Is a Buy Here, Pay Here Lot the right choice for you?

One obstacle you may face with gainful employment is transportation.

One obstacle you may face with gainful employment is transportation. If you are unable to get to work, then it can be difficult to get or keep a job. Purchasing a car is just one way to change that. There are different ways to approach purchasing a car, some easier than others. One way that can be both helpful or hurtful is through Buy Here, Pay Here lots.

A Buy Here, Pay Here car lot is one that allows you to have a payment plan with the dealership directly instead of through a bank or other car loans. The basic situation is: the car dealership acts as both the seller and the lender by offering in-house financing.

Something like the Buy Here, Pay Here option can be tempting, especially if you don’t have the best of credit and are unable to get a standard car loan. There are benefits to buying a car in this way, but you should also be cautious and go into these situations with your eyes open.

Choosing to buy your car with a “Buy Here, Pay Here” dealership is a convenient way of purchasing a car. Unfortunately, the convenience can come at a cost. If you are considered a high-risk borrower, which may mean that your credit isn’t great, then you may face much higher interest rates on your car payments. The higher interest rates will mean than you pay well above the actual price of the car in the long run.

These dealerships can be helpful in the process but there are also some dealerships who may not have your best interest in mind. If there isn’t a a vehicle history report like CARFAX, or they have “spot delivery” that allows you to drive off the lot before you are actually approved to purchase the car, hidden fees, and finagled financing – you should consider looking at a different dealership.

Make sure that before you purchase a car, you research the car history and average pricing for the car you plan to buy.  Just because you have a less than perfect credit score for financing doesn’t mean you should be taken advantage of.    As tempting as it may be, to purchase whatever they have because you feel desperate – you want to be sure you purchase a car that you can afford with a payment that fits your budget.

Researching the dealership before going can also help you prepare to deal with salespeople with a good understanding of the process. Make sure that any Buy Here, Pay Here lot you go to is accredited by the Better Business Bureau with strong customer testimonials. Research the vehicle you wish to buy through non-biased sites like Kelley Blue Book, Edmunds, or J.D. Power. This will make sure you are fully aware of where you are purchasing the car, a reasonable expectation as to what it should cost, as well as what to expect from the process.

Buying a car can be instrumental in getting work or making sure your kids get to school, so you want to make sure which car and where you buy it are reputable and fits your budget.