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Buy Here, Pay Here
In the used car market in the United States and Canada, buy here, pay here, often abbreviated as BHPH, refers to a method of running an automobile dealership in which dealers themselves extend credit to purchasers of automobiles. Typically, purchasers of cars at BHPH dealerships have poor credit history, and loans have high interest rates. BHPH can provide options for those unable to meet credit standards elsewhere. History and background The BHPH Industry originated primarily in the early 1970s during the United States savings and loan crisis. With many similarities to the financial crisis of 2007-2010 credit was difficult to obtain, unemployment was rising & the economy was still in a transformation from a production-based economy to a service-based economy. Automobile dealers who still wanted to sell cars had to find a way to deal with the increasing price of vehicles relative to income. They had to sell these vehicles to wary consumers who were unwilling or unable to pay ca ...
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Used Car
A used car, a pre-owned vehicle, or a secondhand car, is a vehicle that has previously had one or more retail owners. Used cars are sold through a variety of outlets, including franchise and independent car dealers, rental car companies, buy here pay here dealerships, leasing offices, auctions, and private party sales. Some car retailers offer "no-haggle prices," "certified" used cars, and extended service plans or warranties. Used car industry Used car export industry Depreciation levels of vehicles differ a lot in exporting and importing countries due to differences in income levels. The price of a vehicle depreciates faster in high-income countries than in low-income countries. Used vehicles sellers in high-income countries can thus sell their used vehicles for a higher price in low-income countries. This is the incentive to export used vehicles. The major car exporting countries (which includes both new and used vehicles) are Japan, the EU, USA, and Canada. In the ...
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Inventory
Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation. Inventory management is a discipline primarily about specifying the shape and placement of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials. The concept of inventory, stock or work in process (or work in progress) has been extended from manufacturing systems to service businesses and projects, by generalizing the definition to be "all work within the process of production—all work that is or has occurred prior to the completion of production". In the context of a manufacturing production system, inventory refers to all work that has occurred—raw materials, partially finished products, finished products prior to sale and departure from the manufacturing system. ...
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Auto Dealerships
Auto may refer to: * An automaton * An automobile * An autonomous car * An automatic transmission * An auto rickshaw * Short for automatic * Auto (art), a form of Portuguese dramatic play * ''Auto'' (film), 2007 Tamil comedy film * Auto (play), a subgenre of dramatic literature * Auto (magazine), an Italian magazine and one of the organizers of the European Car of the Year award * A keyword in the C programming language used to declare automatic variables * A keyword in C++11 used for type inference * Auto (Mega Man), a character from ''Mega Man'' series of games * Auto, West Virginia * Auto, American Samoa * AUTO, a fictional robot in the 2008 film ''WALL-E ''WALL-E'' (stylized with an interpunct as ''WALL·E'') is a 2008 American computer-animated science fiction film produced by Pixar Animation Studios and released by Walt Disney Pictures. It was directed and co-written by Andrew Stanton, pro ...'' See also * Otto {{Disambiguation ...
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Footnotes
A note is a string of text placed at the bottom of a page in a book or document or at the end of a chapter, volume, or the whole text. The note can provide an author's comments on the main text or citations of a reference work in support of the text. Footnotes are notes at the foot of the page while endnotes are collected under a separate heading at the end of a chapter, volume, or entire work. Unlike footnotes, endnotes have the advantage of not affecting the layout of the main text, but may cause inconvenience to readers who have to move back and forth between the main text and the endnotes. In some editions of the Bible, notes are placed in a narrow column in the middle of each page between two columns of biblical text. Numbering and symbols In English, a footnote or endnote is normally flagged by a superscripted number immediately following that portion of the text the note references, each such footnote being numbered sequentially. Occasionally, a number between brack ...
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Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation (FDIC) is one of two agencies that supply deposit insurance to depositors in American depository institutions, the other being the National Credit Union Administration, which regulates and insures credit unions. The FDIC is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was created by the Banking Act of 1933, enacted during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation, and bank runs were common. The insurance limit was initially US$2,500 per ownership category, and this was increased several times over the years. Since the enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010, the FDIC insures deposits in member banks up to $250,000 per ownership category. FDIC insurance is backed by the full faith and credit of ...
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Industrial Loan Company
An industrial loan company (ILC) or industrial bank is a financial institution in the United States that lends money, and may be owned by non-financial institutions. They provide niche financial services nationwide. ILCs offer FDIC-insured deposits and are subject to FDIC and state regulator oversight. All "FDIC-insured entities are subject to Sections 23A and 23B of the Federal Reserve Act, which limits bank transactions with affiliates, including the non-bank parent company." ILCs are permitted to have branches in multiple states (which is permitted by many states on a reciprocal basis). They are regulated and supervised by state-charters and insured by the Federal Deposit Insurance Corporation. They are authorized to make consumer and commercial loans and accept federally insured deposits. Banks may not accept demand deposits if the bank has total assets greater than $100 million. ILCs are exempted from the Bank Holding Company Act. ILCs assist numerous charities and provide ...
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Grace Period
A grace period is a period immediately after the deadline for an obligation during which a late fee, or other action that would have been taken as a result of failing to meet the deadline, is waived provided that the obligation is satisfied during the grace period. In other words, it is a length of time during which rules or penalties are waived or deferred. Grace periods can range from a number of minutes to a number of days or longer, and can apply in situations including arrival at a job, paying a bill, or meeting a government or legal requirement. In law, a grace period is a time period during which a particular rule exceptionally does not apply, or only partially applies. For the grace period in patent law, see novelty (patent). In games (video and real life), a grace period is the time after a respawn in which a player cannot be hit or killed – they are 'safe' for a short time so that they will not die repeatedly, which would lead to loss of enjoyment. Types Busines ...
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Interest Rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited, or borrowed. The annual interest rate is the rate over a period of one year. Other interest rates apply over different periods, such as a month or a day, but they are usually annualized. The interest rate has been characterized as "an index of the preference . . . for a dollar of present ncomeover a dollar of future income." The borrower wants, or needs, to have money sooner rather than later, and is willing to pay a fee—the interest rate—for that privilege. Influencing factors Interest rates vary according to: * the government's directives to the central bank to accomplish the government's goals * the currency of the principal sum lent or borrowed ...
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Department Of Commerce
The United States Department of Commerce is an executive department of the U.S. federal government concerned with creating the conditions for economic growth and opportunity. Among its tasks are gathering economic and demographic data for business and government decision making, and helping to set industrial standards. Its main purpose is to create jobs, promote economic growth, encourage sustainable development and block harmful trade practices of other nations. Steve Charnovitz, "Reinventing the Commerce Dept.", ''Journal of Commerce'', July 12, 1995. It is headed by the Secretary of Commerce, who reports directly to the President of the United States and is a member of the president's Cabinet. The Department of Commerce is headquartered in the Herbert C. Hoover Building in Washington, DC. History Organizational history The department was originally created as the United States Department of Commerce and Labor on February 14, 1903. It was subsequently renamed the Department ...
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Federal Reserve
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907) led to the desire for central control of the monetary system in order to alleviate financial crises. Over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System. Congress established three key objectives for monetary policy in the Federal Reserve Act: maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve's dual mandate. Its duties have expanded over the years, and currently also include supervising and regulating banks, maintaining the stabil ...
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Line Of Credit
A line of credit is a credit facility extended by a bank or other financial institution to a government, business or individual customer that enables the customer to draw on the facility when the customer needs funds. A line of credit takes several forms, such as an overdraft limit, demand loan, special purpose, export packing credit, term loan, discounting, purchase of commercial bills, traditional revolving credit card account, etc. It is effectively a source of funds that can readily be tapped at the borrower's discretion. Interest In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ... is paid only on money actually withdrawn. Lines of credit can be secured by collateral, or may be unsecured. Lines of credit are often extended by banks, financial institutions and other license ...
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Retail Floorplan
Retail floor planning (also referred to as floorplanning or inventory financing) is a type of short term loan used by retailers to purchase high-cost inventory such as automobiles. These loans are often secured by the inventory purchased as collateral. Floor planning is commonly used in new and used car dealerships. Contrary to common perceptions, most car dealers do not pay cash for the vehicles on their lot. Even smaller dealerships can have an inventory of vehicles representing millions of dollars of capital investment. Most car dealerships use a floorplan facility to finance their inventory and factor the cost of the facility into the price presented to the consumer. The practice of using floorplan loans to finance inventory creates an incentive for the dealers to sell vehicles as quickly as possible in order to reduce the amount of interest that will accrue on the floored vehicle. Floor planning costs can run into hundreds of thousands of dollars a month for a big multi-locat ...
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