Why You Should Avoid Buy Here Pay Here Car Lots

A negative credit score will wreak havoc on your abilityto do many
things. Chief among them is buying a car or other big ticket item.
Thejoke is that it is easier to buy a house with bad creditthan it is
a car, because houses don't move, but cars can be hidden from therepo
man for weeks or even months.
In the past, bad credit meant that most traditional dealerships would
not be able to secure financing for a home loan. In most cases the
only option for these people was the buy here pay here lots that are
found on virtually every corner in every town. BHPH lots are set up
where you buy your car and make your payments to the dealer (usually
in person, usually in cash, and usuallyfor a very high interest rate).
While there are many benefits to purchasing from a BHPH lot, namely
the ability to get a car even with less than stellar credit,there are
certain drawbacks to the process. Many of these are unavoidable, but
in the interest of full disclosure;
Forget having a rewarding car buying experience. Mostfolks enjoy the
process of finding the car they really like and then working out the
finances. With BHPH lots, this process is reversed. Your financial
situation is evaluated first and then you are shown thecars that you
can buy. It is not exactly a process that places a lot of value on the
wishes of the buyer.
In addition, the stereotypical image of a carsalesman, with bad
fashion sense, oily hair, and fake charm is usually found at many buy
here pay here lots. In many cases you won't find the same level
ofprofessionalism that you would at say, a Cadillac store.
You're also limited to the selection of vehicles that are found on the
lot at that moment. The notion of specifying a vehicle for the dealer
to locate and bring infor you does not apply in the buy her pay here
world.
The cars you are looking atwill in all likelihood not be late model,
low mileage options. Many BHPH lots carry older models, often with
more than one hundredthousand miles on them. Mechanical issues such as
transmissions or head gaskets may be suspect.
Expect to pay through the nose on interest charges. BHPH lots feel
(many times rightly so) that they are taking a chance by selling cars
to folks with questionable credit. They protect some of their
investment by ratcheting upthe interest rates.
Expect to pay on a weekly basis, taking time out of your busy schedule
to do so. BHPH lots like to see their money every week, preferably in
cash, so they know things are being paid for on time. Some dealers
will even equip their cars with a timer, which shuts offthe engine on
a given day ifthe payment is not met. Making your payment gets the
timer reset for another week, or two weeks, or month, or whatever your
arrangement is.
Many dealers may also install Lo-Jack in order to keep track of where
the vehicle is at all times.
In addition, don't expect that buying a car from a buy here pay here
lot will help your credit score. Many dealerships do not report
transactions to the three major credit reportingagencies. If you are
workingwith a BHPH lot, ask if they report payment records to Equifax,
Experian, or TransUnion. If they do not, look elsewhere.
If you are attracted to a buy here pay here lot because of the low
sticker price on a given car, forgetit. These outfits are not
interested in cash deals. They make most of their money on the high
interest rates, so selling a car for cash is basically a losing
proposition for them.
Buy here pay here lots are many times the only option for folks with
questionable credit, which can be discouraging. It would be
frustrating for anybody to know that they only have one option, an
option that affords them less desirable vehicles and inflated interest
rates.
On the plus side, there are some reputable buy here pay here lots. You
just need to be diligent, do yourhomework, and select the one that has
a good reputation and places a measure of value on their customers.