If you’re in the market for a vehicle, you’ve likely encountered terms like “Buy Here Pay Here Car Dealership,” “used car dealership,” and “bad credit.” But what do they all mean, and how can they work together to help you secure your next vehicle? Whether you’re in Kansas or anywhere else, this comprehensive guide is here to assist you. We’ll explore everything from “auto loans” and “credit auto” to “pre-owned” vehicles, “approval,” and “warranty.”
Are you in the market for a used car but have bad credit or no credit history? Buy here pay here (BHPH) dealerships offer unique in-house financing options that help people with credit challenges purchase quality used cars.
Read this guide to learn if BHPH financing is right for you and tips for finding reputable BHPH dealers in your area.
Key Takeaways
- Buy here pay here (BHPH) dealers offer unique financing options for those unable to qualify for loans from banks/credit unions.
- In-house financing means no traditional credit checks required. Instead, factors like your income and expenses determine approval.
- However, interest rates and fees are typically much higher than third-party financing from banks or credit unions.
- Not all BHPH dealers are created equal. It’s critical you find a reputable dealer committed to transparency around rates/fees and providing quality used vehicles.
- Ask questions upfront, negotiate the best deal possible, and read all contract terms before committing to purchase from a BHPH dealer.
What Are Buy Here Pay Here Car Dealerships?
Buy here pay here (BHPH) dealerships are used car lots that provide their own in-house financing to customers with poor credit or no credit history. Unlike traditional used car dealership that rely on third-party lenders, BHPH lots carry their own contracts and set the terms.
This article outlines everything you need to know about BHPH dealers, including:
- How BHPH financing and payments work
- Pros and cons of using BHPH dealerships
- What to look out for with “bad” BHPH dealers
- Tips for finding reputable BHPH dealers in your area
- Questions to ask and what to negotiate when buying from a BHPH
How Does Buy Here Pay Here Financing Work?
The term “buy here pay here” refers to the unique dealer-based financing offered. When you purchase a car from a BHPH, you make weekly or bi-weekly payments directly to the dealership, rather than paying down car loans from a bank or other third-party lender.
Payments and Terms
- BHPH dealers set the down payment amount and payment terms on a vehicle-by-vehicle basis. Often little or no down payment is required.
- Payment amounts are based on factors like the vehicle’s value, your income, and credit history. Payments typically range $100-$250 per week or bi-weekly.
- Loan terms are shorter than traditional financing – usually 24-36 months.
- If you miss payments, the dealer can repossess the car quickly since they hold the title.
Interest Rates and Fees
- Interest rates are typically higher than rates from third-party lenders – often over 20% APR.
- There may be origination, documentation, or application fees to process financing. Ask for full disclosure of all fees.
- Late fees, reinstatement fees, or early pay-off penalties may also apply if outlined in your contract.
The Pros and Cons of Buy Here Pay Here Auto Dealership
Below we outline the unique advantages and disadvantages of financing a car through an in-house BHPH dealer to help determine if it is the right option:
Advantages
- Get approved for car financing despite bad credit or no credit history. BHPH dealers use alternative criteria beyond credit scores for approval decisions.
- In-house financing means quicker purchase process without dealing with an outside lender.
- Weekly/bi-weekly payments make managing car payments potentially easier.
- No pre-payment penalties with some BHPH dealers, allowing you to pay off the vehicle faster.
Disadvantages
- Higher interest rates and additional fees result in paying more overall for the same vehicle.
- Shorter loan terms give you less time to pay off the car.
- Strict contract terms allow dealer to repossess vehicle immediately if you miss payments.
- Purchase options are limited to the dealer’s used car inventory selection.
As you can see, BHPH dealers offer credit-challenged car buyers more approval chances, but the trade-off is higher rates and stricter repayment terms. Weigh the pros and cons carefully relative to your budget and credit situation.
What to Look Out for With “Bad” Buy Here Pay Here Dealers
While BHPH dealers provide financing options many traditional lenders won’t, some dealers have earned bad reputations for exploitative practices. Be vigilant of dealers that:
- Fail to disclose full payment amount including high fees or interest rates
- Use bait-and-switch techniques or pressure buyers into vehicles not right for their budget
- Roll back odometers or fail to provide vehicle history reports
- Repossess vehicles at first missed payment
- Lack licensing or credentials
Stick to reputable, transparent dealers to avoid issues down the road.
Tips for Finding a Reputable Buy Here Pay Here Dealer
Since not all BHPH lots operate the same, it’s important to find a dealer committed to helping their customers get quality vehicles at fair rates. Here are tips for choosing a good BHPH dealer:
Check Online Reviews
Search dealers’ names and read recent Google reviews to gauge customer satisfaction. Look for consistent complaints around pressure sales tactics, contract issues, or shady practices as red flags.
Confirm State Licensing
Check with your State Department of Motor Vehicles to verify the dealer and salespeople are properly licensed for car sales in your state.
Ask About Interest Rates and Fees
A trustworthy dealer will disclose rates, origination fees and any pre-payment penalties or late fees before you sign paperwork. Get terms in writing first.
Inspect Cars Thoroughly
Test drive multiple vehicles you’re interested in and have a mechanic inspect prior to purchase. Ensure odometers reflect realistic mileage.
Look for Limited Warranties
Many BHPH dealers offer 30-day warranties or other protections should issues arise shortly after sale. Lack of any warranty is a red flag.
Questions to Ask BHPH Dealers Before Buying
Once you’ve located some reputable local BHPH lots, ask questions upfront before moving forward with a purchase:
- What are your interest rates and how are they determined?
- What fees or penalties could be charged? Get full written disclosure.
- What is the payment schedule – weekly or bi-weekly?
- What happens if I miss a payment? Is there a grace period?
- Do you report to credit bureaus (for positive credit building)?
- Do you provide free vehicle history reports?
- Is there a dealer warranty or service plan included?
- Does the sales contract include a 3-day right to cancel period by law?
- May I have my mechanic inspect the vehicle first?
- What steps do you take to ensure accurate odometer readings?
- Do you provide references from past customers I can contact?
By asking direct questions, you can confirm upfront that a dealer operates transparently and wants to create positive buyer experiences through fair BHPH terms.
Negotiating Your Best Deal at a Buy Here Pay Here
Once you decide to move forward with a purchase from a BHPH dealer, leverage these tips to negotiate the best possible deal on your used car:
- Get terms in writing first – have the dealer print out full terms including interest rate, payment amount, fees and contract stipulations for review before signing paperwork.
- Ask about a lower interest rate – the dealer has flexibility here. See if they can knock even 1-2% off.
- Negotiate a lower downpayment amount – the typical range is 10-30% down. Aim for the low end.
- See if you qualify for their best payment terms – some BHPH dealers offer 24 vs 36-month contracts. The shorter term comes with lower rates.
- Inquire about fee waivers – you can ask politely for the dealer to waive minor fees like documentation charges that bump up costs.
- Get promises in writing – verbal promises mean nothing. Make sure any agreement around payment terms, fees, warranties etc. are printed clearly in the final contract.
The overall key when financing a vehicle from BHPH dealers is to understand the full costs and contract terms before signing anything. Never feel rushed or pressured – a reputable dealer will welcome your questions.
BHPH Dealerships Near You
Intro paragraph summarizing the article’s goal of helping readers find and research reputable buy here pay here dealers in their local area.
Finding BHPH Lots in Your Region
Tips for locating BHPH dealerships geographically close by:
- Search Craigslist and Facebook for used car listings from smaller independent dealers
- Look on Google Maps/search engines for dealers with BHPH or “buy here pay here” in name
- Check used car sale listing sites like Autotrader and Cars.com for local inventory
- Search online business directories for contact info and locations
- Drive around town and look for smaller used car lots advertising own financing
Researching Dealers’ Reputations
Once you find local BHPH lots, important steps to take:
- Search online reviews on Google, Yelp, BBB
- Ask for customer references to call
- Verify proper licensing on state DMV website
- Visit dealer Facebook pages for recent customer feedback
- Check complaint sites for concerning lawsuit records
Customer Testimonials Matter
Read reviews and call references before visiting a lot in-person:
- Get insights from others’ firsthand purchase experiences
- Learn what issues past buyers faced
- Form impressions of dealers’ business practices
- Identify commonly praised traits like quality vehicles or great service
Focusing on customer perspectives helps avoid bad dealers and find a BHPH committed to service.
How to Find Buy Here Pay Here Car Dealerships Near Me
If you’ve weighed the pros and cons and decided that buyer here pay here dealership is your best option for financing a used car locally, follow these steps to hunt one down:
- Search online listings sites – Check used car sale sites like Craigslist, Facebook Marketplace and Autotrader for local independent dealers advertising their own financing.
- Search Google Maps – Look for used car lots in your area with “buy here pay here” or “BHPH” in their name or descriptions.
- Check dealer review sites – Search car dealership names on Google, Yelp, Dealerrater and the Better Business Bureau to vet customer feedback.
- Ask around locally – Friends, family or coworkers may have had firsthand experiences with area BHPH lots worth recommending.
- Stop by in-person – Once you have a shortlist of dealers, visit lots to view inventory and ask financing questions in person.
With some savvy researching, you can locate reputable buy here pay here dealerships in your region with quality vehicles and fair rates to match your budget and credit profile. The right BHPH lot can help you get the car you need now through flexible in-house financing.
FAQs
What is SUVs?
An SUV is a type of vehicle designed for various purposes, including carrying passengers, cargo, and sometimes off-road driving. They are known for their spacious interiors and higher ground clearance compared to sedans.
What credit score is needed for buy here pay here?
Most buy here pay here dealerships do not check your credit score or report from bureaus like Experian or Equifax. Instead, they determine financing eligibility based on factors like your income, expenses, and down payment amount. Those with very poor or no credit may still qualify.
Can you negotiate prices at buy here pay here dealers?
Yes. While inventory is limited with BHPH lots, you can still negotiate the vehicle purchase price, interest rates, payment amounts, fees and down payments. Come prepared with average used car value data and reasonable counteroffers.
Do I get a warranty when buying from a BHPH dealer?
Sometimes. Reputable BHPH dealers often provide at least 30-day warranties. Or you may be able to add aftermarket vehicle service contracts for 1-2 years for transmission, electronics etc. Verify what protections come standard or can be purchased additionally.
What is a payload capacity?
Payload capacity is the maximum weight that a truck’s cargo area can safely carry, including both the weight of the cargo and any passengers or equipment in the cab. It’s an important consideration when choosing a truck for hauling.
Can I return a car I bought from a buy here pay here dealer?
If the signed contract includes a 3-day right to cancel period, then yes – you can voluntarily return the car. There may be mileage and condition limitations outlined formally. Outside state laws, most BHPH contracts are “as-is”, but you can inquire about short term exchange policies.
What happens if my car gets repossessed from a BHPH dealer?
Unfortunately with missed payments, the auto dealer can swiftly repossess the vehicle since they hold title. This damages your credit too. Reinstatement fees may allow you to retrieve the car, but consequences escalate fast so maintaining payments is critical. Avoid dealers with particularly aggressive repossession reputations.
Conclusion
In the world of automotive financing, the ‘Buy Here, Pay Here’ dealership model stands out as an innovative solution, particularly for those with unique financing needs. Our guide delves into this approach, highlighting its benefits.
Additionally, we explore the role of customer relationship management in this sector, focusing on the use of eLeads CRM. This tool is essential for effective customer interaction, mirroring the personalized service found in ‘Buy Here, Pay Here’ dealerships
