Are You Cash Negative at the Inception of a BHPH Deal Due to Sales Tax?
Kevin Londerholm | September 9, 2019
A major advantage of a Lease-Here, Pay-Here program is the sales tax advantage that allows dealers to be cash positive at the inception of a deal. For lease-here pay-here dealers in “pay-as-you-go” states, the sales tax is calculated only on the actual monies collected by the dealer (i.e. down payment, first payment). Sales tax is then remitted to the state on each lessee payment received for the remainder of the lease. With this structure, the dealer can be cash-positive from the moment they roll the vehicle.
Note: If your state is not listed here, this does not necessarily indicate LHPH will not work for you. Sales Tax is one of many benefits LHPH offers.
Contact us at (619) 222-9990 ext. 1010 to discuss how you can build an LHPH program or learn more from our Ebook!