Today’s poor-credit customer has more financing options available to them than just Buy Here-Pay Here. Recent market conditions have reached a point where smart dealers are focusing as much on customer retention as they are on sales generation and that increased focus on retention is highlighting just how important the vehicle is to the model.
Acquiring quality inventory is the most difficult thing we do in Buy Here-Pay Here. Finding quality units that have enough life left in them to stand up rough treatment and high mileage for the right price is hard. Very often the auction environment becomes a feeding frenzy with too many dealers bidding on too few cars. This always seems to happen on the ones I’m trying to buy but never on the ones I’m trying to sell. Funny how that works, isn’t it?
Buying takes a tremendous amount of skill, experience, relationship building, and luck. This is where we spend the money and here is where bad buys keep coming back to haunt us over and over. To be successful in today’s market, buyers must be casting their net wider than ever. Not only does this mean going to more auctions farther away, it also means trying to buy cars directly from sellers or wholesalers.
Just as importantly, ownership needs to be intimately involved in the process because, as we well know, these vehicles today are expensive and I’d want to make sure I’m getting my money’s worth. I learned to buy cars with an involved owner and I’ll never forget what he told me: “You can’t pay too much for a good used car but you will always overpay for a bad one. The hard part about buying isn’t being the last man standing. Any idiot can do that. The hard part is figuring out the ones worth being that last man for.”
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