The Fed Went Digging: What Washington Just Learned About the BHPH Business

The Fed Went Digging: What Washington Just Learned About the BHPH Business

The Federal Reserve doesn't study industries without a reason — and in May 2026, they published a deep-dive report on the Buy Here Pay Here sector that every independent dealer needs to read. Five Fed economists spent months analyzing real loan data, bank records, and portfolio performance metrics to answer one question: what exactly is the BHPH business model, and what risks does it carry for the broader financial system? What they found will surprise you ... in both directions. Yes, the scrutiny is real. The Tricolor collapse put Washington on notice, and the banking community is now looking at every BHPH operator differently because of one bad actor. Capital is being repriced. Risk ratings are shifting. The regulatory environment is changing in ways that aren't always visible from the lot. But the Fed's data also tells a story the industry rarely gets credit for. BHPH loan balances have grown 214% since 2018. Dealers have been quietly moving toward less risky borrower segments for years. And the integrated dealer-financier model — done right — is one of the most effective tools in the market for serving customers traditional lenders won't touch. Today, Jim and Michelle Rhoads breaks down the full Fed report through the White Hat Way lens: what it means for your capital access, your collections strategy, your customer relationships, and your long-term viability as an operator. If you want to understand the environment you're actually operating in right now, this is the episode. 🔗 Full Fed Report: https://www.federalreserve.gov/econres/notes/feds-notes/subprime-auto-lending-trends-in-buy-here-pay-here-auto-lending-20260508.html [https://www.federalreserve.gov/econres/notes/feds-notes/subprime-auto-lending-trends-in-buy-here-pay-here-auto-lending-20260508.html] BHPH Morning Show | White Hat Way | whitehatway.com FIND THE BHPH MORNING SHOW ON VIDEO (LIVE OR ARCHIVED) Find the BHPH Morning Show LIVE on YouTube [https://www.youtube.com/channel/UCPtJMGeHy2itJFxncgyS6pQ], LinkedIn and Facebook every Mon, Wed, & Fri at 11am eastern where we (Jim and Michelle Rhoads along with featured guests) talk #buyherepayhere #bhph #subprime #automotive #finance #ethics #whitehatway #customerretention #customerengagement #marketing and much more!  We are pleased to use our sometimes-scratchy morning voices to speak up on behalf of BHPH Dealers. Don't forget to LIKE the videos and SUBSCRIBE to The Octane Group channel. Also, please add your comments or questions right here in the BHPH Institute.

"Ready to Trade, Mr. Customer?" One Advantage of Lease Here Pay Here

Every dealer wants repeat business. But in the Buy Here Pay Here world, getting a customer back in the door for their next car is more art than science — and more hope than system. You finish financing their car, they make payments for a few years, and then... what? You cross your fingers and wait to see if they come back. Lease Here Pay Here changes that equation entirely. When a customer drives off in a leased vehicle, the end of the road is already built into the deal. You know when the term ends. You know what the car is expected to be worth. You know when they're coming back — because the lease brings them back. That's not a repeat customer strategy. That's a repeat customer machine. In today's Morning Show, we're talking about one of the most compelling advantages LHPH has over traditional BHPH financing: the built-in trade cycle. We'll explore what it looks like when a dealer can plan their next deal before the current one is done — and what that means for customer retention, inventory flow, and the long-term value of every relationship on your books. Whether you're already operating an LHPH program or you're still on the BHPH side of the fence watching this model grow, this episode is going to paint a picture of what's possible when you stop waiting on customers to come back — and start building the road that brings them home. FIND THE BHPH MORNING SHOW ON VIDEO (LIVE OR ARCHIVED) Find the BHPH Morning Show LIVE on YouTube [https://www.youtube.com/channel/UCPtJMGeHy2itJFxncgyS6pQ], LinkedIn and Facebook every Mon, Wed, & Fri at 11am eastern where we (Jim and Michelle Rhoads along with featured guests) talk #buyherepayhere #bhph #subprime #automotive #finance #ethics #whitehatway #customerretention #customerengagement #marketing and much more!  We are pleased to use our sometimes-scratchy morning voices to speak up on behalf of BHPH Dealers. Don't forget to LIKE the videos and SUBSCRIBE to The Octane Group channel. Also, please add your comments or questions right here in the BHPH Institute.

BHPH Economic News According to Claude AI

The economy looks fine — unless you're in it. In today's episode, Jim and Michelle break down the biggest headlines shaking the BHPH world right now, with a little help from AI. From the billion-dollar fraud collapse to a 32-year delinquency record, there's a lot your dashboard isn't telling you — and a lot your competitors aren't paying attention to yet. We share the latest on the Tricolor Holdings implosion — how a vertically integrated BHPH giant allegedly double-pledged $800 million in collateral, took a big chunk out of JPMorgan and Fifth Third Bank in the process , and ended with federal fraud indictments. Then we unpack what the big delinquency data actually says about your customers right now: subprime 60-day past-dues just hit their highest level since 1994, and the K-shaped economy explains exactly why — and how that influences today's best practices in BHPH underwriting and collections. We also look at the regulatory wildcard in the room and how tariffs are likely impacting the auction lanes. If you want to know what's happening in the world your customers are living in, this is the episode. FIND THE BHPH MORNING SHOW ON VIDEO (LIVE OR ARCHIVED) Find the BHPH Morning Show LIVE on YouTube [https://www.youtube.com/channel/UCPtJMGeHy2itJFxncgyS6pQ], LinkedIn and Facebook every Mon, Wed, & Fri at 11am eastern where we (Jim and Michelle Rhoads along with featured guests) talk #buyherepayhere #bhph #subprime #automotive #finance #ethics #whitehatway #customerretention #customerengagement #marketing and much more!  We are pleased to use our sometimes-scratchy morning voices to speak up on behalf of BHPH Dealers. Don't forget to LIKE the videos and SUBSCRIBE to The Octane Group channel. Also, please add your comments or questions right here in the BHPH Institute.

BHPH Report Cards Are In ... WHW's New Business Model Index™ [Episode 2 of 2] 📱

[Episode 2 of 2 - find #1 by same title on YouTube] For decades, Buy Here Pay Here and Lease Here Pay Here dealers have run their operations on instinct, experience, and fragmented data — never quite sure how well their business model or strategy was working. Profitability looked fine on paper. Maybe volume was OK. But the deeper questions — Is my deal structure building a portfolio that actually pays me back? Is my finance arm supporting itself or quietly bleeding? Is my inventory strategy serving my cash flow or fighting it? — went largely unanswered. Until now. In this expanded LIVE Sunday episode, Jim will take viewers inside the methodology behind the WHW Business Model Index™ — a first-of-its-kind framework that uses artificial intelligence to evaluate six core pillars of a BHPH or LHPH operation and assign something operators have never had before: an honest, data-driven letter grade on their overall game plan. We'll start with the 'why' behind the Index — the blind spots it was designed to expose, the weighting of the chosen metrics, and what it actually means to have your business model graded against a standard that looks beyond your best month or your worst excuse. Whether you're running a single lot or managing a multi-dealer group, the WHW Business Model Index™ is built to show you where you stand — and more importantly, where the math says you could. FIND THE BHPH MORNING SHOW ON VIDEO (LIVE OR ARCHIVED) Find the BHPH Morning Show LIVE on YouTube [https://www.youtube.com/channel/UCPtJMGeHy2itJFxncgyS6pQ], LinkedIn and Facebook every Mon, Wed, & Fri at 11am eastern where we (Jim and Michelle Rhoads along with featured guests) talk #buyherepayhere #bhph #subprime #automotive #finance #ethics #whitehatway #customerretention #customerengagement #marketing and much more!  We are pleased to use our sometimes-scratchy morning voices to speak up on behalf of BHPH Dealers. Don't forget to LIKE the videos and SUBSCRIBE to The Octane Group channel. Also, please add your comments or questions right here in the BHPH Institute.

Report Cards Are In! Introducing the WHW Business Model Index™ [Episode 1 of 2]

The BHPH industry will never grade itself the same way again. For decades, Buy Here Pay Here and Lease Here Pay Here dealers have run their operations on instinct, experience, and fragmented data — never quite sure how well their business model or strategy was working. Profitability looked fine on paper. Maybe volume was OK. But the deeper questions — Is my deal structure building a portfolio that actually pays me back? Is my finance arm supporting itself or quietly bleeding? Is my inventory strategy serving my cash flow or fighting it? — went largely unanswered. Until now. In this episode, White Hat Way introduces the WHW Business Model Index™ — a first-of-its-kind framework that uses artificial intelligence to evaluate six core pillars of a BHPH or LHPH operation and assign something operators have never had before: an honest, data-driven letter grade on their overall game plan. We'll walk you through the why behind the Index — the blind spots it was designed to expose, the metrics that matter most, and what it actually means to have your business model graded against a standard that looks beyond your best month or your worst excuse. Whether you're running a single lot or managing a multi-dealer group, the WHW Business Model Index™ is built to show you where you stand — and more importantly, where the math says you could. Part 2 drops LIVE on Sunday at 2:30e, only on YouTube. Subscribe to the channel (@Jim_Michelle_Rhoads) to be notified. FIND THE BHPH MORNING SHOW ON VIDEO (LIVE OR ARCHIVED) Find the BHPH Morning Show LIVE on YouTube [https://www.youtube.com/channel/UCPtJMGeHy2itJFxncgyS6pQ], LinkedIn and Facebook every Mon, Wed, & Fri at 11am eastern where we (Jim and Michelle Rhoads along with featured guests) talk #buyherepayhere #bhph #subprime #automotive #finance #ethics #whitehatway #customerretention #customerengagement #marketing and much more!  We are pleased to use our sometimes-scratchy morning voices to speak up on behalf of BHPH Dealers. Don't forget to LIKE the videos and SUBSCRIBE to The Octane Group channel. Also, please add your comments or questions right here in the BHPH Institute.