Buy Here Pay Here Financing vs. Traditional Dealership Financing

Why should customers consider a buy here pay here dealership for their next car purchase? What are the differences between a buy here pay here loan and a traditional loan from a car dealership?

Having Credit Problems Is No Problem Here

Many factors separate the two. One of the facts that help buy here pay here loans stand out from tradition loans is the way the loan process is handled.

With buy here pay here financing, the customer arranges the loan with the dealership and makes payments to the dealer whereas traditional dealership loans usually include a separate middleman who finances the loan to the customer. This intermediary may be a bank or credit union with its own set of rules and requirements that the customer has to agree to before getting the loan.

Getting a loan through a bank or third party could be very hard for customers with suffering with credit issues. Banks may reject a customer’s loan application because of a few blemishes on his or her credit report. If this happens, getting a buy here pay here loan may not only be a convenience, it may also be the last resort for some customers.

Most, if not all, buy here pay here auto dealerships accept all levels of credit. They even overlook all negative credit issues. What are the chances of a major bank doing the same? This policy benefits customers in many different ways.

College students in need of a new vehicle, or their very first car, can turn to buy here pay here dealerships without worrying about a lack of credit.

Someone with one too many unfortunate life events that ruined their once perfect credit score can also take advantage of a buy here pay here auto dealership.

Customers might want to consider a buy here pay here auto dealer to help repair their credit too. Even with a steady income, having a few negative points on one’s credit score could be the only thing a bank takes into account. On the other hand, with the buy here pay here relaxed credit policies, customers can use this as a great opportunity to repair their credit.

Buy here pay here dealers work with customers to help them determine the best interest rate and monthly payments for his or her budget. Repaying the loan on schedule will change the customer’s credit score for the better.

Cash for Clunkers

Unlike most traditional dealers who frown upon accepting clunkers for trade-ins, buy here pay here auto dealers are known for purchasing older vehicles. Another point to consider is the fact that traditional car dealerships only accept trade-ins that aren’t paid off. If you can drive it to the lot, chances are a buy here pay here dealership will accept it as a down payment toward your next car.

The way trade-ins work at a buy here pay here dealership is they pay what’s left on the balance of the customer’s car loan. The customer usually keeps what’s left over as a down payment toward their next vehicle. For example, let’s assume that a customer owes $4,000 on their current car loan. The customer goes to trade the vehicle in at a buy here pay here and is offered $6,000 for it.

The buy here pay here dealership will pay off the buy here pay here loan leaving the customer with $2,000. The customer can then choose to pocket the cash or use it as a down payment for a new car.

However, don’t think just because a buy here pay here auto dealership is keen on buying clunkers that they sell junk. Just like any traditional car dealerships, buy here pay here dealers take pride in selling reliable transportation to their customers. Vehicles on the lots are certified pre-owned and have been professionally inspected.

Moreover, a majority of buy here pay here dealerships offer a free CARFAX report to their customers. If they don’t, then you’re probably better off shopping somewhere else.

Quick and Easy Car Buying Experience

As mentioned above, buy here pay here auto dealers do not have third-party middlemen. Customers apply for loans that are provided directly by the dealership. This decreases the amount of time customers have to wait before their behind the wheel of their new car. Banks may require a few extra hours of paperwork before agreeing to a loan at traditional dealerships. However, because buy here pay here auto dealerships provide loans in-house and don’t do credit checks, there’s a good chance that customers will get a new car within minutes.

Down payments are also minimal. With buy here pay here financing the amount needed for a down payment is significantly less in most scenarios. Third party lenders via traditional auto dealerships usually at least a good 10% of the vehicle’s selling price as a down payment. buy here pay here dealers are typically more lenient. Sometimes they may limit the loan requirements to a single monthly payment.

Auto Now in Belton, MO goes even further with a limited 24-month warranty on all vehicles.