• Jennifer Snyder

What are "Buy Here, Pay Here" Dealerships?

Some dealerships advertise "we finance everyone" or "everyone is approved", but it may come at a price to the customer.





What is a "Buy Here, Pay Here" dealership?

These are typically auto dealerships that not only sell cars but also work as the bank by providing in-house financing, typically to people with bad credit. Interest rates can be higher than other borrowing options and customers make their payment directly to the dealership. These are different then the traditional dealership that request financing from outside lenders where the customer makes the payment directly to the bank.


Pros

-Bad credit is accepted here. Many of these dealers sell and finance the vehicle to customers with no credit or bad credit history.

-No or little money down. These dealers may offer the ability to purchase a car with zero to very little down payment such as $500 or less.

-Simple process. Buying the car and financing at the same time and making payments direct to the dealership where it was purchased is pretty straightforward.


Cons

-High interest rates at these dealers can be much higher that those from banks, credit unions or other lenders.

-There is a higher risk of borrowing more than the vehicle is worth. Banks and other lending institutions will normally limit the amount they will lend for a specific vehicle based on its value at time of the purchase. The Consumer Financial Protection Bureau cautions "you may end up paying thousands of dollars more than its value."

-The loans may not help build credit. These dealerships may not report your timely payment history to the different credit bureaus such as Experian, Equifax or TransUnion.


What should you do?

So what should you do if you have no credit or bad credit and you need to buy a car? the Consumer Financial Protection Bureau advises that you "not be fooled into thinking that you have no choice. Even if you have poor or no credit, there may be other lenders that are willing to finance your vehicle purchase."


That includes AppCore who accepts applications from consumers with all types of credit including no credit or bad credit, or people who have been through bankruptcy or credit counseling.


You can apply from work, home, or your mobile device in just a few minutes. AppCore can provide you with an approval or a pre-approval so that you can shop confidently letting you know how much you can spend so you can focus on getting the best car deal.


AppCore will also make sure that you receive a copy of the cars history report. We offer a range of payment options and there is no prepayment penalty should you decide to pay off the car earlier if you wish.


Using AppCore to assist in the financing of your new vehicle is a easy and secure process. We will be there every step of the way. We work with all types of credit, every day.


Note: *"Bad" or "poor" credit generally is considered a FICO score of 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association, Bankrate.com, Credit.com, Investopedia, NerdWallet.com and others. The Congressional Budget Office identifies a FICO of 620 as the "cutoff" for prime loans. FICO scores are not the sole factor in lending decisions.

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