The Buy Here Pay Here car dealership is starting to become a familiar sight across the country.
This growing type of automobile retailer is becoming more popular and in demand because they cater to the car buyer with bad credit.
After reading this article you should be familiar with the BHPH process and how it works.
The main idea of buy here pay here is that the customer buys the vehicle from the dealership and makes their weekly or biweekly payments at the same place.
The seller is also the lender rather than having the buyer's loan funded by a third party the dealer is the lender which allows more flexibility when it comes to approving auto loans for the buyer with bad credit.
The approval process is based on the applicant's ability to pay, time on their job and the vehicle they wish to purchase rather than their credit score which is the standard process of qualifying for a car loan.
Sometimes BHPH is also known as in house financing either way the end result and the way it works is the same.
The vehicles that are sold and financed are used cars and trucks so the risk is lower to the dealer and the interest rate that the buyer pays is high.
Financing automobiles for people with bad credit is a risky business and the owner of the buy here pay here dealership wants to be compensated for that risk.
So the downside for the buyer is paying high rates of interest, but the upside is that the customer can buy and finance a vehicle when their poor credit keeps them from buying a car and qualifying for financing.
Buy Here Pay Here Process of Buying a Car When you go to the showroom or car lot the first order of business is to see if you qualify for in house financing so you can purchase a vehicle.
The terms, down payment, interest rate and payment schedule are discussed before selecting a vehicle.
This is just the opposite of how it works at the typical auto dealer.
Once all the details are worked out the salesperson will provide the buyer with a list of vehicles that fit their financial qualifications and they can choose their vehicle.
Once the buyer picks the car they want to purchase the paperwork is prepared and signed.
You can see that the buy here pay here car buying procedure is very different from the traditional process, but the big benefit is that even people with terrible credit can buy and finance automobiles.
The way it works may be unconventional, but the customer of the BHPH here dealership is the person that has a past littered with a bankruptcy, repossessions and charge offs.
The regular car dealer will turn this customer away and their options are slim.
However sometimes bad things can happen to good people and they need a second chance that they will never receive by trying to buy a vehicle from the average automobile dealer.