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Buy Here Pay Here Car Lot

When you can’t afford to buy a car, the first idea you have is a car loan with acceptable interest rate and monthly payments you can afford. But what’s left to do when you have bad credit and no dealer is willing to offer you a financing option? In such a situation most people start thinking about the buy here, pay here car lots.

A buy here, pay here car lot allows you to buy a car from a dealer and pay the loan you used for the purchase to the dealer. This is an in-house financing option that eliminates third parties such as banks that before offering you a loan will show a lot of interest in your credit history and score. So, you won’t be paying monthly payments to a bank, but every week or even twice a week you will have to make similar payments to the dealership that owns the buy here, pay here car lot. While some of these dealerships will allow their customers to pay the amounts online or by phone, others request their clients to physically come and pay by cash or by check.

The main difference between a visit at a buy here, pay here dealership and a visit at a regular dealership is the time when the financing options are explored. In the first case, the dealer needs to firstly know some details about your credit history and what you can afford to pay for a car before suggesting you what car to buy from his buy here, pay here car lot. The traditional dealer will firstly let you choose the model you are interested in and only then let you know about the financing options available.

The buy here, pay here car lots have advantages and disadvantages. An advantage is the fact that they are offering cars and also financing solutions that are available for those with bad credit. Depending on how low your credit score is this may prove to be the only option available. It’s also an opportunity to improve your credit, because as long as you cover every payment in time and succeed to pay off the entire loan, your actions can be reported by the dealer to credit reporting agencies. Their help will definitely result in a credit score improvement. A third advantage is represented by the trade-in flexibility. When you purchase a car from a buy here, pay here car lot you will most likely be able to trade-in even an older model you may own. They will accept the car because many of their customers are in need of cheap cars.

The main disadvantage of buying a car from a buy here, pay here car lot is the high interest rate. You will have to face higher monthly payments and you will realize that most of your money is covering the interest rate and the finance charges and not the vehicle’s price tag. In addition, these dealers usually set higher price tags for their cars. They can do that because there isn’t a third party such as a bank needing to approve the price.

Another disadvantage is the down payment. There are situations when the amount of down payment represents in fact the value of the car you are purchasing while the monthly payments are meant to cover only the interest rate. That’s why you should pay attention and have an idea of what the car is worth and definitely try to find other solutions for your bad credit before choosing to purchase a car from a buy here, pay here car lot.

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