Car Lot Finance

Used Car Dealership or Buy Here Pay Here Dealership - You Decide

If you are already aware that you have bad credit, missing out the part where you go and have your credit run by 4 or 5 used car dealerships might be a good idea. Everytime your credit is run, it reduces your score, if your score is terribly low at the onset of this process, there is no way you will be able to get a loan through normal channels. 

One of the benefits of Buy Here Pay Here dealerships is that 'Your job is your credit' and many times they will not actually check your credit score as it has no relevance to how they would finance you. However, it is always a good idea to find a dealership who will actually report your payment to the credit bureas so that your credit score will be repaired as the used car is paid off. 

A Buy Here Pay Here dealership will look at your monthly bring home pay and the number of commitments which you already have. They will also look at your stability and determine how long you have been in your job and how long you have lived at your current location. If you have only been on your job for 5 months and at your address for 12, you are going to be looking to hand over a larger downpayment as you are a greater risk. In the same way that a bank would look at your credit score to determine how stable you are, a Buy Here Pay Here dealer will be looking for stablity in other ways.

You have to remember that a Buy Here Pay Here dealer is taking all of the risk themselves when they are financing you a car. If you don't make payments on it, it affects the dealer directly and impacts his pockets. They have no bank or insurance to fall back on. This helps to explain why are you likely to be paying a higher interest rate when you purchase a vehicle from them. 

Regardless of the interest rate, it is in the best interest of the Buy Here Pay Here dealer to only put you in a vehicle that you can actually afford. If the payments are too high, or the running costs are over the top then there is a high chance that you will stop paying for the vehicle when times get tough.