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The Financial Benefits of BHPH
Adopting a BHPH model can offer several financial advantages for dealerships. Firstly, it opens up a new revenue stream through interest on loans. While traditional dealerships rely solely on the sale of vehicles, BHPH dealerships benefit from ongoing income generated by financing agreements. Furthermore, this model can lead to higher profit margins, as dealerships have more control over pricing and interest rates.
According to a study by the National Independent Automobile Dealers Association (NIADA), BHPH dealerships have reported an average gross profit margin of 38% on used vehicles, compared to 18% for traditional dealerships1. This significant difference highlights the potential profitability of the BHPH model.