BHPH Marketing Spend

When it comes to marketing and advertising in the Buy Here Pay Here market, Leedom has come up with a composite benchmark of how much dealers are spending per unit sold. The average spend is estimated to be $186 per unit and what that number includes is: Radio ads, TV ads, Print ads, Referrals, Key Chains, balloons and much more. That comes out to be $67,000 per year that the average BHPH dealer is spending on marketing and advertising. Some dealers of course spend less and some more, for example a dealer in Lancaster, CA that owns a chain with 3 different locations is spending $340 per unit averaging 110 units sold putting their yearly spend at about $450,000.

To read full article in Dealer Business Journal, and see how dealers are spending their marketing dollars, please click here.

High Wholesale Prices Effecting BHPH

High wholesale prices on used-vehicles has effected all in the used car market especially the buy-here, pay-here market. The combo of finding reliable used vehicles that can actually be financed at an affordable monthly rate can be tricky. According to Manheim’s annual Used Car Market Report, BHPH dealers are often paying $2,000 more for a car than a couple of years ago. This leaves BHPH dealers with the choice of  (if they can afford the higher priced vehicle) buying it in hopes they can sell it at the higher price or adjusting the financing to lengthen the loan terms which would place them at higher risk. 

Overall the annual report found that regardless of the collections or underwriting that the BHPH dealer had or has, what separated a successful BHPH dealer from one that isn’t doing so well is the vehicles that they have in inventory. When the cars are in good condition and affordable it means less time and money the BHPH dealer has to absorb due to mechanical breakdown and issues.

To read full article in SubPrime Auto Finance News, please click here.