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A unique challenge for BHPH owners is that they are often "cash poor" despite being highly profitable on paper.

A BHPH lot can technically remain profitable even if 65% of its loans default , provided they maintain high sales volume and keep operational costs low. 3. The "Cash Poor" Paradox how profitable are buy here pay here lots

Buy Here Pay Here GAP Coverage for Dealers - Elite FI Partners A unique challenge for BHPH owners is that

The markup on the car itself. BHPH lots often sell older, high-mileage vehicles at significantly inflated prices compared to their market value. The "Cash Poor" Paradox Buy Here Pay Here

At the end of 2025, 60+ day delinquencies reached an all-time high of 6.65% .

Rising vehicle acquisition costs in 2026 are putting pressure on cash flow, requiring dealers to constantly reinvest their "profits" into new inventory to keep the "churn" going. 4. Major Risks to Profitability in 2026