Car Buyer Labs

Car Buying Advice, Tips and Reviews

Facts to Put your Worries About Buy Here Pay Here Dealers to Rest

When you hear the term buy here pay here dealership, no doubt a negative image comes to mind. You might even envision people getting ripped off, thanks to a horrendously high interest rate on a car loan.

Here’s the hard truth: that scenario is entirely exaggerated. Buy here pay here dealerships are still held accountable to all the same rules and regulations as “normal” car dealerships. That truth in lending act ringing any bells? Figured it would. Anyway, BHPH dealerships earned some bad rep over the years due to how they treated consumers when they first opened. But, that’s not the case anymore.

Consider these cold, hard facts and put any worries you might have about buy here pay here dealerships to rest. But first, let’s see why they’re such a good place for consumers to go.

No Credit Checks

For those who have had bad credit, this will resonate. You remember the struggle of trying to find a car on bad credit, you’ve experienced it firsthand. For this who don’t have credit trouble, you’ll never fully understand this situation unless you walk a mile in a bad credit consumer’s shoes.

BHPH dealerships don’t do credit checks. What does that mean for you? It means if you choose to go to a BHPH dealership, you’re guaranteed a vehicle. Will the loan have a higher-than-average interest rate? Yes, but not the 30% that everyone always exaggerates about online when it comes to how they got a completely unfair interest rate, and couldn’t afford to pay off the vehicle.

While the second half of that generic disgruntled consumer rant might be true, it’s no fault of the dealership. They didn’t twist your arm to enter the agreement, and there is no way the interest rate was 30%.

The point is, BHPH dealerships have a no credit check policy, which means they give consumers a much needed second chance. Something that other dealerships aren’t equipped to do, because they don’t do their financing in-house like a BHPH does.

Some Hard Facts

The following facts represent the name of the BHPH game. Keep in mind, these dealerships are trying to help bad credit consumers get into a car. But, they end up taking a considerable financial risk when entering into a contract with these individuals. Backing unstable financial histories, which resulted in poor credit scores, means BHPH dealerships have every right to be concerned as a business.

Therefore, these facts aren’t meant to negatively portray a BHPH dealership in anyway — they’re just facts.

– Inventory is (typically) limited to used cars

– Higher-than-average interest rates (due to the consumer’s poor credit)

  • Payments must be made in person at the dealership
  • Weekly or bi-weekly car payments might be required

That’s it! These are the “scary” and “terrible” truths of your average BHPH dealership in 2017. While some of the more unscrupulous ones might not report your payment progress to the credit bureau (resulting in no improvement to your credit score), most of them will. Why? Because as your credit improves, the better they can refinance you. The more financial responsibility you develop, the less of a risk you are to them. Until, eventually, you’re able to move up in the dealership chain and maybe even get yourself a new car.