July 31, 2007

How is “buy here pay here” different than traditional financing?

How is “buy here pay here” different than traditional financing? This is a common question asked by people searching for non-traditional car financing options.

Buy Here Pay Here (BHPH) financing basically means there is no third party involved, it is strictly a car loan offered through the dealership on their terms. Because people looking for BHPH typically have a very poor credit rating the only real benefit they receive is that they can obtain a car loan and a car.

Differences with the Buy Here Pay Here financing experience:

• The dealership will examine your credit first before you look at cars
• Once they know the amount of your down payment and how much of a monthly payment you can afford then you only look at cars within those parameters
• Weekly or bi-weekly payments made in person at the dealership
• Dealership may or may not report your payment to credit reporting bureaus

Buy Here Pay Here financing does not differ in many ways from traditional car financing, however, the dealerships has and maintains all the power in the financing relationship. You must be prepared to make the necessary trade offs that come with BHPH in order to get the benefit of owning a car.

A site for Auto Financing is an excellent place to begin your search for car financing options.

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Filed under Buy Here Pay Here, Car FAQ