One of the many benefits of a Lease-Here, Pay-Here program is the bankruptcy remote nature of the lease.  Unlike the retail installment sales contract in Buy-Here, Pay-Here, a lease cannot be included in a BK.  Because the dealership owns the vehicle, the lessee must decide to either “accept” the lease and continue making the agreed upon payments, or “reject” the lease and return the vehicle to the lessor (the dealership).  There are no cramdowns available for Chapter 13’s or other headaches for the creditor typically associated with the bankruptcy process. 

When working with subprime customers, there is a possibility that some of them will file for bankruptcy. Leasing allows you to protect your collateral by ensuring your asset is either returned or receiving payments in this type of situation. 

Check out this article from Auto Remarketing on how the current bankruptcy pace has not been seen since the 1980s. 

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