Learning the Truth About Interest Rates & Buy Here Pay Here Dealerships

December 21st, 2015 by

When you’re in the market for a used car, you really want to make sure you check out all your options available to you. Sure, you know to be thorough, but have considered going through a Buy Here Pay Here OH dealership to finance your deal?

In doing  your research, you’ve found some pros and cons, weighed your options and what you’ve found is that a Buy Here Pay Here option seems like a great fit for you. It’s usually around this time when people start swooping in with their opinions and advice that even though you didn’t ask, they feel obliged to tell you stories from their neighbor’s cousin’s sister’s uncle who had a bad experience at that one dealership in Toledo, and well….

Of course, you want to listen to your friends and family because these are the people who know you best, but the best advice you can get is to follow your own intuition. Let’s face it, it’s your money, not theirs. You need to make the decisions that are best for you and this one of those times when you just have to trust your gut.

Because there are common misconceptions about Interest Rates at Buy Here Pay Here dealerships, we’re going to take a look into it to see if we can separate fact from fiction.


Buy Here Pay Here dealerships use the highest percentage of interest rates to get more money from you.  


There are a couple different reasons why dealerships choose the percentage they do, but any reputable dealership won’t chose the highest possible rate.  

Interest Rates

Every state has a regulated limit for dealerships and it does vary from state to state. The maximum amount that a state is allowed to charge is called the ‘state usury limit’. Unfortunately, some Buy Here Pay Here dealerships used the usury limit. Using the usury limit means two things: it’s going to generate the most income for the dealership and it’s going to give that dealership a bad reputation which is bad for business.  

Good Business Practices

One thing you’ll notice about Buy Here Pay Here dealerships is they often advertise their interest percentage rate out front. This is because they want you to know they offer better rates than their competitors. Not only are you more likely to visit their dealership because of their upfront low-interest rate, but this form of advertising keeps competition alive and fierce. These dealerships are literally competing for your business which puts power in your pocket.

It’s not a guarantee, but this can sometimes help you negotiate a better interest rate for yourself.  

If you’re able to get the interest rate you want and leave a happy customer, you’re likely to tell your friends about the great deal you received, Word of mouth testimonials is priceless to dealerships.

One more thing to consider: when dealerships offer lower rates, they are making less income off your loan than the dealerships who have high percentages. It can be assumed that the dealership that offers a lower rate wants to see you succeed so you can be a returning customer. 

Posted in OH