2009 BUY HERE, PAY HERE YEAR-END REVIEW & A LOOK AHEAD!
BY KENNETH B. SHILSON, CPA
FOUNDER, NABD
PRESIDENT, SUBPRIME ANALYTICS
Annually NABD, with the help of Shilson, Goldberg, Cheung & Associates, LLP
(“SGC”), CPA’s, prepares buy here, pay here (“BHPH”) financial benchmarks from a database
of more than 500 operators nationwide. These financial benchmarks are a composite of the “best
performing” operators and are not an average of the entire database. Since 2006, the NABD
benchmarks also include operating information on sales, collections and recoveries, and
inventory management which were developed and supplied by NCM Twenty Groups (NCM”),
based upon a composite of all of their BHPH twenty group members. The attached NABD
benchmarks also include portfolio performance metrics which were compiled electronically by
Subprime Analytics (“Subprime”) who, to date, has analyzed more than $6.7 billion (over
780,000 individual accounts) of BHPH installment contracts to identify loss rates, patterns, and
trends. In the aggregate, these statistics provide a comprehensive look at the financial and
operating performance of the BHPH industry for the last three years and some important trend
information for earlier periods.
At the Twelfth (12th) Annual National Buy Here, Pay Here Conference (NABD 2010) in
Las Vegas, to be held on May 11-13, 2010, I will explain these benchmarks and industry trends
to help operators identify future profit opportunities. For further information or to register for
this important event, visit www.bhphinfo.com.
2009 Year In Review!
The automotive industry had a very challenging year in 2009. A credit “crunch”, rising
inventory costs, “cash for clunkers,” and various other economic factors combined to create
some unprecedented challenges for both new and used car dealers. While franchise sales and
profits declined, the attached benchmarks again show (at least among the better operators) that
BHPH profits did not experience the same fate!
A comparison of the most significant changes in BHPH profitability during the last three
years follows and the table below compares changes in gross profit from 2007-2009