One advantage of buy-here-pay-here car lots (BHPH car lots), or in-house financing dealers, is that you can purchase and pay for a vehicle at one location. Rather than obtaining an auto loan through a third party, like a bank, buy-here-pay-here car dealers set-up a payment plan with either monthly, semi-monthly or weekly payments. Although some dealers may allow you to pay online or over the phone, dealers generally require that you visit the dealership to make your payment.
Pros of Buy-Here-Pay-Here Car Lots
One advantage of BHPH car lots is that even consumers with credit problems can generally purchase a vehicle. Although some dealers may run a credit check, others do not. The vehicle you purchase serves as collateral to secure the loan. Should you fail to pay, the dealer repossesses the vehicle to reduce the loss.
Another advantage of buying from buy-here-pay-here car dealers is that you can often trade in your older model vehicle. Having older models as part of their inventory widens the dealership’s customer base. The wider selection often attracts customers from various income levels.
Cons of Buy-Here-Pay-Here Car Lots
Although some dealers may report your payment history to the Credit Bureaus, not all do. If your main reason for buying an auto from this type of car lot is to reestablish your credit, find out if credit reporting is part of the dealer’s policy.
Understand that this type of in-house financing normally means higher interest rates. You may end up paying considerably more than if you were to buy from a conventional dealership. If you’ve experienced financial straits, however, and don’t have other options, a buy-here-pay-here car lot may be the answer to your dilemma.
Buy-Here-Pay-Here Car Lots & Income Requirements
If you have a steady source of income, it’s generally enough to help you secure a vehicle. Be ready to establish proof of income, show identification and provide a physical address. You will also need to provide a contact number. Regardless of whether the dealer reports your credit behavior to the credit bureaus or not, it’s to your advantage to make payments on time.
How to Find Buy-Here-Pay-Here Car Lots
- Most BHPH dealers make sure that you know about their in-house financing option. As you drive around, take note of dealerships that advertise this type of auto financing. Look for signs that say buy here pay here or in-house financing.
- More conventional dealerships are starting to offer in-house financing as well. Contact your local dealerships and inquire about their financing options.
- Search online for BHPH dealers. Enter the search term buy-here-pay-here car lots followed by the name of your city or town. Go through the search results and choose a HPH car lot near you.
- Get referrals from friends, neighbors, co-workers or family members. This is the best way to find a trustworthy dealer.
- Some online companies make it convenient for you to find a buy-here-pay-here dealer. Such companies have a network of BHPH dealerships. You simply submit an inquiry through the company’s website. Your information is then referred to a local buy-here-pay-here dealer in your area. The local dealership will then contact you about your interest in buying a buy-here-pay-here auto.
Buy-Here-Pay-Here Car Lots & Need for Caution
Research your options before submitting any personal information. Whether you’re dealing with a local dealership or through an online company, take your time to research the company. If you decide to apply online, make sure the website is secure. Look up the company on the Better Business Bureau’s website. Search online for scam or fraud reports involving the company.
Overall, although buy-here-pay-here car lots are not for everyone, they do provide certain advantages for consumers with less than stellar credit. Before applying for an auto, make sure the dealer is legitimate. Get references if possible, and remember to trust your instinct. If something doesn’t feel right, walk away. There is no shortage of buy-here-pay-here car lots; you can apply at a different dealership.
Copyright © 2011 Ana Jackson. All Rights Reserved. Reproduction in whole or in part constitutes plagiarism, is illegal and strictly prohibited.
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