The Buy Here Pay Here Experience
Approved for Your BHPH loan before You Walk into the Car Dealership
There are plenty of options out there when it comes
time to purchase a used vehicle, even if your credit isn’t
exactly in fighting shape. Traditional options like used car lots
and individual sellers are now joined by the likes of the internet
to provide shoppers with an unbelievable number of choices. Unfortunately,
lending practices have grown tighter as the recession deepens,
and hard-working people who would have had no problem finding
financing two years ago are now being turned away from dealers
and banks alike.
When this happens, most buyers are presented with two
possible options. First, they can settle for a less expensive,
lower quality vehicle with high miles. No one likes to jump into
a used vehicle that may end up costing them thousands more in
repairs just a few months down the road. Fortunately, a second
option exists — Buy
Here Pay Here dealerships. Relatively new additions to the
used car buying experience, Buy
Here Pay Here Car Lots allow individuals to rebuild their
credit while driving a high-quality used vehicle at the same time.
The BHPH buying experience differs from traditional
used car buying in one key way. Usually, the buyer looks around
on a car lot, finds a vehicle he or she likes, asks all the right
questions and goes for a test drive. Once the decision to purchase
has been made, the salesperson usually sits down with the buyer
to discuss financing options. There are variations on the theme,
but by and large price negotiation doesn’t begin until after
the buyer has selected his or her vehicle.
With a BHPH system, the transaction works in reverse.
The search for a quality used vehicle begins by meeting a salesperson
and answering a few questions. Usually, the salesperson will ask
buyers about employment history, debt load and what they’re
comfortable with in the way of a car payment. The dealership may
also obtain a credit report, though not always. A buyer may be
asked to supply a list of references – people who know the
buyer and will vouch for his or her personal integrity. Since
here pay here car lots tend to rely less on an individual’s
credit history than traditional used car lots, personal impressions
and references play a large role in whether or not the dealer
will provide financing.
Once a fair monthly payment is arranged after potential
trade-in and down payment information is settled, the salesperson
will then show the buyer vehicles to fit his or her price range.
The result is a much more straight-forward approach to car buying.
The dealer now has a good picture of the buyer’s financial
situation and can direct them toward a quality vehicle that won’t
strain the budget. That’s a big difference from most traditional
The reason for the difference is simple. Since buy
here pay here car dealerships don’t use an external
lender, they finance buyers themselves. This allows the dealership
to provide loans to individuals who may not otherwise be able
to get financing, but it also means payments may be different
from a standard auto loan. Most BHPH dealers require weekly or
bi-weekly payments, sometimes in person only. That means the buyer
must hand the dealership his or her payment in cash twice a month
instead of dropping a check in the mail or paying over the phone.
If you intend to purchase a vehicle through a BHPH dealership,
make sure you fully understand payment stipulations.
The BHPH system isn’t designed for everyone. Individuals
with a solid credit history may find a wider selection of newer
vehicles at traditional used car dealerships. Still, for those
whose financial past may have a few shady areas and need a second
chance at getting back on track, the BHPH system can provide an
excellent used vehicle and rebuild credit scores at the same time.
We've also assembled a list of no
credit check car dealerships. These dealerships offer bad
credit financing as well.