Buy here pay here near me is a way for car buyers with poor credit to finance their purchase through a dealership. This type of financing is also known as in-house financing and it’s different from traditional auto loans from a bank or credit union. Car buyers apply for financing at the dealer, where they choose and pick out their vehicle. In this article, we’ll discuss how buy here pay here dealerships works and some potential drawbacks of this type of car-buying experience.
What does buy her pay here mean?
Possible high interest rates. Dealerships are allowed to charge as much interest as the law allows in their state, which is often higher than what you’d get with a traditional loan. The higher interest rate can make it difficult to keep up with payments and may cause you to end up paying more than the car is worth once all fees and interests are considered.
Disreputable dealers can churn or sell cars to multiple buyers. Dealerships that practice this kind of business are referred to as ‘bad faith lenders’ and they can take advantage of buyers who can’t afford their monthly payments. They can also charge a hefty fee to re-sell the vehicle, called a ‘processing’ or ‘administration’ fee.
Couldn’t help your credit score. Some buy here, pay here dealers don’t report your payments to the credit bureaus, which can be bad for your credit score. On-time payments can build your credit and improve your financial situation, so it’s important to find out whether or not your dealer reports.