#431 - EV is coming to BHPH/LHPH: Are You Ready?

In dealer and lending contexts, a “repo” (repossessed vehicle) is what happens when a buyer stops making payments and the lender/dealer takes the car back. The speaker connects repos to vehicle downtime and repair risk, arguing that higher failure-rate vehicles can turn even “under warranty” cars into repos.

“Failure rates” means how often a vehicle (or a specific system) breaks down or needs major repairs. In this episode, the speaker uses failure rates to explain why some cars—despite being under warranty—still create financial risk for BHPH dealers when repairs take time.

A transmission is the drivetrain component that changes gear ratios so the engine can deliver power efficiently at different speeds. The speaker groups transmissions with engines and other major mechanical failures as the kinds of issues that drive the biggest BHPH risk.

Buy Here Pay Here (BHPH) is a financing model where the dealer both sells the car and collects the payments directly from the buyer. The episode frames EV adoption in BHPH as a major operational challenge because EV repair costs, parts availability, and failure rates can affect how dealers manage risk and repos.

The Tesla Model 3 is an all-electric sedan, and the “long range” version is tuned for more highway range than the standard trims. In this episode, it’s mentioned as a specific EV the host bought to sell, tying the discussion to real-world EV inventory decisions.

“EV space” refers to the market and business ecosystem around electric vehicles—manufacturers, models, charging infrastructure, and the financing/servicing channels that support them. Here, the hosts are using it to discuss how EVs change the economics and customer experience for BHPH/LHPH dealers.

Lease Here Pay Here (LHPH) is a similar dealer-driven financing approach, but structured around leasing instead of outright purchase. The episode frames it as part of the shift toward EVs, focusing on how dealers can make the numbers work and keep customers successful.

When dealers talk about “economics” “paying off,” they’re referring to whether the total cost of acquiring, financing, and servicing vehicles is outweighed by the revenue they can collect. In EV discussions for BHPH/LHPH, this often hinges on factors like residual value risk, servicing costs, and how quickly customers can stay current on payments.

Tesla is the EV brand the speaker says they’ve been transitioning toward for their financing options. In a BHPH/LHPH context, that implies the dealer is choosing an EV lineup they believe they can support and finance reliably.

In EVs, the battery is the high-cost energy storage pack that determines range, charging behavior, and long-term replacement risk. When dealers discuss “the cost and the battery,” they’re usually talking about how battery pricing and degradation affect total cost of ownership and repair bills.

Oil changes are routine maintenance for internal-combustion engines that rely on engine oil to lubricate moving parts and manage heat. The speaker contrasts this with EV ownership, where there’s no engine oil service in the same way.

Charging is the infrastructure and process of replenishing an EV’s battery, typically via home charging, workplace charging, or public charging stations. The transcript points out that EV adoption depends on whether there’s a reliable support system for charging.

Early adoption describes a market phase where EVs are still growing but not yet mainstream, so dealer processes, customer expectations, and supporting infrastructure may lag behind. The transcript predicts the dealer landscape will look different in a couple of years as the market matures.

Financing is the lending arrangement used to pay for a vehicle, typically through a lender or dealer-arranged loan. The segment asks whether dealers are offering financing on EVs, implying that lending terms and approval comfort may differ for EVs versus traditional vehicles.

Cost of ownership is the total cost to run a vehicle over time, including things like energy costs, maintenance, repairs, and financing impacts. The segment frames it as a key factor for deciding whether EVs “are right for everyone.”

Deal structure refers to how a vehicle sale is packaged financially—such as payment terms, incentives, and how risk is allocated between buyer and seller. The transcript says dealers will use “options” in the EV space to structure deals that work financially.

“Coming off lease” means leased EVs are reaching the end of their lease terms and are returned to the lessor, then sold into the used-car market. When a lot of them hit the market at once, it can change supply and pricing at auction and wholesale.

In dealer wholesale, “auction” is where vehicles are sold to dealers (often via online or physical bidding) rather than directly to consumers. Changes in auction volume and pricing can signal broader market shifts for a specific vehicle type like EVs.

Mannheim is a major vehicle auction and remarketing marketplace used by dealers in the wholesale channel. When they report record EV sales, it suggests increased EV throughput through dealer auctions.

The Tesla Model S is a full-size electric sedan that’s often used as a benchmark for Tesla’s performance and technology. It comes up in tracking and sales discussions because Tesla’s pricing and sales strategy can influence how dealers and buyers evaluate the brand’s value over time. That’s why it may be referenced alongside other Tesla models when talking about market trends.

The Tesla Model Y is Tesla’s high-volume crossover EV, making it especially sensitive to changes in used supply and demand. Here, the hosts track Model Y values alongside Model 3 to understand whether price moves are “real” or driven by shifting incentives.

An “ED rebate” refers to an incentive program that can temporarily boost demand and affect used pricing. When the hosts say it was “going to finally go away,” they’re pointing to how incentive changes can distort or normalize EV values.

“Fake inflation” here means price increases that are driven by incentives or market distortions rather than underlying long-term demand. The hosts say the effect varied by vehicle age, implying incentives can shift pricing differently across used-EV cohorts.

“Subprime” refers to borrowers or credit profiles considered higher risk by lenders, which can affect financing availability and pricing in the used-car market. The hosts connect this to how “affordable” cars can become more expensive when there’s strong demand from subprime buyers.

Wholesale pricing is what dealers pay for vehicles in the supply chain before retail markups. The hosts emphasize that EV wholesale prices rose more than in prior years, which matters because it sets the baseline for what dealers can profitably resell.

An EV rebate is a government incentive that reduces the purchase price of an electric vehicle. In dealer financing discussions, it can strongly affect demand because buyers may rush to qualify for the credit before it changes or expires.

The Toyota Tundra is a full-size pickup truck commonly used as a trade-in vehicle when buyers switch to other powertrains. In this segment, it’s mentioned as the kind of truck people might trade in to move toward a Tesla EV.

Off-lease projections estimate how many leased vehicles will return at the end of lease terms over time. Dealers and lenders use these forecasts to plan inventory and financing, especially when EV demand and lease terms are changing.

In the context of Tesla’s sales approach, the Model S is the electric sedan that’s frequently referenced when discussing whether Tesla pushed leasing versus selling. That matters to dealers and buyers because leasing can change monthly costs, ownership timelines, and how vehicles are valued later. So it’s often brought up in conversations about Tesla’s strategy and how it affected the used-car market.

“Autonomous EVs” refers to electric vehicles intended to drive themselves using advanced driver-assistance and automation systems. The segment suggests Tesla’s earlier strategy around leasing was influenced by a vision of using EVs in a fleet model.

A lease buyout is when a lessee pays the pre-set amount to keep the vehicle instead of returning it at the end of the lease. This matters for EVs because it changes how many cars actually come back to dealers/lessors for resale or remarketing.

In leasing, the residual value is the estimated value of the car at the end of the lease term. It directly impacts the buyout price—if the residual is high, the buyout can be cheaper for the customer; if it’s low, the buyout can be more expensive.

“Run the note” is dealer/finance slang meaning the customer’s payments stay current and the financed loan/contract performs as expected. The hosts use it to decide which EVs are suitable for their BHPH-style program based on affordability and customer hassle.

Drivability describes how easy and pleasant a vehicle is to drive day-to-day, including throttle response, smoothness, and overall usability. Here it’s used as part of the hosts’ evaluation of which EVs will satisfy customers in a financed used-car program.

In this context, degradation refers to the measurable worsening of battery performance over time rather than a sudden failure. The speaker claims degradation is much worse in certain climates and on early cars without improved cooling systems.

Advanced cooling systems are battery thermal-management designs that keep EV battery temperatures within a safer operating range. The speaker argues early cars without these improvements experienced worse degradation, especially in harsher climates.

Overcharge here means charging the battery beyond what it should be allowed to reach under normal limits, which can increase stress on battery chemistry and electronics. The speaker links this to early Tesla charging behavior at supercharging stations and resulting battery burnout.

Superchargers are high-power fast-charging stations designed to recharge EVs quickly. Because they deliver a lot of power, the car’s battery-management system may limit charging speed to protect battery health.

Over-the-air (OTA) software updates let an EV change how it behaves without a physical visit to a shop. In this context, the car can adjust charging behavior to reduce battery stress, even if the hardware stays the same.

Buckeye Risk Services is mentioned as the sponsor the host uses for reinsurance-related products. The segment frames it as helping dealers secure coverage and reduce reliance on outside providers.

GAP coverage (guaranteed asset protection) helps pay the difference between what you owe on a loan/lease and what the vehicle is worth if it’s totaled. It’s especially relevant when depreciation is fast or the down payment is small.

“Remans” is short for remanufactured parts—components rebuilt to a like-new standard and sold as replacements. The host suggests third parties could offer reman options for EV components, which matters for independent repair economics and turnaround times.

A “pit stop” is a racing term for a quick service stop where a car is worked on during a race. The host uses it as an analogy for EV service—specifically, swapping battery packs at a service center—so listeners can visualize the speed and workflow of EV repairs.

Coolants are fluids used to remove heat from vehicle systems. The transcript notes that battery-pack swapping takes time partly because coolants must be disconnected, highlighting that EV battery systems are thermally managed like other high-heat components.

In this context, warranty refers to the manufacturer’s coverage that requires certain repairs or parts to be handled through the automaker’s approved channels. The host contrasts that with the idea that independent shops can’t work on Teslas, arguing that some components still need to go back to the manufacturer during warranty.

Independent shops are repair businesses that aren’t the automaker’s own service network. The transcript emphasizes that while some EV components may be restricted or require manufacturer involvement (especially under warranty), there are still shops that can work on Teslas.

The Kia Soul is a compact, boxy-styled crossover that’s been offered in multiple powertrain versions, including an electric variant. In podcast conversations, it may come up when dealers discuss early electric versions and what “first-gen” EV ownership looks like in the real world. That can include questions about battery performance, charging habits, and how the car fits into daily use.

In an EV, the motor is the electric unit that turns electrical energy into motion. The hosts describe early EVs as inserting a motor into the space where the engine used to be, highlighting how EVs were adapted from gas-car layouts.

A fuel tank is the reservoir that holds gasoline in a conventional car. The hosts contrast EV packaging with gas-car packaging by saying early EVs placed the battery pack where the fuel tank used to be.

Reconditioning batteries means refurbishing an EV battery pack or its components to bring it back toward usable condition. The hosts suggest that battery refurbishers will grow as EVs accumulate enough failures and replacement demand to support the business.

“Reman” refers to remanufactured parts—components rebuilt to function like new, typically using a mix of reused and replaced internal parts. The hosts are arguing that as EVs age and fail, remanufactured third-party parts will become more common and easier to source.

Dorman is an aftermarket parts company that makes replacement components for vehicles. The hosts use Dorman as an example of how aftermarket suppliers tend to wait for enough demand before investing in EV-specific remanufactured or replacement parts.

“Electrocute” is used here in the literal safety sense: EVs contain high-voltage electrical systems that can be dangerous if handled incorrectly. The hosts are describing how some shops were initially afraid to work on Teslas due to perceived high-voltage risk, and how that fear is easing as training and experience spread.

Full charge rate refers to how much energy the battery can accept and store when charged to 100% (or near it). In battery-health discussions, it’s used as a benchmark to show how the battery’s charging/usable capacity changes versus when it was new.

EV battery cooling components manage battery temperature so the pack can operate efficiently and avoid excessive heat. The host claims that in 2021, Tesla added cooling system components alongside a new battery type, which helps limit degradation and supports better retained range.

Standard range models are EV configurations with a smaller battery capacity than long-range variants, typically targeting a lower price point. In the segment, the host argues that newer standard-range battery packs can outperform older long-range cars in retained range due to improved battery components and reduced degradation.

Full charge miles are an EV’s estimated driving distance when the battery is charged to 100%. The host uses these figures to show how an older EV can start with high range but lose a meaningful amount over time due to degradation.

In this context, third party companies are outside providers that may supply or support EV battery-related services (like replacement or temporary solutions) for dealers. The host is warning that dealers may need to understand the tech and the process to explain it to customers and avoid risk.

A kilowatt-hour (kWh) is a unit of energy used to describe how much electricity a battery can store. When the speaker says the car reports kWh absorbed, they mean the battery’s usable energy capacity during the test.

The EPA number refers to the Environmental Protection Agency’s standardized range estimate used on EV window stickers. The speaker notes that Tesla’s reported “mild range” is tied to capacity and an EPA-rated figure, which can be confusing because real-world range varies with conditions and driving habits.

The Toyota Prius is a hybrid car that’s widely recognized for its fuel efficiency and long-running popularity. It’s often discussed in the context of hybrid batteries because owners and shops may need to service or replace the battery pack over time. That’s why it comes up when dealers talk about EV vs. hybrid ownership experiences and maintenance.

In an EV battery pack, “cells” are the individual electrochemical units that store energy. The host describes taking a Prius battery apart to replace cells and then recharging/charging everything back up, which illustrates that battery service can be component-level rather than always replacing the entire pack.

An EV tax credit is a government incentive that reduces the cost of qualifying electric vehicles (and sometimes related purchases/eligibility). In this segment, it’s used to explain why the dealer sold many plug-in vehicles like the Chevrolet Volt and then dealt with battery replacements afterward.

This segment is discussing how EV battery coverage and claims often become relevant at higher odometer mileage, especially once the original factory warranty is no longer in effect. For dealers and warranty providers, the risk profile changes as vehicles age and accumulate miles.

Blitz is described as a technology provider for dealers, combining payment processing with collections and analytics. The hosts frame it as an AI-driven platform aimed at helping dealerships manage dealer operations and EV-related workflows.

The segment focuses on how EV owners/dealers should handle poor service experiences—switching service advisors, and potentially switching to a different service center. It also emphasizes that service quality can vary significantly by location and staff.

The hosts are pointing out that some local OEM service channels may not directly support certain EVs or may be limited in who they’ll service. For buyers and dealers, that means you may need to rely on specific service centers, third-party EV-capable shops, or different brands’ support networks.

Ford is a major automaker whose dealer network has to build EV service capability as EVs become more common. The point here is that some dealers initially lacked EV-specific tools and training, so EVs had to be sent elsewhere for service.

Fisker is an EV brand mentioned as an example of a model line where owners may not have nearby OEM-backed service support. The segment frames this as a practical problem for rural buyers: if there’s no local facility that can service the car, repair becomes harder.

Rivian is an EV brand used here as another example of a vehicle where local OEM service availability may be limited. The hosts connect that to higher friction for repairs when the nearest qualified shop is hours away.

“Major components” in EV service typically refers to high-cost, high-complexity systems that may require manufacturer-level diagnostics, parts, or procedures. In this segment, the hosts imply that battery packs fall into this category and may require sending the car to Tesla.

In EV service discussions, “transport” refers to towing or shipping the vehicle to a facility equipped to handle specific high-voltage or manufacturer-only repairs. The segment uses it to illustrate the cost and logistics of getting an EV to Tesla for major work.

Suspension parts are the components that control ride height, wheel alignment, and how the tires maintain contact with the road. The hosts contrast suspension repairs with battery-pack issues, suggesting suspension work may be less of a “send it away” problem when warranty coverage applies.

EV maintenance is the routine upkeep specific to battery-electric vehicles. The big difference versus many gas cars is that EVs generally have fewer wear items related to the engine and exhaust, so maintenance focus shifts toward things like tires, suspension, and brake-related wear patterns.

ICE stands for internal combustion engine, meaning a gas- or diesel-powered vehicle. The speaker is comparing EV maintenance costs to those of an ICE vehicle, implying EVs typically avoid many engine/exhaust wear items.

Inspecting the inside of a tire is important because many alignment problems show up as uneven wear on the inner tread. The speaker emphasizes that EVs—specifically Teslas—can have a visual “new tire” look on the outside while the inside tread is worn.

Bad alignment means the wheels aren’t set to the correct angles relative to each other and the road. Misalignment commonly causes uneven tire wear (often on the inside or outside tread) and can also affect steering feel and stability.

Low range refers to an EV’s limited distance capability on a full charge. In the transcript, the hosts connect low range with higher dependence on frequent public charging, which can lead to buyer dissatisfaction if the customer can’t charge at home.

Charge fatigue is the real-world frustration and inconvenience that comes from needing to stop frequently to recharge. For EV buyers without home charging, the daily routine of fast-charging can feel like a constant chore, which affects whether the vehicle fits their lifestyle.

Lithium-ion technology refers to the battery chemistry used in most modern EVs. The speaker suggests newer lithium-ion implementations handle frequent fast charging better than older generations, which is relevant when advising buyers who may rely on Superchargers often.

“Fuel per mile” is a cost-per-distance way to compare operating expenses. For EVs, it’s typically calculated from charging electricity price and the vehicle’s real-world range/efficiency rather than gas station gallons.

Frame damage refers to damage to the vehicle’s structural body/chassis components, not just cosmetic panels. Structural damage can affect alignment, safety systems, and repair feasibility—especially relevant for EVs where the battery and structural integrity are critical.

“Total out” means the insurer determines the repair cost is high enough that the vehicle is declared a total loss. In EVs, structural damage and battery-related risks can increase repair complexity and cost, making total-loss decisions more likely.

Unibody construction means the body and frame are integrated into one structure, so crash damage can affect the vehicle’s alignment and structural integrity. The discussion is about how unibody EVs (including Tesla) can be risky to repair improperly after an accident, because the damage may be severe enough that the vehicle should be totaled instead.

In dealer/auction finance, CPI usually refers to a coverage product that pays out when a vehicle is totaled (a “total loss” outcome). The hosts are discussing how CPI pricing should reflect the higher chance that certain cars—like accident-damaged EVs with complex repairs—end up totaled instead of repaired.

Autopilot is Tesla’s driver-assistance system that can automate parts of driving (like steering and maintaining lane position) while the driver monitors the road. The segment emphasizes that adoption is the challenge—many drivers don’t use it even when the software is available.