No credit car dealerships are often viewed with apprehension by consumers, when in fact they genuinely work to assist those with poor or no credit to find a vehicle that will fit their budget. Commonly referred to as ‘Buy Here, Pay Here’ (BHPH) dealerships, there are far more positives than negatives that are offered by these dealerships. Nevertheless, despite the key benefits of shopping at BHPH dealerships, misconceptions continue to persist and benefits continue to be often overlooked or ignored. The following are good examples of misconceptions and benefits of BHPH dealership:
One of the prime misconceptions of BHPH dealerships is that they sell “beater” cars. Though this could be said about any car dealership, even those selling new cars, this misconception remains focused on BHPH dealers. Undoubtedly there are some dealers that sell these cars but they are in the minority. The goal of BHPH dealers is to sell you the best car you can afford, and most will let you have your own mechanic look it over before making a commitment to purchase.
Another misconception about BHPH dealers is that they charge sky high interest rates in the neighborhood of 30% or more. There is no denying that finance and lending institutions charge higher interest rates to those with bad credit. However, unlike banks that do charge obscene rates, BHPH dealers usually only charge in the 10% to 20% APR range. The ultimate APR factored is based on the buyer’s credit.
There’s been a long-held belief that down payments for BHPH cars equal the actual cost of the car to the dealer. This misconception dates to when BHPH dealerships first opened, when down payments could equal the total cost of the car, but simply does not apply anymore. Decades ago, cars purchased by dealers at auto auctions were $400-$500. A down payment could be or nearly equal to the total cost of the car. But nowadays? The price of vehicles at auto auctions is in the thousands of dollars. BHPH dealers genuinely work to finance those with no credit or bad credit at their own risk. They fully understand that some have had “bumps” in the road and strive to provide the right loan program for buyers.
A no credit car dealership does not mean that there is no credit check, for there is one. A credit check may not be a hundred percent accurate, but it is an indicator that allows BHPH dealers to work with customers to find a vehicle that fits their budget.
Where your credit score may be too low or nonexistent, the majority of lenders will dismiss you as a financial risk. Once a credit score has been established, a BHPH dealership will take a perceived risk (you and your bad credit) that other lending institutions will not. They do this because, yes, it is a for-profit business, but it’s one that is there to help you.
Another BHPH benefit for consumers is the structured payment system. This program is designed to help prevent a consumer with bad credit from defaulting or missing payments on their car loan, which in turn, promotes financial responsibility.
The fact is that at a BHPH dealership, even if you may be just starting off in life or you have poor credit, many people are approved. No credit, no problem. BHPH dealerships will help you get in a reliable used car and drive.
As one of the area’s leading no credit car dealerships our goal is to free our customers of any misconception or apprehension they may have about our business, and provide them with all the benefits we offer in a dealership. We have a simple loan approval process for our customers so that you may shop with confidence when purchasing your next vehicle, which includes our AA Advantage Program—a worry-free limited warranty with 12 month/12,000 mile vehicle coverage, one year free oil changes, Total Loss Protection, and the secure feeling to know that your vehicle is equipped with an anti-theft device. Take that to the bank!