If you have severe credit issues and need to buy a car, going to a buy here pay here (BHPH) lot is always an option. There are drawbacks that come with a BHPH purchase. But if you can't get auto financing from any other source, a BHPH dealer can help.
When you go to a buy here pay here dealership, you won't get the best deal on a car. In fact, you may end up paying much more than what the vehicle you're buying is worth. However, you will be able to obtain transportation and possibly get a chance to improve your credit.
How a Buy Here Pay Here Car Purchase Works
If a dealership advertises "in-house" financing or uses the term "we finance anyone," they are probably a BHPH dealer. These dealers do not work with third-party lenders. Instead, they provide financing to customers themselves. This is why they typically don't run credit checks.
As long as you can provide proof of a regular, qualifying income, a stable residence and a valid driver's licence, you can be approved for a BHPH loan.
- Find a buy here pay here dealer. Some BHPH lots are better than others. So, you should do some research before visiting a dealership. Look for favourable online reviews and examples of the cars in their inventory. It is also a good idea to find a BHPH dealer that reports timely payments to the credit bureaus.
- Have your documents in order. If you plan to buy a vehicle when you visit the lot, you should have a few items with you. These include your valid driver's licence, most recent paycheque stubs and a utility bill showing your address.
- Meet with a finance manager. At most buy here pay here lots, it is determined what kind of payment a customer can afford before a car is picked out.
- Select a vehicle. You will only be shown the options you're qualified to buy, based on your income. And you will probably be looking at used cars.
- Sign the paperwork. Most BHPH deals come with higher-than-average interest rates and weekly or biweekly payment schedules. You should read over your contract carefully before signing and driving away.
- Make your payments. Some BHPH dealers will allow you to pay online or set up automatic withdrawals. But most still require customers to make payments in person, at the dealership. It is important to make all of your payments on time because a lot of buy here pay here dealers repossess quickly.
If you know that you will never have a problem with making your payments on time, a BHPH purchase can work out okay. This is especially true if you buy your car from a dealership that will report your payments to either Equifax or TransUnion. With these dealers, you can improve your credit while you're paying off your vehicle loan.
Just be aware of the fact that buying a car from a BHPH dealer will be somewhat expensive. But you will get a drivable vehicle without having to worry about your tarnished credit. However, you should consider other options before going to a buy here pay here lot.
An Alternative to BHPH Financing
Even if you have been turned down for auto financing by banks or credit unions, there are lenders out there that might be willing to work with you. These special finance lenders look at factors other than your credit when making an approval decision.
So, even if you think your credit issues will prevent you from obtaining a loan to buy a car, Canada Auto Loan might be able to help. We can match you with a dealership in your area that is connected to special finance lenders in order to give you your best possible chance at getting approved.
Our service costs nothing and places you under no obligation. And with our quick and hassle-free process, you can be back on the road in less time than you think. Go ahead and fill out our simple and secure online loan request to get started today.