Pay Here Buy Here vs. Buy Here Pay Here – Is There a Difference?

Pay Here Buy Here vs. Buy Here Pay Here

There are many car dealerships from which to buy a car in Independence. Though when you’re passing you might consider them all to look the same, there are significant differences in how they run their business.

Pay Here Buy Here and Buy Here Pay Here are virtually interchangeable. These refer to dealerships where you make your repayments directly to them.

This is different from a traditional dealership that is just there to sell you a car. The traditional dealership will only offer you the vehicle and you will be required to borrow money from a bank or other lending establishment and make repayments to them.

What is In-House Financing?

Some dealerships will offer to find you the best deal on financing through their own financing center. This is not the same as a Buy Here Pay Here dealership, as in the end, you’ll still be paying to a lender that is not the dealership. It can save you looking around for bargains on your own, but there’s no guarantee that the dealership you walk into will offer you the best deal on the market. In fact, there could be financial incentives for the dealership to offer you financing from a provider that’s not the best on the market because they’ll receive a larger commission.

In-house financing is much more close to Buy Here Pay Here as the dealership handles the financing of all vehicles themselves. In many cases, the Buy Here Pay Here dealership will have a Related Finance Company (RFC) that handles the actual financing to make it easier to run the separate parts of the business.

The first Buy Here Pay Here dealerships started up in the early 1970s. At the time, the U.S. was in the middle of a sales and loans crisis, and like later times of financial crisis, this made loans hard to obtain for the average buyer. The price of vehicles was continuing to rise but wages were stagnant or falling. Dealerships had to find a way to allow ordinary people the chance to buy the vehicles on the car lot.

The answer for the dealerships was to essentially become the bank and offer loans themselves. This was a risky business for dealerships, new to financing, especially as they had to offer loans to people who were being turned away by the banks for being too risky to lend to. It was new, untested waters, and some of the early Buy Here Pay Here dealerships went out of business when they took on too much risk or failed to understand how much more of a burden on cash flow running a Pay Here Buy Here car lot could be.

When Did Buy Here Pay Here Rise in Prominence?

2008 saw a great number of new players enter the market as it began to mature. The risk to dealerships was lower as they had worked out the right ways to reduce cash flow problems and models for the cost of running the business became better at predicting profit and loss.

With so many new companies entering the market, the down payments required to purchase a Buy Here Pay Here car in Independence have dropped dramatically. In fact, at Auto Now in Independence, you can get a car for a down payment as little as $99.

Interest rates have also become more competitive. Getting a Buy Here Pay Here vehicle in Independence when you have a poor credit history will usually mean you’ll be offered a comparable or better interest rate that at a bank or personal lending company.

What will Pay Here Buy Here be like in the Future?

In-house financing companies continue to innovate and disrupt the used car industry. It’s conceivable that the old method of getting financing from a bank to buy a car will become even more of a thing of the past as more people understand the benefits of buying and financing directly from the dealership.

Some dealerships also include servicing, accessories, and tires on the same lot. This is making the purchase and ownership of a vehicle easier as everything is done in one place.

A relatively new development in Pay Here Buy Here dealerships is the leasing of used cars. This allows for a lower monthly payment, but the vehicle will ultimately never transfer to your name.

Dealerships like Auto Now are making the process of buying a used vehicle extremely simple. Knowing that many people choose a Pay Here Buy Here dealership in Independence because they’re struggling with a poor credit score, Auto Now doesn’t perform a credit check at all. Instead, the criteria for getting a car loan in Independence are simple. If you have a driver’s license, you’re over the age of 18, and you take home over $1,200 per month in salary after tax, then you’ll almost certainly be accepted for a loan and you’ll be able to drive away from the dealership in a vehicle of your own. The down payment will usually be about $99 but can be a bit higher for vehicles that are more expensive. You’ll make your repayments direct to the dealership.

Repayments have become even easier, with the ability to make them online and choose from your credit card or your bank account. You can even set up automatic repayments that come out of your bank account after you’ve been paid each month.

There’s no doubt that Pay Here Buy Here (or Buy Here Pay Here) financing has revolutionized the auto industry in Kansas and Missouri. Especially if you’ve had problems with credit in the past, it’s the best way to get into a great vehicle with a warranty that you can use for family, work, and pleasure.

In Independence, get in touch with Auto Now for Buy Here Pay Here financing that will see you in the car you need in no time. Browse the inventory of vehicles available now.