A couple is signing paperwork at a Buy Here Pay Here dealership.

How Buy Here Pay Here Can Help You Finance a Car with Poor Credit


If it’s time to purchase your next vehicle, but you have poor credit, you may be concern about your chances of getting approved for financing. However, Buy Here Pay Here options allow drivers of all credit to secure reasonable financing terms for a high-quality used vehicle. From understanding exactly what BHPH is, to addressing common concerns with the program, here’s everything you need to know about taking advantage of this type of financing at your local used car dealer.

What is Buy Here Pay Here?

If you’re searching for your next vehicle but have poor credit, you may have heard about Buy Here Pay Here options available at your local used car dealerships. However, many drivers interested in these programs are not entirely sure how they work. Essentially, the idea behind the financing is quite simple. Instead of financing through a third party lender, like a local bank or national automotive finance provider, the loan for your next vehicle is provided by the dealership itself. This allows the dealership to take on what may seem like riskier loans to other organizations and offer more flexible terms. Drivers who opt for Buy Here Pay Here financing will make their payments directly through the dealership for the length of their loan, as well as discuss any options, questions, and concerns with the dealership when needed.

Guaranteed Financing for All Credit

The most appealing quality of Buy Here Pay Here financing is that it offers guaranteed approval for credit of all backgrounds. Low credit or no credit is no problem if you are financing through this arrangement. This is because with the dealership taking on the risk directly, they are able to carefully determine the terms that suit your situation and develop a plan that works for your budget and lifestyle. BHPH financing is typically based on your income, instead of your credit, and monthly payments and an overall spending limit are determined based on what you can afford each month. For this reason, many BHPH programs also offer small down payments and low monthly payments, making it an ideal option for drivers looking for an affordable solution.

Choose from High-Quality Vehicles

The dealership will determine a suitable spending limit and offer a personalized selection of available vehicles. Since the dealership wants your BHPH loan to be a good investment, they are likely to offer high-quality used vehicles for you to choose from. With Buy Here Pay Here programs, you won’t be able to choose from new vehicles, but will instead be able to choose from a variety of practical used vehicles. The number of vehicles you’ll have to choose from will be dependent on the dealership you choose. For this reason, you’ll want to choose a large and reputable dealership that specializes in used cars. Smaller dealerships, or dealers who typically seek to sell new vehicles, may offer very limited options when it comes to their financing plans. If at any point you’re not satisfied with the vehicles offered through the BHPH program you’ve been exploring, be sure to seek other options.

Build Your Credit with On-Time Payments

When used properly, BHPH can improve your credit score drastically. However, there are a few factors that you’ll need to be careful of. For instance, if you’re hoping to build your credit score using this type of loan, you’ll want to verify that the dealership you choose reports your payments to the major credit bureaus. Otherwise, your payment history will have no effect on your current credit. Of course, you’ll also have to make sure that you consistently make on-time payments towards your loan. Late payments will have a negative effect on your credit score, as with any other loan, so be careful to follow your payment schedule to the best of your ability.

A smartphone is showing a credit score app with average credit.

During the financial process of purchasing your vehicle, be vocal about what you can and can’t afford per month for your vehicle. This will ensure that your BHPH loan is designed to be as manageable as possible based on your needs.

BHPH vs Bad Credit Car Loans

One of the major questions that arise among drivers when exploring Buy Here Pay Here financing is how it differs from bad credit car loans. Some drivers with poor may still be able to secure a traditional auto loan; however, the associated loan terms can often be undesirable. This is because drivers with poor credit will likely have to agree to very high monthly payments in order to secure a traditional car loan, especially if they do not have a large down payment available. With poor credit also comes a high-interest rate, which means your high monthly payments will be around for years to come and the amount you pay off will far exceed your vehicles initial value.

However, with BHPH programs, your monthly payment is specifically designed to offer terms that you can afford based on your income. This means you’ll be offered reasonable and more flexible monthly payment options. Some dealerships even allow you to choose between weekly, bi-weekly, and monthly payment plans based on your income schedule. Overall, BHPH is the more flexible financing option while a traditional car loan can quickly become unmanageable for drivers with poor credit.

Common Buy Here Pay Here Concerns

As with any form of lending, there are common concerns among consumers when it comes to Buy Here Pay Here financing. One of these concerns regards the program’s high-interest rates. Typically, high-interest rates are applied to these loans as a way to lessen the risk taken on by the dealership. However, these rates are likely to be the same or less than the interest rates drivers with poor credit would be given with a bad credit car loan. While the interest rates may be high, the monthly payments will be specifically chosen to match your monthly income.

Another common concern is that drivers who choose these loans will be given vehicles in poor condition. This may be true among untrustworthy dealerships; however, many reputable used car dealerships will offer high-quality used vehicles for their BHPH program applicants. A trustworthy dealership wants your loan to serve as a stepping stone into other financing solutions and vehicle purchases. For example, if you purchase a vehicle through a BHPH program and are able to pay it off with on-time payments, you’ll be eligible to upgrade your vehicle and will likely have a lower interest rate given your improved credit. If a dealership offers a low-quality vehicle, you will likely be unwilling to purchase another vehicle from them in the future.

Choosing a Trustworthy Buy Here Pay Here Program

When you’re looking for Buy Here Pay Here dealership near you, you’ll want to choose a large and reputable used car dealership. Choosing the right BHPH program will allow you to choose from a wider selection of high-quality used vehicles while ensuring that fair and reasonable loan terms are created around your income and budget. Before choosing a dealership, be sure to check out any online reviews and inquire about their BHPH process. Dealerships that offer low-quality vehicles for their BHPH programs, or dealerships that do not report payments to credit bureaus, should be avoided. If you’re local used car dealer is helpful, knowledgeable, and flexible with their BHPH program, and offers an excellent selection of used cars, you’ve probably chosen the right place.