Buy Here Pay Here (BHPH) and Lease Here Pay Here (LHPH) A Buy Here Pay Here dealer sells the car and finances it, so the dealer is the lender and collects the payments. A Lease Here Pay Here dealer leases the car instead, keeping title and taking it back at the end of the term. In both, the dealer is the creditor, which means the collections, the compliance and the credit reporting are the dealer's responsibility, not a bank's.
Where we do this: Buy Here Pay Here and Lease Here Pay Here
Recency Recency is the share of open accounts that have made a payment within a recent window, usually the last thirty days. It's the leading measure of a portfolio's health because it moves before delinquency does: an account can be only a few days past due and still be counted as current by recency, or technically current and already quiet. Dealers who track it watch it weekly.
Delinquency buckets Delinquency buckets group past due accounts by how far behind they are, commonly one to twenty nine days, thirty to fifty nine, and sixty and over, with many dealers splitting the first bucket again at ten days. Each bucket gets its own contact cadence and its own decisions. The dollar total in each, and how it moves week to week, is the first page of any portfolio report.
Roll rate Roll rate is the share of accounts in one delinquency bucket that move into the next worse one in a period, rather than curing or staying put. A rising roll rate from the first bucket to the second is the earliest sign that contact isn't reaching people, and it predicts charge offs months before they happen.
Promise to pay A promise to pay is a commitment from the borrower, recorded with a date and an amount, to make a specific payment. Promises made against promises kept is one of the few collections numbers that measures the quality of the conversation rather than the volume of calls, and a broken promise is the trigger for the next contact.
Payment allocation Payment allocation is the order in which a payment is applied to what the borrower owes: fees, interest and principal, in whatever sequence the contract states. A servicing system set up to apply payments in a different order than the contract makes on time customers look late and charges fees that were never earned, which federal examiners have cited across auto servicing. The contract decides; the system has to be configured to match it.
Regulation F Regulation F is the Consumer Financial Protection Bureau's rule, at 12 CFR Part 1006, that implements the Fair Debt Collection Practices Act. It sets limits on contact frequency, including a presumption that more than seven call attempts in seven days on one debt is harassment, rules for texts and emails, and record keeping requirements. It binds third party debt collectors. A dealer collecting its own accounts is usually outside its reach, but state collection laws and the ban on unfair, deceptive and abusive practices still apply, and many in-house desks adopt Regulation F's limits as their standard because it's the one an examiner will recognize.
Right to cure A right to cure is a borrower's chance to catch up a defaulted loan within a set number of days before the lender can repossess, created by state law in the states that have it. Where it applies, the lender must send a notice in a prescribed form and wait out the period. The notice, its date and the proof it was sent are part of the file that makes a later repossession defensible.
Breach of the peace Under the Uniform Commercial Code a lender may repossess collateral without going to court only if it can do so without a breach of the peace. What counts as a breach is decided by state law and by courts, and it generally includes any confrontation, entry into a closed garage, or proceeding over the borrower's objection. A repossession that breaches the peace exposes the lender to damages regardless of the default, which is why the recovery agent's record of each pickup matters.
SCRA check An SCRA check is a search of the Department of Defense's Defense Manpower Data Center database before a repossession, to find out whether the borrower is on active military duty. The Servicemembers Civil Relief Act requires a court order to repossess a vehicle from a servicemember whose contract predates their service, and the penalties for skipping the check are severe. It's a one minute step that belongs in every repossession checklist.
Deficiency balance A deficiency balance is what the borrower still owes after a repossessed vehicle has been sold and the proceeds, less the allowed costs of repossession and sale, have been applied to the loan. Whether it can be pursued, and the notices that must be sent first, depend on state law. A deficiency that's pursued without the right notices is usually unrecoverable.
Net recovery Net recovery is what a repossession actually returns: the sale proceeds minus the costs of recovery, transport, storage, reconditioning and sale. Gross recovery flatters every repossession; net recovery is the number that says whether taking the car back was the right call, and it's the figure a lender comparing dealers will ask for.
Charge off A charge off is the point at which a loan is written off the books as uncollectible, after a set number of days past due or after the collateral has been sold. It's an accounting event, not a forgiveness: the debt may still be owed and may still be collected. The charge off rate across a portfolio, net of recoveries, is the loss rate a dealer's pricing has to cover.
Starter interrupt and GPS devices A starter interrupt device lets the lender prevent a vehicle from starting after a missed payment; a GPS device reports where it is. Both are installed at the sale with the borrower's signed consent, and several states require a warning before a disable and limit when one can happen. The administrative record, consent forms, activation logs, notices sent and their dates, is what has to be in order; the decision to use the device on a particular customer's car stays with the dealer.
Metro 2 Metro 2 is the standard format in which lenders report account data to the credit bureaus each month: balance, status, payment history, dates. Furnishing data that's inaccurate breaches the Fair Credit Reporting Act's accuracy duties and is far more expensive to correct through disputes than to get right before it goes out, which is why the file is checked against the servicing system before every submission.
Floorplan curtailment A floorplan curtailment is the partial paydown a floorplan lender requires on a vehicle's financing once the unit has sat on the lot for a set number of days, with further curtailments at later intervals until it's sold or paid off. Missing one is a default under the floorplan agreement. Tracking the dates by unit is dull work and the kind that's easily lost when the person who did it leaves.
Deal jacket A deal jacket is the file for one sale: the retail installment contract or lease, the required disclosures, the title and lien documents, proof of insurance, the device consent forms, and every notice sent since. A thin deal jacket is invisible until a funding review, a dispute or a state examination asks for the one page that isn't there.