Understanding Buy Here, Pay Here Financing

April 6th, 2018 by

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There are so many ways to own a car these days – you can buy or lease from a dealership, you can buy a car online, you can get a loan from your dealership or from your bank or credit union, or you can pursue Buy Here, Pay Here financing.

There’s a very good chance you just stopped and asked yourself “what is Buy Here, Pay Here financing?” Not extremely well known amongst many consumers, Buy Here, Pay Here financing can be a saving grace for car shoppers who have less than perfect credit – in fact, it’s really ideal for buyers who have poor or no credit history and who have struggled to obtain financing from more traditional avenues, such as a bank or credit union. While Buy Here, Pay Here financing is not the perfect solution for every car shopper, there is undoubtedly a benefit to understanding and familiarizing yourself with Buy Here, Pay Here financing in Indianapolis if you are considering buying a car with less than ideal credit.


What is Buy Here, Pay Here Financing?

The best way to understand Buy Here, Pay Here financing is actually to realize that it is to be used as last resort. Only once all other financing options have been exhausted, should car shoppers pursue Buy Here, Pay Here financing – and that is because in a Buy Here, Pay Here transaction, the dealership actually acts like the bank, “loaning” customers the money they need and cannot get approved for through a traditional financing plan. While that doesn’t sound so bad, the trouble is that the dealerships need to protect themselves from consumers who have already shown that they have a poor history of paying their bills on time – which is exactly what a bad credit history details. So to safeguard themselves against the threat of unpaid bills and substantial losses, Buy Here, Pay Here dealerships need to charge extremely high-interest rates – in many cases, double-digit interest rates, which can make for higher payments than a customer may actually be able to afford.

This is why it is absolutely critical that shoppers work only with respectful, honest and trustworthy dealerships that are known for being above-board and customer-focused. You do not want to get into a Buy Here, Pay Here car loan from an untrustworthy or shady dealer because it can be very easy for an unscrupulous dealer to take advantage of you and your not-so-great financial state. If you decide to go down the Buy Here, Pay Here route, be sure to understand exactly what your monthly payment will be, how much interest you will be charged and be sure that you are completely aware of other rules that may apply to your loan. For instance, some Buy Here, Pay Here dealerships may insist that you physically deliver your payment to the dealership rather than pay online or mail it in. Your Buy Here, Pay Here dealership may also have stringent rules regarding making your payments late, and you’ll want to be sure to adhere to the restrictions. You absolutely do not want the dealership taking your car back for late or unmade payments.

As you can tell, Buy Here, Pay Here financing is not exactly the ideal way to purchase a vehicle, but for people who have experienced bouts of bad credit or financial trauma, sometimes Buy Here, Pay Here financing is the only way to secure a mode of transportation, which, in many parts of the country, is absolutely critical for commuting to work, to the grocery store and to your children’s school. Do not be embarrassed to pursue Buy Here, Pay Here financing. If used correctly, Buy Here, Pay Here financing can actually help you repair your credit history and get you standing back on your own two feet in no time.


Make Buy Here, Pay Here Financing Work for You

As we’ve mentioned, Buy Here, Pay Here financing should really be your method of last resort for purchasing a car. Be sure you have exhausted all of the traditional means of securing automobile financing before you head to a Buy Here, Pay Here dealership… and don’t just assume that you must have lousy credit because you may not make a lot of money. You may be surprised that your credit simply isn’t that bad, to begin with. The best way to check your credit history is to request your free annual credit history report from each of the three major credit bureaus: Equifax, Transunion, and Experian. Review the reports for any errors and make sure that you contact the appropriate bureau if you do find mistakes. If in fact, your credit is as abysmal as you thought it would be, call your bank or local credit union and see if they have any financing options that they may be able to make work for you. If in the end you are unsuccessful in securing your car loan, proceed to a  reputable, trusted and consumer-focused car dealership that has an outstanding reputation for customer service and honesty.

Do yourself a huge favor and do not play coy with the sales and financing teams at your local Buy Here, Pay Here dealership. Be upfront about your financial situation and credit history, and let them work with you to find a car that can fit your budget and that comes with a loan that has terms that are acceptable to you. Then, once you have secured the financing and the car from the dealership, put your vehicle to good use and start digging yourself out of the hole that got you into a Buy Here, Pay Here dealership, to begin with.

Use your new car to pursue new, higher paying employment opportunities, or perhaps pick up a side job to bring in a little extra cash… and put that cash right to your car payment so that you won’t have to worry about falling behind in your payments. Also, be sure to make every single on time, in full each month and be sure that the dealership is reporting those payments to the credit bureaus. Building a history of on-time payments will do wonders for repairing your credit history so that the next time you find yourself needing to purchase a new car, you’ll be an excellent candidate for a traditional loan.

Better Yourself with Buy Here, Pay Here Financing

Don’t let bad credit hold you back and do not be ashamed to pursue Buy Here, Pay Here financing. Be smart about working with a dealership that prides itself on its integrity, be wise about making your payments on time and then before you know it, you’ll never have to worry about being turned down for a loan again.