Car Buyer Labs

Car Buying Advice, Tips, and Reviews

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“Buy Here Pay Here” And How it Can Help You

Navigating the world of car buying can be overwhelming and intimidating, to say the least. While many of us are not quite car experts, it can feel like you’re entering the situation blind when you approach a dealership or inquire about your eligibility for a financing plan. We don’t understand all the terminology, and we also don’t want to get taken advantage of. Now if you are in the market for a new vehicle, you may have heard the term buy here pay here. This is a unique approach to car buying that is designed to help prospective buyers that may have poor credit or have struggled to obtain external financing for a vehicle in the past. Let’s take a closer look at what exactly buy here pay here is, how it works, and how it can benefit you the next time you head out to your local dealership.

Understanding the Basics

To begin, it is important to understand that not all dealerships are buy here pay here dealerships. This is really more of a dealer preference, so if you’re looking for the buy here pay here model, simply inquire with your desired dealership before making the trip. A shop that adheres to this model will typically advertise it loudly and proudly. Some other labels that are indicative of the buy here pay here model are “we finance,” “loans done here” or “easy financing.” Simply inquire with your salesperson to make sure you’re both on the same page before you start.

The most unique aspect of the buy here pay here model is the fact that it really turns the traditional car buying process on its head. Typically, one would enter a dealership, find the car that they love and then figure out how to obtain the proper financing to take it home. But in a buy here pay here situation, the dealer reviews your overall financial credentials and assesses how much they are willing to lend you. Once this number is reached, you will have a certain amount of credit to your name to shop with. However, it is important to remember that because the dealership itself is providing you with the financing, it will often be a bit lower than you may have originally expected. Approach your buying experience with this in mind and you will be off to a good start.

Once your financing is approved, the dealership will provide a document outlining the finer points of the financing plan. A thorough documentation of the transaction should outline how long the overall payment period is, how often payments need to be made, and how long the grace period is between missing payments. We can’t state enough just how important it is that you vet and genuinely understand this information. Because each dealership will treat the buy here pay here model a little differently, it’s crucial that the buyer know every detail in the fine print before committing to a deal.

The Pros of Buy Here Pay Here

The first somewhat obvious advantage of utilizing the buy here pay here model is the convenience afforded to you by using your dealer as a one-stop shop. Instead of making a separate trip to your bank to obtain financing and then going to the dealership to pick up your car, this method allows you to do everything you need to in one easy spot.

Another great reason to use this unique payment model is to use it as a way to build your personal credit. As we previously covered in this article, buy here pay here dealers are typically very willing to accept buyers with low or non-existent credit. This is one of the primary advantages of these types of dealerships. For you as the buyer, you can enter one of these contracts regardless of your current financial standing and provide yourself with a new opportunity to improve. As long as you commit to and consistently meet your new payment plan, a buy here pay here model can be an excellent way to develop or improve your credit in a relatively short amount of time.

The buy here pay here model also adheres to a number of convenient traits that can make a trip to one of these dealers worth your time and money. While we’ve so far been running the “buy here” mantra into the ground, some of these dealerships can offer a “sell here” aspect as well. Make sure to check with your specific dealership first, buy many of these locations will offer to accept your used vehicle as a credit toward the down payment of your new car.

The last important pro to touch on regarding the buy here pay here model is the fact that many of them will offer a free Carfax report as well as a warranty. As many used car buyers are aware, you can simply never have too much reassurance that your car has a clean past and will last you for thousands of miles to come. Inquire with your local dealer to learn their specific policies on reports and warranties to make sure you’re getting the best deal possible for your money.

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The Cons of Buy Here Pay Here

The first important con to be aware of when conducting business with one of these specific dealerships is that they may not be particularly diligent about reporting your loan and payments to the credit bureau. If this were the case, regardless of how many on-time payments you provided, it would do nothing to augment your poor or currently non-existent credit. Make sure to keep track of whomever you have your loan through to ensure that they are properly reporting your payments and helping you in the long run.

The second variable to be aware of in this situation is the fine print. Read your contract and read it a second time to ensure that you are fully aware of everything you’re getting into when you sign on the dotted line. From hidden fees to inflated interest rates, it’s extremely important to understand every aspect of a buy here pay here contract before signing into it. Know what you’re getting into, understand the stipulations, and you can make this business model work for you.

The last con that may affect your buy here pay here shopping process is the fact that you will likely have a very limited selection. Like we’ve stated before, between the combination of you having limited financing and the limitations set by the dealership, your selection will be far slimmer than other shoppers.


Now that we’ve covered the fundamentals of the buy here pay here purchase model, it’s up to you to decide whether or not it’s the best decision for you, and if it is, how you can best use it to your advantage. Simply be sure to have a firm grasp and understanding of your financial situation and read closely into any contracts you sign. Once you’ve committed to your new vehicle, use this model as a way to increase your credit and ultimately improve your finances in the long run. Good luck and happy shopping!