BHPH Success Requires A Powerful DMS

[Pages:3]BHPH Success Requires A Powerful DMS

The ability to collect on a loan is perhaps the most important aspect of a BHPH operation, but there are other capabilities you need out of your DMS to support your BHPH venture.

Whether fueled by tightening credit guidelines or the prospect of earning repeat and referral business by getting credit-challenged customers financed, the idea of opening up a buy-here, pay-here (BHPH) operation or a related finance company seems to trend every few years among dealers reliant on the traditional indirect financing channel. But the benefits of making such a move does come with challenges.

You can't know what areas need your attention without detailed reporting -- data that's sliced, diced and presented in a format on which you can act.

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THE 10 DMS MUST-HAVES

As is the case with any dealership venture, technology is the key ingredient to success. This is especially true when it comes to adding a finance arm to your business; the DMS being the critical component to support such an expansion. So if you're thinking about adding in-house financing, especially with several industry insiders predicting further credit tightening this year, now is the time to consider you options. Here are 10 must-have DMS features you need to support your BHPH venture:

1. INVENTORY MANAGEMENT

Having the right inventory model is critical to a BHPH operation's success, so make sure the platform you choose can help you manage, service, merchandise, and syndicate your inventory.

2. CONFIGURABLE DEAL STRUCTURING

Since you'll be underwriting your own auto loans, you need a DMS that allows you to create multiple payment schedules, payment frequencies and deferred down payments.

3. LOAN PROCESSING PER CONTRACT

Look for a DMS that ensures you are charging interest and late fees per the provisions of your retail installment contract. So look for a DMS that handles true loan processing capabilities.

4. QUEUING/COMMUNICATIONS

The ability to collect a loan is perhaps the most important aspect of BHPH. That's why you need to make sure your DMS allows you to structure collections based on the size and experience of your collections team.

Communication, specifically on-demand and automated task-driven communications, is critical to your collections activities. Popular communication methods include automated dialing, interactive voice response (IVR), email, and texting. In other words, you need to be able to set your DMS to text every borrower who hits five days past due. You should also be able to set your DMS to follow up with a phone call if an account isn't brought current within 48 hours.

5. INTEGRATED PAYMENT OPTIONS

"Buy-here, pay-there" has emerged as an alternative to the traditional BHPH model in recent years. Hey, you stand to collect more payments consistently if your customers are allowed to pay in a way that's convenient to them. That means online, by phone via a 24/7 IVR system, through a mobile app or via text message.

In fact, the more payment options you can offer borrowers, the better. So make sure your DMS can provide all forms of payment, as well as track and link "promises to pay" to schedule payment instructions.

D E A L E R S O C K E T. C O M

888-833-8030

6. COMPREHENSIVE REPORTING AND ANALYTICS

You can't know what areas need your attention without detailed reporting -- data that's sliced, diced and presented in a format on which you can act. The ability to run ad hoc reports is critical to your business. Look for a DMS that not only provides a comprehensive reporting package, but also allows you to customize that reporting to your needs.

7. ACCOUNTING

With so much transaction data stored in your DMS, it's critical that it offer real-time integration or export capabilities with today's leading accounting software.

8. INTEGRATED SOLUTIONS

Your DMS should offer integrations with top providers of valuation guides, vehicle history reports, payment-assurance devices, credit reporting tools, automated payment technology, shop management software, and more. When it does, time-consuming redundancies are eliminated.

9. MOBILE PLATFORM

Your business demands that you be able to respond, review, and act at a moment's notice. That's why a system with mobile capabilities is critically important, allowing you to jump into action from any location using a mobile or tablet device.

10. A SOLUTION THAT SUPPORTS GROWTH

Don't let your software investment of today limit your ability to expand your business tomorrow. So when it comes to selecting the right software solution for your business, consider what you hope to accomplish today and in the future.

D E A L E R S O C K E T. C O M

888-833-8030

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