How Do Buy Here Pay Here Dealerships Work?
Here’s the gist: at a traditional dealership, you usually get financing through a bank, credit union, or another lender. At a BHPH dealership, the dealer is the lender. This setup allows them to sell you the car and collect payments from you all in one place. They usually don’t even run a credit check, which is a relief for many buyers.
Typically, the process starts with picking out a car from the dealership’s selection, then filling out a basic application. Since they’re looking at your income and ability to make payments, you can usually get approved on the spot. This is a big advantage if you need a car quickly and don’t have time for a long approval process.
What Are the Pros?
- Quick and Easy Approval: With no credit checks, BHPH dealerships make it much easier for people with poor or no credit to get a car loan.
- Convenient Payments: Many dealerships offer flexible payment options. Some let you pay weekly or bi-weekly, and you might even be able to make payments in person, online, or over the phone.
- One-Stop Shopping: Everything happens at the dealership—choosing the car, getting financing, and making payments. It can save a lot of hassle compared to going through a bank.
What Are the Cons?
- Higher Interest Rates: This is a big one. Since BHPH dealerships take on more risk by lending to people with low credit scores, they often charge higher interest rates to offset that risk.
- Limited Selection: These dealerships might not have the latest models or the biggest selection. You’ll often find older cars, which may or may not have all the features you’re looking for.
- Risk of Repossession: BHPH dealerships can be strict about payments. If you miss a payment, they might repossess the car pretty quickly, and since they handle both the financing and the car, it’s a lot easier for them to do.
Tips for Buying from a Buy Here Pay Here Dealership
If you decide a BHPH dealership is the right choice for you, here are some tips to get the best outcome:
- Do Your Research: Not all BHPH dealerships are the same. Look up reviews and ask around to find one with good customer service and fair terms.
- Understand the Terms: Always read the fine print. Know what you’re agreeing to in terms of interest rate, payment schedule, and fees. Don’t be afraid to ask questions!
- Check the Car’s History: Ask for a vehicle history report. Knowing what the car has been through can save you from costly repairs down the road.
Is Buy Here Pay Here Right for You?
Buy Here Pay Here dealerships can be a lifeline if you’re dealing with credit issues, but they’re not for everyone. By understanding both the advantages and drawbacks, you can make an informed choice that fits your situation. Just remember, there’s no rush! Take your time to find the right car and dealership for you.