"Buy Here Pay Here" Dealers
Whenever you think of buying a car, you would usually go to a bank and apply for a loan. The bank would in turn check your credit score, besides other documents before approving your loan. If you don't have a good credit score, the chances of you being rejected for a loan is high, or your loan may be approved with a very high rate of interest. However, there is an alternative in the form of buy here pay here, wherein loan for car buying is arranged by the car dealership. In this case, the buy here pay here dealers provide you with the money to buy the car, and you need to pay the money back with interest to the dealer on a specified date(s) every month. Usually buy here pay here car dealerships require you to pay the money in cash or check at the dealership, but there are some which accept online or phone payments.
Buy Here Pay Here Financing Basics
If you have applied for a traditional auto loan with the bank and have been rejected due to your bad credit ratings, then you can think of getting one from buy here pay here dealers. This financing option is specifically designed for people with bad credit, unlike the traditional dealers. The main difference between traditional and buy here pay here dealers is that the traditional ones would first show you the car and then let you know about the financing options. On the other hand buy here pay here dealers would speak of the financing options first and then show you the car.
The main advantage of buy here pay here car financing option is that you have a chance of credit repair if you make payments on time. Most dealers report positive or negative financial behavior to the credit reporting agencies, which over time can positively or negatively effect your credit worthiness. While buying a car from such dealerships, you need to make sure whether they report your payment history to credit reporting agencies or not. The only disadvantage is that the interest rates are high, but if you don't have any other option, then this option can be godsend.
There are several questions to ask a car dealer who deals with buy here pay here cars. Some of the most important questions include the kind of documents required, payment options, policy of late payment, location, kind of vehicles you can buy, financing options and the car condition. If you want to get the vehicle fast enough, you need to have all the documents handy while going to any buy here pay here dealers. The documents required include auto insurance proof, present phone bill or any other utility bill like gas or water, proof of residence which includes rent agreement or mortgage document, employment proof, social security number, information of your bank account, driver's license and references.
Once you have got the car, the next important thing is making regular payments. In a buy here pay here car dealership, you may need to make bi-weekly or weekly payments. Usually such dealers don't have the facility of making online or phone payment, so you'll need to go to the dealership and pay them, either by cash or check. Some dealers also have the option of automatic withdrawal from your account, so ask them about the payment options.
Many a time it has been found that if there's a delay in making even one payment, the dealer repossess the vehicle. So you need to clarify that part as well. You need to ask them whether they have a policy of grace period, and if yes, the number of days. Besides that, location of your dealer is also an important part to consider, otherwise you may have to go to the dealership and make payments; a dealership close by helps in making payments easily. If a dealership is situated far away from the place you live or work, going there and making payments may become difficult. Also consider the other options regarding what to look for when buying a used car, so that you get the best deal.
So, if you can't get a car loan due to your bad credit, you may try the option of buy here pay here dealers to get your dream car. Make sure you look at all the pros and cons and the terms and conditions before signing on the dotted line.
