A buy here pay here dealership offers in-house financing, meaning that they lend you the money to purchase a car directly from the dealer. This can be an excellent option for those with bad credit who need a vehicle but aren’t able to obtain a loan from a traditional bank or lender. However, it’s important to understand how these types of dealerships work and the possible drawbacks before buying a used car with BHPH financing.
What is an example of buy now, pay later?
In buy here, pay here (BHPH) lots, the dealership acts as the finance company. This allows them to streamline the process by keeping all steps, including arranging the financing, in one place. It can also help them be more flexible with buyers’ budgets since they have a vested interest in making sure the buyer can make payments. More info : buyherepayhere.io
Despite the convenience of a buy here, pay here car lot, you should be aware that these types of dealerships may charge higher rates than other lenders. Additionally, BHPH dealers have the option to sell you a car for thousands of dollars more than its value, warns the Consumer Financial Protection Bureau (CFPB).
Another potential issue with BHPH is that they don’t always report on-time payments to credit bureaus. Although this has recently changed in the used-cars industry, it’s best to ask your dealership if they will be reporting your auto loan’s payment history to the major credit bureaus before you sign on the dotted line. If you find that you’re not able to keep up with your BHPH loan, the best option for avoiding repossession is filing bankruptcy. This can protect your car and other property while you rebuild your credit.