Purchasing a new car can be a thrilling experience. Not only do you get to sit behind the wheel of a vehicle that you’ve picked to fit your every automotive need, but you get the experience of having a new and reliable form of transportation. Unfortunately, purchasing a car isn’t always easy. While the traditional method does offer many paths towards car ownership, not every potential driver has access down these avenues. There are a wide variety of reasons why the traditional method of car buying simply won’t work, but one of the leading reasons is bad or no credit. A poor credit score can follow you for some time, and can keep you from purchasing the brand new car of your dreams; fortunately, no credit car lots act as a solution. There are a number of auto dealerships out there that can offer drivers an auto loan regardless of their credit score. But are these kinds of dealerships too good to be true?
The Traditional Path to Car Ownership
For those with decent credit, car buying is fairly straightforward. In most cases, these drivers visit their local dealership and take their ideal car on a comprehensive test drive. They’re often given a full view of what the vehicle has to offer, and are introduced with financial options for taking this dream car home with them. The next step involves sitting down with an auto dealer to fill out paperwork and applying for an auto loan from a financial institution. Based on their credit score, this financial institution will provide them the funds necessary to drive this new dream car home with them, as long as they continue to make monthly payments according to the terms of the loan.
Unfortunately, this path to ownership is not available to everyone. Financial institutions use your credit score and your credit history to determine whether or not you’re a trustworthy lender. That said, credit score only does so much to describe the financial standings of a potential buyer, and some with a poor credit score can face rejection even if they have the financial means to make consistent and reliable payments to the auto loan.
Fortunately, no credit car lots, or buy here pay here dealerships, serve as an alternative option. That said, there are a variety of generalizations surrounding these kinds of dealers, and while some may have a bad rep, not all deserve to be grouped in with a couple of bad eggs.
What is a Buy Here Pay Here Dealership?
As mentioned prior, buy here pay here dealerships are auto providers that rely less on your credit score and more on your overall financial standing. Buy here pay here dealerships allow you to skip the third party and apply for an auto loan directly from the dealership. In this case, buy here pay here dealerships are also the financial institution, approving your loan, and receiving your monthly payment. Since the middle-man is eliminated, buy here pay here dealers almost always give drivers approval for their loan. As long as your income is solid, and have a dedicated address, these kinds of dealerships will grant you a path to owning the car of your dreams.
One thing to keep in mind when purchasing a vehicle from a buy here pay here dealership is that the dealership stands to make a considerable profit off of your auto loan. In some cases, these kinds of dealerships can slap auto loans with double-digit interest rates, which can dramatically put the cost of the vehicle over the actual value. That said, these high-interest loans aren’t universal, and the generalizations surrounding buy here pay here dealerships aren’t always true.
Navigating the Buy Here Pay Here Dealership
There is a common misconception that buy here pay here dealerships exist to scam drivers. While there are certainly plenty of bad apples out there (even with traditional dealerships), there are plenty more that are willing to work with you and help you find a financial plan that meets your expectations and budget. All that said, there are a number of ways that you can make the most out of your buy here pay here dealership experience.
One thing you ought to do before racing to a no credit car dealership is to ensure that you choose one that is of reasonable proximity to your home, and that has convenient payment methods. When you make payments on your no credit car loan, you’ll have to send them directly to the dealership. While every dealership has a different process, some of these kinds of dealers expect their customers to make weekly or biweekly visits to their lot to make a payment in person. Some no credit car dealerships also allow drivers to make payments online, although before you sign the dotted line, it is best to have a full understanding of their process.
Another thing worth noting when purchasing a vehicle from a buy here pay here dealer is to ensure that you budget accordingly. While this can be a pretty straightforward piece of advice, when purchasing a vehicle from one of these dealers the ending sticker price is likely to be higher than the original value. On the topic of budgeting, some of these dealers are less likely to cooperate when it comes to being unable to make a regular payment. This is a benefit of financial institutions as they tend to have more capital on hand to be more flexible when a payment is missed. We also recommend that if you can, pay as much money down as possible. The greater the down payment, the less overall amount that you’ll have to finance for, and as a result, it reduces your monthly financial burden. Of course, it goes without saying that you should review all of the final paperwork with a focused eye. Each of these dealerships operates differently, and there can be unexpected details in an auto loan that can make or break the deal.
So, should you go with a no credit car lot? The answer can be complicated, and it all depends on your own financial standing and credit history. That said, the appeal is hard to argue against, and can be a great path to car ownership.
Should You Buy a Car from a Buy Here Pay Here Dealership?
While there may be some downsides to purchasing a car from a no credit card lot, the benefits certainly outweigh the costs for drivers who may not have the best credit standing. These car dealerships tend to have a wide selection of vehicles to choose from, and is often no different from a traditional dealership, showcasing models from some of the industry’s top manufacturers.
Unfortunately, not all drivers enjoy a great credit score. No credit car lots are a great alternative for those who have the financial means but not the best financial history. We don’t recommend that drivers who would find a good deal at a traditional lot go straight to a team of dealers that do all of their financing in-house. That said, if you’re trying to get on their feet, or don’t have a financial history at all, these dealerships can help you get behind the wheel of a vehicle of your dreams.