Securing a loan with favorable terms can be tricky if your credit score is low. However, owning a car is often necessary, if you rely on it to commute to work. In such cases, you may be tempted to turn to a ‘buy here, pay here’ financing option offered by a car dealership. Understanding such a financing arrangement is necessary, so that you can make an informed decision. Read on to know more.
What Is ‘buy Here, Pay Here’ Financing?
‘Buy here, pay here’ (BHPH) financing refers to obtaining a loan for a vehicle from the same dealership where the vehicle is being purchased. Dealerships offer such financing to make the purchasing process easier, as it eliminates the need to go through a separate lender. Some dealers may advertise these loans as being available without a credit check, making them appealing to individuals with poor credit scores. Other terms for BHPH financing include no credit loans, subprime car loans, in-house financing, and poor credit or bad credit auto loans.
PROS OF ‘BUY HERE, PAY HERE’ FINANCING
Qualify with Bad Credit
‘Buy here, pay here’ financing can help buyers with bad credit qualify for auto loans. A car is a necessity for most people, and one might not have another option to purchase it. This financing option works well when your credit score is lower than expected.
One Location
One of the advantages of ‘buy here, pay here’ financing is that it offers a convenient one-stop shopping experience. Instead of going to a bank or credit union separately to obtain financing, you can complete the entire process at the dealership. Not all vehicles may qualify for ‘buy here, pay here’ financing, and it’s typically offered on older, less valuable models. If you’re open to purchasing an older car, this financing option may be worth considering.
No Credit Inquiry
Another advantage of ‘buy here, pay here’ financing is that it may not require an official inquiry on your credit report. This helps maintain your credit score.