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Category Archive: BHPH

Brent Carmichael

BHPH Basics: Inventory Acquisition

Vehicles in Lot

One of the hottest topics in the Buy Here Pay Here (BHPH) world is—and has always been—inventory. Not only where to buy vehicles, but also what stock to select and where to find it. Like most other areas of the BHPH business, the most successful dealers are those who focus on the basics. I’m also a firm believer in the K.I.S.S. philosophy: Keep It Simple, Stupid. No need to over think, and thus, over complicate things.

Repeat customers

The first fundamental that successful dealers focus on is repeat business, aiming for 30 to 40 percent of their monthly sales from repeat customers. These people will be either low-balance customers who traded into a new vehicle or previously paid-out customers who have returned to purchase again. With this approach, a sizeable portion of the dealership’s monthly inventory needs could be satisfied with vehicles with known histories. Pretty valuable information to have!


Recycling of repossessions is the next basic. With repossessions, you have the ability and time to check out the vehicle completely to determine its reconditioning need. You also have some historical information for it. Some of my dealer clients are recycling 60 percent of their repossessions each month, on average, to put back out on the lot for sale. The only negative seems to be that the recycled vehicles tend to have a higher reconditioning cost. They may need a little more love to get lot-ready but, overall, this tactic is more cost effective than purchasing at auction.


Speaking of auctions, they are an essential you should not overlook. It is true that there are not as many vehicles going across the block these days, but it is still an effective source. One positive to the downturn in vehicle volumes at auction is that auctions must compete for dealer business. Some sales even waive buy or post-sale inspection fees! There is no better time to expand your horizons, so check out as many auctions as travel and expense will allow.

When shopping for new or additional auction sources, don’t limit your choice to just the large national sales. Independent auctions are becoming very aggressive, going after dealer business as well. I may be a little old-fashioned, but I’ve always preferred the independent auction because they seem to provide better service and a better overall buying and selling experience.

Digital options

I also recommend utilizing the internet in your search for an auction pot o’ gold. Most auctions, national and independent, post most—if not all—of their upcoming sale vehicles online with such tools as Smart Auction, Open Lane/Adesa, or OVE. Not only can you use these systems to purchase vehicles, but dealers can also use these resources to research upcoming sales and plan their next visits. You might just stumble on an auction you weren’t even aware existed.

Dealer trades

A final basic in the K.I.S.S. approach to inventory acquisition is dealer trades. New car sales are at an all-time high, so dealers should have a few trades lying around. No, it won’t fill your overall need due to those who are holding on to their trades waiting for the super aggressive subprime market; but, you can still fill a partial need with this buying tactic.

I think the key here is personal contact with the dealer. You aren’t going to get anywhere by just calling the dealer asking what they have! Instead, take the time to visit the dealers … and develop a mutually beneficial relationship for the long run.

Not so basic: private sellers

Not necessarily a basic, but a stone that should not go unturned, would be the private seller. Craigslist, eBay, newspapers, and auto magazines are all sources to find vehicles. I’m not going to lie: I used to turn my nose up at this tactic, feeling it wasn’t worth my time or effort. But with today’s economic challenges, there are sellers out there who need the money to get by and are far more reasonable in their expectations. Will it fill the lot? No, but it could fill part of it, and that is what counts.

When it comes to BHPH inventory acquisition, I think it comes down to two very simple questions: How much do you have in the bank account? And how much of that are you willing to spend? Finding the right inventory for the right price is still possible. Just focus on the basics, and soon you’ll be working smarter, not harder, to fill your lot.

Learn about NCM’s 20 Group and consulting options for your BHPH dealership. And don’t forget to check out our BHPH training options.

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Brent Carmichael

4 Essentials for Big Sales in the Dog Days of Summer

Picturesque desert landscape with a golden sunset over the dunes

The dog days of summer are here. The typical BHPH dealer will sell 30 percent to 35 percent of their annual units in the first three months of the year. They will also realize about the same percentage of their annual profit in the first quarter.

So, if you got off to a slow start this year, summer could be the only way to salvage your annual sales; however, it’s going to be a lot harder.

But you can profit in the summer—with the right plan.

Good sales in the summer are no different than selling in the first-quarter heydays. It just requires more focus and drive because your customers have less money and can be harder to find. The four steps I outline below will give your team the skills and focus on making sales, even in the most challenging months.

Step One: Develop the right skills

The first of the key ingredients, and most important, is simply training. Well-trained salespeople can sell any time of year.

Set up a training schedule to get your team on point. Both phone training and basic sales skills training should be done weekly, at a minimum. Specifically, address how to overcome objections; role playing is a good way to accomplish this.

Educate your staff on how to set effective appointments by recording and reviewing the calls. Lot traffic is at a premium during the dog days, so make sure your people know how to handle effectively what opportunities they do have.

Step Two: Keep up appearances

Appearance is critical. Now, I’m not necessarily talking about your employees’ appearance, which should always be neat and professional, but your overall lot appearance.

Over my many years in the business and as an executive conference moderator with NCM Associates, I’ve discovered that the No. 1 reason BHPH customers choose a dealership is that it looked good when they drove by. Let’s take this at face value and make sure your lot is the best-looking one in town!

Fortunately, improving your lot appearance isn’t difficult. Make sure it is always neat and orderly.

Arrange vehicles evenly and with a good mix of colors and styles; don’t have them face all four directions of the compass! Host a lot party or rodeo at least once a week to force yourself to keep the lot fresh.

And don’t forget the cars themselves. You should consider the vehicles on your lot as your mannequins and treat them the way a fine department store treats theirs. Keep them fresh, neat, clean and always ready to sell. That goes for overall lot appearance as well. A fresh coat of paint and some weed killer can do wonders.

Step Three: Entice your customers

Successful dealerships understand that you can’t just wait for clients. Good marketing brings people to your lot; develop a plan that offers attractive incentives.

Summer is a time when repeat and referral programs really pay dividends. And it is also a good time of year to focus on referrals, not just with your customer base but with outside companies and people as well. (If you are not already paying referrals to non-customers, it’s something that you should give some serious consideration to. I can assure you some, if not all, of your competitors are doing it.)

Marketing also extends to your Web presence. Make sure your website is up to date. Read through your “About Us” sections and any testimonials — do you need to make changes?

Review your employee introductions — has anyone left or been promoted? Do the photos need to be replaced? Reviewing photos is of particular importance if you display inventory: I was on a dealer client’s website the other day, and the inventory photos had SNOW on the vehicles!

It’s also critical that you check any advertised specials. You don’t want someone stopping in for a deal that’s no longer current!

Step Four: Get your message out

If you want to make the most of the dog days of summer, make sure people know about you. In this very competitive industry, advertising in some form or fashion is a must. The two most popular advertising media are, of course, television and radio. And, contrary to popular belief, use doesn’t drop off in the summer.

Advertising is only effective when it reaches the right folks with the right message. When promoting in these channels, remember to advertise to your customer, not yourself. Chances are your buyers watch different television stations than you do and may even listen to different radio stations.

Select ad placements where your clients are watching and listening. If you aren’t certain what media your customers are using, survey both new and existing customers to gauge their entertainment preferences. In other words, just ask them.

Moving past traditional media, there are many options in social media to get your message out. I won’t go into them here, but I recommend you get the basics by reading this great article from Trevor Robinson, NCM Associates’ director of retail solutions, training and development.

As you can see, the formula for selling in the dog days is the same as selling in the heydays. Although there are usually fewer opportunities, you can capitalize on what you have when you pay more attention to detail.

And it doesn’t need to be expensive—the two most important I outlined above are the least expensive. With the right mix of training, lot maintenance, and marketing and advertising, I know you can keep the dogs at bay.

Join the NCM Institute its upcoming Buy Here Pay Here class, BHPH Collections: A Customer-Centric Approach. Article originally published by AutoRemarketing on May 31, 2016. Be sure to check out more insights from them.

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Dustin Kerr

So, What’s The Secret To A Successful BHPH Business?


I have the pleasure of meeting buy-here, pay-here owners all over the country when I travel. I see dealers of both small and large operations. Sometimes, I meet a BHPH owner that is just starting out. Other times, one who’s been going strong for many years. I’ve even encountered retail dealers who are seriously considering a jump into our industry.

Even with all these differences, there’s one universal question that unites these people: What’s the best way to run a BHPH business?

You may not like my answer

It’s a question I take very seriously, so I answer it honestly. And, I’m not going to lie. So, generally speaking, they aren’t very satisfied with my answer!

Why? Because I genuinely believe that there are many successful ways to run this business. There’s no cookie-cutter solution. Success depends on your available capital and your day-today involvement, your commitment to collections, and so much more. How the business performs is heavily influenced by your temperament and your market — there are dozens of factors that can make or break BHPH dealerships. I see different business models every day that are highly successful.

Pick your method — but follow best practices

Even though I heartily believe that the right success model depends on your circumstances and attention to detail, each of the profitable BHPH businesses I’ve encountered operate with a few best practices that I believe you should follow to maximize your business and mitigate your exposure to risk.

1. Understand this is a collections business, not just a sales business. I see more dealers struggle with this idea than any other because they just don’t understand this simple, but crucial, point.

It’s especially hard sometimes for someone who has built a successful franchise or independent business where sales, gross and expense control were the keys to success. In the BHPH business, we cannot just sell our way out of bad collections! To make the most of the business, our collectors have to be the dealerships most talented, best trained and best compensated employees. A well-run collections department can make up for a lot of mistakes in other areas.

2. Get serious about compliance. If you don’t have the wherewithal to devote time every day to compliance, I suggest not getting into this business. If you’re already in and still not serious about compliance, I suggest getting out while you still have a business and a choice!

The CFPB and the Department of Justice will do everything they can to put you out of business if they even think you are not following their rules. Ignoring compliance puts everything you have in jeopardy. If you can’t (or won’t) manage that reality, you shouldn’t have a BHPH dealership.


3. Be an advocate for BHPH businesses. Reread No. 2. If you want the life in BHPH industry to be easier, you have to fight for it. One way is to join the state and national associations that are fighting for your businesses survival against the likes of the CFPB and DOJ. Not only should you be a member, but it is very important you contribute financially to these associations so they can fight for your rights.

Connect with your city council members, senators and state/national representatives and other important political figures in your area. Make sure they understand just how much your business contributes to the local economy—and educate them about the industry, so they realize that you aren’t the “bad guy” consumer advocacy groups like to make you out to be. Figure out their stance on the CFPB and DOJ and vote accordingly.

Remember the quote by Edmond Burke: “The only thing necessary for the triumph of evil is that good men do nothing.” Stand up for yourself and others.

4. Join a 20 Group. The best career move I ever made was joining an NCM 20 Group. Nothing else I tried made me a better operator— or provided a better ROI—than the insights I gained from that group.

The power of peer collaboration and accountability that you receive in a 20 group setting is magnificent. Imagine sitting in a room with 20 other dealers talking about your business. You get to see the good, the bad and the ugly and have, literally, hundreds of years of experience in the room with you! The one warning I will give you, though, is that you must have an open mind and be ready to go back to your dealership and make meaningful change because your fellow 20 group members will hold you accountable to making your business better. Even when you’d prefer they didn’t.

BHPH success is possible — and important

I love this industry. Although we often get a bum rap, BHPH dealerships provide a valuable service to the vulnerable in our community. We help people learn to be financially responsible, and we give them the means to get up on their feet and improving their lives. It’s amazing.

So, no. There’s no perfect business model success in this industry, no matter how many times people may ask me to show them the way. But if you take our work seriously, commit to helping people while making a profit and follow the best practices I’ve outline above, you’ll make it. And, if you encounter bumps along the way, give me a call and I’ll help you out!

Join the NCM Institute and Dustin Kerr for the upcoming class, BHPH Collections: A Customer-Centric Approach.

Article originally published in the March/April 2016 issue of the BHPH Report. Be sure to check out the full issue!

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Dustin Kerr

Watch Out For Tax Season Temptations

Car taxes  design

It’s that time again. Right now, buy-here, pay-here dealers are in their busiest time of the year: tax season.

Although most dealers will tell you that tax season is not nearly as crazy as it used to be, there’s no denying that it’s still a major event in our business. BHPH dealers are likely to sell more cars—and collect more cash—in the next couple of months than any other month for the rest of the year.

Tax season means buyers, but what kind?

Sadly, it’s not all good news. It’s during tax season that we put our worst performing paper on the books. Flush with income tax returns, people walk into our dealerships with $1,000, $2,500, maybe even $4,000 or more down. And, just as giddy as our buyers, we completely forget about our underwriting guidelines and the fact that we are still going to have to collect on this account for the next two to three years.

Now, some dealers simply don’t care how well the paper performs. They feel that the cash down overshadows the risk of bad underwriting. And, many argue, they will just get the car back quickly if the customer defaults.

Now, I don’t entirely disagree with this philosophy. There is a certain point where the amount of cash down mitigates the risk involved. However, I always tell my consulting clients that there’s a way to do both—get the large cash down payments and properly underwrite each loan to ensure the highest probability of success.

And that approach, I think, is better.


Don’t lower your standards

The first thing we need to do? Slooowwww dooowwnnn! Hey, I get it. This time of year is very hectic, not only with sales but also with collections. It’s very likely we have more people in our lobby right now than any other time of the year.

When things start to get a little crazy, though, usually the first thing to suffer is attention to detail. Go back and look at the applications that were collected during tax season the last couple of years and compare them to applications collected during the rest of the year. If yours is like most dealerships, you’ll see a significant difference in the quality of information collected.

You need to discuss this situation with your staff ahead of time. Make it very clear that incomplete applications will not be accepted. (And, I mean be stern about it: It’s non-negotiable!)

Remember, you have to collect on this account for the next few years. A quality application is the first step to making sure you can do that.

The next thing I usually see that sets us up for failure is a complete disregard for payment to- income percentages. We all know by now, or should know by now, that accounts with payments greater than 25 percent of net income perform at a much worse rate than those with payments below 25 percent net income.

I’ve found that dealers and managers forget this rule when a large down payment is made. The attitude seems to be, “If they have skin in the game, they’ll make all the payments.”

Sad news, friends, but this just simply isn’t the case with most customers.


Don’t forget that tax money is free money

Here’s an important lesson I’ve learned after reviewing hundreds of thousands of loans over the years: The down payment amount has very little to do with how well a loan performs.

As far as our customers are concerned, that sizeable tax return is just free money. This sudden windfall isn’t a result of careful budgeting or pinching pennies for a down payment. No, it’s a bonus with very little emotional attachment.

Don’t compromise your payment to income standards just because the customer has a big down payment. Remember, all that tax money will be spent very soon, and they will only have their weekly paycheck available to make their car payment.


Don’t forget the delivery and closing process

Another area I see slip during tax season is the closing process. I consider the application and closing to be the most important aspect of the collections process. And, if you’ve ever read my articles, watched my BHPH Tip of Month video segments, or attended one of my training or consulting sessions through NCM, you know that I firmly believe that an improperly closed loan is a charge off waiting to happen!

In this busy time of year, it may seem like a simple solution to ask our commissioned sales team to close the loan instead of a manager or a collector. Sure, it might speed up the process, but the whole point of having a manager or collector close the loan is to double check and ensure that the salesperson hasn’t missed or skipped an item because they were afraid of losing a deal.

Don’t do be tempted to “streamline” the close; you’ll just pay for it later. Keep your processes intact, and have a dedicated person or team well-trained in the closing procedure review every application. And never let them veer off track just because you are busy.


Make the most out of tax season

I know how exciting this time of year is, but you can’t afford to be burned. Remember, these could be the worst-performing deals you make all year.

Make sure you have a great application process in place, follow your payment-to-income guidelines and don’t short-cut your closing procedures. If you do these three things, you can enjoy the cash windfall of February and March without the headaches that come in July and August.

Article originally published in the January/February 2016 issue of the BHPH Report. Be sure to check out the full issue!


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Dustin Kerr

Quiz show: Using questions to increase BHPH profits

Businessman thinking

As a moderator with NCM® Associates, I make my living with questions. Not only do I challenge my clients with questions about their business practices, but I also must answer to their concerns and worries. Put simply, questions are my life.

It’s a great challenge. I think the habit of questioning things is critically important for all car dealerships, but especially for BHPH dealers who face an ever-changing and detail-oriented business subject to many rules and regulations.

Oddly enough, these rules and regs tend to invite inaction by BHPH dealers. Once we finally figure out a business process that works, it can be very hard for us to even consider changing it. That’s a problem. This reluctance to change can not only cost us potential profit given today’s complicated compliance landscape, but it has the runs the risk of costing us our business entirely.

So what things should we take a look at and question? EVERYTHING! Here’s a few to get you started.

Question your advertising

Are you still pouring the majority of your advertising dollars into television, radio and print?

I’m not saying these media are dead, but I see far too many dealers spending their budget on traditional marketing channels while completely ignoring their own website, digital marketing and social media.

We know that 90 percent of American adults have a cell phone, and more than half of those phones have internet access. In fact, practically half of the U.S. sleeps with their phone so they don’t miss a text or email!

Your BHPH customers aren’t any different. They have a phone, and they use it to shop for cars before they even think about looking in person. Unless they see your dealership online, it’s doubtful they’ll even make it to your lot.

Like everything else, advertising isn’t cut and dry for our BHPH industry. Not only do you need to pick the right platform for your ad, you must be sure to comply with industry regulations. Here’s an example:  Are you still advertising zero down to get customers in the door when in reality virtually no one can qualify for your zero down?

Just open up any industry publication and you will see stories of BHPH dealers getting hammered for this type of advertising. Transparency is the new buzz word in the industry, and if your advertising is misleading in any way you are playing with fire. Don’t get burned.

Question your collections

I could write an entire article on collections compliance but that’s not the point I want to make here. Instead, let’s talk about your collections culture.

Your entire organization needs to understand the BHPH customer. Our customers are likely to have problems making payments at some point. Does your staff understand that it’s their job to help the customer through these times? Or do they still have the attitude of “give me the money or give me the car?” More importantly, are your collectors well-trained in connecting with the customer—empathizing with them and defusing problems—while still demanding payment?

The best collection cultures can sympathize with the customer while successfully collecting payment in full. Most of the time I see departments great at being nice to the customers and truly understanding their situation, or I see collections departments that are great at collecting payment in full. I rarely see collections departments that excel at both.

The collections department is the key to your long-term success. The sales department will sell the first car, but it’s up to the collections department to sell the repeat business. Make sure your collections team is one of the best.

Question vehicle repairs

I’ve found two typical approaches to vehicle repairs: Fix everything or fix nothing.

Let’s think about the “fix everything” approach. Do you help your customer with repairs on their vehicles after the sale? Where do you draw the line? Are you financing that repair if the customer cannot pay for it?

Have you checked with an attorney to see if it is even legal for you to finance the repairs and have it paid back through a “side note?” I’m going to bet that there are a lot of you reading this right now that are financing repairs illegally.

Now, what about those of you who don’t fix anything? While you don’t want to repair all the problems, you might reduce your charge-off rate and your repeat business if you loosened up your repair policy a little bit. Complete a repossession analysis to show how many of your repossessions are related to mechanical problems – would a new repair policy improve that?

Question the sales process

Here’s a little-recognized truth: Repeat and referral business is far more effective in BHPH than in the new-car business. But, I rarely see BHPH dealers training their sales people on how to generate their own leads. Don’t let your sales people rely on you to put enough customers on the lot through advertising.

And, thinking about that customer, does your sales staff actually serve the customer or just take orders. An effective sales team will match the right customer to the right vehicle and process effectively to maximize down payment. When you sales team actually sells, there will be greater collection potential throughout the life of the loan. Use your sales team to plan for success from the beginning of the transaction.

Question accounting and legal advice

When I’m asked to explain the BHPH model, I often say that we’re in the finance business … and we happen to sell cars, too. Our clients need solid financial advice and guidance. When you do it right, not only have you helped someone out, but you’ve also made a profit.

Because finance and law play a major role in our industry, you need well-educated, reliable advisors.

Does your accountant truly understand the BHPH/LHPH model and all the tax implications that come along with it? Just because they are an accountant doesn’t mean they know what’s best in this industry.

The same goes for attorneys. Find someone that is well versed not just in the auto industry but in the BHPH industry, as well. Hire the right financial and legal experts. (And, if you think it’s too expensive, just look at what it’s costing your peers who didn’t hire them.)

Question everything

When I write that I want you to question everything, I mean everything. Don’t just stick to the suggestions I’ve listed above. I challenge you to go into your dealership and play devil’s advocate for every policy and procedure you have in place. Ask your staff how you could change things or do things differently to produce better results.

Once that’s done, take your questioning to the next level. Ask your peers to analyze and critique your business. If you don’t have an established relationship with your peers, take the time to join a 20 Group, which facilitates peer-to-peer collaboration and continuous improvement.

Then do something with your answers

No matter which option you choose—examining your business on your own, enlisting friends for help or joining a 20 group—the most important thing you can do is be willing to listen to the answers. You are likely to find items that need immediate attention. Having critically examined your business, you can start fixing these problems with confidence.

And then you should start questioning again!

Blog originally published in the September/October 2015 issue of the BHPH Report. Be sure to check out the full issue!

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Brent Carmichael

Three Steps to Structure Profitable Car Deals


Whether you are concerned about collecting or about meeting sales goals, there are good reasons to make sure the deals you do make are well-structured. Here are three tips to make that happen.

1. Choose the right term and payment

A sound deal starts with the term. Your deal has to make sense. A low ACV unit on a long-term just because we got a good down payment? That simply doesn’t work. Not because the car won’t run the note, but because the customer won’t run the note. Fewer than half the deals we put on the books in the BHPH industry go to term. Almost a third will charge off, and another 20% will pay off early either through our effective repeat programs or from our competition.

Term should be dictated by two factors: What the customer can afford, based on their verified net income, and your appetite for exposure. If the customer can afford a $300 monthly payment and you are only comfortable with a 30 month term, then that customer’s total contract can only be $9,000. So, you can sell that customer any vehicle on your lot as long as they leave owing you no more than $9,000 in principle and interest.

Obviously, because payment is an integral piece of establishing term, it’s also an important factor in a sound deal structure. What we are looking for here is the same as term. The payment date has to be logical. Payment should be due when the customer gets paid and on their next available paycheck, barring any deferred downs.

Allowing a BHPH customer to go 30 days without a car payment without a deferred down is asking for trouble. We know our customers have had issues with budgeting money in the past, why not help them budget better by starting their payment right away? And, to help them even more, have their payment scheduled for the day they get paid. It’s an easy reminder: get paid; make payment.

2. Select the right rate and add-ons.

Interest rate is the next aspect of deal structure. Now, before I get hate mail, I’m not suggesting you shouldn’t profit from your state’s usury limits. But, I am saying that you may need to adjust this expectation depending on the term and payment deal structure. Yes, interest income is our reward for the risk. However, if the overall deal structure doesn’t make sense, your ability to collect your reward will greatly diminish.

Back end or add-on products are similar to interest in the overall scheme of deal structure. While they are great profit generators, their addition to a deal can effect payment and term, not to mention cash flow.

It’s a balancing act. You have decided how you want to divide the money you collect from the customer. Will it go to principle and interest in order to reduce your risk and increase your reward? Or will it go to recoup cost in a product?

3. Use common sense to help the client pick the right vehicle.

You can’t forget the customer in the deal structure. Yes, the term, payment, rate and additions are all critical to the hard business aspects of the deal, but you need to keep an eye on what they are buying.

Let me give you an example of a deal I came across during a consulting visit. A single mother with four children, two of whom required car seats, was allowed to purchase a Chevrolet Camaro. When I asked the dealer about it, he responded that the customer could afford the payment based on his criteria and the term was within his criteria. Okay. Yes, both of those do make sense, but common sense should tell us the deal doesn’t make sense. Sure enough, the owner wanted to be traded out of the vehicle within the first year because it wasn’t big enough.

Moral to the story? The overall deal structure has to make sense not only for you the dealer, but for the customer, as well.

Bringing it all together: Make the right deal

So, let’s review three main steps you need to take to create the most profitable deal structure.

  1. Term should be dictated by your exposure comfort level.
  2.  Payment needs to fit the customer’s financial ability. Interest and add-ons need not dictate the term and payment; instead, term and payment should impact how you set up interest and add-ons.
  3.  Not only should the vehicle fit not the customer’s financial needs, but it must meet their physical and lifestyle needs, as well.

Does your dealership face challenges collecting during the holiday months? How have you addressed it? Tell us below. 

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Dustin Kerr

The Buy Here Pay Here 20 Group – What It Is and How It Will Help

A 20 Group is a peer collaboration model that allows you to meet with other BHPH dealers of similar size from non-competing markets to share best practices, successes, and more importantly, failures. NCM® Associates is the originator of the automotive 20 Group process, and has been empowering dealers to learn from one another since 1947.

A typical BHPH 20 Group meets three times a year at a location chosen by the group. Meetings can range from 1 ½ to 3 days depending on what the group wants to discuss and the location.

The ability to get away from the day-to-day distractions of the dealership and share ideas with some of the brightest, most successful dealers in the industry are some of the key factors that drive profitability amongst NCM® group members.

In addition to the meetings, members receive monthly financial composites that allow them to compare themselves to other group members, as well as comparing themselves against the NCM Benchmarks® across all groups.

The meetings are facilitated by a professional NCM Executive Conference Moderator with years of experience in the BHPH and LHPH industry. The agenda and hot-topic discussion is decided by members of the group.

Topics of discussion include:

  • Compliance
  • Proper Inventory
  • Advertising
  • Collections policy and procedures
  • Hiring and retaining top talent
  • Sales and collection pay plans
  • Employee productivity
  • And much more!

Why choose NCM as your Buy Here Pay Here 20 Group provider?

You have probably realized by now the power of the BHPH 20 Group peer collaboration model, but why should you choose NCM Associates to facilitate your group?

  1. NCM Associates is the originator and pioneer of the 20 Group model. We started our first Ford 20 Group nearly 70 years ago and that group is still in existence today!
  2. Data Integrity- Numbers are only as good as their accuracy. All statements are reviewed personally by a moderator before they are compiled and sent to you in your monthly composite. Our data team manages and processes your data in-house; we don’t outsource it!
  3. Access to an Industry Expert- Your emails and calls are personally answered and returned by your moderator, not an assistant or secretary. Even when we are facilitating meetings, you can expect a return email or call within 24 hours!
  4. Custom Composites- You have the ability to log on to your member website and compare yourself against as many or as few members from your group as you want in whatever categories you want.
  5. It’s All About You- The group gets to decide what goes into the composite, where you want to meet, agenda topics, and much more.
  6. Online Training- Your membership includes training from some of the top experts in the industry that would cost you thousands to obtain on your own. This training is delivered by our OnDemand virtual training site.
  7. No Contracts or Commitment- If you don’t feel like you are getting value from the group, you can resign from the group at any time.
  8. Innovation- As the industry leader, NCM is always working with the brightest minds in the industry to develop tools and strategies to help you become more profitable. As a BHPH 20 Group member, you often get access to these tools for a reduced cost or even free!

In addition to the 20 Group, NCM Associates also offers on and offsite consulting as well as BHPH training for salespeople, collectors, and managers.

If you are ready to join your peers and find out how to achieve a 50% or better ROI, click here or contact me today at 913-827-6677 or

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Dustin Kerr

Oregon Senate Bill 276 – How Could This Affect Your BHPH Operation?

Government building blog 4.22

The Oregon Senate recently introduced a bill that has BHPH dealers in that state up in arms, and for good reason. The bill would drastically change the way some buy here pay here dealers do business. I am not going to try to debate the merits of this bill, or the lack there of. As BHPH dealers, we have all been discussing and fearing the changing landscape of compliance for many years.

The point of this article is to focus on a couple of the provisions in the bill and ask ourselves, “Doesn’t this just make good business sense?” Keep in mind the old saying “Pigs get fat; hogs get slaughtered” and ask yourself if you are running your dealership as a fat, happy pig or as a hog headed for slaughter.

Here’s a quick rundown of the highlights of the bill:

  • Obtain the same type of license from Oregon’s Department of Consumer and Business Services (DCBS) as payday or auto title lenders.
  • Reduce interest rates to account for the amount of the consumer’s down payment.
  • Stop accruing interest once a vehicle has been repossessed.
  • Cap repossession fees at 7.5 percent of the purchase price.
  • Stop using GPS or starter-interrupt devices.
  • Wait to repossess a vehicle until after 30 days from when nonpayment has occurred.
  • Cap interest rates at no more than 20 percent or the federal funds rate plus 17 percent, whichever is lower.
  • Form a good faith belief that the consumer has the ability to perform on the contract by using underwriting standards passed by DCBS.

I want to focus on the last two bullet points of this bill and ask you, as a dealer, to think about how you are handling these two issues in your state?

Cap interest rates at no more than 20 percent or the federal funds rate plus 17 percent, whichever is lower.

Full disclosure here, I used the state max of 21% for nearly every car deal I ever financed and would have probably charged more if the state would have allowed. My question to you though is this: is it good business to charge our customers more than 20% interest? Every 20 Group meeting I have ever been a part of has included conversation on how we reduce the term of our loans and retain our good customers.

Another big conversation is about the cars not lasting the term of the note. Are we sacrificing a few thousand dollars of gross for a few hundred dollars of interest? Interest income is a big part of this business and I have always been on the side of maximizing the interest dollars collected. Although, when do we hit a point of diminishing returns?

Form a good faith belief that the consumer has the ability to perform on the contract by using underwriting standards passed by DCBS.

Now I have no idea what the DCBS will set as underwriting standards should this bill pass, but let’s look closely at the rest of that statement and change it slightly.

What if the motto of our underwriting department was something similar to this? “Form a good faith belief that our customer has the ability to perform on the contract based on our underwriting and verification practices.” Nearly all BHPH dealers want to reduce charge-off losses and regulators on the state and federal level want to make sure you are not setting your customers up for failure. Having a written underwriting policy in place that is based on industry analytics and your own loss ratios will go a long way towards achieving those goals.

Don’t forget the verification part of the process. An application is only as good as the verification to support it. There is little doubt that there are serious changes on the horizon for the BHPH industry and some that may change the way we do business forever. However, some of these items just make good business sense. Is your business a “fat, happy pig” or a “hog headed for slaughter”?

Learn more by attending these upcoming courses:


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Dustin Kerr

Garage/Liability Insurance for the Buy Here Pay Here Dealer

For car guys and gals, insurance is a lot like compliance; we hate to deal with it, but we know we have to.

Those who have been operating for a number of years have a pretty good idea of what they need to look for in a garage policy and generally shop their coverage annually.

For those that are new to the business or haven’t dealt with the insurance side of things much before, this can be a very daunting task.

Every state and every dealer are going to have requirements specific to them based on state law and the dealer’s tolerance for risk.

This article is meant to give you a basic idea of what to look for in a policy.

  • Liability/Auto — This generally deals with test driving or when your covered employees are driving your vehicles. This covers medical bills and damage to someone else’s car or property if you, your customer, or your employees are involved in an accident that is their fault while driving one of your vehicles.
  • Other Liability — This would cover medical bills if someone fell or had an accident while they were on your lot. Think about someone slipping on an icy sidewalk or an oil slick.
  • Personal Injury Protection — This would pay medical expenses for you or occupants of your vehicles. This coverage is required in some states.
  • Inventory – (Your vehicles) can include comprehensive for things such as fire, hail, or vandalism as well as collision coverage, and might have a maximum value per vehicle. Some dealers who own their vehicles outright and have a very low ACV (actual cash value) do not carry this coverage at all.

There are other coverages you may consider. These are usually add-on benefits that require an increase in premium.

  • Truth in Lending — Covers mistakes made on contract or incorrect reporting of odometer.
  • Errors and Omissions – Have you ever made a mistake when perfecting a lien? That’s what this coverage is for.
  • False Pretense – Covers you from consumers who purchase using false information or bad checks.

This should give you a good starting point to understand what to look for in a garage/liability policy. Remember, no policy is right for every dealer or state, and rates may vary wildly for very similar coverage.

Also, be sure you know exactly what your policy says. Every provider is going to have different requirements for what they will cover. For example, they may not cover a wreck on a test drive if your salesperson is not in the vehicle. These are important items for you to know.

If you need any further help or guidance, please feel free to contact me at any time.

Cell 913-827-6677  |

NEW Buy Here Pay Here Courses from the NCM Institute:

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Dustin Kerr

Hiring Buy Here Pay Here Salespeople That Produce – The Newspaper Ad

I’ll be blunt; hiring candidates from a newspaper ad is not the most effective way of finding the type of talent that can be molded into a productive salesperson. However, there is a time and place for the newspaper or Craigslist ad, and in this article, we are going to discuss how to make your ad as effective as possible.

Watch the video – Click here!

First, we should set the correct expectations. It’s highly unlikely you are going to find a seasoned, successful salesperson through these types of ads. Salespeople that are already trained and productive are likely making a significantly better income than what the average BHPH dealer is going to be willing to pay them.

So, we are really looking for people that have the right temperament, work ethic, and confidence to be receptive to our training program (because we are going to train them correctly) and to fit in well with the culture we are trying to promote.

Before we go any further, I want to give you two sources that I have used in the past that provide great information on hiring salespeople. The first is a book by Chet Holmes titled “The Ultimate Sales Machine,” and the second is “The Anderson Hiring System” by Dave Anderson, a virtual training program available in NCM OnDemand.

The ad I use and will describe below is a combination of what I have learned from those two gentleman mixed in with my own experiences. Be warned: this ad will eliminate most of the applicants you would get through the typical newspaper or Craigslist ad, and that’s what we’re going for. We don’t want to have to wade through all the applicants who are just looking for another paycheck.

The headline of the ad should get their attention and should show the upward end of what they could expect to make. For example: Now Hiring Sales – No Experience Necessary – Extensive Training Program – $40,000-$60,000.

The body of the ad should then eliminate as many of the undesired applicants as possible and we will do that by using very blunt, straight-forward language.

We are looking for individuals that have the desire to be great. Please do not apply if you only have an average desire or work ethic. Our training program is very extensive and includes a great deal of role playing and practice. We are a rapidly growing company that is a leader in our industry and we are only interested in those that want to be the best.

Too many times we get caught up with trying to sell the reader on why they should apply with our company, generally because we are in crisis mode and desperate for a warm body. This ad will eliminate a great deal of the warm bodies as they will be turned off by the strong, in-your-face language. Those that do apply will typically be very confident in their abilities and open to the idea of training.

Now, this MUST be followed up with a thorough interview process that goes well beyond the applicant’s previous job history and resume. Conducting a proper interview is beyond the scope of this article, but is something we will cover in great detail in future articles.

In the meantime, get these ads running continuously on Craigslist, and if you have any questions regarding improving your hiring process or how being a member of a 20 Group can help your profitability and cash flow, please email me at, or call me at 913-827-6677.


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