Deal Pack Blog

Lease Here – Pay Here

posted on: July-06-2016
by: Mark Andenmatten
category: CustomerType

Many used car dealers are operating in the Buy Here – Pay Here (BHPH) market currently, but many are missing a great opportunity with Lease Here – Pay Here (LHPH). Here are six reasons why you may want to consider adding LHPH to your business:

 

1)  LHPH allows the lessor to maintain ownership of the vehicle, which means if the lessee files for bankruptcy, they are not shielded against repossession. Additionally, there is no mandatory grace period before a leased vehicle can be repossessed.

2)  Used car leasing is a relatively new market and is less regulated, thus making it easier to be in compliance.

3)  Consumer attitudes towards used car leasing has improved over the years, and this market is continuing to grow.

4)  Most states allow deferred sales tax on leases, so instead of having to pay the full amount of tax up front like in a typical car sale, lessors only have to pay the tax as they collect it with each lease installment payment.

5)   Because the leased inventory remains on the Balance Sheet, lessors can depreciate the leased units over the term, and thus get a tax deduction for the depreciation of those assets. This can also eliminate the need to have a related finance company (RFC) for tax haven purposes.

6)  Lessors can collect a non-taxable security deposit from the lessee which can be used to offset any losses/expenses incurred during the lease.

 

A large number of dealer management software (DMS) programs are not equipped to handle LHPH; with Deal Pack Pro it’s included at no extra charge, and the complex accounting is fully integrated in real time. Please contact a Deal Pack Pro support representative at 800-526-5832 to see a demo today!

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