The Truth Behind “Buy Here and Pay Here” Financing

The dealer offers BHPH financing. These loans were usually obtained through the credit union or bank of your choice. It is becoming increasingly difficult to obtain a mortgage for people who have average to poor credit. BHPH could be a good way to get around the problem.

With BHPH the loan is provided directly by the dealership, so payments are also made there. Different dealerships have different payment methods. Most dealerships only accept cash. Sometimes they will also take checks and credit card payments. Please ask as many questions as possible about the payment options available. If you miss a payment, it is the same anywhere else. You may incur late fees and, in the worst scenario, a repossession. Your car will be repossessed if it is not paid for in full.

What is the Difference Between BHPH Financing and Traditional Finance?

The difference is not that great. Only the figures that are used to calculate it make a difference. The same dealerships that offer BHPH loans have done so for years, although they may advertise them differently. These loans were deemed high risk by some dealerships, and they never offered them. Now that financing is almost impossible, dealers are just joining the game.

How can I determine if I’m looking for a BHPH retailer?

If your application was declined at a dealership more than once because of your poor credit, BHPH may be the best option for you. Some will insist that you can take different routes.

Internet companies, for instance, will ask you for information in order to get instant approval. These companies advertise that they accept bad credit, do not require any job experience and will take no payment. Beware of these places. The places either have the same or very similar lending practices to BHPH dealers or will funnel you through a BHPH Dealer in disguise. There are times when they may send you on to dozens BHPH dealers around you and make phone after phone. It can be more convenient to sit with a BHPH salesperson face-to face than get dozens and dozens phone calls.

Leave a Reply

Your email address will not be published. Required fields are marked *