Auto Loans - What is 'Buy Here Pay Here'?

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What Is a Buy Here Pay Here Auto Dealership?

Buy Here Pay Here auto dealers are different from traditional auto dealerships. Where traditional auto dealerships fund purchases through a finance company that lends money to the buyer based on their credit history and score, BHPH dealerships finance buyer purchases themselves. Since they want to sell you a car, it is much easier to get financing through a Buy Here Pay Here car lot regardless of your credit history than it is with a traditional third-party lender.

Make sure to choose a dealership near your home or office. Instead of mailing in your monthly payment or paying online, BHPH payments are generally made weekly or bi-weekly at the dealership where you purchased your car. Some Buy Here Pay Here dealers are independently owned and operated. However, the larger dealerships have started seeing the value of offering multiple buying solutions to customers with difficult credit histories or lower down payments and are now also offering buy here pay here and in-house financing options.

Why Choose a Buy Here Pay Here Dealership?

According to the credit bureau Experian, nearly a third of Americans have a credit score below 601. That means that nearly 30% of Americans have poor or bad credit, which makes getting a traditional car loan from a bank, credit union, or third party lender nearly impossible.

With a Buy Here Pay Here dealership, bad credit or no credit is not a problem. As long as you have a valid address and proof of a steady income, approval is almost always guaranteed. These dealerships put people into cars when traditional dealers and financiers won’t.

Another incentive to using Buy Here Pay Here dealers is the opportunity to build or boost your credit score. Make sure that your dealer reports your payment histories to the credit bureaus and then make sure to always make on-time payments. It won’t take long to see an impact on your credit rating.

Have an old car you want to get rid of? BHPH dealerships are more than willing to take your old cars and your beaters as down payments on a new car. This saves you from needing a large chunk of cash up front and clears space in your driveway for your new car!

What Makes a BHPH Dealership Different?

Besides the financing options, another thing that sets apart Buy Here Pay Here dealerships is the way you choose your new car.

With a traditional dealership, the customer would browse their selection of cars and choose the one they like. The dealership would then sit down with the customer and find financing through a third party lender.

With Buy Here Pay Here dealerships, customers will sit down with a specialist who will determine how much money they are eligible for and also how much of a down payment they will need or how much they will give you for a trade-in. Once the amount the customer is qualified for is determined, the dealers will show the customer which vehicles are available within their price range. This will eliminate time wasted looking at cars that the customer simply cannot afford.

How Can You Be Sure to Get the Best Deal?

Like any other purchase, there are things the consumer can do to make sure they get the best deal possible. Here are a few tips to protecting your investment and getting the most out of the experience.

Make sure to research Buy Here Pay Here dealerships ahead of time. Check customer reviews and business ratings on the Better Business Bureau website. Also, talk to friends and family who have done this before and find out which companies they used.

Have a mechanic inspect the vehicle before you make the purchase.

Ask about the vehicle’s history and check the CarFax report.

Check the Kelley Blue Book (or the website) to find the current value of the car you are interested in.

As always, make sure to read the contract before you sign it. If anything is unclear, ask for clarification before you sign.

Take a deep breath and relax. You’ve done your research and you are ready to take your new car home!

Buying a car can seem like a scary thing especially for people struggling with no or bad credit. Take the stress out of the situation by letting an expert Buy Here Pay Here auto dealership set you up with financing you can afford so you can drive away in a new car today.



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