How does using a capital provider create more financial consistency / regularity / reliability?

One of the most important factors for a BHPH dealership's success is having capital on hand to keep cars moving on and off the lot.

There are several benefits you can expect once you've decided to work with a capital provider. Using a capital provider also helps dealerships save money by allowing them to better forecast their income. In addition to having more time from not skip tracing, this also ensures that they will have a steady cash flow coming in. Having a steady stream of income will allow dealerships to plan out their own payments and expenses, while also allowing them to invest wisely and get better deals on their car sales and loan terms. It is crucial that dealerships are allowed the freedom to build their brand without the risk of insufficient cash flow. In this competitive marketplace, businesses must use their resources and time to grow their brand, less they be left behind.

Dealerships, especially new ones, have quite a lot of risks involved with their business. There is always a risk of damaged cars, the risk of payments not being made, risky investments, and the risk of lawsuits, not to mention state by state regulations. Any of these risks can end up costing dealerships a fortune. Luckily, a capital provider can alleviate some of these risks and, potentially, save money. As discussed earlier, a provider will ensure that payments are consistently made with strict compliance to a myriad of regulations. By using a provider, a dealership could leverage their existing portfolio to use funds that they would not have had access to otherwise.

How does using a capital provider drive more revenue & profits from existing loans?

Many buy here pay here dealerships might think using a capital provider is just adding an unnecessary middleman whom would take away from their profits. The opposite is true, as using a capital provider can help dealerships make more money with what they already have. Using a capital provider is an investment that can pay off relatively quickly. There are several ways a provider can allow owners to make more money.

Capital providers give you the most important resource available (besides cash!): time. Since they take care of handling payments, there is no need for dealerships to waste time chasing down delinquent loans. Making sure that payments are made can be one of the slowest and most aggravating processes. This time, which would otherwise be wasted, can be put to better use by making sales and creating more inventory. Avoiding this time trap can make a critical difference in revenue, especially with a new dealership, where every minute counts. Likewise, utilizing a capital provider in the early stages of a business' life would be a smart decision. It’s true what they say: time is money.

In the case of Glenview Finance, dealers receive an upfront payment of 50% of the amount that the customer financed and then immediately start receiving 40% of every payment. This creates a situation where, after the deal is complete, the dealer has significantly more cash flow consistency, which all means more opportunity for more profit.

Auto Remarketing Article Summary: NADA cautions dealerships about Consumer Review Fairness Act

In the last few months several dealerships have been engaging in questionable conduct by putting clauses in their installment contracts that discourage customers from leaving negative online reviews. This was a clear violation the Consumer Review Fairness Act (CRFA), which is a consumer protection statute banning the use of gag clauses in non-negotiable consumer for contracts.

The National Automobile Dealers Association (NADA) announced that the Federal Trade Commission (FTC) recently came down on five separate businesses that violated CRFA. These businesses were sued on the basis that their contracts barred customers from leaving negative reviews and demanded financial compensation from those whom did. This is the first time that the Federal Trade Commission has enforced the CRFA ever since it was signed into law in late 2016.

The CRFA protects a broad variety of consumer assessments, including your right to share your opinion about a business without negative repercussions. This includes comments, thoughts, reviews, or dislikes on any forum.

In a later blog post the FTC shared more information about the CRFA and how dealerships, and other businesses, can avoid violating it. This post urged businesses to thoroughly review their form contracts. It is best that these form contracts are very clear regarding the CRFA, as any suspicious conduct can be challenged if it blurs the lines. On the same note, the FTC reminded dealerships that the FTC act, which outlaws unfair acts or practices that affect commerce, still applies. Lastly, all dealerships should know that any clause baring reviews is in violation of the CRFA, even if the dealership does not enforce it.