HOUSTON — As Ken Shilson, founder of the National Alliance of Buy-Here, Pay-Here Dealers, prepares for the upcoming Dealer Academy and annual conference in mid May, he revealed some early benchmark results to SubPrime Auto Finance News.

One of the key trends he discovered is that the acquisition of vehicles at competitive costs will be a major challenge for operators for the next few years.

"Reduced franchised sales in 2008-2010 will adversely impact the availability of these vehicles for BHPH operators in the foreseeable future," Shilson explained.

"Although the industry has adjusted buying patterns, such adjustments should be viewed as temporary. Absent increases in down payments, which didn't happen in 2010, or repayments, which were constant in 2010, the operators who increase sales prices also increase their risk by extending contract terms," Shilson stressed.

He went on to point out that, "Higher mileage vehicles, even with increased reconditioning, will likely cause higher defaults in the future. The increase in the recycling of repos will also result in more defaults unless the contact term is reduced."

Capital availability will likely remain very limited, he added.

"Acquiring and reconditioning the ‘right' inventory at a reasonable cost remains a continuing challenge. Successful operators controlled expenses by implementing new technology which increased efficiency and reduced personnel costs. The best operators continue to reduce leverage in order to maintain maximum flexibility. Decreased leverage reduced corresponding interest expense," he said.

And to learn what technologies dealers are implementing, as well as a breakdown of benchmarking results and much more, be sure to attend the NABD Dealer Academy or national conference. The Dealer Academy will be held May 16-17 at the Venetian Resort in Las Vegas, while the national conference will be held May 18-20 at the same location.

To register or see full agendas for these events, visit www.bhphinfo.com/events.php.