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The Pros and Cons of Buy Here Pay Here

Businessman holding car keys in a dealership

There are pros and cons to just about every method of buying a car. Today, we will discuss the pros and cons of using a Buy Here Pay Here (or BHPH) dealership for finding and purchasing yourself a car. If you know anything about BHPH lots, you know that they should never be a car buyer’s first option. Major dealerships offer financing deals that are much more lucrative when it comes to interest rates and how that affects the final price than BHPH dealers. However, if you have really bad credit or no credit at all, many dealerships and banks won’t take the chance on financing your purchase. If you don’t have the money to buy a car that will suit your needs outright, and you can’t get a dealership or bank to finance your loan, there aren’t many choices left on the table to choose from.

A BHPH dealer can get you in a car right away, no matter what your credit report looks like, as long as you’re willing to overpay for the car by paying high-interest rates and stretching out the payment plan so that you end up paying for the car up until the point that it’s time to think about getting a new one. A BHPH dealer that reports the payment histories to the credit bureau is actually a way to repair or build your credit to a level where you may have more options the next time you’re in the market for a car. Just be careful, not every BHPH dealer reports to the credit bureau. So if you’re paying off a car and making timely payments in hopes of building or repairing your dismal credit score, you may be disappointed to find out that all your hard work and timely payments have done nothing for your credit score because the dealer you were going through doesn’t report to the credit bureau. Be sure to ask ahead of time and find a BHPH dealer that does report payment history to the credit bureau, as one of the main pros of BHPH financing is the opportunity to build or grow your credit score.

A great way to save money while using a BHPH loan is to trade in your old vehicle as a payment towards the new car you are trying to acquire. Many BHPH loans are small and not worth the hassle of setting them up, but usually, they save you a good bit of money when you look at the bigger picture. Imagine if you have an old gas guzzling mobile from the late 80’s, and you’re trading it in for a gas efficient economy car. Not only is the trade-in going to knock a chunk of change off of the amount that you owe on the new car, it’s going to save you tons of gas money and get rid of an old clunker in the process.

When looking for the right car at a BHPH dealer, you may want to mention being interested in a certified pre-owned vehicle. The price point on these cars may be a bit steeper than non-certified vehicles, but having a thoroughly inspected car instead of one that could fall apart as soon as you drive it off the lot, may save you lots of money down the road on maintenance and help to ensure that your investment stays on the road for as long as possible.

Another drawback to BHPH dealers is that many of them don’t offer warranties on their vehicles. Sometimes warranties are offered, but not on every vehicle on the lot as some are too old to cover. A used car without a warranty option should be a red flag for any potential car owner. A reputable dealer should offer warranties for the cars on the lot worth investing in. If no warranty is offered on the car you are interested in, you should think long and hard about whether or not it is the right car for you.

Another plus about buying from a BHPH lot is that many BHPH lots offer a 48-hour return option if you are not satisfied with the car you chose originally. So, you’ve been car shopping all day and you ended up at a BHPH dealer. You find a car that looks like the one for you, haggle the dealer about the price and finally arrive at a deal you can get behind. You sign along the dotted line and the dealer gives you the keys to your new ride. You pull out of the dealership and onto the street and all of a sudden the car starts to seize up. You try a few things, talking to your car, patting her gently, but the car is still not handling right and you realize you made a big mistake picking out the car that you chose.

With most dealers, you are stuck with your decision, that’s your car now and you have to deal with it, but with most BHPH lots, you have a 48-hour window to decide that the car is not right for you. Make sure you are dealing with a BHPH lot that offers the return window in case you find yourself in this situation after you make your decision. Many reputable BHPH dealers also offer a free CarFax report on the vehicles they sell. If you have bad credit, BHPH lots are much less of a time waster than the traditional dealership, who will spend hours showing you the car of your dreams only to let you down drastically when it’s time to see if they can help you finance the car. If you know you’re credit is shot, you may not want to waste your time at the traditional dealership only to come up disappointed. Sometimes, a BHPH lot is the only decision for a potential car buyer, and the purchasing process is a lot more realistic and hassle-free if you are aware of your financial position.

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