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manimal said:
^ lol


I have been thinking about starting a buy here pay here lot for imports. Have any of your customers used the loans to purchase cars? The sheer amount of people who walked away from mortgages has created huge opportunity for lending.

BTW I personally dont understand the rancor towards highland because of the thread. Dude is a small businessman following the laws and providing a service to people that cant afford it.


Why doesnt everyone who objected to the thread list their jobs and titles and the margins they use and if they pass your own litmus test.
Click to expand...

They trying to cut down on that in CA

Curbs on Buy Here, Pay Here
The legislature is considering bills that would rein in some of the abusive practices of this segment of auto dealers.
Click to expand...

http://articles.latimes.com/2012/jun/24/opinion/la-ed-loans-20120622

Legislation aiming to regulate the Buy Here Pay Here used car industry has survived key committee votes in Sacramento, bringing it significantly closer to final passage.

Bills by Assemblymen Bob Wieckowski (D-Fremont) and Mike Feuer (D-Los Angeles) won passage in a marathon Senate Judiciary Committee session Tuesday, just days before summer recess.

The Wieckowski bill, AB 1534, would require that Buy Here Pay Here dealers -- which provide their own financing on sales of used cars and typically sell to people with credit problems – post fair market valuations on every car they sell. Feuer’s bill, AB 1447, requires dealers to provide 30-day limited warranties on the cars they sell and would prohibit use of GPS tracking devices without consent from customers.

Meanwhile, a bill by Sen. Ted Lieu (D-Torrance), sailed through the Assembly Judiciary Committee, which happens to be chaired by Feuer. It will be heard in the Appropriations committee next month. Like the Feuer and Wieckowski bills, Lieu's bill, SB 956, has already passed floor votes in its originating chamber.

Lieu's bill, SB 956, would require Buy Here Pay Here dealers to register as finance lenders with the California Department of Corporations and would cap interest on their loans at 17% plus the federal funds rate (currently at 0.25%). In addition, it would place restrictions on how and when dealers can repossess autos.
Click to expand...

http://www.latimes.com/business/money/la-fi-mo-bhph-bills-advance-20120703,0,1431498.story
 
manimal said:
^ lol


I have been thinking about starting a buy here pay here lot for imports. Have any of your customers used the loans to purchase cars? The sheer amount of people who walked away from mortgages has created huge opportunity for lending.

BTW I personally dont understand the rancor towards highland because of the thread. Dude is a small businessman following the laws and providing a service to people that cant afford it.


Why doesnt everyone who objected to the thread list their jobs and titles and the margins they use and if they pass your own litmus test.
Click to expand...

The problem with "buy here pay here" lots or, "we tote the note" is that they are not in car sales, they are in loan sales. They sell at inflated prices and immediately sell the loan to another company. They are then just a middle man who takes their cut off the top and passes the risk to another company. Sounds like the American dream doesn't it?
 
MagnusTheBrewer said:
The problem with "buy here pay here" lots or, "we tote the note" is that they are not in car sales, they are in loan sales. They sell at inflated prices and immediately sell the loan to another company. They are then just a middle man who takes their cut off the top and passes the risk to another company. Sounds like the American dream doesn't it?
Click to expand...

I completely agree with your assesment of the BHPH industry as it sits. Doesnt mean thats the only way that type of business can run. While probably not a valid model I have always wanted to sell high end imports and resto mods. I am half way there and have considered financing the cars myself and thus my interest in the industry.


Dont blame you for making assumptions though. This is ATOT 😛
 
highland145 said:
If you know the used car business, you can make a lot of $$. My previous employer has a used lot/loan office plus 5 loan offices in other towns. The one lot/loan office makes as much as the 5 other offices combined.

If you know the used car business......


$1K is my biggest loan so that's not a lot of car.
Click to expand...
Well I own a auto shop and have a transfer license so I am close. The finance portion is what I need to research.

Ns1 said:
They trying to cut down on that in CA



http://articles.latimes.com/2012/jun/24/opinion/la-ed-loans-20120622



http://www.latimes.com/business/money/la-fi-mo-bhph-bills-advance-20120703,0,1431498.story
Click to expand...

I have done some auto repair and big projects for a few BHPH lots here locally. The general business practices that some people employ is reprehensible. I ultimate stopped doing work for almost all of them because they would routinely ask us to butch or mask problems and we always plainly refused.

I was amazed at how often we would see the same car come back..

really awful and nothing I aspire to.
 
alkemyst said:
he's probably just a process server for a mortgage company.
Click to expand...
Something for you to aspire to. Props.
MagnusTheBrewer said:
The problem with "buy here pay here" lots or, "we tote the note" is that they are not in car sales, they are in loan sales. They sell at inflated prices and immediately sell the loan to another company. They are then just a middle man who takes their cut off the top and passes the risk to another company. Sounds like the American dream doesn't it?
Click to expand...
Typically the BHPH here are just that. It's all in house like my previous employer. Profit from the mark up, $$ from the down payment, interest earned on the finance side. Repo and recycle if need be.

I know companies do it but doesn't make much sense to me. A friend works at one of the larger finance companies that tried it. The car lot got the profit on the mark up and the down payment. The loan office lost their ass because when our quality of customer has a problem with the car or wreck it, they walk away. When you're dealing with sub 550 credit score customers, that's normal. The loan office was left with messed up cars and upside down on the value.
manimal said:
Well I own a auto shop and have a transfer license so I am close. The finance portion is what I need to research.
Click to expand...
Good luck. There is a lot of $$ to be made. A quick call to your consumer finance division should get you in the right direction. Should be plenty of software venders too.

Highly recommend talking to someone that does it. Customers won't be as honest/fair as you are. My typical write off is ~10% and that's better than most here.
 
highland145 said:
Something for you to aspire to. Props.

Typically the BHPH here are just that. It's all in house like my previous employer. Profit from the mark up, $$ from the down payment, interest earned on the finance side. Repo and recycle if need be.

I know companies do it but doesn't make much sense to me. A friend works at one of the larger finance companies that tried it. The car lot got the profit on the mark up and the down payment. The loan office lost their ass because when our quality of customer has a problem with the car or wreck it, they walk away. When you're dealing with sub 550 credit score customers, that's normal. The loan office was left with messed up cars and upside down on the value.
Good luck. There is a lot of $$ to be made. A quick call to your consumer finance division should get you in the right direction. Should be plenty of software venders too.

Highly recommend talking to someone that does it. Customers won't be as honest/fair as you are. My typical write off is ~10% and that's better than most here.
Click to expand...

Are you yourself using levered money or 1:1 full reserve?

ROE's seem out of this world if some of this money is borrowed and lent.

What do you do in the way of defeasance in case you are paid back early? Could screw up some of the borrowing/lending if this was leveraged compared to the rates of charge offs.
 
I thought I needed my coffee, but the first few responses well all correct.

Why did you write a few paragraphs of in in-comprehensive babble?
 
surfsatwerk said:
In before the mods allow this thread to become derailed into an Alky ego crapfest.
Click to expand...

jesus. Do you realize comments like your's and the others are what cause this?

I was not trying to be snippy saying Mortgage Process Server, if the OP wasn't trying so hard to hide the basic nature of what he does instead of trying to spin himself into some kind of homewrecker...none of us would have had to guess.
 
MagnusTheBrewer said:
The problem with "buy here pay here" lots or, "we tote the note" is that they are not in car sales, they are in loan sales. They sell at inflated prices and immediately sell the loan to another company. They are then just a middle man who takes their cut off the top and passes the risk to another company. Sounds like the American dream doesn't it?
Click to expand...

This is a quality post and I agree with the thoughts and themes contained within.
 
Selling money instead of cars is fine. If you can bankroll it yourself there is some fairly good ROE's involved. The problem is the clientele you have to deal with is often not the best thing in the world.

Having said that this has been the economic expansion of auto sales. At this point we continue to see expansions in consumer credit for new auto sales purchases because in a lot of cases this is the only type of credit that consumers can get (collaterilized lending) and they are easy to securitize as the market is again functioning well. Even suprprime ABS moves well, so the clientele you are dealing with on the no down payment type scum car lots is going to be among the worst in the US...
 
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