Clear Concept About Buy Here Pay Here Car Lots |
Posted: December 7, 2021 |
What Are Buy Here Pay Here Car Lots?Auto dealers that accept no credit checks will allow you to purchase a used vehicle without having to go through any kind of formal financial review. These locations are also sometimes known as "Buy Here Pay Here" dealers because they’re willing to finance the purchase of vehicles on their lot even if you have little or bad credit, or no history at all with lenders. They’ll rely on your used car’s value as collateral and require that you make a monthly payment sufficient to cover the loan and any interest fees. The buyers at buy here pay here dealerships typically include those who:
How Buy Here Pay Here WorksOnce you choose a used car from the BHPH lot, a dealer will typically offer to finance your purchase through one of their in-house lending branches. This dealer financing option allows them to have more control over which customers they approve for loans and how many or what type of loans they give out at any given time. Most buy here pay here car lots will ask for a down payment equal to 10 percent of the vehicle’s price to ensure that there’s some collateral involved if you default on your installment agreement. You can also negotiate with the dealership about what percentage of the selling price is acceptable as a down payment. In addition, interest rates on these types of auto loan programs are often around 25 percent APR. What Buy Here Pay Here Does NOT Mean?You should be aware of the possible drawbacks to buy here pay here vehicle lot financing. For example, some dealerships may require that you complete a credit application, even if it’s only using secondary sources (such as your utility bill) to get pre-approved for dealer financing rather than having an in-depth review done on your credit report by a traditional lender . This can still be beneficial because it tells the dealership that you are serious about buying their car, but it doesn’t offer nearly as much financial history for them or other lenders to evaluate compared with getting an actual loan through a bank or credit union. Also, some BHPH lots will not allow you to shop the vehicle around to other local banks and lenders for a better rate. Finding Buy Here Pay Here Used Car LotsYou can use several different resources when you’re looking for buy here pay here car lots in your area. Many of these dealerships list their used vehicles with companies like DriveTime, but if they do not, you can find the contact information (address and phone number) by searching on such sites such as: CarsDirect; DealerRater; Edmunds; or TrueCar. Once you get in touch with one of the dealers, ask them about their BHPH dealer financing options and how it works--they may even let you take a test drive, although this is unlikely. Many buy here pay here lots will also accept trade-ins with another vehicle, but this is not always the case. Other collateral options they may consider include boat titles, motorcycle titles or personal property such as home appliances or even an engagement ring.
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