By now, many of you have probably seen John Oliver “exposing” how horrible buy here, pay here dealerships are on his talk show. In it, he provides a comical (and quite painful to sit through) explanation of BHPH dealerships, and how they are out to get the consumer. News flash — not all of them are. While that might have been the case when they first opened, it’s not in 2016. Apart from not wanting to take advantage of a consumer, there are also a lot more rules and regulations set in place to protect the consumer and prevent the dealerships from screwing with them.
Even if a single dealership is considered to be unscrupulous, don’t assume all of them are. Why? For starters, you can’t let one bad apple ruin the bunch. Secondly, until you face bad credit problems and step into the shoes of that consumer — which is a situation a wealthy talk show host will likely never experience — you don’t know how hard it is to find a car. For some consumers, it’s their last hope of getting transportation to and from work — why crush it with a generalized assumption?
BHPH Dealers Take Risks to Help the Consumer
Oliver even goes so far as to take us on a “magical journey” about a used 2003 Kia Optima that the LA Times followed. It kept getting resold after being repossessed again and again, eventually totaling more than eight sales and seven repossessions. The funny part about this is that he takes us on this “magical journey” without providing any context as to why the car was repo’d each time.
Most likely, the owners didn’t plan ahead to keep up with the payments, which is no fault of the dealership.
Why can I say that confidently? Because, those who have bad credit issues have sometimes fallen into this hole of financial irresponsibility. Which means they will have trouble keeping up with car payments — regardless of how expensive or inexpensive their payment is — or default on the loan entirely, and cost the dealership money. This is why these dealerships have such a strict repossession policy. They’re taking a risk when it comes to financing consumers with bad credit.
BHPH is the Only Hope for Some Consumers
Am I saying that all buy here, pay here dealers are saints looking to help bad credit car buyers? No. Am I saying that all bad credit consumers are financially irresponsible? No. There’s two sides to every coin, and it’s foolish to just look at the one side laying flat on the table. It’s not okay to lob all the dealerships together as this festering, evil clump by using one car that was repossessed (for reasons unknown) by the same dealership multiple times as an example.
Why is this not okay? Because, for some bad credit consumers BHPH financing is their last hope of getting a car. Instead of being negative and kicking desperate consumers while they’re down, why not focus on the silver lining of the situation?
Getting a bad credit car loan will actually provide a world of good if both the consumer and BHPH dealership work together. It’s a great way to build financial responsibility, and get your credit score back on track. Contrary to popular belief, BHPH dealerships do report your in-house payments to the credit bureau. Just like a “normal” car dealership does.
Bottomline: you should be wary of any dealership or automaker. The recent VW scandal proves that. But, does that mean that all franchised new and used car dealerships are evil? No. All independent car dealerships are out to get you? No. Even if the dealership that did repossess the car was in the wrong, you can’t assume the dozen is spoiled because of one bad egg.