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Buy Here Pay Here Dealerships: Simple In House Financing

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Buy Here Pay Here

In today’s automotive market, buyers have various options for purchasing a vehicle, and one such option is buying from Buy Here Pay Here (BHPH) dealerships.

Buy here pay here dealerships provide an alternative financing solution for individuals with bad credit or no credit history.

In this article, we will discuss the pros and cons of purchasing a vehicle from Buy Here Pay Here dealerships, along with steps you can take to pre-qualify for an auto loan before hitting the car lot.

Pros of Buy Here Pay Here Dealerships

  1. Flexible Financing: Buy Here Pay Here dealerships offer in-house financing, meaning they extend loans directly to buyers without relying on third-party lenders. This flexibility allows individuals with poor credit or limited financial history to have a chance at vehicle ownership.
  2. Quick Approval: Unlike traditional lenders, BHPH dealerships often prioritize the approval process over credit history. Buyers can often get approved quickly, sometimes even on the same day, making it a viable option for those in urgent need of a vehicle.
  3. Opportunity to Rebuild Credit: By making regular payments on time, individuals can start rebuilding their credit score. BHPH dealerships often report payment history to credit bureaus, giving buyers a chance to improve their creditworthiness for future financial endeavors.

Cons of Buy Here Pay Here Dealerships

  1. Higher Interest Rates: Since BHPH dealerships take on greater risk by financing individuals with bad credit, they often charge higher interest rates compared to traditional lenders. This can result in higher overall vehicle costs.
  2. Limited Vehicle Selection: BHPH dealerships primarily offer used vehicles in their inventory, which may have higher mileage and limited options. Buyers looking for specific makes, models, or newer vehicles may have fewer choices.
  3. Strict Payment Terms: Buy here pay here dealerships often have strict payment schedules and consequences for late or missed payments. Buyers must carefully assess their financial situation before committing to ensure they can meet the repayment obligations.

Steps to Qualify for an Auto Loan

  1. Assess Your Credit Report: Obtain a copy of your credit report from the major credit bureaus and review it for inaccuracies or negative marks. Dispute any errors to improve your credit standing.
  2. Build a Stable Income: Lenders, including buy here pay here dealerships, prefer borrowers with a stable source of income. Ensure you have steady employment or a consistent income stream to increase your chances of qualifying for an auto loan.
  3. Save for a Down Payment: Saving for a down payment demonstrates your commitment and ability to manage finances. Aim for a down payment of at least 10% of the vehicle’s price to improve your loan approval chances.
  4. Consider a Co-Signer: If your credit is extremely poor, you may benefit from having a co-signer with good credit. A co-signer agrees to take responsibility for the loan if you default, reducing the risk for the lender.
  5. Shop Around: Explore various lenders, including BHPH dealerships, credit unions, and online lenders, to compare loan terms, interest rates, and repayment options. This allows you to make an informed decision and find the best deal.

Improving Bad Credit and Raising Your Credit Score

  1. Pay Bills on Time: Ensure that all your bills, including credit card payments, loans, and utilities, are paid on time. Consistent, timely payments demonstrate financial responsibility and help improve your credit score.
  2. Reduce Credit Card Balances: Aim to keep your credit card balances below 30% of your available credit limit. Paying down existing debts can positively impact your credit utilization ratio, a key factor in credit scoring models.
  3. Don’t Close Old Credit Accounts: Length of credit history is important in determining your credit score. Instead of closing old credit accounts, keep them open to show a longer credit history.
  4. Diversify Credit Types: A healthy credit mix, including a combination of credit cards, installment loans, and mortgages, can boost your credit score. Consider diversifying your credit portfolio over time.
  5. Monitor Your Credit: Regularly review your credit reports and scores to track your progress. Many credit card companies and online services offer free credit monitoring, allowing you to stay informed about any changes.


Buy Here Pay Here dealerships can be a viable option for individuals struggling with bad credit or no credit history.

While they offer flexible financing and an opportunity to rebuild credit, buyers should be aware of the higher interest rates and limited vehicle selection.

By following the steps mentioned above, you can improve your chances of qualifying for an auto loan and work towards raising your credit score.

Remember, responsible financial habits and a proactive approach are key to achieving a better credit standing in the long run.

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