Roughly 25–40% of BHPH customers become delinquent within the first 60 days.
Calculated based on the portfolio's performance, including average APR (often 20%+), payment history, and vehicle age. 📈 The Economics of BHPH Bulk Models Feature Traditional Dealership BHPH Bulk Model Profit Timing Immediate (at sale) Realized over 24–36 months Interest Rate Market rates (low) High (20% to 29%+) Inventory Source Manufacturer/New trade-ins Wholesale auctions/Bulk blocks Risk Management Third-party bank risk Dealer/Investor risk (1:4 fail) ⚠️ Core Risks in Bulk BHPH buy here pay here bulk purchase
Larger franchise dealerships often sell their "low-line" trade-ins (cars they won't sell on their own brand-name lot) in bulk to independent BHPH lots. Portfolio Sales (Bulk Note Buying) Roughly 25–40% of BHPH customers become delinquent within
Bulk buyers must ensure all contracts comply with the federal Truth in Lending Act (TILA) and state Retail Installment Sales Acts (RISA) . The Art of Turning Cars into Cash | Auto Dealer Today Portfolio Sales (Bulk Note Buying) Bulk buyers must
In BHPH, a "broken car = broken payment." If the car dies, the customer almost always stops paying.
BHPH is a cash-intensive business. Once a dealer has loaned out all their capital to customers, they "run out of cash" but have a "portfolio of notes" (contracts). To get cash back to buy more cars, they sell these contracts in bulk to financial institutions. Key Terms in Bulk Portfolio Sales: