Countless Americans rely on cars to do everyday tasks like get to work, go grocery shopping, and ferry family members around. If you’re in that group and have a less-than-stellar credit score, it may be tough to qualify for traditional financing through a bank or other lender. However, a buy here pay here dealership might be able to help you get the vehicle you need and start working on your credit at the same time.
What is it called when you buy now and pay over time?
Here’s what you need to know about buy here pay here and whether it’s a good option for you.
Buy here pay here gastonia nc car dealerships (also known as BHPH) offer financing in-house rather than through a traditional lender. They can be especially helpful for people with no or limited credit, or those who have been through a bankruptcy. However, they come with their own set of issues and drawbacks.
One of the biggest drawsbacks is that interest rates for BHPH loans are typically much higher than those offered through traditional lenders. In fact, according to Forbes, they can be as high as 20%.
Another issue is that BHPH dealers often require a down payment and make payments more frequently than traditional lenders (often weekly or biweekly). And they may also require the vehicle be fitted with a tracking device in case you default on your loan and need to repossess it.
Lastly, BHPH dealers may not report your payment history to mainstream credit bureaus. This can negatively impact your credit if you’re not making on-time payments or pay off the full balance in a timely manner.