Yahoo Autos What is a buy here pay here car dealership?
There are a lot of choices to make when you’re car shopping. Beyond choosing a vehicle, you’ll need to select a lender or decide how you want to pay if you don’t want a loan. You might think that all car dealers are created equal, but there are options beyond major franchised car dealerships and used car lots. One type of used car store is known as by the term buy here pay. These buy here pay here car dealerships are an option that many shy away from – in many cases for good reason – but there’s more to them than meets the eye. Let’s take a closer look.
How does a buy here pay here car dealership work?
Most car dealers offer financing on the vehicles they sell, but buy here pay here car dealers — sometimes shortened to bhph dealership — take a slightly different approach. Rather than accepting a credit application and submitting it to a bank for approval, buy here pay here car dealership lots finance the vehicles in-house and can offer credit to borrowers that wouldn’t be approved through traditional channels. These are the roadside dealers you see with signs that advertise bad-credit car loans and other offers. You’ll likely be required to provide proof of income and other documentation, but in most cases, the dealer won’t run your credit.
The dealer uses your income information to determine how much it is willing to lend you for a car purchase. Studies have shown that buy here pay here car dealership vehicles are older and of lower value than traditional used car dealers’ inventories, with prices averaging just over $7,000 in 2018. You will be asked for a down payment, and the loan payments are made to the dealer. In some cases, these stores offer weekly payments or flexible payment plans.
Pros and cons of a buy here pay here car dealership
Buy here pay here car dealership lots can be a decent option for buyers with jobs but bad credit and people with lower incomes who just need a commuter vehicle. That said, the age and mileage of many cars on these lots can make them unreliable and expensive to repair, killing any cost benefit from the lower purchase price. Some stores stock older luxury vehicles to entice buyers, only for them to realize that fixing the car is no less expensive than a new model.