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Insiders Explain Why the Buy Here-Pay Here Industry Is Worthwhile

We can go on and on about why Buy Here-Pay Here dealerships shouldn’t be avoided (as we have plenty of times before). However, as a customer, you may not feel comfortable opting for this option until you’ve actually read some customer and insider testimonials.

Fortunately, we’ve compiled several of those positive reviews below. The internet is generally littered with negative takes on the industry, but these individuals justify the dealerships’ high interest rates while also denying any lies about these particular businesses.

If you’ve been thinking of exploring a Buy Here-Pay Here dealership in Columbus, see the testimonials of former insiders who would support that decision…

To start, user “43north87west” on city-data.com refuted the notion that Buy Here-Pay Here dealerships only focus on selling beater vehicles. Rather, these dealerships are still looking to stock their lot with dependable, trustworthy cars.

“Back when I was doing auction buying, there was a buyer for a buy here/pay here chain who would only buy specific pieces. You’d basically know which units he was going to be on before the sale even started. He would only buy clean units with clean titles, miles under certain limits, no announcements, no mystery noises, etc. Understand that he would sometimes buy cars that were not known to be great models in general, but when he did, he only bought the best examples of those cars. And I presume he only bought them to satisfy the demands of his local retail demographic.

Naturally, these lots overcharged on a retail basis when combined with their financing plans and warranties, but I think they offered some sort of basic warranty included with the purchase, and service for buyers. I only know one person who bought a car from one of those lots. He was a local property manager, a young guy from a small town with a young wife, a newborn, and he had absolutely zero credit. He did get a nice Grand Cherokee, and considering his very limited finances, he probably could have done worse. I guess it did help him build good credit, and he was good for the payments, so I’m sure it worked out for him.”

Ultimately, when it comes to expectations for your recently purchased used car, you’ll get what you pay for. If your budget can only fit a car that’s less than $1,000, then you should anticipate some mechanical issues. Overall, it’s clear that these dealerships aren’t attempting to pull a fast one and sell mediocre vehicles.

Next, Redditor u/nude_peril justified the Buy Here-Pay Here industry’s logic:

“There’s nothing particularly sinister about buy-here-pay-here lots, but they are designed to serve a market that isn’t served elsewhere. It sounds like you might be in that market. They’re dealing with a population that is frequently unable (or unwilling) to pay their debts. As a result, they take actions to protect themselves. Those actions include:

  • Charging above market (frequently “highest legally permissible”) interest rates.
  • Requiring a payment from every paycheck. If you get paid weekly, they want to get paid weekly.
  • Higher down payments. In many cases, they essentially cover their own cost with the down payment on the car. Everything after that covers overhead and profit.
  • Quick action when a payment is missed. They’re not going to wait 2 months and try to “work things out” with you if you miss a payment. They’ll just repo the car and sell it to someone else (and you won’t get your down payment back).”

Fellow Redditor u/coffejunki, who previously worked in the industry, also defended these dealerships’ high interest rates:

“I have a different view of these places but that’s because I work in one.

For many people, we are the ones you go to when you have no other choice. You don’t have the money nor the credit for a better deal. But a car is a necessity.

People who cry that we are ripping you off forget that we are working with the riskiest portion of the population, people who make poor financial decisions. We are not like other agencies that get paid by the banks or other financial institutions. Our money comes from you. If you stop paying, we have to make the effort of tracking you down and repossessing your car. If you disappear with the car, that’s a loss our company has to take. In our industry, there’s not a lot we can do or we can afford to do, to get our vehicle back. And people in your situation do one or the other a lot. We are not like a bank that can just write it off like no big deal. Every loss is a big deal.

That’s why we have high interest rates because you are the riskiest people to sell a car to. If you think you can do better, then you wouldn’t be here buying a car from us.”

Finally, Redditor u/trytych specifically worked in the credit departments for dealerships, and he explained how these high interest rates may not be as worrisome as they sound:

“Playing devil’s advocate here but paying 24.99% for a vehicle and being able to drive to and from your job is better than not having any financing options and walking/bussing/begging rides.

It’s a bit of a catch-22 and really the only way it’s going to get better is if the person makes a serious effort to better themselves in order to make more money or be very serious about making payments on time so that their next vehicle will have a better rate. That’s literally the very last chance for financing and there isn’t a lot of margin for error anymore when they reach that point.

Also it’s important to remember that there is a difference between the lender and the dealer. The dealer has every right to expect to make a profit on any vehicle that they sell, after all that is why they are in business. If they owned the vehicle for $2,000 and sold it for $10,000 I would guess there was probably over $7,000 in fees because these types of deals generally have a low profit margin. I know it’s hard to believe that when you’re talking $8,000 of markup but the lender is taking a big chunk of that to offset the risk etc.”

See? There are actually some who believe the Buy Here-Pay Here industry is necessary for those with bad credit. If you’re in a tough financial situation, you shouldn’t have any reservations about pursuing a vehicle from one of these dealerships

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