Eyo Toe | November 9, 2021
Jonathan Smoke, Chief Economist at Cox Automotive, stated in a Forbes article that he does not see the supply and demand normalizing until 2025. Between the new car factories temporarily shutting down during the pandemic followed by the chip shortage, Smoke predicts used car prices will remain high until the supply is back to normalized levels which could take years.
Buy-Here-Pay-Here dealers will be faced with the obstacle of finding a way to keep their customer payment affordable as car prices increase. One way of doing this is extending the term, but data has shown that the longer the term is with subprime customers, the more likelihood there is for delinquency. Leasing is an innovative solution not only maintaining an affordable customer payment, but also giving your dealership a competitive advantage.
Check out these benchmarks from out LHPH Summit comparing BHPH and LHPH.