Why Buy Here Pay Here is Great for Teens
Most teenagers dream about the day that they turn 16 and can finally get their driver’s license and start driving themselves and their friends around, gaining some independence from their parents. However, even after they get that driver’s license in their hands, most teenagers aren’t able to buy a car on their own. Even if they have a steady job and can afford to make modest payments, they don’t have the credit to get approved for a traditional car loan.
Some teens can convince their parents to co-sign on a loan for a car or to take out the loan themselves. However, most parents are likely already paying on an auto loan of their own and may not have the additional credit to take on more financing. Some parents may just not want to shoulder that burden for their teens, who may still need to learn some lessons in responsibility.
One excellent option for teenagers looking to buy their first car is a buy here pay here dealership. Teenagers who are new to auto loans may be wondering “What is buy here pay here?” The term refers to just what its name suggests: Financing that is available from the dealership where you buy the car.
Buy here pay here financing is an excellent choice for first-time buyers like teenagers who don’t have any credit history. The financing is offered to buyers who have no credit, poor credit or even bad credit. Those who are not able to get traditional auto financing are typically able to get approved through a buy here pay here dealership.
In some cases, the interest rate is a little higher on a loan offered by a buy here pay here dealership. The higher interest rate is to cover the increased risk that dealerships are taking on by lending money to those who have such poor credit. Most lenders who are having a hard time getting traditional financing are glad to pay the higher rate as a trade off for getting the money they need.
Whether you are a teenager looking to buy your first car or you are the parent of a teenager who is begging you to buy that car, it might be time to start looking into buy here pay here financing. It may give teenagers the money they need to buy the car while also allowing them to start building a positive credit history. By the time they are ready to apply for college, they may even be able to get their own apartment or student loan.