Buy Here Pay Here (BHPH) is a dealership model where the dealer provides in-house financing directly to the customer rather than arranging third-party bank or credit union loans.
In the BHPH model, the dealership serves both as the seller and the lender. Customers who may not qualify for traditional financing due to credit challenges can purchase a vehicle and make payments directly to the dealership. Because the dealer is carrying the loan on their own books, they assume the full credit risk — which fundamentally changes how F&I products are positioned and valued.
For BHPH dealers, backend products still represent an important profit center, but the dealer's relationship with those products is different. Since the dealer holds the loan, they have a direct financial interest in protecting the collateral and ensuring the customer remains current. This is why GPS tracking and starter interrupt devices have become standard tools in the BHPH environment: they help dealers manage risk and locate vehicles if a customer stops making payments.
Even though BHPH customers often have limited financial flexibility, vehicle service contracts and GAP coverage remain relevant. A major mechanical breakdown or a total loss without adequate coverage can cause a performing loan to default — which directly impacts the dealer's bottom line. The key for BHPH dealers is structuring F&I products in a way that aligns with the customer's budget while still providing meaningful protection. When done thoughtfully, backend products don't just generate F&I income — they help stabilize the loan portfolio and improve long-term profitability.
Discover F&I strategies that work for in-house financing models.