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Earl Brown | Solera Dealer Solutions
Rates are still high. Delinquencies are sticky. Regulators are watching. If you run a BHPH store, it’s probably feeling like you’re getting squeezed from all sides. The way through is a set of simple habits that lower risk, keep you compliant and protect cash flow. When money is expensive, bad paper gets very expensive. Here are a few ideas to keep you focused ad flourishing through the end of the year and on into tax season 2026.
Underwrite what you can service
The best collection is a payment that fits your customer’s life. Build your underwriting around verified income, realistic budgets, and vehicles you can stand behind. Use your portfolio data to set minimum down payments and maximum terms that actually perform. Avoid stretches that feel good on the sales floor but turn into repos and messy recons on the back end. Keep the car affordable to own. That means a payment the household can make and a unit unlikely to strand the buyer. Consumers have been overextended for several years already, and if you run a BHPH lot, you already know how dangerous that phenomenon can be to your bottom line.
Make communication effortless
Aside from the peace of mind provided by GPS tracking tools, communication is your best collections tool. Consistent and compassionate, but firm. Text when appropriate. A link to pay from a phone when possible. Quick help when a customer hits a bump. Those simple touches cut your roll rates and keep your portfolio in the black. If your DMS provider supports automated outreach and easy pay options, turn them on and measure the change. Call a little earlier and be a little kinder.
Try to save the tough talk for later stages, so you can maintain the relationship and retain trust and transparency. A respectful tone gets more people back on track than a threat ever will.
Protect the metal
When a customer disappears or stops responding, every day matters. Asset‑tracking technology (like GoldStar and others) helps you locate and recover vehicles faster within the law and within your contract terms. Use it alongside a clear, documented collections process so your team knows when to escalate and how to stay compliant with changing state rules. Faster, lawful recovery improves loss‑to‑liquidation and puts cash back into cars you can sell again.
Tighten your compliance basics
Two areas deserve fresh attention. First, the FTC’s Safeguards Rule. Dealers who finance are financial institutions. You need a written information security program, a qualified individual, risk assessments, and an incident response plan. The FTC’s dealer‑specific FAQs and its breach‑notification rule put timelines and responsibilities in black and white. Notify the FTC as soon as possible, and no later than 30 days after discovery, if a security event exposes nonpublic personal information of 500 or more consumers.
Second, the FTC’s Red Flags Rule. Maintain a written Identity Theft Prevention Program. Approve it at the top, train the team, review it annually, and update it as fraud patterns change. Use checks for synthetic ID indicators at the desk, not after a charge‑off. A cloud DMS like iDMS helps you embed those checks into everyday work and leaves an audit trail that proves you did what your policy says you do.
Watch the portfolio (and policymakers) like a hawk
You know to keep a close eye on your roll rates and recoveries, and to identify accounts that need live outreach today. Staying disciplined on disclosures, fees, and fair treatment is part of survival in the BHPH space. But one area that too many dealers overlook is the level of policy involvement at the local, state, and federal levels. The CFPB’s Supervisory Highlights continue to focus on auto finance practices and UDAAP risk. To that point, staying profitable also means staying ahead of policy changes.
In September, at NIADA’s Policy Conference in Washington, D.C., Independent dealers got a chance to make their voices heard on the regulatory front. I was proud to join colleagues and allies to represent Solera and it’s dealer partners in our effort to help clarify the industry stance on CFPB reform, the PARTS and REPAIR acts, SID-regulations, and more. Our meetings with lawmakers on the hill were well received and productive.
The Bottom Line: Be Disciplined.
You already know BHPH is not an easy business – it never has been, and the road into 2026 isn’t getting easier. But it’s also true that BHPH dealers are a resilient bunch. The keys to survival (and even success) in this high-rate, high-reg environment are straightforward: stick to the fundamentals, and use every tool at your disposal to mitigate risk. That means disciplined underwriting, strong customer communication, rigorous collections, ironclad compliance, and making smart use of technology to tie it all together. None of these are “set it and forget it” areas – you have to stay on top of them constantly. Yet, by doing so, you protect what you’ve built and position your dealership to thrive when conditions eventually improve.
Every recommendation here ties to a real business outcome: avoid bad loans, and you avoid future losses. Keep good relationships, and you collect more of what you’re owed. Follow the rules, and you won’t pay penalties. Use technology, and you can manage a bigger portfolio without proportional extra cost. It all adds up to profitability through discipline and efficiency. High rates and heavy regs may define the times, but with the right tactics, a BHPH dealer can still write their own success story in the year ahead. Survival requires adaptability, master that–and you’ll thrive.
