The Cold Hard Truth About Buy Here, Pay Here Car Lots

When the economy slows down and people are losing jobs, there are always certain types of businesses that begin to thrive. One such type of business are car dealerships that offer to finance their own cars, generally to people that are not in the financial position to pay cash, or that don’t have good credit to get a normal auto loan. This is one of the most profitable business models in the auto industry, yet one of the most costly if you are a consumer.

Buy here, pay here car lots are a good way to get a car loan if you are in a bankruptcy, have just had a repossession or make below $1500.00 per month and need basic transportation. This is because those are the three conditions in which you will not be able to qualify for a normal auto loan.

In contrast, if you have not had a repossession in the last 12 months, make more than $1500.00 per month and are not currently in a bankruptcy, then you can qualify for an auto loan through good sources online that work with people that have bad credit. So, you don’t have to use a buy here, pay here car lot if you don’t want to.

Buy here, pay here dealerships are in the business of making money, and that’s ok. That’s what all businesses are in business to do. There are some questionable practices however, in regards to these types of car lots.

One such questionable practice is that of pricing cars above retail price. At a normal dealership, one would expect to pay a thousand or so dollars below retail book value. At dealers that finance their own cars, you can expect to pay a thousand or more dollars above the retail value of the vehicle. Why is this so? Is it because the people that patronize these types of establishments are in desperation mode? Possible, but that’s for you to decide.

Aside from the price of the cars themselves, interest rates at buy here, pay here places can soar into the 20’s. That’s 20% or more, depending on the lot. Isn’t it funny how when people have a hard time paying their bills, they end up with higher and higher payments? That’s just not fair, is it?

That’s the cold hard truth about buy here, pay here type car lots. You’ll pay more for a car, higher interest rates and probably wonder what you were thinking when you bought a car from them. can help you to get pre-qualified for a good auto loan if you have bad car credit.

I’m Jason Lanier. Looking out for you.