Software for buy-here-pay-here dealerships

What to check before you decide

Ask how payments are allocated between principal, interest, late fees and side notes, and whether the allocation rules can follow your state's requirements. The software should produce the compliance documents that credit sales require: Truth-in-Lending disclosures, retail installment contracts, privacy notices and whatever the state adds for in-house finance. Ask how it handles payment reminders, past-due notices and insurance expiration reminders by text and email, including consent and opt-out records.

Tracking devices and starter interrupters are a separate purchase with its own rules, since few states regulate them directly and the contract usually has to disclose them. Ask how device alerts connect to the collections queue and what record is kept of each action.

Finally, measure the tool by portfolio results: delinquency by age, charge-off rate, the share of accounts paying on time, and recovery. Ask the vendor to show the reports that let you compare those by month and by lot, and to show what a full export of accounts, payment history and notes looks like, because moving a loan portfolio between systems is the hardest conversion a BHPH dealer faces.

Run a parallel month before you switch. Post a month of real payments, late fees and extensions in the new system and in the old one.

Then compare the ending balances account by account. Differences show up in the first week.

Each one is a rule the software applied differently from your contract.

Watch the collections queue for a week before you sign. Count how many accounts an employee can work in an hour, how many notes are typed twice and how many promises to pay get lost. Those counts set a fair target for what the software must improve.