Why dealerships should move to a lease here pay here business model:
- To differentiate themselves. Competing for volume in the BHPH segment often leads to lowering rates, more aggressive buying, higher advances, and abusing program guidelines in general. With leasing, the dealer can make their program better for the customer and not provide an Apples-to-Apples comparison for the competition.
- Better options when a deal goes bad. There are more favorable rules for repossessions and bankruptcy – get the car back and on the road quicker.
- No sales tax due up front in 32 states, which leads to lower advances and hence, lower losses with much improved cash flow.
- Easier to sell and retain the customer. The dealer can provide a nicer car at the same payment, and the customer has to come back at the end of term.