What is Add-On Interest?

Add-On Interest is a very simplified method of calculating the total Finance Charges for a loan. The Rate is simply multiplied by the Principal, and that result multiplied by the number of years in the loan. Example: $10,000 Principal 15% Add-On Rate 48 Months (4 Years) (Or use Number of Pmts / 12 to arrive… Continue reading What is Add-On Interest?

Calculating Loan Interest

OK, there is apparently a LOT of misinformation floating around on how to calculate a loan. The most common misconception is to take $ 10,000 and multiply it by 18% to get Interest of $ 1,800. But this is highly incorrect. The words Interest and Finance Charges are used interchangeably by most people in the… Continue reading Calculating Loan Interest

Talk To Your Lawyer.

Thats a quote I find myself using a lot in my line of work advising used car dealers. The reasons I say it range from the mundane to the shocking. First, and foremost: I am NOT a Lawyer. I do not pretend to be one, and frankly, not sure I’d want to be one. (No… Continue reading Talk To Your Lawyer.

What do we do about COVID-19 ?

The current Covid19 / CoronaVirus situation has changed a lot of how we do business. With the recommendations against in-person meetings or personal contact, it’s time to re-think the business model, at least temporarily. First and foremost, do not allow your employees to spread rumors or scare stories. Manage the messaging. Only present what is… Continue reading What do we do about COVID-19 ?

Is Rule of 78’s Theft, a Trick, or a Trap?

Well, that’s what some financial people would have you believe, anyway. (BankRate.com gleefully titled a column by Lucy Lazarony – “Watch Out For This Auto Loan TRICK.”) The Motley Fool also calls it a “trick” in a column by Kailey Hagan: “Hint: It’s another trick lenders use to line their pockets at your expense.” https://www.fool.com/the-ascent/personal-loans/articles/what-is-a-precomputed-loan/… Continue reading Is Rule of 78’s Theft, a Trick, or a Trap?

Listen To Yourself!

Go ahead, just listen. Listen to the radio ad you have, really *watch* the TV ad you paid for. Read those automated marketing emails. Do they sound ok? Are you comfortable with the image that these things project of your dealership? If you said yes, then go get someone else to listen, watch, or read… Continue reading Listen To Yourself!


The NIADA analytics for 2015 had some interesting statistics. By and large, BHPH dealers are spending more on cars, and getting less down. A quick comparison to just 4 years ago(2012) shows that the average BHPH unit cost is up almost $1400. At the same time, the average down payment is down by about $125.… Continue reading WHERE DO YOU STACK UP?