Buy Here Pay Here Financing

This is the financing that you get at a buy here pay here car lot. It usually consists of your down payment plus a fixed number of loan payments. The loan payments are due every week and are usually made in person at the lot you purchased the car from. Some dealers will let you pay biweekly or monthly, but they will usually have you pay when you get paid. You are borrowing the money from the dealer to pay for the car. If you fall behind or are late on your car payments, it is the dealer that you talk to regarding other payment arrangements and if you stop making payments, it is the dealer that will repossess the car. The dealer also has the option of whether or not to report the payment history to the 3 major credit bureaus. The dealerships that offer these loans generally sell only used cars. Very rarely do they sell, or are in any way affiliated with, a new car franchised dealer. 

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Pluses: The cars are usually less expensive. Many people prefer to make payments on a weekly or bi-weekly  basis. Payments are made face to face so you know your lender personally and they know you personally, they are also able to work with you if you get sick or lose your job and are having a hard time paying your note. Most but not all would rather see some payment coming in than getting their car back. Many dealers don’t bother with a credit check before selling you a car, which means you can walk in give them your down payment and drive away. And not have to wait for credit approval.

Minus: Most buy here pay here dealers do not report to the credit bureaus. The cars that are for sale are usually older and have high mileage as a result, some of the cars may not be that reliable. Carfax vehicle history reports are usually not furnished by the dealer for these vehicles. For most people, it is not convenient to visit the dealer every week to make a payment. Loan terms usually range from 12 to 24 months, limiting the amount of the loan to lower-priced older cars and the interest rates can be exteremly high.

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If you go to a buy here pay here dealer for financing, remember to always pay your payments on time. If for some reason you aren't able to pay, you had better get in contact with the dealer and make arangements. Alot of dealers go by the business model that if your payment was due on Friday and they have not recieved it by Monday they will be picking up your car. Then you will have to pay fees and make up back payments or risk losing your down payment and getting a repo on your credit report.