Hello to everyone, new to autodealerpoeople. Ive recently got my dealer license and selling cars has been more of a profitable hobby than a full time career for me. I've always repaired cars and bought rebuilt salvage titles or fix up cars and resold always doing well but never tried to make it a full time gig. Now that I'm licensed it seems everyone expects on the lot financing. I'm all for helping arrange deals with finance companies but I don't know the first thing about money down etc and I have westlake I can use and a local company neither of which have I done a deal with because of westlake a fees and just got the local source relationship. Cars are generally $6,000 practical cars around 150k miles . But my customer expects to put $500--$800 down and I can't make money with westlake because they want big downs that the customer doesn't have or want to give but a huge local dealer does get huge downs like $2350 down on a $5995 car. What am I missing, that seems really high. How much is practical downs on say 07 car Retails at $6,000 ? I know every customer is different. But how does a lender figure a Ltv with a fair practical down? And How does anyone make money with westlake? By overpricing cars?

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Hey Brandon,

Welcome to the world of BHPH which is very different from being a private seller, in order to be profitable you have to avoid common mistakes. There are about 10 ways to be profitable and 1,000 ways to go broke. You're right, people will expect to put down close to nothing compared to what your cost on the car is.

Example: Your cost on a Honda Civic might be $4,500 after reconditioning. Along comes a client offering you 1k down which leaves you $3,500 short (also known as CIV - Cash In Vehicle). This is why in your business plan you have to know what your maximum CIV is for any sale. If you ignore your CIV and just start financing everyone with low down payments then it is very likely that you will run out of money to buy more cars which eventually can cause a dealer to close down.

My suggestion is sell cash and only finance clients whose down payments come close to your Investment. Keep in mind you can deffer the other part of the down payment for the first month or so in order to get the down you need to restock inventory. Make sure to qualify people, the last thing you need is to take a $500 dollar down payment but then spend $1,000 on getting your vehicle back after they've taken out parts.

I hope this helped.

Thanks AAH for the reply. I'm not really interested in BHPH right now. More just thinking if I should use a third party like westlake to sale to poor credit customers and price cars as high as possible or just try to price under book and do cash only deals. The reason I feel like this is important is because the cars price range I'm trying to stay in is cheaper end $4,000-$7000

Call Kevin @ 330-286-3761

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