The Hospital: Life, Death, and Dollars in a Small American Town

by Brian Alexander

As an accounting consultant to the industry wrote to buy-here-pay-here dealers, they were “selling money, not cars.” And there was a lot of money to be made selling money to poor people. Buy-here-pay-here dealerships made net profits of about 12 percent, while new car sales netted profits of between 2 and 4 percent. The dealers typically bought high-mileage cars from auto auctions. (“In BHPH one fact of life is vehicle breakdowns,” a consultant advised dealers in 2019.) Operators spruced the cars up a little and then sold them—often at double the wholesale price they paid for them. NIADA dealers like the one Keith turned to charged, on average, 20 percent interest for a car loan. (Regular auto loans at the time of Keith’s accident could be had for about 3.5 percent from credit unions by customers with good credit.) Buy-here-pay-here businesses expected a lot of their customers to default, so they installed GPS tracking devices, and often “kill switches.” That way the dealers knew just where the car was at all times and could disable it if the customer was late with a payment. “Lenders [are] repossessing at a record pace,” the same consultant wrote. Once they repossessed the car, they could sell it again. And again.