Buy Here Pay Here dealerships not only sell used cars but offer a unique and easy way of lending to buyers with bad or no credit. Instead of sending such buyers to auto lenders such as banks or auto finance companies, dealerships provide them with a one-stop vehicle financing and buying facility. BHPH dealerships are different from regular used car dealerships that typically ask customers to get financing from third-party auto lenders or banks. Interest rates are usually higher than those of other lenders, and customers make repayments directly to the dealership.
Buy Here Pay Here dealerships have a set of pros and cons that should be considered while purchasing a used vehicle.
Pros of Buy Here Pay Here Dealerships
There are some very important and crucial benefits of buy here pay here dealerships, which come in handy when purchasing a used car.
- Bad Credit Accepted: A typical lender or bank will lend you a vehicle loan if you have good credit, but may refuse to finance your purchase if you have no credit or bad credit. For those buyers who have poor or less than perfect credit, such lenders will not work. However, buy here pay here dealerships sell and finance used vehicles to customers with bad and no credit.
- No Down Payment Needed: A bank would ask you to make a down payment of a minimum of 5 to 10% to prove eligibility for a loan. But, buy here pay here dealerships may allow you to buy a car with no or very small down payment. An initial down payment can range from $500 to as low as zero. Such an option makes it a lot easier for people with very little cash in hand.
- Easy and Simple Process: Buy Here Pay Here Dealerships have a very simple and straightforward process, starting from the selection of a car of your choice, financing, paper work, and making a payment to the dealership to complete the purchase.
- Flexible Repayment Options: BHPH Dealerships often have flexible options for setting up payment dates. Buyers can align their repayment dates with their paychecks. You can also decide to pay once a month or twice a month as per your convenience. Such flexibility is rarely available with third party lenders or banks, and they get to decide the due payment dates.
Cons of Buy Here Pay Here Dealerships
Now that we have discussed the main pros, let’s have a look at some of the cons of buy here pay here dealerships.
- High Interest Rates: The interest rates charged by buy here pay here dealerships are significantly higher than those charged by banks, credit unions, and other lenders. By offering easy-to-take vehicle loans for customers with bad or no credit, these dealerships are at a much higher risk than regular banks or financers. For this reason, BHPH dealerships charge much higher rates than the market.
- Risk of Borrowing More Than the Vehicle's True Value: If you are not careful in determining the true value of your chosen vehicle, you may end up paying more than it is worth.Banks and other auto lenders normally limit the amount they will lend based on the true market value of the vehicle, which is not the case with buy here dealerships.
- Benefits of Credit Building: More often than not, loans obtained from and repaid to buy here pay here dealerships do not contribute to the buyers' ability to build a positive credit history. The dealerships may not report your payments to credit bureaus, so even if you maintain a good payment routine, your credit report may not improve.
- Vehicle Tracking is Common: It is common with buy here pay here dealerships for some buyers to stop making payments and become untraceable. Therefore, due to the risk involved in lending to such people with bad credit histories, the dealerships install a tracking device on the vehicle to help them in the event of payment defaults or at the time of repossession. This can prove to be a serious concern for customers who intend to make timely payments and want to create a positive credit history.
Conclusion
There are some real pros and cons to buy here pay here dealerships, but no two dealerships are the same. Some dealers may prove to be more suitable for certain buyers, while others may be more beneficial to others. Customers can significantly reduce their hassle and avoid any unpleasant experiences by choosing the best buy here pay here dealership suited to their situation and needs.
Buying your used vehicle from a dealership has several advantages.
For others, specialized establishments sell used cars to guarantee specific components (such as the engine, the box and the transmission), while natural persons transfer the buyer to the buyer.When it comes time to buy a car, we know you have various options available to you.
Not only do you need to choose the make and model of your vehicle, but you also have to decide whether you want to buy a new or used car.A new vehicle may have a warranty, but it does not guarantee that your car will spend several days or months in the workshop due to factory defects.Used cars have already gone through this process, and their factory defects have already been corrected.
Also, some used vehicles still have their factory warranty.If you plan to purchase a vehicle, these are some reasons to do so.
It will be a good option and will have advantages:The savings:Buying a used car will always be cheaper than purchasing a zero kilometre, plus they lose less money over time.The used car is already registered, it pays less value in bearing taxes, and you can even save some money on the value of the SOAT and with comprehensive insurance.There is no doubt that with the money with which you get a new entry vehicle of some brand, you could buy a used of a higher range with more equipment.Since last year and part of it, the increase in the dollar had a blow to the country's economy, and the automotive industry sector was no exception, especially in new vehicles that increased in value due to the importation that the brands do.Maintenance:The used ones do not require expensive periodic reviews and needed for the brand.
Also, you can do their maintenance in the place you prefer.Financing options:The used car dealer Upper Darby entities have also chosen to offer excellent benefits and adequate plans for people to acquire a used one.
