Buy Here Pay Here Auto Dealers: Fact & Fiction

The world of automotive finance is vast and it can be easy to feel overwhelmed when turning to the market for a new car. There are many financing options available, from leases, to loans, in-house financing, or even paying in cash.

One method in particular of purchasing a new car is by going to a ‘buy here pay here’ auto dealer. A buy here pay here dealership is different from the traditional method of purchasing a vehicle where a loan is typically acquired from an outside lending source.

With a buy here pay here auto dealer, you can either acquire a loan from a third party, directly from the dealer, or neither, although paying in cash is usually only reserved for less expensive vehicles. When you use a buy here pay here auto dealer, you are cutting out one step of the process and securing the loan or making the purchase directly at the dealer as opposed to going to a third party lender.

Why Use a Buy Here Pay Here Auto Dealer?

Buy here pay here no down payment auto dealers are a great option for those with little or poor credit since the standards are not as stringent to acquire a loan through this method.

A buy here pay here auto dealer is a lot more flexible when it comes to securing a loan and the dealer may be willing to write a loan where a third party lender was not.

This can help those who are trying to build their credit or are just starting off by giving them an opportunity to acquire a loan that will build their score.

Another good reason to use a buy here pay here auto dealer is if you’re looking to trade in your old car. Oftentimes a buy here pay here auto dealer will take your old car as a down payment or buy it and factor it into the loan by putting the value towards your new car.

Some Common Misconceptions

One of the biggest misconceptions about buy here pay here auto dealers is that they will charge in excess of 30% interest. There may be some auto dealers who charge this rate but this is not to say that you cannot find a buy here pay here auto dealer that will get you into a new car for less.

Another commonly held belief is that buy here pay here auto dealers will repossess your vehicle with one missed payment. While it is true there may be a late charge, a buy here pay here auto dealer will not repossess a vehicle after one missed payment. Contracts can vary and being late beyond a certain period of time can result in a termination of the contract. Always be aware of what the late charges are and exactly what the terms are of your contract.

One of the biggest misconceptions about buying a new car is the best time to buy a new car is at the end of the month. This is a common misconception because most people assume that because salespersons receive bonuses for meeting quotas that this means they are more likely to strike a better deal to get that extra commission. This is usually a poor approach since quotas typically end at the end of the quarter or even year. The best route to approaching your new car purchase at a buy here pay here dealer is to research the vehicle you want and make the purchase when you are ready. Don’t try to rush into the process.

A Good Time to Purchase at a Buy Here Pay Here Auto Dealer

The last several months have seen a decline in market share for buy here pay here auto dealers, according to Forbes. This means that there will be a higher amount of competition between buying here pay here auto dealers. Now is a good time to take advantage of the market and see what kind of deals your local buy here pay here auto dealer is willing to make.

Even if you don’t have the best credit, a buy here pay here auto dealer can be a great option for getting into a new vehicle. This type of auto dealer understands that everyone goes through tough times, and they will not treat you any different for having less than stellar credit.

Fortunately, as the economy goes up and down, businesses such as buy here pay here auto dealers exist to get those with lower credit scores into a new car. A low credit score can be improved and it shouldn’t discourage you from seeking a new car.

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