Buy here pay here car dealerships are everywhere for a reason. In a down economy a lot of people have bad or no credit or spotty payment history. Unfortunately, none of that will help you finance a car through a regular dealership.
Improving Your Credit through Buy Here Pay Here Dealers
Buy here pay here dealerships help good people who have no or bad credit get financed for a car. Some of them, although not all of them, also work with other companies so your payments get reported to the credit bureaus, which in turn improves your financial scores.
Having a higher credit score lowers your interest rate and raises your financial profile in the eyes of any company that you can get a loan from, including a bank or other finance company.
Higher Credit Risk = Higher Prices
One of the complaints of buy here and pay here dealerships are the prices. This isn’t by accident that they are a little higher than if you had A+ credit. Your payment history determines how risky it is to loan money out to you.
That’s the same wherever you borrow money.
The level of risk determines how likely it is that you may or may not default on your car loan at any point. Your financial history includes most of your major financial decisions throughout your life including loans, credit cards, missed hospital payments or mortgages.
How to Qualify for Financing
This profile is combined with your current job, job history, income, and current living situation to determine whether or not they can finance you. This also determines how long they can finance you for and also how high your interest rate will be.
Some factors that will hurt your chances of getting financed for a car is if you’ve had a previous repossession, if you have a current auto loan, if you’ve missed loan payments, if you have medical bills that aren’t paid off, past foreclosure, past bankruptcy or if you are currently in the process of bankruptcy.
If you have any of these issues then it will be next to impossible to go through traditional dealerships. If your looking for cars from auto dealers, buy here pay here dealerships are your best bet.
A buy here pay here dealer will work with you and get you financed even with all of the listed finance issues you may have had or currently have.
Bad Borrowers Increase Risk for Everyone
Loans are often short term, as auto buy here pay here loans are higher risk than other loans. Believe it or not cars vanish completely or are chopped up and sold for parts.
Sometimes customers will drive the car into another state and abandon it leaving the dealership to pay for the towing and recovery all the way back home. Depending on where it ends up it could cost a $1,000 or more. Disgruntled customers will also crash them and abandon cars as they are sometimes leaving them completely totaled or damaged, where fixing it wouldn’t make sense.
There is a higher rate of default on buy here pay here loans which also hurts and disrupts the flow of business raising the costs of running auto dealerships. These are the types of customers that drive up the buy here pay here prices all over the United States. While they aren’t every type of buy here pay here customer, that small group raises the prices and interest rate for everyone else.
Prices at buy here pay here dealerships, and every other market in the world, is determined by the amount of risk involved to do business. The less risk involved the less it will cost. Take McDonald’s for example. The risk and cost of doing business is so low now they can charge you $1 for a large coke and $1 for a cheeseburger or Spicy chicken sandwich. They have distribution centers located all over as well as farms to raise cows for their beef and lettuce and whatever else ends up on a burger.
Because they have all these locations they know exactly what to expect because it all falls under a unified set of company values. They control the flow so it in turn lowers the risk and cost of doing business so you can have a meal for $2-$3.
Imagine if you were in Russia right now where their currency is plummeting. Owning a business in Russia has always been a risky proposition because of how Putin runs the country. Just a few months ago before this all happened the Russian government, in response to sanctions imposed by the United States, went around shutting down McDonald’s in key areas for no reason except to send a message.
Drilling for oil off shore is also a highly risky proposition which in turn is part of the reason why oil and gas, up to this point, has been so expensive.
Buy here pay here prices, just like everything else, are determined by the speculation involved with doing business. This doesn’t make buy here pay here any worse than any other dealerships.
Rebuilding Credit
Buy here pay here dealerships can help you get back onto the right track to rebuilding your finance history. Most of them work with outside companies to report your payments to all the major credit agencies. In many cases they will also work with you if you have a low down payment.
These stores typically have a wide variety of trucks, SUVs and cars to choose from.
When searching for flexible Colorado auto sales, buy here pay here dealers can be found in Denver, Lakewood, Littleton, Aurora, Thornton, Northglenn and Englewood.
