Buy Here, Pay Here Dealerships: Friend or Foe?

May 4th, 2018 by

Hand of a person in a blue shirt shaking hands with a person in a pink shirt

Purchasing a new car can be a stressful endeavor.  Between choosing what car best suits your needs, what dealership you can trust, and how much you can afford to spend, not to mention negotiating for a good rate (if you can even get approved for financing), it can become an overwhelming task. An Car Week survey of more than 1,000 Americans revealed that the average U.S. citizen thinks shopping for a new car is more stressful than getting married. That’s right—signing on the dotted line for a vehicle stresses us out more than pledging a vow that binds us to our romantic partner for life, even taking into account all the costly hoopla, pitfalls of etiquette, and pressure to be Pinterest-perfect that goes along with the wedding.

Instead of new drivers being excited about buying a car or truck, daydreaming about shaking the sales rep’s hand, accepting the keys to their very own ride, and revving the engine as they drive off the lot, Edmunds found almost half of us would rather clean a toilet. Why do you think this is? The level of trust our culture has for sales representatives at secondhand car lots is notoriously shameful; it’s brought us the caricature trope of the smarmy used-car salesman. (Obviously, they’ve never shopped for used cars here at McCluskey.) And these aren’t the only pressure points in the car-buying saga.

Often, consumers get halfway through the hunt to discover they cannot get approved for financing due to a low credit score or lack of significant income. Then they begin to wonder, even if they can get approved, will they be able to keep up with a monthly payment? And if they aren’t able to pay, what happens then? If we were talking about cable TV, a person could choose to go without, but a car is often a need just to stay afloat in today’s society.

Buy here, pay here dealerships are sprinkled throughout the landscape and are an option for people struggling to get approved for financing. You may be asking yourself what a buy here, pay here dealership is exactly.  Are buy here, pay here dealerships a good choice?  How do people filter the good from the bad when they know very little about cars or the buying process? Let us explain. A buy here, pay here dealership provides in-house financing.  There are definitely pros and cons to this approach when buying a car.  The best advice is to do your research.


How do buy here, pay here payments work?

A buy here, pay here dealership makes it easier for people with low credit scores to be approved for financing.  While this sounds like an ideal situation for those in this credit category, be aware that the dealership will still run a credit check.  After that, they’ll determine how much they will lend you and at what interest rate. The dealer will then concentrate on the cars your approval qualifies you for, not necessarily the cars you want.

For some people, a buy here, pay here lot still may feel like the only or best option.  Therefore, you need to be aware of some possible negative aspects of buy here, pay here dealerships. Price tags could be well above the Kelley Blue Book value, interest rates may be significantly higher, a large down payment may be required, and a higher number of payments may be included in financing.  For example, buy here, pay here buyers may have to make payments weekly or bi-weekly, as opposed to monthly, depending on the frequency at which they receive their own paychecks.


What else should I know about buy here, pay here dealerships?

You’ll also want to take into consideration how the dealership wants to be paid.  Many buy here, pay here dealerships require cash or money orders as their form of payment. This means you could be delivering your payments in person every other week. If you do decide to go with a buy here, pay here dealership, it’s smart to make sure it is conveniently located, or you may be going out of your way quite often— wasting both time and gas money.

Some buy here, pay here dealerships may not report your on-time payments to a credit bureau, meaning your credit score will not be improving as you build history. Tracking devices are sometimes put on cars from buy-here, pay-here lots to make it easier for the vehicle to be repossessed if payments are not being made at all. It sounds drastic, but these dealers are business owners, and they expect to protect their investment and turn a profit.

Another thing to take into consideration is the fact that you are purchasing a used vehicle in as-is condition.That means it is most likely not covered by any warranty, although you could potentially purchase a warranty from the dealership. The vehicles are going to be much older (typically around ten years old) used cars and trucks with higher mileage. A purchaser should definitely have a vehicle from a buy here, pay here dealership inspected before signing on the dotted line, even if the dealer seems straightforward and trustworthy—and especially if you do not know much about cars.



  • Easy approval for financing, regardless of credit score
  • May report on-time payments to a credit bureau, increasing your credit score
  • Vehicles could be more affordable
  • Accepts cash/money orders as payment (a benefit for people who don’t use traditional banking)




  • Potential high-interest rates
  • May not report on-time payments to a credit bureau, not affecting your credit score
  • Vehicles are older with higher mileage
  • May ONLY accept cash/money orders, requiring in-person payments


How does a consumer protect themselves, especially if they have a low credit score and a buy here, pay here dealership is their best option? By educating themselves on the process. Families without smartphone or Internet access can utilize computers at public libraries, and others have the whole Internet at their fingertips from home Consulting a trusted friend or neighbor who has purchased a car recently may help educate you on what to expect during this process and aid you in making smart choices.

A shopper’s best protection is to know exactly what they are looking for. Go in prepared, know your credit score, be aware of what kind of down payment you can afford, and be sure of how much you can consistently afford to spend on monthly payments.  Also, be honest with any salesperson or dealer you are working with. They are going to run a credit history report, so you should develop a sound relationship with them.  It may not make a difference financially, but they are going to be more willing to help meet your needs if you have a good rapport.

You should also know what features you are looking for in a car and be prepared to get it inspected before you purchase it.  A lot of dealerships will allow you to test-drive the car for several days, which is the perfect opportunity to have everything checked out by your regular mechanic, or one a friend has recommended, to make sure it’s the best fit. Also, it is okay to walk away, shop around, and come back if you decide it’s right. And if a sales representative uses high-pressure tactics, that’s your cue to find the nearest exit. The right salesperson will be honest, give you time to choose, and listen to what you’re looking for. Come to McCluskey Automotive and let us show you a professional level of service while finding out what we can do to get you the car you need.

Posted in Buy Here Pay Here