Wholesale vehicle prices remain high and the costs associated with reconditioning vehicles continue to increase. The amount of money BHPH customers have available for down payments remains about the same, as it has for years. Buy Here Pay Here dealers are being forced to increase their cash in deal on each sale to maintain their sales levels and their customers.
These things have led many Buy Here Pay Here dealers to consider something they never would have before; selling their BHPH notes. More readily available cash and higher costs have made this an attractive option for some. Look at some of the advantages of selling off some notes so you can decide whether selling some or all of your notes is a step you should consider for your dealership.
Advantages
What are the benefits of selling your auto notes?
It does not create debt on your balance sheet.
It increases your purchasing power, enabling you to do more business.
Eliminates the need for bank loans or SBA Loans.
Improves your credit rating, and gives you cash to meet your obligations.
Eliminates using equipment, real estate or inventory for collateral.
Saves on your in-house staff costs.
Presents a professional image to your clients.
Eliminates the need for venture capitalists or partners that share in decision making and profits.
Quick Cash Flow
Even the best dealers often spend more money than anticipated and need a quick infusion of cash. Selling BHPH notes is an easy way to do this.
Focus on sales
By selling off notes, some dealers believe they can operate more efficiently. Selling a note transfers the collection responsibility, in most cases, to the note buyer. That means that the dealer and his staff can spend their time selling vehicles and let someone else worry about collecting the notes.
Eliminate interest expenses
Many dealers use floor plan lines, credit lines from their banks or loan to fund their operations. Some have had to take on partners to increase the equity in the business. Many of these dealers have decided that selling off notes might be a better alternative to these other funding sources by giving them more control of the process.
Factor ALL of your receivables, or only the ones you choose.
Stop factoring any time you choose without termination penalties. Start again any time you need the service.
