Financing methods are one of the most important aspects of purchasing a solid, reliable vehicle. There are several ways to do this, including leasing, buying outright, and becoming pre-approved for a car loan. Today, Vista Auto Group will explain the Buy Here, Pay Here method.
What is Buy Here, Pay Here?
Most car buyers are probably familiar with buying a vehicle at a dealership while financing the purchase through an external lender (i.e., a banking institution). However, with Buy Here, Pay Here, you buy the vehicle from the dealer, who also furnishes the financing mechanism–meaning they lend you the money themselves.
As you may have guessed, this is a popular approach for car buyers with less-than-optimal credit histories looking for a reliable vehicle with reasonable payments.
Pros and Cons to Buy Here, Pay Here
There are pros and cons to this financing system. It’s important to educate yourself on the risks and rewards of doing Buy Here, Pay Here.
- PROS: While American credit scores may be improving, almost everybody needs a car, including those with below-average creditworthiness. Therefore, this is a good option for those facing loan rejection through traditional means. Also, this is a simpler process because you interface only with the dealer, thus removing the middleman (the bank) from the equation. Furthermore, Buy Here, Pay Here arrangements do not carry any negative impact on your credit score (provided you make timely payments).
- CONS: Convenience often entails greater expenses. This is true with Buy Here, Pay Here as well sometimes. You could face interest rates that are as high as your state legally allows. This encourages and incentivizes you to make vehicle purchases as prudently as possible; to buy the more affordable models with fewer amenities and features. Also, all things being equal, expect to pay a higher down payment. If you have a way to shoulder a big down payment and expect your future income to justify the monthly payments, BHPH might work for you, but it’s not a miracle fix.
Vista Auto Group offers a wide variety of used cars for sale and always makes every effort to help our customers finance them as painlessly as possible. We know you want to make the right automotive purchase without having to face unduly burdensome interest rates and monthly payments. Therefore, we promise that our trained customer service team will walk you through the buying and financing process with the care you deserve. If you have any questions about how we do this, we’d love for you to call us at 215-821-3557. We are located at 7418 Frankford Ave in Philadelphia, PA.