To buy a car, new or old, people would go to a traditional dealership, select the car and deal with financial arrangements. They will own the vehicle easily and will pay off the loan in easy installments. It’s simple! However, it may be a rock-climbing experience for those who don't have a good credit score. Their hopes to buy a car could be shattered down several times by several dealerships whose criteria does not allow working with such people.
Traditional dealerships set such criteria to avoid every way by which buyers' bad credit score could take a toll on their business. After all, the consumers' credit history shows up that they have been failed miserably to pay off their loans. What if the same thing happens again?
Consequently, there is almost nothing that can help these buyers, but Buy Here Pay Here (BHPH) lot. BHPH’s are dealerships that will sell a car to you and also finance you for the same, on the same spot. So the dealer earns not only from the car that he would sell but also from high interests on the financed amount. The hefty profits that the dealer makes, is the very reason that he does not mind how your credit history looks like.
The major difference between a traditional dealer and BHPH dealer lies in the manner things occur. Traditionally, the buyers first choose a car they like and then get into the financial stuff related to the purchase. Whereas with a BHPH, the process initiates with the buyers explaining their financial situation to the dealer so that he can filter the car or cars suitable to the budget. This is kind of sad on the part of buyers as they may have to confine themselves to a few options, but they clearly have no option than accepting this harsh truth with aplomb.
Most BHPH make a weekly, or bi-weekly or bi-monthly payment a mandatory condition to secure the loan. And these payments may have to be made at the dealer’s office. Also, some dealers set a timer in the car that gets stopped on missing out a payment. In response, the timer disables the car engine which can only be run again when the buyer makes the payment.
What Are The Main Benefits Of Buying From BHPH?
In all industries, there are good as well as bad organizations. So, when you have decided to go to a BHPH, make sure you have done enough research on the dealership and are confident about its reputation. The notorious ones must have some wrong-doings on the record as it takes years of time to acquire what actually ones are known for. But a professional, reputed BHPH will surely aim to be known for good car dealership services as the objective would be to increase customer base.
The buyers going to BHPH will most likely be paying high-interest rates and compromising with an average quality car. Knowing this beforehand, you must turn this into an opportunity of rebuilding your credit score. Be regular of payments and try to pay off the loan earlier than it has to be paid. Also, ensure that the BHPH lot reports credit info to credit agencies. Eventually, it will help you to buy a better vehicle at a lower interest rate from a traditional dealership.