It can be challenging to get the go signal on your car loan application when your credit status is less than stellar. While some see this as a sign that it might not be a good time to buy some wheels, others look for other ways to pay for the car they’ve long been wanting to have. This is where buy here pay here financing comes in. It’s an option offered in most car dealerships because it approves loans filed by borrowers with poor credit.
Of course, as with all things, this comes with a price. A buy here pay here loan means that the car dealership becomes the seller and the lender of used cars for sale. Buy here pay here falls under the category of in-house financing, which is why it’s more lenient when granting loan applications. Read on to know more about buy here pay here financing.
What You Need to Know
Buy here pay here dealerships finance used cars for sale that are from their lots. They’ll ask you for your proof of income and proof of residence, but they won’t dabble that much into checking your credit status. The terms of the loan are highly dependent on your credit score. If you have a good credit score, they will give you good interest rates. Oftentimes, this also means you can give them a smaller down payment. Once they determine which loan amount you’re qualified for, they will show you cars that are within the price range.
A Different Process of Buying Cars
Have you ever been to a buy here pay her car dealership? If the answer is yes, then you know that negotiations about financing come after you’ve eyed cars that are within your budget or price range. The process is a bit different at a buy here pay here because they look at your financial affairs before taking you to where the cars are. This is where knowing a thing or two about inspecting used cars or which models have excellent resale value will come in handy. Nothing beats leaving a buy here pay here dealership with a great financing plan and a car that’s in excellent condition. While you can get buy here pay here financing regardless of your credit score, it would be good to wait around first and build your credit before running to a dealership near you. Why? Because the car you get to buy still depends on what your financial capacity or credit score is. You can do this by addressing issues affecting your credit score, applying for a credit card (make sure you pay your monthly bills on time), and avoiding frequent credit applications. The better your credit standing is, the more car options you’ll have at the dealership.