Buy Here Pay Here
It is estimated that there are more than 33,000 dealerships that offer this type of sub-prime financing to car buyers, and more than 2.4 million people took advantage of Buy Here Pay Here financing in 2016. For a certain type of borrower, the Buy Here Pay Here model makes absolute sense and is the fastest and easiest route to getting behind the wheel.
What is a Buy Here Pay Here Dealership?
When you sign a contract or a bill of sale to purchase a car with a traditional used car dealership, they will send the contract over to an auto finance company to finance the auto loan. With a buy here pay here also known as (BHPH) dealership, the dealer will sell the vehicle and finance it themselves.
Buy here pay here(BHPH) dealerships specialize in car buyers who have bad credit, thin credit or no credit history at all (i.e., zero credit score). Since lenders may consider the buyer high-risk, the BHPH car dealer provides the buyer with an opportunity to finance the vehicle with them. However, since a financial institution may consider you a high-risk borrower, you will be paying a higher-than-average interest rate through a buy here pay here dealer to drive away in your new vehicle.