Buy Here Pay Here Car Dealers a Word of Caution
Posted: Sunday, January 09, 2011
by Jim Klark
Car Buying How to and More!
Buying a car without getting taken for a ride can be a challenge, but doing business with Buy Here Pay Here car dealers can become a regrettable experience if you are not familiar with the differences. The BHPH auto dealership is different in the respect that they sell and finance vehicles for people that have bad credit. They typically sell used cars to people that cannot get a conventional auto loan because of a low credit score, bankruptcy, prior repossessions or tax liens. They sell the vehicle and they finance the vehicle despite bad credit and dictate their own terms and conditions of the auto loan.
Traditional automobile dealers use third-party lenders to finance their customer’s vehicles and must abide by the lenders stipulations and conditions. The borrower is approved or rejected based on their credit history, score and past credit experience. The BHPH car dealer approves their auto loans based on the car and profitability of the deal, the amount of down payment, ability to make the car payments on a weekly basis. Yes, they typically require the borrower to pay weekly or bi-weekly at the dealer where they purchased the vehicle and often in cash.
When you have a traditional car loan and you are late with your monthly car payment from a few days to a week there is a late charge. If you are later than a week you can expect phone calls from the lender and mail notices. If you go a month or more your car may be repossessed. However with the BHPH car dealer if you are late one day the car may be repossessed the next day. To reinstate the auto loan you will have to make the payment, pay a late charge and pay for the repossession fees which can be several hundred dollars. At some buy here pay here car lots there is no chance of reinstatement and you lose your car along with your down payment and any other payments that were made.
When you visit the standard auto dealer you can choose any car that fits your budget and your credit worthiness from new to used. When you go to a Buy Here Pay Here Car Dealer you are restricted to a very narrow choice of vehicle that is in stock on the lot, typically used and has high mileage. This is because the dealership sells the car at a higher profit margin to make up for the risk that they take by selling and financing a car to customers with bad credit.
Doing business with a BHPH car dealer is for the person that needs a car, but is not able to get a conventional car loan. This type of automobile dealership caters to people that are normally considered to be un-financeable. This niche in the auto industry is growing every year and is forecasted to grow for years to come. Buying a car from a buy here pay here auto dealer is often the last chance for some people to buy and finance a car. Whether you buy a car from a traditional car dealer or a BHPH car lot it is important to know the facts and conditions of your transaction.
This article about BHPH Car Dealerships was written by Jim Klark that has worked in the auto industry for decades and writes blog for consumers about buying a car with bad credit. You can find a BHPH Car Dealer in your are at BuyHerePayHereVehicles.com
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