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Buy Here Pay Here Dealerships

When your credit score is low or you’ve been turned down by traditional lenders, buy here pay here (BHPH) dealerships may seem like an easy solution. But they’re not always the best option. In this article, we’ll explain how buy here pay here financing works and offer some alternatives to consider.

What is a buy here pay here dealership?

Buy here pay here near me dealerships offer in-house financing, which means they finance the car themselves instead of working with outside lenders. Typically, these dealers will make the loan arrangements and collect monthly payments directly from the borrower. As a result, they can often process applications more quickly than other lenders, especially for applicants with less-than-perfect credit.

On the downside, BHPH loans are usually subject to higher interest rates than other financing products. They also tend to have stricter terms, including a lower credit limit, less wiggle room for late payments, and tracking devices on the vehicle.

Additionally, the cars sold on BHPH lots are generally older and lower-value. They’re not as reliable as newer models, and they can be a significant financial burden for the borrower.

Considering all of the drawbacks, it’s best to avoid a BHPH dealer unless you’ve exhausted other options. If possible, try to save for a down payment or obtain a personal loan from a friend or family member before purchasing a car with an in-house lender. Doing so will reduce the risk for the lender and could help you qualify for a larger car loan amount with better terms.