Buy Here Pay Here Car Lot Business Plan [Sample Template]

A Buy Here Pay Here (BHPH) car lot business is a type of used car dealership that not only sells vehicles but also provides financing to customers directly.

In a traditional car dealership, customers often secure financing through banks, credit unions, or other third-party lenders. In contrast, a Buy Here Pay Here (BHPH) dealership acts as both the seller and the lender, offering financing options to buyers on-site.

It’s important to note that while Buy Here Pay Here dealerships can provide a financing option for people with poor credit, they are often associated with higher interest rates and more expensive vehicles.

Buyers should carefully consider the terms and conditions of the loan and explore other financing options before committing to a Buy Here Pay Here (BHPH) deal to ensure they are getting the best possible terms for their financial situation.

Steps to Write a Buy Here Pay Here Car Lot Business Plan

1. Executive Summary

Jordan Bentley® BHPH Car Lot, Inc. is a customer-focused Buy Here Pay Here used car dealership located in the vibrant city of San Francisco, California.

We specialize in providing affordable vehicles and financing options for individuals with various credit backgrounds, ensuring that everyone has access to reliable transportation.

Our primary target market includes individuals with varying credit histories, including those who may have been declined by traditional lenders. San Francisco’s diverse population and economic landscape provide an excellent market for our services.

We differentiate ourselves through our commitment to exceptional customer service, competitive interest rates, and a straightforward purchasing process.

Our team’s dedication to transparency and flexibility sets us apart in the Buy Here Pay Here (BHPH) industry. We are committed to fostering strong relationships within the community and building a thriving, customer-centric business.

2. Company Profile

a. Our Products and Services

Jordan Bentley® BHPH Car Lot, Inc. offers a carefully curated selection of used cars, trucks, and SUVs to cater to the diverse needs and preferences of our customers. We also provide in-house financing, making it easier for people with credit challenges to acquire the vehicle they need.

b. Nature of the Business

Jordan Bentley® BHPH Car Lot, Inc. primarily sells pre-owned vehicles and provides in-house financing options to customers, often with lower credit scores or challenging credit histories.

c. The Industry

Jordan Bentley® BHPH Car Lot, Inc. will operate in the Buy Here Pay Here (BHPH) car lot business that belongs to the broader automotive retail industry. More specifically, it is a segment of the used car dealership sector.

d. Mission Statement

At Jordan Bentley® BHPH Car Lot, Inc., our mission is to empower individuals and families in the San Francisco community by providing a diverse range of quality pre-owned vehicles and flexible financing solutions.

We are committed to making car ownership accessible and hassle-free for all, regardless of their credit background. Our aim is to contribute to our customers’ financial growth, personal mobility, and peace of mind.

e. Vision Statement

Our vision at Jordan Bentley® BHPH Car Lot, Inc. is to be recognized as the premier Buy Here Pay Here dealership in the San Francisco Bay Area. We aspire to set industry standards for excellence, innovation, and customer care.

We envision a future where every member of our community has the opportunity to drive a reliable vehicle, improve their credit, and experience the benefits of responsible car ownership.

f. Our Tagline (Slogan)

Jordan Bentley® BHPH Car Lot, Inc. – “Driving Dreams, Building Futures”

g. Legal Structure of the Business (LLC, C Corp, S Corp, LLP)

Jordan Bentley® BHPH Car Lot, Inc. will be formed as a Limited Liability Company (LLC).

h. Our Organizational Structure

• Chief Operating Officer (Owner)
• Dealership Manager
• Compliance and Credit Manager
• Accountant
• Mechanic
• Sales and Marketing Officer
• Customer Service Representatives

i. Ownership/Shareholder Structure and Board Members

• Jordan Bentley (Owner and Chairman/Chief Executive Officer) 56 Percent Shares
• Joel Meyer (Board Member) 14 Percent Shares
• Dianah Matthew (Board Member) 10 Percent Shares
• Jackson Myles (Board Member) 10 Percent Shares
• Lois Solomon (Board Member and Secretary) 10 Percent Shares.

3. SWOT Analysis

a. Strength

• A strong commitment to exceptional customer service and personalized assistance sets us apart in the industry.
• Offering in-house financing solutions enables us to serve customers with various credit backgrounds, expanding our customer base.
• A dedication to transparent and fair transactions builds trust and loyalty among our customers.
• Involvement in the local community through sponsorships and outreach programs helps us build strong relationships and goodwill.
• A knowledgeable and dedicated team with expertise in the used car and finance industry.

b. Weakness

• As a growing business, the selection of vehicles may be limited compared to larger competitors.
• Serving customers with lower credit scores carries a higher risk of defaults and delinquencies.
• Compliance with federal and state regulations regarding auto financing and lending practices can be complex and time-consuming.

c. Opportunities

• The San Francisco market and its surrounding areas offer opportunities for business expansion and a broader customer base.
• Expanding the variety of vehicles offered could attract a wider range of customers.
• Developing a strong online presence and digital marketing strategies can enhance customer reach and engagement.
• Collaborations with local credit unions or financial institutions for co-financing or referral programs.

i. How Big is the Industry?

The Buy Here Pay Here (BHPH) car lot industry is a significant segment within the used car dealership and automotive financing sectors.

However, the exact size of the Buy Here Pay Here (BHPH) industry can vary by region and may be influenced by economic factors, regulatory conditions, and consumer demand.

ii. Is the Industry Growing or Declining?

The buy Here Pay Here (BHPH) car lot industry has been experiencing a degree of stability and adaptation rather than significant growth or decline. The industry’s fortunes can be influenced by a variety of factors, including economic conditions, regulatory changes, and consumer preferences.

iii. What are the Future Trends in the Industry>

Future trends in the Buy Here Pay Here (BHPH) car lot industry are likely to be shaped by evolving consumer preferences, technology, and regulatory changes.

Firstly, digitalization and online sales platforms will play a significant role, with Buy Here Pay Here (BHPH) dealerships increasingly embracing digital marketing, customer engagement, and online vehicle browsing.

Additionally, there will be a growing emphasis on providing eco-friendly and fuel-efficient vehicle options to meet changing consumer demands.

On the regulatory front, continued oversight and potential reforms may affect industry practices. With the focus on responsible lending, Buy Here Pay Here (BHPH) dealerships may adopt more robust risk assessment methods.

iv. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to a Buy Here Pay Here (BHPH) car lot business because the Buy Here Pay Here (BHPH) car lot business is a niche idea in the automotive retail industry. More specifically, it is a segment of the used car dealership sector.

v. Can You Sell a Franchise of Your Business in the Future?

Jordan Bentley® BHPH Car Lot, Inc. has plans to sell franchises in the near future and we will target larger cities all across the United States of America and Canada.

d. Threats

• Economic recessions or financial crises can impact customers’ ability to make payments on loans.
• Competition from other used car dealerships and larger automotive retailers in the area.
• Evolving regulations in the automotive and financing industries may necessitate adjustments in business practices.
• Changes in interest rates can affect the cost of borrowing and the profitability of the business.
• Shifts in consumer preferences and demand for different types of vehicles may impact sales.

i. Who are the Major Competitors?

• DriveTime
• JD Byrider
• America’s Auto Auction
• AutoMax
• The Key
• CarHop
• Car-Mart
• Car Factory
• Auto City
• Byrider
• E-Z Auto
• Car Deal Auto Sales
• ABC MotorCredit
• A&D Auto Sales
• Auto Masters
• Empire Auto Group
• Frank’s Auto Credit
• D. Byrider
• AutoMax
• RightWay Auto Sales.

ii. Is There a Franchise for the Buy Here Pay Here (BHPH) Car Lot Business? If YES, List at least 20 of them and their cost

No, there are no franchise opportunities for the Buy Here Pay Here (BHPH) car lot business.

iii. Are There Policies, Regulations, or Zoning Laws Affecting Buy Here Pay Here (BHPH) Car Lot Business in the United States of America?

Yes, there are policies, regulations, and zoning laws that significantly affect Buy Here Pay Here (BHPH) car lot businesses in the United States.

These regulations are primarily designed to protect consumers, promote fair lending practices, and ensure the proper operation of these businesses.

The Buy Here Pay Here (BHPH) dealerships typically require licenses to operate. These licenses often involve bonding to provide financial protection for customers.

Interest rate caps, often referred to as usury laws, limit the maximum interest rates that Buy Here Pay Here (BHPH) dealerships can charge on loans to prevent excessive or predatory lending.

The Buy Here Pay Here (BHPH) businesses are subject to consumer protection laws that govern issues such as disclosure requirements, dispute resolution, and fair collection practices.

Truth in Lending Act (TILA) which is a federal law requires Buy Here Pay Here (BHPH) dealerships to disclose loan terms, including interest rates, in a clear and transparent manner.

Fair Credit Reporting Act (FCRA) governs how Buy Here Pay Here (BHPH) dealerships report customer payment and credit information to credit bureaus.

Zoning laws can dictate where Buy Here Pay Here (BHPH) car lots can be located, affecting the dealership’s choice of physical location.

The Buy Here Pay Here (BHPH) dealers must comply with state and federal regulations related to vehicle safety and emissions standards. Each state may have additional laws and regulations specific to the Buy Here Pay Here (BHPH) industry.

4. Marketing Plan

a. Who Is Your Target Audience?

i. Age Range:

• Adults aged 25 to 65. Our primary focus will be on individuals in their late twenties to early sixties who are looking for reliable transportation options.

ii. Level of Education:

• Varied educational backgrounds, but our services may appeal to those with a high school diploma, some college education, or vocational training.

iii. Income Level:

• Our target audience spans a broad income range, from lower-income individuals with limited financial resources to those with moderate incomes.

iv. Ethnicity:

• Diverse customer base, catering to people of various ethnicities and backgrounds reflective of the San Francisco community’s diversity.

v. Language:

• Multilingual approach to serve the diverse linguistic needs of San Francisco, with a focus on English and possibly Spanish.

vi. Geographical Location:

• Residents in and around San Francisco, California, who seek accessible and affordable transportation solutions. Specific neighborhoods or areas within the city can be emphasized based on our location.

vii. Lifestyle:

• Our target audience includes working-class individuals, students, families, and people who need practical and budget-friendly transportation options. They may lead busy lives, value convenience, and seek ways to improve their credit and financial stability.

b. Advertising and Promotion Strategies

• Use FOMO to Run Photo Promotions.
• Share our cars for sale in Local Groups and Pages.
• Turn our Social Media Channels into a Resource
• Host Themed Events That Catch Attention.
• Tap Into Text Marketing.
• Develop our Business Directory Profiles
• Build Relationships with Other Businesses in our Area

i. Traditional Marketing Strategies

• Broadcast Marketing -Television & Radio Channels.
• Marketing through Direct Mail.
• Print Media Marketing – Newspapers & Magazines.
• Out-of-Home” marketing (OOH marketing) – Public Transits like Buses and Trains, Billboards, Street Furniture, and Cabs.
• Including direct sales, direct mail (postcards, brochures, letters, fliers), tradeshows, print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing), radio, and television.

ii. Digital Marketing Strategies

• Social Media Marketing Platforms.
• Influencer Marketing.
• Email Marketing.
• Content Marketing.
• Search Engine Optimization (SEO) Marketing.
• Pay-per-click (PPC).
• Affiliate Marketing
• Mobile Marketing.

iii. Social Media Marketing Plan

• Create a personalized experience for our customers.
• Create an efficient content marketing strategy.
• Create a community for our audience.
• Start using chatbots.
• Gear up our profiles with a diverse content strategy.
• Use brand advocates.
• Create profiles on the relevant social media channels.
• Run cross-channel campaigns.

c. Pricing Strategy

Jordan Bentley® BHPH Car Lot, Inc. will adopt the following pricing strategies:

• Cost-Plus Pricing
• Value-Based Pricing
• Competitive Pricing
• Dynamic Pricing
• Bundle Pricing

Please note that our pricing strategy is based on a careful analysis of the costs and profitability of the business, as well as the needs and preferences of the target customer base.

5. Sales and Distribution Plan

a. Sales Channels

Jordan Bentley® BHPH Car Lot, Inc. employs a multi-faceted approach to sales channels. We primarily engage customers through our physical dealership location in San Francisco, California, providing them with an in-person vehicle selection experience.

Additionally, our online presence plays a crucial role, with a user-friendly website showcasing our inventory and financing options.

We also leverage digital marketing strategies and social media platforms to reach a wider audience and provide information and support to potential buyers.

By combining the convenience of online accessibility with the personal touch of in-person interactions, we create a comprehensive and customer-centric sales channel, ensuring that our diverse clientele can explore, finance, and purchase the vehicles they need with ease and flexibility.

b. Inventory Strategy

Jordan Bentley® BHPH Car Lot, Inc. employs a well-rounded inventory strategy to cater to the diverse needs of our customers in San Francisco.

Our approach focuses on offering a carefully curated selection of pre-owned vehicles that balance affordability, reliability, and variety.

We stock a range of makes and models to meet different preferences, with an emphasis on fuel-efficient and eco-friendly options to align with changing consumer demands.

Our inventory includes vehicles suited for individuals, families, and professionals, spanning various price points. We regularly assess market trends and customer feedback to keep our inventory current and appealing.

This strategy ensures that we provide accessible and quality vehicle options while adapting to evolving customer needs and preferences in the ever-changing automotive market.

c. Payment Options for Customers

Here are the payment options that Jordan Bentley® BHPH Car Lot, Inc.  will make available to its clients;

• Bank Transfers
• Credit or Debit Card
• Cash
• Checks
• Electronic Payment Systems such as PayPal or Venmo.

d. Return Policy, Incentives and Guarantees

Return Policy:

At Jordan Bentley® BHPH Car Lot, Inc., we are committed to ensuring customer satisfaction and confidence in their vehicle purchase.

Our return policy offers a “5-Day Satisfaction Guarantee”. If, within five days of purchase, a customer encounters a major issue with their vehicle that cannot be resolved to their satisfaction, we offer the option to return the vehicle. Terms and conditions apply though.

Incentives:

We believe in rewarding our customers for their loyalty and responsible financial behavior. As part of our incentives program, we offer:

• Customers returning to us for their next vehicle purchase may be eligible for exclusive discounts.
• Customers who refer friends or family members to us can receive incentives as a token of our appreciation.
• We provide a unique program to assist customers in rebuilding their credit and potentially upgrading to a higher-quality vehicle with improved terms over time.

Guarantees:

• Every vehicle in our inventory undergoes a comprehensive inspection to ensure its quality, reliability, and safety.
• We offer a credit rebuilding program, assisting customers in improving their credit scores through responsible financing and timely payments.
• We guarantee transparent and straightforward transactions with no hidden fees, ensuring our customers have a clear understanding of their purchase and financing terms.

Our return policy, incentives, and guarantees are designed to build trust, enhance the buying experience, and support our customers in their journey toward reliable transportation and improved financial well-being.

e. Customer Support Strategy

Jordan Bentley® BHPH Car Lot, Inc. places an unwavering focus on an exceptional customer support strategy. We prioritize customer satisfaction at every stage of their journey with us. Our strategy includes:

• Personalized Assistance: We offer one-on-one guidance to understand each customer’s unique needs and financial situation, ensuring they make informed choices.
• Clear Communication: Transparent and honest communication is our foundation. We provide customers with all the information they need to make confident decisions.
• Educational Resources: We offer resources and guidance to help customers make the most of their financing options and build or repair their credit.
• Responsive Assistance: Our team is readily available to address questions, concerns, or issues promptly, enhancing the overall customer experience.
• Post-Purchase Support: We continue to assist customers even after the sale, offering resources for vehicle maintenance, credit improvement, and any other post-purchase needs.
• Community Engagement: We actively engage with and support our local community, fostering strong relationships and a sense of trust.

Our customer support strategy aims to provide a supportive, trustworthy, and empowering experience for our customers, helping them achieve their transportation needs and financial goals.

6. Operational Plan

Jordan Bentley® BHPH Car Lot, Inc. has a comprehensive operational plan designed to provide high-quality service and reliable vehicles to our customers in San Francisco. Our plan includes:

• Inventory Management: Continually curating a diverse selection of used vehicles to meet the varying needs of our clientele, with a focus on affordability and reliability.
• In-House Financing: Offering flexible financing solutions to accommodate customers with diverse credit backgrounds, helping them access the transportation they need.
• Quality Assurance: Conduct rigorous inspections to ensure the quality, safety, and reliability of every vehicle in our inventory.
• Customer-Centric Approach: Prioritizing exceptional customer service, transparency, and responsiveness throughout the sales process and beyond.
• Community Engagement: Engaging with the local community through outreach programs and partnerships to build trust and foster strong relationships.
• Digital Presence: Leveraging digital marketing and an informative website to enhance accessibility and convenience for customers.

Our operational plan is founded on the principles of quality, transparency, and customer empowerment, ensuring that Jordan Bentley® BHPH Car Lot, Inc. remains a trusted and valuable resource for transportation and financial progress.

a. What Happens During a Typical Day at a Buy Here Pay Here (BHPH) Car Lot Business?

A typical day at a Buy Here Pay Here (BHPH) car lot business is a dynamic blend of various activities. It involves vehicle inspections and preparations for sale, engaging with customers to understand their needs and financing options, finalizing sales contracts, and coordinating vehicle deliveries. Managing payment collections, addressing customer inquiries, and providing post-sale support are ongoing tasks.

Compliance with regulatory requirements, maintaining a well-organized inventory, and marketing efforts also play a crucial role.

BHPH dealers must balance these operational aspects to ensure a smooth and customer-centric experience, helping individuals secure reliable transportation and build or repair their credit.

b. Production Process (If Any)

There is no production process.

c. Service Procedure (If Any)

At Jordan Bentley® BHPH Car Lot, Inc., our service procedure is designed to provide customers with a seamless and customer-centric experience.

It begins with a warm welcome and personalized assistance from our knowledgeable team, who work to understand each customer’s unique needs and credit situation.

We guide them through our diverse inventory, facilitating test drives and providing clear information. Our transparent financing options cater to various credit backgrounds.

After purchase, we continue to support customers with maintenance advice, credit-building resources, and responsive assistance. Our commitment is to deliver quality vehicles and financial empowerment, ensuring satisfaction and peace of mind.

d. The Supply Chain

Jordan Bentley® BHPH Car Lot, Inc. manages a streamlined supply chain focused on acquiring quality pre-owned vehicles. Our process involves sourcing vehicles from various channels, including auctions, trade-ins, and direct purchases.

We emphasize thorough inspections and reconditioning to maintain vehicle quality. We maintain strong relationships with vendors and service providers to ensure efficient operations.

Our inventory is continually updated to meet the diverse needs of our customers, balancing affordability and reliability while adhering to high-quality standards.

e. Sources of Income

Jordan Bentley® BHPH Car Lot, Inc. generates income primarily from two sources: vehicle sales and in-house financing.

The bulk of revenue comes from selling quality pre-owned vehicles to a diverse customer base. We also provide in-house financing solutions, earning interest income from customer loans.

Additionally, we plan to generate income from extended warranties, optional services, and post-sale vehicle maintenance.

Our multifaceted approach ensures a stable income stream, while our focus on customer satisfaction encourages repeat business and referrals.

7. Financial Plan

a. Amount Needed to Start your Buy Here Pay Here (BHPH) Car Lot Business?

Jordan Bentley® BHPH Car Lot, Inc. would need an estimate of $1.2 million to successfully set up our Buy Here Pay Here (BHPH) car lot company in the United States of America. Please note that this amount includes the salaries of all the staff for the first three months of operation.

b. What are the Costs Involved?

• Business Registration Fees – $750.
• Legal expenses for obtaining licenses and permits – $2,300.
• Marketing, Branding, and Promotions – $5,000.
• Business Consultant Fee – $2,500.
• Insurance – $15,400.
• Rent/Lease – $120,000.
• Other start-up expenses including commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
• Operational Cost (salaries of employees, payments of bills et al) – $120,000
• Working Capital (For Purchasing of Used Cars) – $800,000
• Store Equipment (cash register, security, ventilation, signage) – $4,750
• Website: $600
• Opening party: $3,000
• Miscellaneous: $10,000

c. Do You Need to Build a Facility? If YES, How Much Will It Cost?

Jordan Bentley® BHPH Car Lot, Inc. will not build a new facility for our Buy Here Pay Here (BHPH) car lot company because we plan to start from a leased car dealership facility.

d. What are the Ongoing Expenses for Running a Buy Here Pay Here (BHPH) Car Lot Business?

• Cost of purchasing used vehicles for our inventory.
• Employee Salaries (compensation for sales staff, finance managers, mechanics, and administrative personnel.)
• Costs associated with the physical dealership location, including rent or lease payments, utilities, and maintenance.
• Expenses for advertising campaigns, online marketing, and promotional materials to attract customers.
• Coverage for the dealership, vehicles, and liability insurance.
• Interest on Financing (the cost of funds used to provide in-house financing to customers.)
• Routine maintenance, inspections, and repairs to ensure vehicle quality.
• Expenses related to adhering to state and federal regulations, including licensing and compliance programs.
• Costs for office supplies, software for managing inventory and customer data, and administrative needs.
• Property taxes, income taxes, and sales tax remittances.
• Expenses for training programs to keep staff informed about industry changes and customer service standards.
• Repayment of loans or credit lines used to finance vehicle purchases and dealership operations.

e. What is the Average Salary of Your Staff?

• Chief Operating Officer (Owner) – $85,000 Per Year
• General Manager – $65,000 Per Year
• Compliance and Credit Manager – $58,000 Per Year
• Accountant – $50,000 Per Year
• Mechanic – $55,000 Per Year
• Sales and Marketing Officer – $35,000 Per Year
• Customer Service Representative – $34,100 Per Year

f. How Do You Get Funding to Start a Buy Here Pay Here (BHPH) Car Lot Business?

• Raising money from personal savings and sale of personal stocks and properties
• Raising money from investors and business partners
• Sell shares to interested investors
• Applying for a loan from your bank/banks
• Pitching your business idea and applying for business grants and seed funding from the government, donor organizations, and angel investors
• Source for soft loans from your family members and friends.

8. Financial Projection

a. How Much Should You Charge for your Product/Service?

Prices at Buy Here Pay Here (BHPH) dealerships tend to be higher than the private sale prices of similar vehicles, as they often include the cost of financing and the added risk associated with lending to customers with subpar credit.

Buy Here Pay Here (BHPH) dealerships may have a range of vehicles with prices starting at a few thousand dollars and going up to several thousand dollars, depending on the vehicle’s age, make, model, and condition.

b. Sales Forecast?

• First Fiscal Year (FY1): $750,000
• Second Fiscal Year (FY2): $1.2 million
• Third Fiscal Year (FY3): $2 million

c. Estimated Profit You Will Make a Year?

Jordan Bentley® BHPH Car Lot, Inc. is projecting to make;

• First Fiscal Year (FY1): (20% of revenue generated)
• Second Fiscal Year (FY2): (25% of revenue generated)
• Third Fiscal Year (FY3): (30% of revenue generated)

d. Profit Margin of a Buy Here Pay Here (BHPH) car lot Company Business Product/Service

The profit margin of a Buy Here Pay Here (BHPH) car lot company business is not fixed. It could range from 20 percent to 30 percent depending on some unique factors.

9. Growth Plan

a. How do you intend to grow and expand? By opening more retail outlets/offices or selling a franchise?

Jordan Bentley® BHPH Car Lot, Inc. will grow our Buy Here Pay Here (BHPH) car lot company by first opening other outlets in key cities in the United States of America, and Canada within the first seven years of establishing the business.

We anticipate steady growth in both revenue and profit over the next three years as we expand our customer base and vehicle inventory. With a conservative approach to risk management, we aim to maintain healthy financial stability throughout this period

b. Where do you intend to expand to and why? (Geographical Locations)

Jordan Bentley® BHPH Car Lot, Inc. plans to expand to

• San Diego, California
• Nashville, Tennessee
• Charlotte, North Carolina
• Phoenix, Arizona
• Dallas, Texas
• Atlanta, Georgia
• Portland, Oregon
• Minneapolis, Minnesota
• Denver, Colorado
• Tampa, Florida.

Internationally, we plan to expand to Canada.

The cities listed above have a growing car ownership market, making them potentially attractive markets for Buy Here Pay Here (BHPH) car lot businesses.

10. Exit Plan

Jordan Bentley® BHPH Car Lot, Inc. plans to achieve a successful exit through a strategic merger or acquisition. We will focus on enhancing our market positioning, financial stability, and operational efficiency to make our business an attractive prospect. Expert M&A advisors will be engaged to identify potential partners and negotiate favorable deals.