Credit trouble? That sucks, especially when you’re trying to find an auto loan. It’s going to be more difficult, and some places might not even consider extending a loan your way, including used car dealers and banks. So, how will you get a car? Well, you could always shop on Craigslist and buy a used beater, but that won’t get your credit score back on track. Nor will you have anyone to hold accountable if something goes wrong with the car. You’re better off going to a buy here, pay here dealership.
What is a BHPH dealership? I’ll tell you that along with a few of the ways it can benefit your particular situation.
What is a BHPH Dealership?
A buy here, pay here (BHPH for short) is a dealership where you go to get a used car if you have bad credit or no credit.
You won’t get turned away due to poor credit, because BHPH dealers do everything themselves in-house. They set you up with a car in-house, they sell you the car in-house, and more importantly, do all the financing in-house. Since they’re able to provide you with a loan, they’re also able to charge you a higher interest rate in order to cover the potential cost of damage, repossession, or your failure to make payments.
Not saying you, the reader, would do this. Rather, this is just an explanation as to why interest rates are higher-than-average at a BHPH. Well, that and because of your poor or no credit score. It’s a way to cover themselves, so they’re able to help you get into a car.
You make all the payments in-house, too. A lot of BHPH dealers won’t accept checks or money orders for fear of them bouncing. Most put their customers on a bi-weekly pay schedule, and expect you to pay off the loan in cash right at the dealership.
How This Benefits You
Higher-than-average interest rates; bi-weekly, in-cash payments; all of this sounds negative, or may make you hesitant.
For starters, it’s not necessarily negative. It’s just the reality of the situation. There are plenty of ways a BHPH dealership benefits you.
First and foremost, a BHPH dealer is likely your last hope for a car. Without a car, you can’t get to work. If you can’t get to work, you get fired. If you get fired, you can’t make money. If you can’t make money, you can’t get a car or put food on the table. It’s all connected, and for someone with bad credit, who needs a quick solution when it comes to getting a car, a BHPH dealership is the way to go.
Secondly, BHPH dealerships still have to adhere to all the same rules, regulations, and standards (if not more) as your A-typical dealership. You can expect your BHPH dealership to report your loan payment progress to the credit bureaus. You know what that does? Increases your credit score. (provided, of course, you’re making timely payments). As your credit score increases, you’re able to work your way towards a better used car at that same BHPH dealership, or even venture to a traditional dealer.