Buy here pay here car lots are everywhere. Most of the time they are found in or around cities in densely populated areas. They are designed to get people financed with no credit or bad credit and sometimes with a low down payment. If you have credit issues a buy here pay here dealership may be your only choice.
There are pros and cons to everything you do in life including buy here pay here. It’s up to you to decide whether or not buy here pay here is the best route for you or if there are better options.
The bottom line is there are good buy here pay here dealerships and bad buy here pay here dealerships. Before you make a choice make sure you understand what you’re getting into.
Cons of buy here pay here financing
You have to pay interest rates on every loan you take out for the rest of yourself. A car loan is no different.
A buy here pay here loan is considered high risk financing. It’s the same thing in a regular dealership except instead of buy here pay here they call it “special finance.” Either way you’ll be paying between 17-21% interest for a dealership to take on your loan.
This is because of a few bad apples who take advantage of lax financing which results in higher business costs. Sometimes they disappear into other states never to be seen from again. Other times they are chopped up and sold for parts. There is a high risk of default as well which is all reflected in the interest rates.
Pros of buy here pay here financing
No credit check
In a sense a buy here pay here dealership doesn’t have to check your credit. Some of them do. Some of them don’t waste their time. Either way they are way more flexible in their lending practices and can work with you on just about every credit issue.
Even if you have a previous repossession, foreclosure, bankruptcy or missed credit card payments they can still finance you.
Bad credit can happen to good people and everyone deserves a second chance. Buy here pay here dealers understand this more than anyone and can be the start of getting back to having good credit.
Improve your credit score and lower your interest rate
When you have bad credit regular dealerships think you’re radioactive. They won’t touch you and if they did they would charge you higher interest rates.
While it isn’t standard most buy here pay here dealers work with independent companies that report your payments. Reporting your payments boosts your credit rating. A higher credit rating can result in lower interest rates which means you’ll save money over the long run.
Flexible payment plans
A buy here pay here dealership will always work with you on your payment plan. They are more understanding than anyone. Often times they will finance you with a low down payment and give you a period of time to pay off the rest. They can even defer or delay your first payment for 60-90 days.
These are practices buy here pay here dealers have adopted because most people who finance through them need help getting back on their feet. They need help managing their everyday bills. Buy here pay here dealers more often than not will work with you. At a regular dealership that works with a bank isn’t as flexible with your payment schedule.
At the end of the day bad credit happens to good people. There are more pros to financing at a buy here pay here dealership than there are cons. You’ll be able to finance a car and rebuild your credit history at the same time.
Your credit is one of the most important things you can do and can save you lots of money over the long run.
You can found buy here pay here car lots in Lakewood, Aurora, Denver, Commerce City, Thornton, Northglenn and Littleton.
Make sure to do your homework before buying from a buy here pay here dealership.