In recent years, ‘Buy Here, Pay Here’ dealerships (BHPH) have gained in popularity as more people have come to realize the convenience, helpfulness, and benefits that these types of used car dealers offer. Gone is the stigma once associated with BHPH dealerships, the sketchy used car dealers have been replaced by reputable car dealers that offer a good inventory of quality used cars with guarantees and viable options to purchase for people with limited or no credit, or those with poor credit. The differences between BHPH dealerships and traditional used car dealers are minimal and can offer several key financial benefits to their customers.
What Makes BHPH Dealerships Different From Other Dealerships?
These days, the difference between BHPH dealerships and traditional used car lots is becoming less defined. Traditional used car dealers offer the same incentive to customers as BHPH dealers do. Many provide the same in-house financing programs as any BHPH offers and guarantee the cars they sell for a number of given months and-or miles.
The most notable difference between the dealerships is the manner of the selection and payment process. Instead of selecting a car and then seeking financial terms, a BHPH dealer will discuss your budget requirements and then show what’s available to fit your budget. The payment process is also different. As the ‘Pay Here’ implies, in general, there is weekly payment of your loan at the dealership.
Key Financial Benefits of ‘Buy Here, Pay Here’ Dealerships
BHPH dealerships mean that the used car dealers finance the cars they sell to people of all credit ratings, including buyers with poor credit scores. BHPH dealers often advertise ‘no credit, no problem’ to promote their auto loan programs. That said, reputable BHPH dealerships will do credit checks. Though credit checks are not always a hundred percent reliable or accurate, they do provide a reasonable indicator of what vehicle can fit a customer’s budget.
BHPH dealers have a simplified buying process. It’s pretty straightforward— BHPH dealerships provide the opportunity to purchase and finance a car at the same time, and then make payments directly to the dealership where the vehicle was purchased.
Improve Your Credit Score
Reward your good payment habits. Making weekly payments on an auto loan can help to improve your credit score. Each week, ask your BHPH dealer to make sure to report payments to the major credit bureaus and ask for a copy or verification for your records.
Structured Payments Boost Financial Responsibility
Also, the structured payment system that BHPH requires will benefit consumers in the long run by promoting financial responsibility. The weekly payment program is designed to help prevent a consumer with bad credit from defaulting, making late payments or skipping payments on their car loan. Sticking to a weekly payment schedule helps those with little or no credit, and those with poor credit, to improve their budget management skills.
Transparent Sales Process
Reputable BHPH dealers comply with federal law when selling you a car. Unlike traditional used car dealers who sell cars through third-party lenders, BHPH dealers that are also the financier, are subject to the same federal laws as if it were a bank making an auto loan. Meaning, it has to provide you with Truth in Lending notifications and comply with the Truth in Lending Act, which also means they are bound by federal law to accurately disclose the cash price of the vehicle and the amount financed.
Same Day Drive Away
Finally, BHPH dealerships will help you purchase a dependable used car and drive away the same day. It may not be the car of your dreams, but it will be reliable and it will fit your budget. Reputable BHPH dealerships will guarantee the cars they sell. For example, a limited warranty with 12 month/12,000 mile vehicle coverage.
Looking for more information about buy here pay here dealerships in Arizona? Don’t wait – contact us at Auto Action today for more information!