BHPH United - Buy Here Pay Here Dealer Education and Training for Subprime Auto Financing In House Financing Lease Here Pay Here Operations Compliance Leadership Marketing and Dealer Success Nationwide

Looking to improve margins while keeping payments affordable for customers who need second chance auto financing? Our Buy Here Pay Here pricing strategy training shows you how to build a repeatable, data driven model that aligns inventory costs, risk pricing, and payment structures with your market. You will learn how to stack costs correctly, match term to vehicle life, set down payment bands, and monitor portfolio performance so you can price with confidence in changing conditions. We also cover compliance and customer communication, so your pricing is transparent and sustainable. Explore related learning paths like buy-here-pay-here-operations-training and buy-here-pay-here-profitability-training to round out your approach. Whether you operate a single rooftop or a multi location BHPH group, this page outlines the frameworks, metrics, and tools to help you turn pricing into a strategic advantage.

Why BHPH Pricing Strategy Matters

In Buy Here Pay Here, pricing is not just a sticker on a vehicle. It is a complete financial design that must simultaneously cover acquisition and recon, fund your capital stack, price for expected credit losses, and produce an affordable payment that customers can keep. Price too high and you increase default risk and rewrite activity. Price too low and you lose the margin you need to fund collections, reconditioning, and inventory turns. A strong pricing strategy connects the dots between unit economics, portfolio performance, and customer outcomes. The payoff is real: more stable payment performance, lower loss severity, higher turns, and repeat buyers who trust your transparency.

The Cost Stack: Building Your Price From the Ground Up

Start with a disciplined cost stack for every unit. Your structure should be consistent and reviewed weekly. Use actuals, not assumptions, and lock definitions so your team speaks one language across buying, recon, sales, and accounting.

ACV plus auction fees and transport
Reconditioning parts and labor, internal and vendor
Front end overhead allocation per unit, including title and registration support
Cost of funds and expected holding cost to sale date
Expected credit loss factor and recovery assumptions

Your gross target must exceed this foundation, but not at the expense of payment affordability. Anchor your pricing range with a market check and align it with your risk policy. If your acquisition approach changes, update your cost stack rules and pricing bands immediately.

From Price to Payment: Affordability That Performs

BHPH customers do not buy price, they buy payment and reliability. Define consistent rules that convert retail price to down payment, APR or fee structure, and term. Focus on affordability and sustainability while guarding total interest expense to avoid early burnout.

Target payment to income ratio and debt to income limits based on your portfolio data
Minimum down payment bands tied to vehicle price or risk tier
Term ceilings aligned with vehicle age and mileage so the car outlasts the note
A standard fee and APR policy documented for compliance transparency

If you operate in multiple markets, create region specific payment bands based on income levels and insurance costs. Align this with training from buy-here-pay-here-payment-performance-education and buy-here-pay-here-sales-process-training so your team is consistent at the desk.

Risk Based Pricing That Customers Understand

A clear risk policy avoids arbitrary pricing and builds trust. Use risk signals that are predictive and easy to verify. When a risk tier changes the payment or down payment, state the reason in plain language. Your collections team will thank you later because clear expectations set at the sale reduce friction during the term.

Stability markers: time on job, time at residence, pay cycle fit, reference quality
Affordability markers: net income, PTI, DTI, insurance cost verification
Collateral markers: vehicle class reliability and recon risk

Pair your risk policy with ongoing education such as buy-here-pay-here-underwriting-education and buy-here-pay-here-risk-management-training to keep decisions consistent across managers and rooftops.

Key Metrics To Monitor After You Price

Pricing does not end when the car leaves the lot. Proactive monitoring tightens your model and reveals when to adjust price bands or down payment rules.

30, 60, and 90 day delinquency by pricing band and vehicle segment
First payment default rate and rewrite rate by desk manager and store
Net loss percent, loss severity, and recovery rate by cohort
Gross per unit sold and front end gross return on capital employed

Feed these insights back into your pricing rules monthly. If a band shows rising 60 day delinquency, evaluate PTI tightening or a higher down payment floor. Align actions with training from buy-here-pay-here-portfolio-performance-training.

Compliance and Transparent Communication

Transparent pricing protects customers and your brand. Document your disclosures, avoid junk fees, and ensure APR or fee structures are consistent with state and federal requirements. Train your sales and collections teams to explain pricing simply and consistently.

Standardize deal paperwork and scripts for price, payment, and term explanations
Validate that add ons are optional and fairly priced with clear benefit statements
Refresh training quarterly to match regulatory changes and exam feedback

For deeper guidance, visit buy-here-pay-here-compliance-education, buy-here-pay-here-compliance-best-practices, and buy-here-pay-here-federal-compliance-education. If you operate in multiple states, see buy-here-pay-here-state-compliance-training.

Technology To Scale Your Pricing Model

A scalable pricing engine reduces variance and speeds decisions at the desk. Integrate your pricing rules into deal tools, CRM, and DMS so managers get instant guardrails and scenario analysis. Use dashboards that show payment affordability, cost stack validation, and predicted loss by unit. Tie this to collections segmentation and automated reminders to complete the loop.

Explore dealer-technology-training-education and buy-here-pay-here-technology-integration-education to modernize your workflow and audit trail.

Step By Step BHPH Pricing Framework

Define your acquisition targets and maximum ACV by segment based on demand and reliability
Create a recon playbook with expected ranges by vehicle class and mileage
Establish your risk tiers and affordability rules using historical portfolio data
Convert retail price to payment bands with set term ceilings and down payment floors
Test bands on 90 days of deals, measure delinquencies and loss severity, and fine tune

Revisit this framework every 30 days during volatile markets and at least quarterly in stable conditions. Align accountability with buy-here-pay-here-management-training so store leaders own the results.

Common Pricing Mistakes To Avoid

Chasing market retail without accounting for recon volatility and rising cost of funds
Allowing payment to drift past PTI guardrails to close a deal today and create a default tomorrow
Setting terms longer than the useful life of the vehicle, which increases loss severity
Ignoring early warning metrics like first payment defaults and rewrite rates

Case Example: Tightening Payment Bands To Improve Performance

A two store BHPH operation observed rising 60 day delinquency on vehicles priced 10000 to 12000 with terms exceeding 42 months. Portfolio review showed PTI drift from 18 percent to 22 percent and lower down payments on these deals. The dealer implemented a revised band: capped term at 36 months for vehicles with more than 110k miles, raised minimum down payment by 250 dollars on that segment, and required documented insurance quotes during the desk process. Within 90 days, 60 day delinquency fell 3 percentage points in the affected band, first payment defaults improved, and gross per unit remained stable due to better matching of term to collateral life. This is the type of targeted adjustment your pricing strategy should enable and measure.

Integrate Pricing With Operations, Collections, and Service

Your pricing is only as strong as the operations that support it. Link your price bands to make ready timelines and service warranties so the vehicle experience matches the payment promise. Require collections to tag issues by pricing band and vehicle segment so you can see which combinations stress customers. Visit buy-here-pay-here-operations-education, buy-here-pay-here-collections-best-practices, and buy-here-pay-here-service-operations-training to align teams end to end.

Training Pathways and Related Education

For a complete skill stack, pair pricing strategy with deep dives in underwriting, collections, and capital planning. Pricing is a core input to your capital needs and cash flow, and it drives the predictability lenders expect when you seek growth capital. Consider these next steps to scale with confidence.

buy-here-pay-here-capital-strategy-education for funding structure and cost of capital
buy-here-pay-here-portfolio-management-education to monitor cohorts and loss curves
buy-here-pay-here-customer-retention-training to turn first buyers into repeat customers
used-car-dealer-pricing-strategy-education for broader used car pricing perspectives

Helpful Links and Resources

Explore more insights, regional events, and expert sessions to reinforce your pricing strategy and execution.

Frequently Asked Questions

It is a structured approach to build, test, and manage a pricing model that converts vehicle cost and credit risk into an affordable payment and term while delivering target gross and portfolio performance. It includes cost stack design, payment bands, risk policy, and monitoring.

Start with ACV plus recon, overhead, and cost of funds. Add a gross target that covers expected losses and desired margin. Convert to a payment using down payment floors, PTI rules, and a term cap tied to vehicle age and mileage. Validate against market retail and your historical performance.

Use PTI and DTI guardrails, minimum down payments, and term ceilings to protect affordability. Then calibrate gross and fee structure to cover losses and overhead. Track 30 to 90 day delinquency and loss severity by pricing band and adjust rules every 30 to 90 days based on results.

Review monthly in volatile markets and at least quarterly otherwise. Trigger an immediate review when ACV, recon, insurance costs, or cost of funds move materially, or when your first payment default and 60 day delinquency exceed thresholds for a given band or vehicle segment.

Use your DMS and collections data for delinquency and loss by band, local income and insurance cost benchmarks, auction and recon cost trends, and vehicle reliability history. Integrate these into dashboards. For broader education see dealer-industry-insights-education and dealer-portfolio-management-education.

Ready to go deeper into the craft of pricing and its downstream impact on collections and repeat sales performance? Continue your journey with buy-here-pay-here-dealer-education, dealer-practical-training, and dealer-real-world-education. For event based learning and peer exchange, review education-and-events, who-should-attend-bhph-united-summit, and 2025-featured-speakers. For privacy details, see privacy-policy.