DCS Insider: LHPH: Ownership, Profitability, and Tax Advantages for Dealers

As tax season approaches, Franchise and Independent Dealerships face a pivotal question: How can they maximize profitability, improve cash flow, and strengthen customer loyalty? The answer lies in controlling your lending process through Lease Here, Pay Here (LHPH). Unlike conventional leasing models that transfer control—and profits—to banks, LHPH allows Dealerships to operate their own leasing companies, enabling greater financial control and unmatched tax advantages.

Why Dealers Are Choosing LHPH

1. Tax Advantages Dealers Can’t Ignore

Owning the leasing process allows Dealers to capture depreciation benefits directly. Under LHPH, the Dealership owns the leased vehicles, enabling substantial write-offs that reduce taxable income. When structured effectively, Dealerships can use these tax advantages to offset other business expenses, making leasing not just profitable but also tax-efficient.

In contrast, conventional leasing models give these benefits to the bank or leasing company, leaving the Dealer with a smaller slice of the pie. By controlling the lease, Dealers retain the depreciation, minimize taxable income, and reinvest in their operations.

2. The Vehicle and Customer Flywheel

Conventional leasing often results in Dealers losing control over both the vehicle and the customer relationship. Once a lease is signed with a bank, the Dealership forfeits the chance to influence the customer’s future buying decisions or recapture vehicles efficiently for resale.

With LHPH, the Dealer maintains control over the entire transaction lifecycle. This means:

• The vehicle returns to your inventory at the end of the lease, ready for resale or a new lease.
• The customer remains connected to your Dealership, creating a feedback loop for future transactions.
• You retain first-party data for personalized marketing, equity mining, and improving customer experiences.

3. Recurring Revenue - Yes Finally!

LHPH creates a steady stream of monthly payments that boosts Dealership cash flow. This predictable income stabilizes operations and supports investments in growth, even during tighter economic periods like tax season.

LHPH vs. Conventional Leasing: The Clear Winner

• Depreciation: LHPH lets Dealers capture this critical tax benefit. Banks take it under conventional models.
• Control: Dealers own the customer relationship and vehicle lifecycle in LHPH, compared to handing it over to the bank.
• Profitability: LHPH transforms a one-time sale into recurring revenue, aligning with long-term business stability.

DCS Empowers Dealerships to Leverage LHPH

Dealer Controlled Solutions (DCS) simplifies the complexities of LHPH with advanced technology and support:

• Turnkey Leasing Platform: DCS’s intuitive tools allow Dealerships to launch in-house leasing quickly and confidently.
• AI-Driven Underwriting: Our AutoLendIQ module ensures risk is mitigated while enabling Dealers to approve unbankable consumers.
• Tax-Ready Reporting: Streamlined documentation ensures compliance, making tax season stress-free.
• Dynamic Inventory Management: Vehicles are seamlessly reintroduced into your inventory cycle, minimizing downtime and maximizing returns.

Turn Tax Season into a Competitive Advantage

This tax season, LHPH offers Dealerships a transformative opportunity: greater control, higher profits, and better customer loyalty. With Dealer Controlled Solutions, you gain the tools and technology to dominate your market, drive recurring revenue, and retain both customers and vehicles.