Do Buy Here-Pay There Car Lots Offer a Way for People with Bad Credit to Purchase a Vehicle?

When you’ve had a bad credit history, it may have been difficult for you to obtain a loan at your local car dealership. Your first thought might be to look for a dealership that offers buy here, pay here to help you buy a new car despite your bad credit.

You DON’T have to.

The first thing we’ll do is look at some of the reasons that you may not want to purchase a vehicle from a pay-here dealership.

This type of dealer offers “in-house financing”. They purchase cheap vehicles from car auctions with high mileage or that possess something special that prevents a traditional car dealership and new car dealers from buying it.

This could mean that it’s a water car, an old car, or has been in a lot of accidents. Cars that are available at buy here pay now lots have either been salvaged and cleaned from flooding areas or they’ve gone through auctions. What ever the reason is, if a vehicle ends up on a Buy Here Pay Here lot it usually does NOT mean that it was in good condition.

Car lots of this type then buy the cars and clean them, charging a much higher price than they would at a regular car dealer. They are able to charge high prices on junk cars, because people usually buying them suffer from serious credit difficulties. This is a case of “desperation” – the dealers take advantage of people in a hurry to find financing.

A down payment is required on top of a price that’s already very high. This amount usually represents a considerable portion of how much the dealer has paid for the automobile. Just enough to say.

Interest rates can be so high that credit card companies would blush. It is possible to get a car at a cheaper rate by using a credit card than a buy-here, pay-here dealer. Doubt it? Make a number of calls and inquire.

If you buy the car at a higher price than it’s value, then that is what you are doing. A car with a questionable past is what you pay for. If you pay high interest rates for a car, it will be overpriced with no warranty and cost thousands more. GAP insurance will cover you if your vehicle becomes a total loss.

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