What Does “Buy Here Pay Here” Mean?

When you don’t have cash available to buy a car and have been turned down for a car loan, don’t overlook the option of buying a car from a buy here pay here car lot. A buy here pay here dealer can help by setting up an in-house financing plan. Here’s what to expect at a buy here pay here car lot.

Dealing with a buy here pay here dealer may be easier than working with a traditional dealership. You can make all loan arrangements and sometimes may make payments on the purchase at the same dealership where you purchased your car. The dealership acts as a one-stop-shop for buyers that need financing.

Financing with a buy here pays here dealer may come at a cost, though. If you are classified as a ‘high risk’ borrower, you may be paying higher-than-average interest rates through a buy here pay here financing program.

Still, getting approved means you can finally purchase that car you’ve had your eye on. You may even be able to trade in your older car as a down payment for the purchase!

Shopping at Buy Here Pay Here Car Dealerships

If you have bad credit, buying a car might seem somewhat of a daunting task.

In your search for an auto loan, you may have considered a buy here pay here dealership: an auto dealer that essentially acts as a bank by offering loans in-house to buyers with bad credit. These buy here pay here dealers can offer an alternative to the traditional route of securing an auto loan, but they can also be trouble if you don’t know what you’re getting into.

Buying a car with bad credit can be intimidating and may make it more difficult to negotiate the financing terms you want. That’s why it’s always good to do a bit of homework before going in.

Buyer Beware: Top Buy Here, Pay Here Scams

Purchasing a new vehicle is one of the most exciting and significant purchases you can make but get scammed can turn the experience into a nightmare. While car consumers are protected by government regulations, not all business practices are created equally. Here are a few buy here pay here car lot scams to look out for.

No vehicle history report

If a buy here pay here dealer glosses over the car’s history or insists it’s in mint condition without offering proof, beware. Demand a vehicle history report from a service such as Carfax or Experian to get unbiased information on the vehicle. You can also check the vehicle identification number to learn about the car before deciding on a purchase.

Spot delivery

“Spot delivery” is a technique where a buy here pay here dealer may let you drive the car off the lot before you’re officially approved for financing, then calls back and demands more money or says you need to renegotiate the loan. To protect yourself, don’t take the car until you’re fully approved, and keep track of all your paperwork and everyone you speak with. Bring a witness with you for your buy here pay here dealings to serve as an advocate and consult a lawyer if you suspect you’re being scammed.

Hidden fees in the fine print

Get the deal you deserve and agreed to by carefully reading everything listed in the contract from a buy here pay here dealer. Make sure the price is the same as was discussed and do not sign the contract until all your questions are answered.

Purchasing a new vehicle is one of the most exciting and significant purchases you can make but getting scammed can turn the experience into a nightmare. While car consumers are protected by government regulations, not all business practices are created equally. Here are a few buy here pay here car lot scams to look out for.

No vehicle history report

Spot delivery

Hidden fees in the fine print

Finagling financing

Make sure you’re paying only what you can afford with buy here pay here financing by calculating potential interest rates and down payments. States may put caps on interest rates, which the buy here pay here dealer is obligated to follow.

Protect yourself from a buy here pay here dealership scam by conducting thorough research on the vehicle you’re considering by using a non-biased comparison site such as Kelley Blue Book, Edmunds or J.D. Power. Choose a buy here pay here dealer that is accredited by the Better Business Bureau and has strong customer testimonials to get you on the right track and on the road with your next car.