Dealer glossary
Buy Here Pay Here (BHPH)
A dealership model where the store finances the customer itself and collects the payments, instead of selling the loan to an outside lender.
Definition
Also called BHPH, in-house financing, tote the note
In a conventional deal the dealership sells the car and a bank or finance company buys the loan. In Buy Here Pay Here the dealership keeps the loan. The customer pays the store directly, usually weekly or twice a month, and the store carries the credit risk.
That changes what the business is. A BHPH dealer is running two businesses at once: selling cars and servicing a loan portfolio. The second one is where the money is made or lost, and it needs its own tooling - payment schedules, due queues, promises to pay, payoffs, and a way to handle the accounts that go bad.
It also changes what the software has to do. A payment is not just cash received; it has to split across principal, interest and sales tax, and it has to post to the books. When the notes are serviced in a system separate from where the deals were written, the two stop agreeing, and month end becomes a reconciliation exercise.
Related terms.
Promise to pay →
A recorded commitment from a customer to make a missed or upcoming payment by a specific date.
Related finance company (RFC) →
A separate company, affiliated with the dealership, that holds and services the notes the dealership originates.
Repossession →
Recovering a financed vehicle after the customer has defaulted on the loan.
See how this works in one system.
DealersCloud runs inventory, the CRM, desking, the books and your dealer website on the same records - so the things in this glossary stop living in separate places.
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