Have you been searching for a car and came across specialized dealerships known as ‘buy here pay here’ dealerships? You may be wondering, how does a buy here pay here work?
It’s harder than ever to qualify for the credit you need to buy a car. That’s why some used car dealerships have stepped up with buy here pay here (BHPH) programs. BHPH dealerships offer financing themselves, giving them the flexibility to offer a financing plan that fits your unique situation. Whether your credit history is too short to qualify for a traditional auto loan, or your credit has been dinged in the past, a BHPH dealership can be your best route to the car you need and want.
So, how does a buy here pay here work? Let’s take a look at exactly how buy here pay here works, and how it benefits both you and the dealership.
How Does a Buy Here Pay Here Work: The Differences
The traditional way of buying a car involves several steps. When you agree to purchase a vehicle, your contract is sent to an auto lender who specializes in issuing loans for vehicle purchases. That lender can make or break the sale.
That’s not the only way to go. Some car dealerships go out of their way to offer financing themselves, using their own resources. That’s what makes them buy here pay here dealers. Keeping the financing side of things entirely in-house lets BHPH dealers close sales that other car dealerships can’t.
BHPH is especially useful for people with short credit histories (or none at all), and for people who have been forced to take a few hits to their credit scores. Traditional auto financers can be so risk-averse that deserving buyers find themselves unable to complete a purchase. BHPH dealers tend to be more willing to listen to their customers, and to work out loan terms that benefit everyone involved.
A BHPH dealer will likely ask you to verify your source of income and to provide proof of your residence. Beyond that, the process of negotiating a loan can be tailored to the circumstances and needs of each buyer. Third-party lenders tend to see you as a set of numbers. BHPH dealers get to know you as a person.
The Benefits of Buy-Here-Pay-Here
Let’s look at some specific reasons why BHPH might be right for you.
Quick Approval, Even with No Credit or Bad Credit
BHPH was invented to fulfil a real need. None of us is perfect, and that’s true of our credit histories, too. If you’ve been avoiding traditional car dealerships because you dread being turned down by third-party lenders, BHPH gets you right back into the game. Getting to know each customer allows BHPH dealers to offer financing when remote bean-counters won’t.
BHPH dealers set their own terms. Some offer “No Credit, No Problem” financing plans, while others have ways of loaning money without the need for a credit check. Don’t be afraid to ask your BHPH dealership what they can offer you.
Clear Financing Process
Buying a car at a traditional dealership can take hours and hours as one lender after another decides whether they want to work with you. The loan process can even carry on well after you drive off the lot. At a BHPH dealer, things are more straightforward. You borrow from the same team that sold you your car, keeping the lending process smooth and efficient, with no loose ends when you take possession of your car.
The Bottom Line
Buying a vehicle is never exactly easy. Bad credit, or a limited credit history, makes it even tougher. Buy-here-pay-here dealerships know that not everyone who deserves a car has a sparkling credit record. That’s why they’re here for the rest of us.