As you probably know, it can be a real challenge to get a car financed if you have bad credit. Buy here pay here dealerships have become a common option for people in Missouri, because they will finance virtually anyone, regardless of major credit issues. As a rule they are more interested in your income and history of employment when it comes to approvals. You will make your payments directly to the dealer, either in person, by mail, or online. That’s why these dealers use the slogan: “buy here and pay here.”
How to Know if a Dealer Offers BHPH Financing
There isn’t one single way to identify these types of dealers, but there are a number of clues. Most importantly, keep a look out for terms such as tote the note, rent to own, your job is your credit, and in house financing. All of these mean basically the same thing: the dealer approves people for financing in house, as opposed to working with banks and credit unions and finance companies.
Drawbacks of BHPH Car Lots
- There isn’t a minimum credit score to apply. Having said that, a lot of dealers do have a minimum monthly income limit: $1500. This is pre-tax income, not take-home pay. If you don’t earn enough, but you have a spouse or parent who earns $1500 monthly and is willing to cosign, make sure to indicate this on your application.
- Down payments are commonplace with this type of dealer. It’s just a fact: people with bad credit default at a higher rate, so dealers try to secure a significant percentage of the funds at the outset of the loan. Down payments lower your monthly payment, but you must decide whether you’d rather have those funds set aside for emergency situations.
- The dealers charge exorbitant interest rates, often in excess of 20% APR. That means even an expensive used car could cost you thousands in interest. Given that most BHPH dealers don’t report to the credit bureaus, all that interest will be spent for naught, as you won’t even get the benefit of a raised credit score if you make all of your payments on time.
- Lastly, these dealers are notorious for predatory sales and lending tactics, and because they are not regulated like normal financial institutions, it seems they can get away with more egregious offenses.
Offering a Better Alternative
You could go get in your car or truck and drive around town, hoping to find a buy here pay here dealer, but wouldn’t that be a waste of time and gas? That’s where we come in. We can arrange a loan from a dealership in your neighborhood – online! You can apply in as little as three minutes, and there is no fee. You could be taking home your new vehicle before you know it. Plus, we work with dealers who finance bad credit, but also report to the credit bureaus, which is rare among buy here pay here dealers. This reporting is important because it enables you to rebuild your credit.