If the last few years have taught dealers anything, it's that the ground beneath their feet can shift fast. As current benchmark data shows, new and used vehicle sales are contributing less to net profits, while overhead continues to rise. In contrast, Parts & Service (Fixed Ops) have become an increasingly reliable revenue source.

But there's still one major opportunity missing from most dealership income statements: in-house lending. With tools like DCS and LHPH frameworks, dealers can now recapture subprime lending profits without massive capital, licensing, or disruption.

The Growing Profit Gap in Sales vs. Fixed Ops

According to the National Automobile Dealers Association (NADA) and Cox Automotive, per-vehicle margins that spiked during inventory shortages are normalizing and, in many cases, falling below pre-pandemic levels.

• New Car Margins are under pressure due to rising inventory, high interest rates, and OEM pricing constraints.
• Used Car Sales remain volatile, with double-digit drops in volume.
• Fixed Operations consistently deliver, often accounting for the majority of storewide net income.

Still, dealers are leaving money on the table by ignoring one high-potential area: store-level lending.

The Missing Department: Dealer-Controlled Lending

Lending is often the most underutilized profit center in the modern dealership model. With Lease Here Pay Here (LHPH) strategies and tools like @DCS, dealers can control the finance process and unlock:

• Interest income
• Origination fees
• Finance product upsells

All while staying compliant under Reg Z.

Why Now Is the Time to Launch In-House Lending

1. Higher Margins: Dealers can increase revenue by underwriting subprime leases.
2. Low Barriers to Entry: Platforms like DCS reduce capital requirements and automate compliance.
3. No Disruption to Sales: LHPH overlays your current process with minimal friction.
4. Stronger Customer Retention: Control the vehicle and the customer, with retention rates nearing 60%.

Subprime Auto Lending: A Growing Opportunity

Subprime customers make up 20% of all U.S. auto loans according to the Federal Reserve. And despite market downturns, Cars Commerce reports that subprime originations remain stable because transportation is essential.

In-house lending lets dealers:

• Serve customers other lenders decline
• Protect revenue during downturns
• Establish recurring income from an underserved market

Why LHPH Is Beating BHPH for Dealers

More dealers, including franchises, are adopting LHPH (Lease Here Pay Here) for its flexibility and profitability.

• Shorter lease terms reduce risk and default rates
• Vehicle retention keeps cars in inventory and customers returning
• Monthly lease payments offer predictable cash flow
• High return customer rate (60%) enhances service and resale

Final Word: Your Next Profit Center is Lending

Vehicle sales are earning less, while expenses keep climbing. Fixed Ops is holding the line, but lending is your untapped profit center. With no major capital outlay or staffing burden, tools like DCS let you:

• Enter subprime lending
• Increase customer retention
• Build recurring revenue fast

Ready to stop leaving money on the table?Contact DCS today and discover how in-house lending can transform your bottom line.

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