I just started work for an independent dealer in Florida. My past experience was at a small town new car franchise where I started off in sales, became the internet manager and got worked into F&I.
About the dealer I'm working for. Been in business since 1984 but never offered financing. For the past 10 years, they (two brothers own the place) have been doing mostly wholesale. Last year they did over $5 million with 90% being wholesale to other dealers. Recently they decided to get heavy into retail so they got signed up with a few secondary finance companies. We don't pull credit. We ask some basic questions and I sent customer credit applications straight to the lenders via dealertrack. Our good credit customers I fax over to the local credit unions.
We have been considering doing buy here, pay here on a case-by-case basis. This raises some questions. If we do BHPH, should we form a seperate related finance company? Why or why not? If so, how hard is it to incorporate and do? What kind of regulations are out there that we need to know about that affect BHPH? First goal is to get the customer financed but some of the finance companies are being super picky. Lastly, these secondary finance companies charge the dealer a reserve fee that is withheld from the funding. These fees force us to adjust the price of the unit sold and sometimes kill the deal depending of the call back. I have received mixed answers about disclouse of the fee to the customer. Does anybody know?