You have a lot of options for buying a used car. You can go the traditional way of taking out a car loan from banks and other lending companies.
If your credit score needs a little work, though, you might want to consider shopping at buy here pay here car dealerships.
A buy here pay here (BHPH) car lot typically offers a wide variety of pre-owned vehicles for you to choose from.
Plus, these dealers can offer you an auto loan that fits right into your budget so you won’t have problems making an on-time monthly payment.
BHPH car dealerships typically require some documents from you to jumpstart the loan application process. These requirements include proof of identity and proof of residence, as well as proof of employment and salary and proof of automobile insurance.
All these documents help car dealers ensure that you are who you say you are and that you have a steady stream of income. BHPH dealerships may also ask car buyers to provide references and a current utility bill for additional assurance.
Most dealerships will check your credit history while your auto loan is pending approval, but certain dealerships claim to have a “no credit check” policy.
Auto financing experts recommend staying away from this kind of BHPH dealership, as you’re more likely to get higher interest rates at these places.
This is an important question to ask buy here pay here car lots, especially if you’re planning to apply online for car financing. It’s best to pick a BHPH car dealer that’s close to where you live or work, so it’s easier for you to come into the dealership to make your monthly payment or if you experience problems with your car.
BHPH dealers also usually prefer to grant loans to customers who live close to the dealership, since this makes it easier for the dealer to maintain the loan’s terms. So you may get faster loan approval with a BHPH car dealership in your area.
Most BHPH car dealerships offering pre-owned vehicles are committed to providing customers with high-quality used cars. After all, buyers are more likely to continue monthly payments for a car that runs well.
However, it doesn’t hurt to bring in your own mechanic to inspect the vehicle you want to buy. This way, you get an honest, unbiased inspection report on the vehicle and you can make an informed decision before you sign the loan documents.
Most buy here pay here car lots won’t have problems with your mechanic doing an additional check on the vehicle. Don’t hesitate to walk away from BHPH dealers that won’t let you do so.
Remember to ask dealerships about their inspection standards, as most buy here pay here car dealers will have in-house mechanics that perform maintenance and repairs when needed.
See if the BHPH dealership offers on-site maintenance and repair or if they use a third-party provider for these processes.
You can also ask dealers about the reconditioning processes that they use for preparing vehicles that are going on sale. All these ensure that you’re getting a reliable pre-owned vehicle you can use for years.
While you should do your best to hand over your monthly payment on time, certain circumstances may make late payments inevitable.
The good news is that your BHPH car lot probably has a late payment policy in place. Some dealerships have a grace period after the due date during which repossession is temporarily delayed and you can still make payment.
Other dealerships will contact you after you miss a due date rather than repossess the car right away.
You should always make on-time monthly payments, but it’s best to know what to expect if you do if an emergency prevents you from handing in your payment on time.
You can also ask the dealership if they offer other payment methods – such as phone or online banking – that make it easier for you to pay on time.