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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (46679)	2/20/2012 10:08:17 AM
From: robert b furman	2 Recommendations Read Replies (1) \| Respond to of 78680

Buy here pay here is an illusion to be a new car store experience on a low end used car purchase. Unsophisticated people with bad credit or no credit go there. These are buters who are generally not savers. Generally this business is at its strongest after the government gives low income people more than they have put into the federal income tax system as a tax return. This once a year money burns hot in their pocket and they are able to buy a better car than they have money to pay cash for, with usually weekly payments. Good BHPH develops and works with a very loyal clientele. That being said,there is a core of bad credit, high risk people that create huge losses from accidents and no insurance or skips (Leave town/state). BHPH offers transportation to those who would not be touched by banks and do not know how to go out and make a good used car purchase. Most BHPH charge the limit interest rates. The mark ups are twice the cost plus a thousand with 35% being reserved for repo losses. I have attended several national conventions held by Leedham and associates regarding BHPH. If you are good at collections BHPH is very rewarding - if you are not good at collections BHPH can be a disaster. I started a BHPH back 1998 in a very small way with just a few customers in a low income area of East texas. I found it trouble free.This was before I learned about the big markups. kept it to strictly local people. My most rewarding experience was from a perfect payment customer who paid like a clock.I had documented her perfect record and GMAC allowed her to buy a new car on the First Time Buyer program. I remember as I delivered her first new vehicle - she began crying with pleasure.It was far beyond her initial dreams that she could ever become a new vehicle purchaser. BHPH has a place in the overall scheme of automobile purchases. Bob