Can someone tell me details of a Buy Here, Pay Here Auto Dealer? Pros/Cons?

Answer 1

A buy here pay here lot will offer credit to people who have poor or no credit history, and are unable to get conventional financing!

The interest rate is higher, but that is because of the increased risk they take! They usually set the payment schedule based on the customer’s payday. A customer who is paid weekly will have a weekly payment to make; a customer who is paid every two weeks will have to pay a payment every two weeks! This is done so that the customer has a payment that they can handle, without having to save up for it!

It is a lot more labor intensive for the dealer! They have to keep track of the payments, and also may spend quite a bit of time making "reminder" calls and sending warning letters to customers who are late. They also have to pay for cars to be repossessed.

Others have said that they can repossess a car and sell it again. In some cases this is true, but in many, the car comes back with either body or mechanical damage! The costs of repair many times exceed the value of the vehicle!

A buy here pay here lot is a good option for someone who has had credit problems in the past, and is serious about turning their credit history around! It allows them to get the transportation that they need, and to establish a good payment history! They pay more, but al least they have a vehicle and a chance!

It is a bad thing for people who are not going to pay on time! They are going to end up either paying more in late fees, or are going to end up with no car and a court judgment and wage garnishment.

If you qualify for conventional financing, use it! If you do not, a buy here pay here lot will provide you with a chance to set yourself onto the right path!

Answer 2

Rather than ripping Buy Here Pay Here's I'll try and offer you a suggestion about them. The most important thing is research. This is true with anything. Find out what fees they tack on to the final sale price. Find out if they charge for their warranty and how they honor it. Ask if they have any 3 day return clauses or anything that can protect you from getting a complete lemon. No mechanic is perfect. Most BHPH will do enough reconditioning to the vehicle to get it in proper working order. There are some that go above what is asked and actually put serious money into to ensure they don't get it back in a month. As for your situation, some of the people posting on here may not have any idea what it is like to go through a credit challenged period in their life. I work for a very reputable BHPH and see people of all income levels. There is such a thing as someone making good money but hit bumps in the road. Divorce rate is steady at 60%, that is one of the major things that impacts our customers. Divorce can do nasty things to your credit. Anyways, the gist of the this answer is to get you to think about your options. Research the places and have a plan when you walk through their door. Chances are you will pay a higher price for the vehicle because BHPH is a risky market. But, if you can't get approved through anywhere else, where can you go? That is why we exist. Good luck with your car buying!

Answer 3

They are a resource if your credit rating is in the toilet. You don't have to worry about credit rating, because they carry their own notes. They will take a down and then set up payments, sometimes weekly, sometimes monthly. Generally they keep the title until it's paid for, so it remains their car. Some of them have little machines in the car that they reset when you make a payment so it will run for the next 30 days. Miss a payment and your car won't start the next time you try. All of them keep an extra key. Miss a payment and they send the repossession people (with the key) to take it. That way they can keep selling the same vehicle over and over.

The interest rate will be very high, at the legal limit for your state (after all they are taking people with poor credit--or that is their excuse for charging the high rates) and then there will be other charges as they can get away with them, late fees, bad check fees.

I'd try somewhere else first and see if you can get financed. But if you can't, and are desperate, buy here pay here can be of help.

Answer 4

True...Buy Here/Pay Here is not the most cost-efficient way to buy a car. But there is a reason that the people who buy them aren't at the Dodge store buying a new Charger!! Bad Credit = High Risk. Don't be so quick to judge these people... would you loan money to a guy with 2 repo's and zero good credit??? The risk is that the car leaves and is never found, the reward is 24% interest. Don't like their tactics, take your good credit to a dealer with low rates and good service!!

Answer 5

PROS - NONE

CONS - miss the deadline on one payment and they can come and take your car and you are out your entire investment.

THE WAY IT WORKS -
First there is the "money down" - that usually equates to the amount of money the dealer spent on the car at auction plus whatever he put into it to get it able to sell.(note this is not necessarily 100% mechanically sound) - that way his out-of-pocket is covered 100%

The for sale price is his profit - he is looking to you to finance his operating expenses over the next 24-36 months. Be ready to fight the price. If he already has 5-6 people making payments, his bills are probably already covered so he will be less anxious to negotiate the price, whereas if he has an overdue electric bill sitting on his desk, the price becomes more pliable.

THE CATCH: you have entered into a contract that states that if you are one day late on a payment, and you forfeit your investment and guarantee the dealer access to come get the car. This is a way that some of the dealers really make their money, by reselling the same car 2 and 3 times. Major warning signs of this are:
*biweekly instead of monthly payments - twice as many chances to get you missing a payment
*you cannot make a payment at the dealership where you bought the car - they claim they did not get the payment in time and you have no proof as it was sent to a PO Box through the mail.
*the will not accept direct debit (automatic payments) from your checking account - this would almost eliminate any chance of them being able to legally repossess the vehicle.

Answer 6

Pros: none.

Cons: Everybody has written them. Your interest rate is going to be outrageous. One of this guys wanted to sell me a car, it was 3k cash or 4k if I pay one year finance. I said no, of course. I saved some money and paid cash for my car in another dealership.

Not of all them are going to repo the following day if the payment is late, but some of them they will do.

Answer 7

fluke is right.

One con is that payments usually have to be made bi-weekly and mailed somewhere other than the exact place you bought the car because of different franchises and stuff.

Also, they get NASTY if you miss a payment.

Answer 8

Don't do it If you miss one payment they will come and get it no questions ask , If you need a car find another way those guyes are sharks, hope this helps.

Answer 9

there is no such thing as an honest used car dealer. period.