The Ultimate Buy Here Pay Here Buyers Guide For Colorado
There are many different forms of financing most of which aren’t available to you if you have bad or no credit. If you have fallen onto hard times and have a low credit score and a low down payment there are places you can go to both finance a car and rebuild your credit profile. These specialized dealerships can finance you no matter what kind of credit issues you’re working your way through. They are called buy here pay here dealerships. Buy here pay here dealerships don’t go by credit score. Usually their loan process is based around stability. How do these buy here pay here dealerships work and where in Colorado are they located? I’m here to break down the ins and outs of buy here pay here and what you can expect when you go to one.
What exactly is buy here pay here? Buy here pay here is a dealership that approves auto loans for people who have credit problems and a low credit score. A low credit score is relative in that in this day in age you need a 700 or above to get financed at a dealership as well as good job history. A buy here pay here dealer can look past credit issues and get you into a car and also help you rebuild your credit profile. Buy here pay here is in reference to the fact that you buy the car at the dealership and also pay them there as well. The dealer finances you directly instead of selling the loan off to the bank.
Are all buy here pay here car lots exactly the same? Just like any other dealership out there there are some good ones and bad ones. The goods ones are understanding and willing to work with all types of credit. The bad ones just want your money and will sell you cars that are more likely to break down then last the length of the loan. You’ll want to only buy from the dealers who report your credit history while also servicing their cars before selling them. All cars in Colorado are as is no warranty expressed or implied. That doesn’t mean you aren’t protected in some way. Always request the service records before buying.
What do I need to bring? You’ll need a drivers license, proof of income and proof of residency with your down payment cash and 99% of the time you can drive off with a car in under 2 hours. If you don’t have pay stubs you can often time show bank account statements to get going. You’ll also need insurance which can often times be arranged right at the dealership.
How much down payment do I need? A lot of buy here pay here dealerships require a $1,000 down at least to get started. If you can’t afford that there are other places that will split your down payment up over a period time. That means you can put $99, $100, $200 or $300 down and drive off with the car while paying the rest of the down payment later on. Down payment is important because oftentimes the buy here pay here dealer has to pay all taxes and fees up front. You’ll also end up with a lower payment and save money on interest the more money you put down up front as that money goes towards the principal.
How long are buy here pay here auto loans? They are usually 3 years or less which means you’ll own the car much faster. Payments will be a little higher but you’ll lose less on the car as it depreciates because you’ll own it out right much faster. If you need something cheap you can do a 60-90 day same as cash with no interest. Buy here pay here dealerships are more flexible with you because they understand how much your credit history can vary and there is no one size fits all.
How much money do I need to put down? It really is case by case dependent. If you go to a regular car dealership you usually need a $1,000 down. If you go to a buy here pay here you can put down a few hundred and walk away with the car paying the rest off over 45 days or some other time frame.
Do the cars have warranties? It depends on what dealer you go to. Some of them carry limited warranties but most of them don’t have one already on the car. They can sell you one otherwise the car is as is no warranty expressed or implied. Make sure you find the dealer who services all of their cars before selling them. The bad ones will sell you a car with a problem.
What kinds of cars should I expect at a buy here pay here? You can expect every type of car and every type of model. You can get an suv, truck, full sized truck, van, mini van, hybrid and whatever else you need. They also carry Ford, Chevy, BMW, Lexus, Mercedes, Pontiac, Buick, Nissan, Toyota, Honda, GMC, Volvo and more.
What about my credit history? If you had good credit you probably wouldn’t even bother with a buy here pay here. At the end of the day bad credit can end up costing you a lot of money and it’s in your best interest to fix your credit history. Not all buy here pay here dealerships do this but only go to the ones that report your payments. If they don’t report your payments then there is no point in buying from them. Once you rebuild your credit profile your credit score will go up substantially. Once your score goes up you’ll get much lower interest rates and payments on everything you take a loan out. You’ll also be able to get more credit cards as well which also builds your credit.
How does the application process work? The buy here pay here application process is somewhat backwards in that they approve you first before being shown cars. By approval I mean they do a customer interview and see what you can afford. It’s not like a regular dealership where they want to sell you the most expensive thing possible. Buy here pay here salesman don’t make money on how much profit on each car. They get a flat amount for every car they sell so forcing you into something you can’t afford is the last thing they want. There goal is to make sure to find you something you both like and afford at the same time and can also pay off. They understand that because you may have bad credit you can’t afford everything on the car lot. The buy here pay here salesman also needs to ensure they you pay on your loan because if you default too soon they won’t make any money.
So you can rest assured that when you go to a buy here pay here car lot they aren’t going to force you into something you can’t afford. When you sit down they ask you stuff like how much you can afford with payments, how much you make, when you can pay, if you can afford insurance and why you may have bad credit. Once they assess the risk level and what you can afford they show you a set number of cars, trucks or suvs that fit your needs. You then drive them, figure out which one fits your budget best and then do all the paper work and drive off.
Which buy here pay here dealerships in Colorado should I go to? That’s really ultimately up to you. Buy here pay here dealerships are located all over the states but most of them can be found in Denver, Lakewood, Aurora, Littleton and Englewood. There are also some in Thornton, Longmont, Ft. Collins, Glendale or Englewood. Remember, you have to pay directly at the dealership so convenience is paramount. Some of them let you pay online or deposit at a local bank so you’ll have to make sure before you purchase the car.
Ultimately, it comes down to whether or not the dealership reports their credit, reconditions their car, splits up your down payment, defers your first payment 60 days and also has a short term loan. If they do all those things then play ball. If they don’t then you should avoid them.
Remember, when you go to a buy here pay here dealership you’re protected by a bunch of different laws. Some of those laws include:
The Fair & Accurate Credit Transaction Act
The Safeguards Rule
The Disposal Rule
The Fair Debt Collections Practices Act
State & Federal Unfair & Deceptive Practices laws
The Red Flags Rule
The Risk Based Pricing Rule
That’s a lot of rules to follow.
State Usury laws
The Truth in Lending Act
The Used Car Rule
The Privacy Rule
It’s not like the wild west of car dealerships like some people believe. If you feel you are getting taken advantage of refer to one of these laws to make sure everything is ok. If you have any questions about whether or not you can get financed give us a call and we can help you 303-623-1926