What’s Buy Here Pay Here (BHPH)?

What Is Buy Here Pay Here

If you are searching for “What Is Buy Here Pay Here“, this post should help! Buy Here Pay Here is a term used to refer to “buy here pay here automotive dealerships” that allow customers to buy an automobile and pay financing payments at the same dealership where they purchased their vehicle.

What Is Buy Here Pay Here?

Buy here pay here is a great option for people that want to buy a car but have poor or no credit.

  • Dealership that offers financing at the same place you bought the car
  • Bad credit or no credit car dealerhips
  • Buy here pay here auto dealerships
  • Buy here pay here financing
  • You can buy a vehicle with little to no credit
  • Making on-time payments can actually help increase your credit score (*only if the BHPH dealer reports to the credit bureau)
  • You can use your old car as trade in value towards another used car

Can’t I Just Get a Loan From The Bank or Credit union?

You can get a loan from a bank of credit union if you have good credit but most borrowers who choose to go with a buy here pay here dealership have poor or no credit so getting a bank or credit union approved loan is next to impossible. BHPH dealers are your only option if you have bad credit.

How Does Buy Here Pay Here Financing Work?

At a buy here pay here dealership you make the payments at the same dealership where you bought your car. It’s basically a one-stop shop where the finance company is the car dealer.

Because the BHPH dealer makes the loan decisions, getting approved is usually guaranteed as long as you can show you can make the payments. As long as you have steady income and a home address, your chances of getting approved are great!

BHPH Means Higher Interest Rates

Due to the fact that you are a high-risk loan borrower, your interest rates will be nearly double that of a traditional bank loan. BHPH dealers charge higher interest rates when dealing with borrowers that have little or no credit. There is no guarantee to the dealer that the borrower will pay the loan back because they have little or no credit history to back it up.

Also, make sure the BHPH dealer you choose is close to your home. Most BHPH dealers only accept payments in person rather than by mail, phone or online. This means that you will have to take weekly, biweekly or monthly drives out to the dealership to make your payment.

The Difference Between Traditional Dealerships & BHPH Dealerships

Typically Buy here pay here only referred to “no credit dealerships” or “bad credit dealerships”. However, over the years, the lines between a BHPH dealership and a traditional dealership have become blurred. Some traditional used-car and new-car dealerships are offering buy here pay here as a finacing options. If the dealership says “We Finance”, that is usually a sign of a buy here pay here dealership.

If you can’t get bank approved financing, start out at a used car dealership, such as Dodge or Chevy, that offers rebuilding credit or easy financing.

The Downside Of BHPH

The downside of a buy here pay here car dealership is that it doesn’t give you that many options for choosing a vehicle. Typically a car buyer would come into a lot and pick out the car they want and then find out if they can get financed for it. With a BHPH dealership, on the other hand, the dealer will usually qualify the customer for financing before determining how much money they are willing to let the customer borrow. Then, the dealer shows the customer the selection of cars they have an option to buy – usually a limited amount of choices.

Making Late Payments To A BHPH Dealership

When dealing with BHPH dealerships or bad credit dealerships, the late payment policy is usually pretty strict. However, most BHPH dealerships allow a grace period and tell you to call them if you get into money troubles. Most dealerships understand tough situations and will work with you before repossessing your car. However, if you fail to contact them or miss multiple payments your car will get repossessed.

Why Buy A Vehicle At A BHPH Dealership?

The only reason you should buy a car at a high interest BHPH dealership is if you have little or no credit. If you have some credit, you should definitely try traditional financing first before going to a BHPH dealership. You will save more money on financing and build your credit.

Benefits of Buy Here Pay Here

  • You can buy a vehicle with little to no credit
  • Making on-time payments can actually help increase your credit score (*only if the BHPH dealer reports to the credit bureau)
  • You can use your old car as trade in value towards another used car

Find Buy Here Pay Here Dealerships In Phoenix, Arizona

When bank or credit union lenders won’t loan you money for a vehicle, BHPH dealers are willing to put you behind the wheel today. If you live in the Phoenix, Arizona area and are wondering if a buy here, pay here car dealer is right for you, stop by In-Power Motors. We are a buy here pay here dealership in Phoenix, Arizona ready to get you driving today.

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