If you’ve been searching for a better vehicle to park in your driveway, you’ve probably run across an auto dealership that advertises “Buy Here Pay Here.” At a base level, this term seems like an oxymoron as you typically pay for a good at the same place where you buy it. A typical auto purchase works in a slightly different way.
Unless someone is paying cash for their new ride, they often get a loan from a bank, credit union, or another lender. These third-party dealerships add extra steps to the auto purchasing process, which might even mean additional fees. Typical lenders are often more strict about your credit history, which can make buying a vehicle difficult if you’re just starting to build your credit or have past mistakes.
Another option is Buy Here Pay Here programs offered at many dealerships around the country. Instead of using a third-party lender, these programs allow you to borrow funds directly from the dealership.
The Advantages of the BHPH Auto Dealership Program
There are tons of benefits of shopping with a BHPY program. One of the most obvious reasons these programs are well-loved is that it provides you with more freedom in how you purchase a car. If you’re having trouble getting approved for auto financing from a traditional lender, you may feel like you’re stuck waiting at the bus stop. BHPH programs open new doors to your transportation situation.
Here are some other perks to using a BHPH program:
- Build or repair your credit. So long as you make your payments on time, you’ll enjoy the perk of rebuilding your credit. That means any mistakes you’ve made in the past can essentially be erased over time.
- Simplify trade-ins. Most BHPH lots make trading in your old car more straightforward. They’ll even take some older models that traditional dealerships won’t touch.
- Straight-forward process. When you shop with a BHPH dealer, they’ll help you set your budget before you start looking at vehicles. You won’t have to constantly think back to what you can afford.
- Greater flexibility. Because the dealership is also the lender, they can often adjust things to fit your needs. This could be a smaller down payment, longer loan terms, etc.
The Downside of BHPH Auto Dealership Program
No purchasing programs are perfect, even if they offer tons of benefits. While BHPH programs have some drawbacks, their programs aren’t as bad as some people might have you think. Local dealerships are able to offer competitive loan terms that can match what even the biggest lenders offer.
Here are some of the drawbacks for a BHPH program:
Interest rates. Since your loan terms are based on your credit history, it could mean that you end up having a slightly higher interest rate on your BHPH loan. Don’t worry, though. As you make on-time payments, your credit will improve, which will lead to more favorable terms in the future.
- Your loan is only as good as the dealership that gives it to you. Some of the perks of a BHPH program can be erased if you’re not shopping with a quality dealership. For example, it’s hard to build your credit if your dealer isn’t reporting your payments. Make sure you always shop with a reputable dealership.
Do What’s Right For You
Ultimately, the way you purchase your next vehicle is up to you. It’s critical that you weigh your options and make sound decisions on what works best for your situation. With that in mind, don’t be afraid of a good BHPH program. With flexibility and simplicity, these options could be a fantastic path to your driving future.
