Buy Here Pay Here: What It Is and How to Start Your Own Financing Program
Buy here pay here (BHPH) is the business model where the dealer is both the seller and the lender for the vehicle. Instead of the customer getting a loan from a bank or an outside finance company, they pay the dealer directly — usually in weekly, biweekly, or monthly installments.
Why does this model exist?
Many customers who buy from BHPH dealers don't easily qualify for traditional bank financing, whether due to limited credit history or not having the paperwork larger finance companies require. The dealer takes on that risk directly, and in exchange charges a price and rate that reflect it.
Advantages of running BHPH
- Recurring income, not just the profit from the sale.
- Access to a wider customer market than the one that qualifies for traditional financing.
- Full control over contract terms: down payment, payment frequency, rate.
What you need to get started
Beyond inventory and capital to finance, a well-run BHPH program needs three things: a clear contract (date, total price, payment frequency), a consistent collections process, and full visibility into how much is owed to you at any given moment.
The most common mistake when starting out
Dealers new to BHPH tend to underestimate how much administrative time it takes to follow up on payments from several customers at once. Without a system, this becomes unsustainable after the first 8 to 10 active contracts.
How J5Drive helps you run BHPH without the hassle
J5Drive brings inventory, customers, contracts and collections together. Explore its dealership management features, including VINs, costs, photos, recorded payments and upcoming dates. Work in English or Spanish from your phone or computer.
Explore the interactive demo without signup · View pricing · Try J5Drive for 30 days