Buy Here Pay Here Disadvantages
Tuesday, March 17, 2015 at 3:20 AM
If you're short on credit (or the credit that you have isn't exactly praiseworthy) but you need a car, you will surely come across Buy Here Pay Here dealerships as you research your options. After all, without a good credit score, it's impossible for someone to obtain an auto loan from a bank or credit union. Although you could always pay in cash, that scenario isn't financially possible for most consumers. Instead, you will need to find a way to slowly pay for your new car, and Buy Here Pay Here dealerships fulfill that request by offering their own loans to consumers. However, just because an option is feasible, that doesn't mean it's preferable. Do your research and pay close attention to these Buy Here Pay Here disadvantages . . .
Buy Here Pay Here Disadvantages
You'll be hit with high interest rates. Although Buy Here Pay Here dealerships lend to people who would have a hard time securing a loan otherwise, they also load those loans with exorbitant interest rates, from 20% to as much as 35%. Plus, many dealerships require weekly payments, which can be frustratingly frequent.
You'll pay far more than the car is worth. At Buy Here Pay Here lots, not only do the vehicles tend to be sub-par, but you'll probably be charged a very unfair amount for them. It isn't unusual for these dealerships to mark the price at 100-200% of the car's actual value, with a price that reflects how much the dealer wants the customer to pay (not how much the car is actually worth).
You probably won't receive a warranty. What if the car breaks down and a repair is absolutely necessary? Because Buy Here Pay Here lots rarely offer warranties, you will have to pay for the repair yourself. Sometimes this won't be a big deal, but if the repair is pricey and your budget's already tight, you might struggle to pay both the repair fees and your regular loan payments.
The dealer will not report payments to credit bureaus. If you have bad credit or no credit, it's safe to assume that you're hoping to someday gain a respectable credit score. Making regular payments on a loan may seem like a good way to show your creditworthiness, but unfortunately, your full and timely payments won't be reported to credit bureaus, so they won't help you work toward a better credit score.
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So what do you think: is a car worth all of these disadvantages? If you decide that it's not, you may want to shelve the idea of a Buy Here Pay Here dealership and instead look into rent-to-own and lease-to-own dealers. They offer quality vehicles for very reasonable rates, and they also don't require a credit check! If you're interested in renting-to-own or leasing a car, be sure to check out Auto By Rent, the largest rent-to-own/lease auto dealer in Missouri and Tennessee. We can help you secure a quality vehicle regardless of your credit history. To learn more about our services, please click here for a free quote or contact the location nearest to you:
North Springfield: 417-447-7979
South Springfield: 417-877-2001
We look forward to hearing from you!