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If you have ever found yourself in a situation where you want to buy a car, but just don’t have the cash for it, it can be a confusing experience. Many people may find themselves in a situation where every single avenue of credit is closed to them. This is where a Buy Here Pay Here dealer can be your last, and perhaps best resort
Almost all of us buy a car with money which is lent through third hand parties. For example, banks, credit unions, and other car associated lending companies may lend you money so you can make your purchase. But if you are ever turned away, for whatever reason (such as poor credit score), BHPH car lots may be exactly what you need.
Whenever you decide to purchase and then finance a car at any traditional dealership, you will often select a car that you like, and the dealer will then pass your information on to a whole network of potential lenders. Should you get approved for that car loan, you will pay monthly instalments to the lender who will finance that loan. Alternatively, Buy Here Pay Here car dealerships will change the car-buying process in a few ways.
For example, these dealers will sell the car and finance them straight off their own lots. You might see some of them being advertised with ‘we finance’ or other lines such as “no credit, no problem”. When you decide to buy a car through a BHPH dealership, it is likely that you will be asked to prove your income, as well as providing some form of residence proof, but the dealer will not check your credit. Once the dealership determines the loan amount that you can qualify for, cars will be shown to you within that price range.
However, you should keep in mind that the dealership is unlikely to grant you alone simply out of kindness. They are likely to make just as much money in financing the deal, as they do on selling you the car itself. If you are deemed a “high-risk” borrower, you shouldn’t be surprised if you are faced with a double digit interest rate.
Another note, is that you may wish to find a dealer which is relatively close to your place of home or work. The reason for this is that unlike making a monthly payment, the dealer may require you to make a weekly payment, or once every fortnight. Although some dealers may accept payment by phone or by mail, others will want you to physically bring your payment into the dealership. This is something you will want to bear in mind when opting for a BHPH dealership
In recent years, the gap between what is considered a traditional dealership and a BHPH one has become rather small, leaving them relatively indistinguishable nowadays. Some traditional car dealerships will include BHPH financing as an option when purchasing from them. They may not be well-known as BHPH dealers, but any kind of signal which would indicate that they offer finance deals should prove they are BHPH.
Like we mentioned above too, when you opt for a BHPH dealership, the process of actually purchasing a car is reversed. Rather than the traditional method of selecting a car and then beginning to discuss financing, with a BHPH dealership, the customer will initially be qualified in order to determine how much the dealer is willing to lend. Finally, the dealer will show which options they can buy, which are often limited.
Another thing that you should keep in mind with a BHPH dealership is the late payment policy. Make sure that the contract you agree to clearly spells out the terms of any potential repossessions, and make sure that you are happy with them before agreeing.
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Whether you haven’t had the chance to build a credit history, or if your credit is simply in bad shape, you may struggle to get approval from third party lenders such as banks. However, like we mentioned before, when you choose a BHPH dealership, the standards to be accepted are much lower, as the dealership themselves will want to profit from the interest rates as well as the car itself
Whenever you purchase a car from a BHPH dealership, the entire process of buying the car and financing the deal can be fully completed when you drive off the lot. With other dealerships and third parties, the loan process can take quite a while to complete, particularly if you have a bad credit.
Nowadays, many BHPH dealerships will provide no down payments whatsoever, which is beneficial for you as it simply allows you to save some of your cash now, and make up for it with later payments.
Like we mentioned above, these BHPH car dealerships may be likely to charge you a little like we mentioned above, these BHPH car dealerships may be likely to charge you a little bit extra for your deal. However, should you have to go to your bank or any other third party lender with a poor credit score, or no history whatsoever, you are likely to walk away with a much heavier interest rate. Some BHPH dealerships may be able to offer you interest rates which are similar to that of conventional lenders
In conclusion then, BHPH car dealers are dealers which finance the deal themselves, meaning you won’t have to turn to third party lenders such as banks or credit unions in order to get financial assistance to purchase your car. There are several benefits to using BHPH dealerships, including better interest deals for you, and a smoother buying process.