LHPH and Your DMS

By Claire Cruce - July 8, 2020

What exactly is LHPH?

Lease Here Pay Here – also referred to as Rent-to-own –  is a form of lending designed to assist consumers in finding vehicles they may not qualify for with traditional banking or lenders. LHPH is similar to BHPH (Buy Here Pay Here,) but instead of using an installment loan for the financial instrument, it is a used car lease. The dealer then services the lease through the life of the contract.

LHPH and Your DMS

What are some Benefits?

  • Profitability – One vehicle can be leased multiple times increasing your return on the asset.
  • Competitive Advantage – Dealers can offer a more competitive vehicle than BHPH dealers because of leasing structure.
  • Income Tax Deferment – When the dealer becomes the lessor with ownership rights, they can depreciate the vehicle as an asset.
  • Sales Tax Advantage – In most states, sales tax is only calculated on the actual monies collected, not due up front.
  • Collateral Control – As the owner of the vehicle, the dealer has more rights when recovering their property. Recovery times and the post-repo process can both be improved.
  • Bankruptcy – A lease cannot be included in bankruptcy. The lessee will have the option to assume or reject the lease after filing and can continue to make payments if they assume it.
  • Customer Retention – The dealer maintains stronger customer control. To keep the vehicle in prime condition many will include a warranty in hopes to turn over the asset again. At the end of the lease, the customer and sales team will work together to decide if they would like to keep the vehicle or lease a new one. Either way the relationship continues.

Does a good LHPH DMS exist?

Deal Pack Pro can provide you with complete Lease Here Pay Here software to assist you through the whole leasing process. Purchase and non-purchase payoffs can be completed within the system. Inventory can be converted from unit inventory to leasing inventory. All your accounting is tracked in real-time, so you do not have to manually make entries.

Not only does Deal Pack work for LHPH operations, but BHPH and Retail deals as well. If you are a BHPH company looking to begin LHPH deals, Deal Pack can handle both. Deals can be structured for leases separately from BHPH and Retail. Accounting entries will be made appropriately for each type, from deal posting or taking a payment. Contracts and forms can be printed from the system for all types of deals as well.

A lot of dealers are shifting to virtual purchases instead of in person for both BHPH and LHPH. The customer can view your website for available inventory without ever having to leave their home. Once they have decided on their ride the deal can be completely entered in Deal Pack without being face to face. It doesn’t matter if it’s a lease or retail installment! Once the customer and you agree on the deal the forms can be signed virtually as well thanks to our integration with DocuSign! The customer can even have a copy of their contract emailed to them!

As we all continue to adjust to a new normal of buying, selling and leasing cars let Deal Pack work hard for you. That will give you more time to ensure you are keeping all parties safe, and comfortable without impacting business. Don’t forget Deal Pack offers limitless free training for any employee over the web. We are always here for you. Remember, we are all in this together! Contact a Support Agent today for further information.

For more information on Deal Pack Software and to schedule a demo, contact 1-800-526-5832.

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