Are Buy Here-Pay Here Car Lots a Good Way to Buy a Car With Bad Credit?

If you have a low credit score, you may have had a hard time getting approved for a car at a normal car dealership. You might think that you will have to use a buy here pay here car lot to be able to buy a car with bad credit.

You do NOT have to.

First, let’s look at why you don’t WANT to use a buy here, pay here dealership…

These types of dealers that offer “in house financing” on vehicles, buy cheap cars at car auctions that are high mileage, or have something about them that a new car dealership or mainstream car dealer from wanting it.

It may be that it has a bad mechanical history, has a history of a wreck and in some cases, is what is known in the car business as a “water car”. These are cars that have been salvaged from flood areas, cleaned up and run through auctions. Whatever the reason that a car ends up at a buy here pay here lot, it’s usually NOT because it’s a vehicle in pristine condition or has a clean record.

These types of car lots then take those vehicles, clean them up and charge a price for them that is above and beyond what they would sell for at a new car dealer. They can charge high prices for junk cars because the people that usually are buying them have serious credit problems. Desperation is the key word here – and these types of dealers make a business of preying on people that are “desperate to get financing”.

Then, on top of an already high price, they require a down payment that normally equals a significant portion of what the dealer paid for the vehicle. Enough said.

Also, interest rates are charged that are so high they make credit card companies blush. You can get a credit card at a lower rate than you can get car financing at a buy here pay here dealer. Don’t believe it? Call up a lot and ask.

So, you pay more for the car than book value. You pay for a car that most likely has something in it’s past that makes it undesirable. You pay enormous interest rates and end up with an overpriced vehicle with no warranty that you will owe thousands more on that it is worth. If you DO go that route, make sure you get GAP insurance to cover your debt if the vehicle gets totaled.

If you have bad credit, the best option that you have is to avoid these types of dealerships. There are companies that provide auto financing for people that have bad credit without your having to go through a dealer that finances their own cars. You can get pre-approved online and get financed with little to no down payment.

See what you can qualify for and you’ll be able to get more car, a better car and with much lower payments if you use a good secondary lender on the internet. helps with auto finance prequalifying online. See what you can get approved for, before you shop and you’ll be able to make a smarter decision.