steady cash flow, rather than waiting on customer payments

By reducing your reliance on long-term installment payments, your dealership can maintain liquidity for purchasing inventory and cover operating expenses.

Reducing the burden of collections and default

The challenge

Handling collections in-house is resource-intensive. Late payments can strain your cash flow, while repossessions add further costs. That’s why you need a reliable way to manage delinquent accounts while keeping operations running smoothly.

The solution

A structured collections strategy can:

• Improve payment tracking and enforcement to minimize defaults.
• Implement automated billing and payment processing to reduce late payments.

By simplifying collections, dealers can spend more time selling cars and less time chasing payments.

Approving more customers without increasing risk

The challenge

Many BHPH dealerships struggle to approve customers with little or no credit history. Without the proper financing structure, they may need to turn away potential buyers, leading to lost sales.

The solution

A flexible financing model can:

• Expand approval criteria to reach more customers
• Offer structured payment plans that fit a buyer’s financial situation
• Provide credit-building opportunities for customers making on-time payments

By increasing approval rates, you can serve a larger customer base and grow their sales volume.

Maintaining inventory without draining capital

The challenge

Purchasing and reconditioning inventory requires a significant upfront investment. Many dealers struggle to maintain a steady vehicle supply without exhausting their cash reserves.

The solution

A financing structure that supports inventory management can help you:

• Access upfront capital to restock your lot
• Turn inventory faster by maintaining a steady flow of reconditioned vehicles
• Stock vehicles that match customers’ affordability levels, ensuring more successful sales

With consistent inventory turnover, you can reduce holding costs and maximize profitability.

Navigating compliance and regulatory requirements

The challenge

BHPH dealerships must comply with a range of lending laws and financial regulations, including:

• Truth-in-Lending Act – This federal law requires lenders, including BHPH dealers offering in-house financing, to provide clear and accurate disclosures about financing terms. Dealers must inform buyers about the annual percentage rate (APR), total finance costs, associated fees, and repayment schedule. Failure to disclose this information properly can result in severe penalties and customer disputes.
• Fair Debt Collection Practices Act – While primarily aimed at third-party debt collectors, this law still applies to BHPH dealerships when they collect payments. Dealers must ensure that all collection efforts are lawful and ethical, meaning they cannot harass customers, make false statements, or use unfair practices. Violations can lead to lawsuits and hefty fines.
• State and local financing laws – Many states have consumer protection laws, repossession rules, and lending regulations that BHPH dealerships must follow. These laws often set the maximum allowable interest rates, disclosure requirements, and fair vehicle repossession procedures. Your non-compliance can result in revoked business licenses, financial penalties, or legal actions.

Failure to meet these standards can lead to legal penalties and financial losses.

The solution

BHPH dealers can protect their business by:

• Utilizing legally structured contracts that meet regulatory guidelines
• Ensuring transparency in lending terms and collections practices
• Adopting underwriting policies that align with local and federal laws

Staying compliant means you can avoid costly legal risks and operate with confidence.

Leveraging technology for smarter loan management

The challenge

Many BHPH dealerships track payments, accounts, and contract performance using manual processes or outdated systems. This leads to inefficiencies, errors, and difficulty scaling operations.

The solution

Modern loan management tools help dealers:

• Automate payments and tracking, reducing administrative workload
• Integrate with dealership management software for better efficiency
• Utilize digital contract processing for faster deal approvals

By embracing technology-driven financing solutions, dealerships can enhance operational efficiency and reduce administrative burdens.

Strengthening your BHPH dealership financing model

BHPH dealerships face unique financial challenges, but the appropriate financing structure can help them:

• Increase sales by approving more customers
• Reduce collection burdens with automated solutions
• Free up capital for inventory and expansion
• Stay compliant with legally structured contracts
• Maintain steady profitability, even in uncertain markets

Join a network designed for BHPH success

Enrolling in Credit Acceptance’s dealer network provides the tools, financing structure, and risk management support needed to sell more cars, approve more customers, and maintain steady cash flow.

Credit Acceptance offers a path to growth and profitability for BHPH dealerships looking to expand their financing capabilities while reducing operational burdens.